BusinessDay 19 May 2020 by BusinessDay

igeria still intends to spend more than it will earn in 2020, signalling a refusal to cut its coat according to its cloth. And it will fund a part of it, half of its revised 2020 budget, through debt. A meagre N71 billion was trimmed off in a downward revision of the budget bringing it to N10.52 trillion.

Nigeria’s 2020 budget needs a rethink Oil revenue is dwindling, more borrowing won’t fix it

In a normal year this would be unsurprising – though Nigeria has never been able to borrow that much, even in the

FRONT PAGE EDITORIAL

good old days. But 2020 is an unprecedented year. Less than

halfway into the first year of the second decade of the 21st century, the coronavirus pandemic has brought the world economy

to a standstill. Economies that buy the sweet crude Nigeria produces are struggling to restart, airplanes that run on fuel refined from it are grounded (several airlines have gone bankrupt). Hence, the world is awash in oil, Nigeria’s major source of revenue, and its price has dropped Continues on page 12

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news you can trust I ** tuesDAY 19 may 2020 I vol. 19, no 566 TONY AILEMEN, HARRISON EDEH, SOLOMON AYADO & GODSGIFT ONYEDINEFU, Abuja

he Federal Government on Monday said it would maintain the current guidelines on “ease of lockdown” for another two weeks, insisting on strict enforcement of laid-down rules going forward. This means that with effect from midnight on Monday, the ban on non-essential inter-state passenger travels, overnight curfew from 8pm to 6am, restrictions on social and religious gatherings, mandatory use of facemasks or coverings in public in addition to maintaining physical distancing and personal hygiene, among other guidelines

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Current ease of lockdown guidelines remain till June 1 – FG 8pm-6am curfew, ban on non-essential inter-state passenger travels, others Extension to enable sectors develop guidelines to restart economy safely

Continues on page 7

Inside

Tomato Jos secures Series A round funding of €3.9m P. 6 Zenith General Insurance’s profit before tax rises by 16% to N3.67bn P. 6

L-R: Ferdi Moolman, chief executive officer, MTN Nigeria; Ernest Ndukwe, chairman, Board of Directors, and Uto Ukpanah, company secretary, at the First Public Annual General Meeting of MTN Nigeria Communications plc, in Lagos.

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Tomato Jos secures Series A round funding of €3.9m OLUFIKAYO OWOEYE

omato Jos, an agro-processing company focused on the local production of high-quality tomato paste for the African market, has announced it had completed a €3.9 million Series A round. Goodwell Investments, via its West Africa partner Alitheia Capital, led the round with participation from Acumen Capital Partners and VestedWorld. Tomato Jos was founded by Mira Mehta in 2014 with the vision to create and retain local value-add to the tomato value chain, reduce post-harvest losses, and improve the lives of smallholder farmers.

Since its inception, Tomato Jos has focused on securing its supply chain through primary production. The combined €3.9 million Series A funding boosts the transition to its next stage of growth — the processing and distribution of tomato products. Growth plans include the installation of a drip irrigation system and a processing plant that can produce 24 tons of finished product per day. At scale, Tomato Jos will work with thousands of smallholder farmers on over 2,600 hectares of land, putting more than $1 million of direct income into the local economy each year. “Processing has always been the plan for Tomato Jos, but to get there, we

spent a long five years working only on farming and primary production to make sure that we had a really solid foundation in place,” said Mira Mehta, founder and CEO of Tomato Jos, on the investment. “Everyone at the company is extremely excited to take this big step forward into the world of food processing and value-add production!” While Nigeria is the second-largest producers of tomatoes on the continent, farming inefficiencies create a demand-supply gap resulting in Nigeria also being one of the biggest importers of tomato paste in the world. Tomato Jos works to increase yields and incomes of the local smallholder tomato farm-

ers it works with, boosting the sector with an improved capacity of farmers, reduced post-harvest losses, and a high-quality product. “With a rapidly growing population driving demand and an increasing focus on improving the sufficiency of the agriculture sector, there is a big opportunity for domestic tomato paste production,” said Mobola da-Silva, partner at Alitheia, Goodwell’s investment partner in West Africa. “Tomato Jos has chosen the right market, business model and management to succeed as a truly inclusive business within this environment. As an Continues on page 7

MTN commits N600bn to network infrastructure in Nigeria

TN Nigeria plans to spend an estimated N600 billion on technical infrastructure over the next three years as it looks to expanding its network coverage across the entire country by 2024. Speaking at the company’s first public Annual General Meeting which held in Lagos on Friday, Ferdi Moolman, CEO, MTN Nigeria, said, “Due to the nature of our business, we always have to keep up and innovate new technology which is capital-intensive. Our target is to have coverage across the country and a minimum of 4G network service across all locations. “Cash collateralised Letters of Credit, forwards contracts, and favourable credit rating with major partners and vendors will make funding relatively easy for us, but we will also be cautious in our approach to limit foreign currency exposure.” The company’s 4G network currently covers approximately 40 percent of its coverage locations, which translates to about 65 million

data customers. A significant amount of investment would be made to not just extend the 4G network but to also cover more rural locations in Nigeria. The company expressed excitement on the possibilities that the transition to digital platforms presents to the company as growth in voice revenue is also expected to remain healthy. “We closed the year with 132 cities covered by 4G and became the first mobile network operator in West Africa to demonstrate the capability of 5G technology. We are excited about its potential for our customers and the country’s national development plans,” said Moolman. “We maintained our leadership position in network net promoter score (NPS) as we continue to invest to improve service quality and drive expansion and innovation,” he said. This investment in infrastructure will enable the company to accelerate its 4G network expansion, deepen population coverage, and support the Federal Government’s broadband initiatives.

Slight liquidity squeeze expected in absence of NTbill, OMO maturity this week ... Investors can seek attractive opportunities in Commercial Papers, says Afrinvest Hope Moses-Ashike

Hassan Bello (l), executive secretary/CEO, Nigerian Shippers’ Council, with Ogho Okiti, managing director, BusinessDay Media Limited, during Bello’s courtesy visit to BusinessDay head office (The Brook) and presentation of face masks and hand sanitisers, in Lagos, yesterday. Pic by Olawale Amoo

Zenith General Insurance’s profit before tax rises by 16% to N3.67bn BALA AUGIE

enith General Insurance Limited has released its full-year financial statements for the year ended 31 December, 2019. A review of the results showed positive improvements on a year-on-year basis with profit before tax rising by 16 percent from N3.16bn to N3.67bn, while profit after tax rose by 10 percent from N2.79bn to N3.06bn. The company also maintained a robust balance sheet closing the year with total assets of N40.1bn and a shareholders’ fund of N25.9bn. Gross premium grew by

17 percent year-on-year from N13.7bn to N16.1bn, while there was a 46 percent growth in underwriting profit from N2.77bn to N4.06bn. The company made substantial gains from reduced claim expenses and healthy growth in gross written premiums. I nv e s t m e n t i n c o m e showed an increase of 2 percent year-on-year, up from N3.55bn in 2018 to N3.63bn in 2019, despite lower yields on most investment classes in 2019. “We are re-affirming our mission statement that Zenith General Insurance Ltd exists to ensure peace of mind and also create value to people www.businessday.ng

in a world of uncertainties,” Kehinde Borisade, managing director/CEO, said. “This is evident in our strong financial performance showing improvement across the board through increased premium income, underwriting profits and investment income despite the economic headwinds witnessed in various sectors of the economy. We also ensured prompt settlement of claims with total claims payment of N3.8bn for the year and an average settlement turnaround time of three days,” Borisade said. He said the company has continued to maintain a very strong and healthy financial

position with a growth of 6 percent year-on-year on total assets and a 4 percent increase in shareholders’ funds. “We also continue to strive to be the best in the insurance industry, maintaining the strongest solvency position and closing the year with a solvency ratio of 726 percent,” he said. Zenith Insurance is one of Nigeria’s leading insurance institutions. The company is one of the first insurance companies to have met the recapitalisation requirements of the National Insurance Commission (NAICOM) by increasing its share capital from N3bn to N10bn.

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he financial markets may experience slight liquidity squeeze as there would be no Nigerian treasury bills (NT-bill) and Open Market Operation (OMO) maturities this week. Treasury bills are shortterm investment securities issued by governments to finance national borrowing requirements. OMO is the buying and selling of government securities, which enables a central bank to control the supply of money in the banking system. “In the absence of TBills and OMO maturities this week, we expect liquidity level to be slightly tight as the Debt Management Office (DMO) holds May Bond Auction,” said Ayodeji Ebo, managing director, Afrinvest Securities Limited. However, analysts at Afrinvest have recommended that investors seek other attractive opportunities such as available private money market offers like Commercial Papers (CP), in addition to cherry-picking attractive instruments across the NTBills secondary market. The Series 15 and 16 Commercial Paper issuance (“CP or the “Issuance”), under the @Businessdayng

Dangote Cement plc (“Dangote Cement”) N150.0bn CP Issuance Programme, is now open and scheduled to close on Wednesday, 20 May, 2020. “We expect sustained buying interest in the secondary market due to the unfilled bids from last week’s auction,” the analysts said. Last week, the NT-bills at the secondary market kicked off on a calm note with investors treading cautiously in anticipation of the Primary Market Auction (PMA) that held on Wednesday. However, towards the end of the week, there was an uptick in activity levels as inflow (N209.0bn) from matured Open Market Operations (“OMO”) buoyed bullish sentiments leaving system liquidity at N388.5bn long on Friday. Ayodele Akinwunmi, relationship manager, investment banking at FSDH Merchant Bank Limited, told BusinessDay that there seems to be moderate liquidity in the market. Average yield across all NT-Bill tenors declined by 38bps W-o-W to close at 2.3 percent with most buying interest skewed towards the medium and long-term instruments, particularly the 10-Sep-20 (-80bps), 17-Sep20 (-76bps) and 15-Oct-20 (-75bps) bills.

Tuesday 19 May 2020

BUSINESS DAY

news Tomato Jos secures Series A round... Continued from page 6

agro-processing company

that sources from local smallholder farmers and provides affordable access to finance in the form of farming inputs to farmers, Tomato Jos is a good fit for uMunthu’s inclusive strategy of investing in agribusiness,” da-Silva said. By connecting local farmers to domestic consumers, Tomato Jos helps to improve the lives and incomes of smallholder farmers and increase the sustainability and stability of food supply in Nigeria. Tomato Jos directly supports over 70 smallholder farmers across three growing cycles. During this time, smallholder farmers’ average yield has grown by over 340 percent from 5 to 22 metric tons per hectare, while their average income increased by 455 percent. CrossBoundary provided advisory support to this transaction through USAID’s INVEST program, funded by the USAID Southern and East Africa Regional Missions in support of the US Government’s Prosper Africa initiative. The advisory support helped Tomato Jos respond to critical investor questions as part of the due diligence process; and enabled Goodwell Investments, Acumen and other investors to gain further insight into the size of the opportunity and the value that Tomato Jos has created up to this point. “Acumen Capital Partners is thrilled to join Tomato Jos’ investors to help the company continue to develop a worldclass vertically integrated tomato processing operation in Nigeria,” said Tamer El-Raghy, managing director of Acumen Capital Partners. “Tomato Jos is positioned not only to locally produce tomato paste, which is mainly imported into Nigeria but to help Nigerian smallholder farmers increase their income by increasing their yield by 3-4x.” “As investors in the Tomato Jos business since 2017, we are incredibly proud of this dedicated, resilient team and recognize the many obstacles overcome to get us to this point. The addition of Goodwell Investments, Alitheia, and Acumen Capital Partners will be a great resource for this highly impactful company, and we look forward to working with them,” remarked Jeffrey Stine, managing director of VestedWorld and Tomato Jos Board Member. “I am really excited to partner with investors who understand and care about who Tomato Jos is, what we are trying to accomplish, and why this work matters so much,” noted Mehta. Tomato Jos is an African agricultural production company that believes in the power of farming and processing local food products for local consumption. Established in 2014, Tomato Jos has focused solely on primary production

of tomatoes, soya, and maize to demonstrate that global excellence in agriculture is achievable in Nigeria, to train a large network of smallholder farmers to grow high-quality produce for the company under mutually beneficial systems; and to guarantee enough raw material (tomatoes) to support an investment in a tomato processing facility. Growing from 2Ha to the current 500Ha, the company has made tremendous leaps towards higher yields at lower production costs. Tomato Jos relocated to Kaduna in 2017 and the State Government has provided consistent invaluable support with the result that Tomato Jos now operates the largest active tomato farm in Nigeria and supports 2,500 Nigerians through direct and indirect employment. Goodwell Investments is a pioneering impact investment firm focused on inclusive growth in sectors providing basic goods and services and income generation opportunities to underserved communities in Africa and India. The firm provides early-stage equity to high growth, high impact businesses. With teams in Kenya, Nigeria, South Africa and Amsterdam and a track record of over ten years, Goodwell demonstrates the ability to simultaneously deliver significant social impact and strong financial returns. Alitheia Capital is an investment management firm focused on channelling capital into businesses that enhance access to essential goods and services for small and growing businesses and low-income households. Alitheia has a proven track record of financing and supporting entrepreneurial businesses that address a business, social or environmental need. Alitheia’s investments include businesses that enable the provision of: financial services to the un(der) banked through traditional and digital banking models; offgrid energy to businesses and households; affordable, clean cooking fuel to low income households; and mobility solutions that tackle the challenges of urban mobility in emerging economies. Acumen Capital Partners’ Climate Resilience Initiative is focused on investing in companies with business models that helpsmallholderfarmersinEast and West Africa become more resilient to climate change. VestedWorld is an earlystage investment fund manager that invests in companies that have the potential to generate competitive financial returns while contributing towards the growth and development of the markets in which they are located. The firm supports these businesses through the infusion of capital, active involvement in corporate governance and by providing direct strategic and operational assistance. www.businessday.ng

President Muhammadu Buhari, during a virtual meeting with some governors led by Governor Kayode Fayemi of Ekiti State/chairman, Nigeria Governors’ Forum, yesterday. NAN

Current ease of lockdown guidelines... Continued from page 1

earlier announced by the

government remain in force. In addition, selected businesses and offices will remain open from 9am to 6pm, while partial and controlled interstate movement of goods and services will continue to be allowed to ease the movement of goods and services from producers to consumers. “President has approved that the measures, exemptions, advisories and scope of entities allowed to re-open under phase one of the eased lockdown shall be maintained across the federation for another two weeks effective from 12:00 midnight today (18th May, 2020 to 1st June, 2020),” Boss Mustapha, chairman of the Presidential Task on COVID-19, said during the daily briefing of the task force in Abuja on Monday. President Muhammadu Buhari had, in a nationwide broadcast on April 27, approved a phased and gradual easing of lockdown measures in the Federal Capital Territory, Lagos and Ogun States effective from Monday, May 4. He said at the time that this would be followed strictly with aggressive reinforcement of testing and contact tracing measures while allowing the restoration of some economic and business activities in certain sectors. The Presidential Task Force (PTF) on COVID-19 had followed with detailed guidelines for the gradual easing, which has now been extended till June 1. “Nigeria is not where we wish to be in terms of control, ownership, infrastructure and change of behaviour,” Mustapha said on Monday. “The reality is that in spite of the modest progress made, Nigeria is not yet ready for full opening of the economy and tough decisions have to be taken for the good of the

greater majority. Any relaxation will only portend grave danger for our populace.” As a result, he said the current phase of eased restriction will be maintained for another two weeks during which stricter enforcement and persuasion measures would be pursued. He, however, said the task force would continue intensifying efforts to “tell (communicate), trace (identify) and treat (manage)” cases as well as elevating the level of community ownership of non-pharmaceutical interventions. Mustapha, who announced that President Buhari approved the maintenance of the guidelines based on the recommendations of the PTF, said in arriving at the final recommendations to the president, the task force objectively and frankly interrogated certain critical factors and came to the conclusion that the fight against COVID-19 is long term as the virus is not likely to go away very soon. He noted that going forward, government would refocus policy on community ownership by intensifying the mobilisation of individuals, especially the communities, to take ownership of the COVID-19 fight. He said this would be accompanied by a corresponding development of infrastructure and other public health measures to be undertaken in every community and at every phase of the response, including surveillance, case finding, testing, isolation, tracing and quarantining contacts. The PTF said the existing lockdown order in Kano would be maintained for additional two weeks, adding that there would be imposition of precision lockdown in states, or in metropolitan/ high-burden LGAs, that are

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reporting rapid increase in number of cases, when the need arises. He, however, announced that government would complement these measures with the provision of palliatives and continue reevaluation of the impact of the interventions, as well as aggressive scale-up of efforts to ensure that communities are informed, engaged and participating in the response with enhanced public awareness in high risk states. Giving account of achievements in the phase one of the eased lockdown in the last two weeks, Mustapha said there has been an increase in the number of laboratories in the COVID-19 network from 15 to 26, additional 15,558 tests were conducted in the country (with a cumulative total of 35,098 tests and the number of tests per million increasing from 50 to 154), increase in the number of trained personnel to 11,409 health workers thereby boosting capacity for case management, as well as procurement and distribution of additional personal protective equipment and ventilators across the country. He also noted that the doubling time of the virus has slowed down from seven days to 11 days; beds available for isolation and case management increased from 3,500 to 5,000 beds nationwide; increase in efficiency of the identification, testing, evacuation, and isolation process for confirmed cases and progressive improvement in capacity of the health system to respond to the outbreak. Chikwe Ihekweazu, director general, Nigeria Centre for Disease Control (NCDC), explained that the two weeks’ extension of the phase one of ease of lockdown is to enable all sectors develop guidelines to re-start the economy safely, but he said restarting Small Medium Enterprises (SMEs) @Businessdayng

may be difficult. The DG revealed that one major consensus reached during the PTF meeting with President Buhari was that the country would have to live with the virus, safely, but noted that SMEs are unregulated unlike the aviation, education sector, etc. Therefore, developing and adhering to guidelines may be difficult. “How do we restart the economy safely from a lockdown? How do we do this safely is a question we all have to grapple with. How do we restart the economy safely in the farms, market, schools, transport, aviation? This has to be our focus in the next few weeks,” he said. Meanwhile, the Federal Government has commenced infection prevention and control training for Almajiris in Kano State to enhance community awareness and drastically contain the rising cases of the dreaded coronavirus in the country. Olorunibe Mamora, minister of state for health, disclosed that the NCDC is to collaborate with development partners and engage influential religious leaders on community outreach in eight states of the federation. “The NCDC is collaborating with development partners to engage influential religious leaders in Akwa Ibom, Bauchi, Ebonyi, Kebbi, Nasarawa, Plateau, Sokoto and Zamfara States to complement the community mobilisation activities of our community health workers,” Mamora said. “They will also facilitate awareness creation on COVID-19 in the rural communities as well as support our efforts to ramp up community testing. In addition, we have commenced Infection Prevention and Control (IPC) training specifically for the Almajiri in Kano,” he said.

Tuesday 19 May 2020

BUSINESS DAY

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NEWS ANALYSIS

Why Nigeria, Africa must avoid ‘Covidspiracies’ MUSILIU AKANNI

T Babajide Sanwo-Olu (2nd r), governor, Lagos State, addressing the media; Obafemi Hamzat (l), deputy governor; Hakeem Odumosu (r) Commissioner of Police, Lagos Command, and Hakeem Muri-Okunola (2nd l), head of service, during a media briefing on Covid-19 update after the State Security Council meeting, at the Lagos House, Marina.

Oil, gas investment drives Nigeria’s FDI flows to $3.4bn in 2019 BUNMI BAILEY

frica’s biggest economy attracted $3.4 billion worth of Foreign Direct Investment (FDI) in 2019, buoyed by patient capital flows to the oil and gas sector, the country’s most critical sector. This is after FDI flows plunged to 13-year low in the preceding year, making the country to be overthrown by its smaller neighbour, Ghana, as the most preferred destination in the West African sub-region. According to a recent investment tread monitor report by United Nations Conference on Trade and Investment (UNCTAD), FDI flows to Nigeria rebounded by 71 percent from $2 billion attracted in 2018 to $3.4 billion last year, fuelled by resource seeking inflows in the oil and gas sector. Flows to Nigeria’s oil andgas sector, substantially contributed to 17 percent increase in capital flows to about $11 billion in

West Africa. Inferences from this suggest Nigeria might have dethroned Ghana as the top recipient in the sub-region. Damilola Adewale, an economic researcher, said, “FDI flows into Nigeria just like its peers in sub-Saharan Africa are concentrated in extractive sectors in the past two to three decades. But it is high time we change the narrative by reforming non-oil sectors to attract investors’ interest. With oil gulping 100 percent of FDI suggests that investors are not convinced about the growth prospects of other sectors.” Worried about the skewness of capital flows to the oil and gas sector, analysts at UNCTAD note in the report that the development of $600 million steel plant in Kaduna State offers some evidence of investment diversification of a long-standing policy objective. The report is based on FDI inflows for 150 economies for which data are available for at least part of 2019, as

of January 17, 2020. Annual figures are estimated based on available partial-year data, in most cases up to the third quarter of 2019. The proportion of inflows from these economies in total inflows to their respective region in 2018 is used to extrapolate 2019 regional and global data. Quarterly, FDI data are based on the directional principle. For a few countries data following the asset/liability principle was used for estimation. UNCTAD’s FDI data exclude special purpose entities (SPEs) and offshore financial centres. In Africa, FDI flows amounted to an estimated $49 billion, an increase of 3 percent. From the report, the persistent global economic uncertainty and the slow pace of reforms seeking to address structural productivity bottlenecks in many economies continue to hamper investment in the continent. Egypt remained the largest FDI recipient in Africa with a 5 percent increase in inflows to

NECA accuses Customs of impeding ease of doing businesses Joshua Bassey

he Nigeria Employers’ Consultative Association (NECA) has raised concerns over what it termed recurring bottlenecks associated with the Nigeria Customs Service (NCS), which are hindering the ease of doing business by manufacturing companies. The employers’ body says at a time when all hands must be on deck to promote local enterprise competitiveness and prevent job losses, actions of the Customs operatives are jeopardising government’s efforts at promoting the ease of doing business in Nigeria. Speaking in Lagos on Monday, Timothy Olawale, directorgeneral of NECA, stated, “It is a known fact that the world economy is on the precipice with nations doing all that is necessary to keep their productive sector going.” According to Olawale, in recent times, incessant issues with the NCS have become worrisome as it has the potential to push businesses off the cliff, thereby fast-tracking the demise of more enterprises and exacer-

bating the current unemployment situation in Nigeria. While expressing concern at operational challenges faced by businesses, he observed that “rather than facilitate enterprise competitiveness in line with the Government’s policy on Ease of Doing Business, Customs operatives have constituted themselves into clogs in the wheel of legitimate businesses through inconsistent and arbitrary tariff classification, excessive and unfriendly duty rate on key raw materials without local substitute.” He also pointed to the improper valuation of consignments and reckless interception of containers after legitimate clearance, among other ills being carried out the Nigerian Customs. With the dwindling oil prices at a time when the nation needs all the investment it can attract, these bottlenecks will further make the nation to fall behind in investment destination rating, he noted. “While the Customs Service is desirous of meeting its revenue target, it should not be at the expense of legitimate businesses,” he said. www.businessday.ng

$8.5 billion. The country’s efforts to implement economic reforms have resulted in strengthened investor confidence. While FDI to the country was still driven by the oil and gas sector, major investments in the non-oil economy emerged, notably in telecommunications, real estate and tourism. But despite the increase in Egypt, FDI to North Africa declined by 11 percent to $14 billion, due to a significant (45%) slowdown in flows to Morocco ($2 bn from $3.6bn in 2018). In contrast, FDI to Southern Africa increased by 37 percent to $5.5 billion mainly due to the slowdown in net divestment from Angola. South Africa consolidated last year’s recovery with inflows remaining almost constant at a little more than $5 billion. In addition to intracompany transfers by existing investors, investment to the country was led by merger and acquisition (M&A) deals in business services and petroleum refining.

COVID-19: Edo advocates tech solutions to disruptions

do State governor, Godwin Obaseki, has made a case for tech-based solutions to the disruptions caused in the wake of coronavirus (COVID-19) pandemic, noting that Information and Communication Technologies (ICT) have proven quite useful in managing communication, eCommerce and other disruptions to the social order. The governor said this in commemoration of the World Telecommunication and Information Society Day marked by the International Telecommunications Union (ITU) and other agencies. According to Obaseki, “There is no denying that COVID-19 pandemic has altered life as we know it, but what is soothing is that advances in telecommunications have created alternatives. Much as there are limitations to physical contact, we can still continue with our tasks and engage with people through videoconferences, eCommerce and other tools that have made life a lot easier.” The governor urged scientists and innovators to con-

tinue to seek out new ways to cope with the disruptions to social order, noting that the state government, for instance, has embraced technology in educating pupils in primary schools through the Edo Basic Education Sector Transformation at home (EdoBEST@ Home) initiative. “We have and will continue to promote the use of science and technology to better human life. This is why for years, we embarked on the training of youths in computer programming and data science so that our youths will be best equipped to work in the 21st century workplace. A lot of them today are reaping the benefits of the training they got,” Obaseki said. Noting that the state government will continue to up-skill its staff to adapt to changes in technology, he said, “We have just completed the John Odigie-Oyegun Civil Service Training Academy, which will offer courses that would help our workers perform better and be more productive. These constitute the many changes we are making to ensure that the people are best served.”

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he novel coronavirus is forcing the physical isolation of people around the world at great cost to their economies but with the promise of slowing the spread of the disease. In its subtle and more deadly form, the outbreak is driving a political and ideological wedge between nations with no benefits and only costs to its unsuspecting pawns. Africa has not been spared from this misjudgement. The outbreak of the virus on the continent was accompanied by a blame-game targeted at foreigners and expats, especially Europeans, accusing them of deliberately importing the disease to Africa in attempts to recolonise the continent. France was one country at the receiving end of such brutal attacks, even though the first case of Covid-19 in Africa was recorded in Egypt on February 14, involving a non-European, and Africans in diaspora were returning from around the world including Asia at that time. Anti-European sentiments are unbeneficial for Africa, which has a strong bond and mutually beneficial relationship with Europe. On its part, Europe has been the worst-affected continent by the pandemic so far having recorded 152,418 deaths as at May 11. Even though the virus originated elsewhere, deaths in Europe have been in their thousands; United Kingdom (31,855), Italy (30,560), Spain (26,621), France (26,380) and Belgium (8,656). This clearly shows that the coronavirus is not in any way a ploy by Europe to colonise Africa; for Europeans themselves the disease is a nightmare and a big cost to their economies. Understanding the importance of unity and cooperation, the European Investment Bank (EIB), which is the lending arm of the European Union (EU), in April announced €5.2 billion of emergency funding foritsnon-EUoperations,thebulk of which would be sent to Africa for immediate support to their healthcare systems and provide liquiditytoSMEsonthecontinent. The EIB’s effort is just one part of a wider collaboration between European Commission, the EBRD, European countries and other organisations to help support countries affected by the pandemic. The EU last month said it was securing more than €15 billion to help its partners worldwide (including Africa) to combat the coronavirus. “By standing united and working together, we can defeat this virus. #StrongerTogether,” Ursula von der Leyen, president of the EU Commission tweeted. On April 14, EU in a meeting with President Muhammadu Buhari, announced a €50 million (N21bn) contribution towards the implementation of a coordinated response to theCOVID-19 pandemic in Nigeria. In recognition of the solidarity demonstrated by the EU, President Buhari said: “Although the EU is @Businessdayng

facing significant challenges due to this pandemic, I am indeed touched and grateful that the EU still had the vision and foresight to remember its friends, partners and allies across the world”. Meanwhile, Commissioner for International Partnerships, Jutta Urpilainen, stressed, “COVID-19 must be fought globally. The EU support is focused on the people most at risk. Africa and Nigeria are vital priorities, and must not be forgotten or left alone. Now more than ever we want to show solidarity with our partners.” The EU’s efforts, many of which have gone unmentioned, are a show of good fate towards Nigeria and Africa in a tradition that has been consistent over the decades.EU and its member states support AU’s activities to the tune of around €300 million ($342m) each year while Europe remains the most open market for African export.EU also is the main funder for educational or sanitary project, and for official development aid in Africa. In early March, EU proposed the basis for a new strategy with Africa, to intensify cooperation through partnerships in five key areas:greentransition;digitaltransformation;sustainablegrowthand jobs; peace and governance; and migration and mobility. While the world awaits a vaccine and the end of Covid-19, it is critical that Africa does not fall a victim to ‘coronaspiracy’ or simply, the creation of enemies where there are only allies. The world post-coronavirus no doubt would be different, but it would be one where cooperation would be needed to rebuild lives and cities; synergy not just to help Africa prosper but on the basis of equal and respectful partnership. Africa must not isolate itself from the rest of the world, and definitely not from its closest allies. The continent must introspect and consider this pertinent question other continents are also considering: After the crisis, who will help us to get back up? The concerns of a post-COVID-19 world again are not peculiar to Africa hence the need for a continued mutually beneficial relationship and the avoidance of hate and conspiratorial errors that do not play in anyone’s favour. The ugly era of colonialism is long past and the world has moved to a more civilised order, more than ever the tempo of progress must remain upbeat. Africa remains the European Union’s natural partner and neighbour in trying times and in prosperous ones, and while the coronavirus keeps nations apart physically, there is the need to show strength against the virus by enriching the ties that transcend physical distance. As the coronavirus shows clearly, fortunes are tied and downfall of a nation threatens contagion effect to others. This means accusing fingers; especially unfounded claims that hold no logical, scientific or moral basis are the very viruses we must distance ourselves from.

Tuesday 19 May 2020

BUSINESS DAY

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SMEs: What essential business records do you keep?

Timi Olubiyi

f you have established or are about to launch your business, congratulations! It takes unwavering passion and perseverance to get by with that all-important decision. Starting a business or running it effectively can be an overwhelming process in this environment. You will agree with me that small business operation is difficult without proper records and documentation of all business transactions. In Nigerian, especially Lagos State which is the commercial nerve centre of the country, millions of micro and small business owners are struggling with basic bookkeeping and having structured financial statements despite having a good business case with great products and services. Consequently, it is important to state that business records are significant to the sustainability of any enterprise. The simplest of the records are Book Keeping and Accounting which are two aspects of the Accounting process. Bookkeeping is the dayto-day process of recording business activities, summarising, categorising financial transactions, and reconciling bank statements.

Accounting assumes more advanced responsibilities of analysing and interpreting outputs of bookkeeping. Bookkeeping is so essential from the first day of your business to the time of the business owner’s retirement. Book keeping and accounting tell the actual state of the business. Therefore, for an entrepreneur, it is advisable to monitor the progress of your business by paying attention to every minute detail of Book Keeping and Accounts. Consequently, to achieve this, one must be aware of the accounting basics and keeping the right records. As a business owner or entrepreneur, if you do not understand the different types of “accounts” required to organise your finances, measuring the success (or failure) of your efforts will be fruitless. Particularly doing it right, prepares you for government audits, helps prevent fraud, and also help in recognising the business status. Categorically, basic accounting practices are the primary tasks in every business entity, regardless of its size and number of employees. Many small business entrepreneurs in Nigeria forget that the token of being a successful entrepreneur is understanding the basic terms of bookkeeping and accounting. No doubt, small and micro business owners forget that for business to be adequately successful everything about the business finances needs to be captured, not just the business bank account balance. Do you know according to Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) the Government agency stimulating, monitoring and coordinating the development of the MSMEs in Nigeria and intermediat-

ing between MSMEs and Government reported that over 50 percent of small businesses fail in their first year and 95 percent fail within the first five years of the business?. And the most common reason is a lack of bookkeeping knowledge among the owners. Without proper accounting system and bookkeeping, it will be difficult to survive with the harsh environment in Nigeria. Because a good financial record and bookkeeping is the road map that shows us exactly how the business choices affect the profitability of the company. The starting point is to have legal registration of your business, set up a business bank account with a commercial bank. Develop a bookkeeping system that is the foundation of solid business record keeping, learning to track your business income and expenses effectively. Recall quality accounting practices can assist you to make timely payment or early payment, which is a good sign of business success. So, learning the way to create and read balance sheets, cash flow charts, and other financial records has become imperative for small businesses to survive in the competitive market. However, if this proves difficult it can be outsourced. Here are some of the accounting and bookkeeping basics that you need to understand: Cash Account is important, remember cash is the blood of any business and every business transaction passes through the cash account; this ledger shows how much cash a company holds. Further to this is Accounts Payable which is concise bookkeeping to help assure accurate payments and avoid paying a vendor/contractor twice. More so it helps in managing working capital and also improves business reputation.

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No doubt, small and micro business owners forget that for business to be adequately successful everything about the business finances needs to be captured, not just the business bank account balance

Dr. Olubiyi holds a Ph.D. in Entrepreneurship and Small Business Management. He is a prolific investment coach, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com.

Can herd immunity save Nigerians?

s we continue to battle with the COVID-19 pandemic, several questions on how it can be best addressed keep emerging. Most prominent amongst them is whether lockdowns are the best approach or herd immunity is a better one. Considering both options, one can say they both have their pros and cons, and while lockdown seem as the safest practice, it doesn’t seem as the most logical considering the fact that COVID-19 can span longer than we wish and the duration for mass-producing a vaccine is not a short one. Scientists and researchers have predicted that it might take 12 to 18 months to discover a vaccine. This shows that there is a dire need to consider the best approach that should be adopted by an economy like ours that has no hope of surviving a prolonged lockdown in the absence of vaccine. Of note – In response to the call to control the spread of the virus, governments of several nations have put in place several precautionary measures like lockdown and social distancing. In the midst of all these, the world is marching towards a global economy meltdown, one that has never been seen since the global recession of 2008. Nigeria’s economy which has over the years depended on oil has been dealt a huge blow with the fall in oil price. Non-essential formal and informal workers are affected by the lockdown as a result of the stay at home orders; farmers are in a loss due to lack of sales and wastage of farm produce. Private school teachers have seen their salaries stopped and start-ups are folding. This and the prevailing hunger in the country

witnessed by the lockdown have made people in different quarters call for the suspension of the lockdown order, albeit unpopular and controversial. While we must appreciate that the essence of the lockdown is to slow the spread of the virus and ease the burden on already overcrowded hospitals. More striking is that legislations have been passed in different countries to enforce the lockdown orders. These top countries where lockdown has been effected are facing stiff oppositions from citizenry as they want to go about their daily activities. Hunger is affecting their physical health; isolation is affecting their mental health. This leads us to the now frequently used term “herd immunity”. Herd Immunity is a term used in veterinary medicine and coronavirus has exposed it to common usage, it happens when so many people become immune to the virus in the society. It can happen in two ways, either by making a lot of people contract the virus and becoming naturally immune to it or getting vaccine for the larger population, with the latter currently unavailable. While medical experts go against this mode of control, the question that has been begging for answers is that what happens in the case that vaccine for coronavirus isn’t found after two years or what will happen in the cause of the two years, will the world be on hold till then, more importantly to what effect will the lockdown be after months of economic and social depletion. This begs for the question that due to the uncertainty of pandemics, if there’s a second wave of the virus, the country that has adopted

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It’s necessary to track the pending bills and have a clear idea of the payments that need to be done. Accounts Receivable is next, this simply means the amount owed you. Every business should keep a record of its debts and try to recover the amount as soon as possible to keep the business liquid. Another very important accounting activity to prepare is Bank Reconciliation which in accounting means verifying, so this is the verification of the statements/records that you have maintained and the bank statements. This helps you to avoid any kind of fraudulent transaction and gives you the right picture of your income and expenses. It is said that Loans Payable should be monitored in business because if you have borrowed money to buy equipment, vehicles, furniture, or other items for your business operations, the Loans Payable account tracks payments and due dates. Some of the other records to keep are Inventory Account, Payroll Expenses, Equity Shares of the owner, Sales Account, Retained Earnings. In conclusion, if you are you having problems managing the records, bookkeeping or accounting process of your business or your business process require a review due to some challenges or current realities, you might need to reach out to get smart, professional, and effective advice to help rectify any business related issues. Good Luck!

Abass Oyeyemi herd immunity would be immune from the second outbreak and countries without this immunity would have to go through another phase of lockdown and restriction rules. The more we practice lockdown, self-isolation and social distancing, the longer it will take for everybody to catch it. Looking at the historical Spanish flu, one will see that the second wave of an outbreak has high mortality than the first. Hence, we evaluate the policy adopted by Sweden which has been commended by World Health Organization as a model for fighting the virus. Though, the authorities of the country have denied that what they’re practicing isn’t herd immunity, however, when one look at how it opposes the restriction policy of its Nordic neighbours and the number of cases confirmed, one will see that the country is close to admitting its herd immunity policy. In evaluating Sweden policy, one needs to understand that the government has left the administration of the pandemic in the hands of experts instead of politicians. In sharp contrast to what’s happening around the world, the state epidemiologist in Sweden, Anders Tegnell has been the one making news conferences and handling the national response. Also, there has been a mutual trust confidence between the leadership of Sweden and its citizenry. The citizens while supporting the government for not restricting their freedom have also been responsible to each other as they maintain ethical adherence to recommendations and the country is united. Indeed, trust trumps authoritarianism. However, looking at it from a different

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angle, one will agree that some factors have been responsible for the positivity seen from Sweden approach to coronavirus response. Sweden’s small but IT literate population, good health care facility, highly advanced digital infrastructure, world class welfare system, national unity and consciousness have been responsible to its ability to maintain the policy. These factors are lacking in Nigeria and most African countries. Hence, we have to put in a policy that would ensure our sustainability. The lockdown has lived a purpose, it has been able to publicise the virus. Now is the time to ensure compliance to using face masks, avoidance of public gatherings of more than 20 people, hand washing and teaching people on how to live with the virus. Many have said that this is not the best of time to be a national officer but I’ll rather say that in a matter of picking what’s right or popular, the government should stick to what’s right and is of national interest than what’s popular. Pandemic might be full of uncertainties as we don’t know what would happen in the next hour, however, government should be visionary while making decisions, as this is the right time to gain the people’s trust. Until a vaccine is discovered, COVID-19 is our reality and we cannot run away from it by locking ourselves up. The numbers would rise but with good policies, the virus would be managed till there’s a cure and a vaccine. Oyeyemi writes from Ayetoro, Ogun State and can be reached via oyeyemiabass@yahoo.com

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Tuesday 19 May 2020

BUSINESS DAY

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COVID-19 hovers over the oceans STRATEGY & POLICY

MA JOHNSON

he oceans is not the natural habitat of mankind. That is why most of us do not appreciate the oceans because we live on land. To make matters worse as we observe the disorderliness of lives during the pandemic, most of us have forgotten the oceans. But those who have ships, containers, goods, friends and family members at sea cannot forget the oceans. The open ocean spreads across three-fourths of the Earth’s surface. Those who had sailed, and are still sailing know that the oceans is a place of storm and danger, both natural and man-made. An example of a man-made danger at sea is seen in the Iranian missile fired during a training exercise in the Gulf of Oman which struck The Konarak, a Hendijan-Class support ship near its target recently. Until you relate with the oceans, you may likely not understand how the enterprise- legal and illegal- contained in it flourish daily. If you sail through the oceans over time, you will notice its efficiency accompanied by challenges. The challenges posed by shipwrecks, pollution, the hard lives and death of sailors, large ships, and the growth of two pathogens: A modern and sophisticated strain of piracy and its close companion- maritime sabotage.

The widespread disorder of the oceans is hard to explain in writing. But nations that ignore the oceans do so at their peril. For most of human history, with few exceptions though, the open ocean is a forbidden zone- a place of horror- real and imagined- that has made it notoriously dangerous for mankind to use. In order to have ships ply the oceans unhindered among other reasons, navies are established. And in order to protect commerce and trade, navies maintain presence at sea whether there is pandemic or not. COVID-19 has wreaked havoc on trade, economy and shipping worldwide. As expected, the whole world has been focusing on the spread of the coronavirus which is of humanitarian concern. The financial markets globally have been under a lot of pressure while the impact on shipping industry has so far been substantial. During global lockdown, most shipyards in the world were abandoned, shipbuilding activities were slowed down, and many ships could not complete dry docking. Most nations are dependent on China’s manufacturing sector for their basic necessities and raw materials. These nations are hard hit by COVID-19. In fact, COVID-19 has shattered oil demand and sunk prices among other risks. That is why most maritime experts were not surprised to read the headline report: “Nigeria to lose 75 percent port revenue as crude oil price, and shipment decline.” With gradual ease on lockdown restrictions, shipbuilding activities have continued slowly but steadily. And operations have been resuming bit by bit despite reduced personnel globally. This is a development expected as shipping is linked with trade in several ways. After the spread of the virus, we expect a strong rebound to follow in the market. In these difficult times, the ability

for shipping service and seafarers to deliver vital goods including medical supplies and foodstuffs will be central to, and eventually overcoming this pandemic. If the flow of commerce at sea is not to be disrupted unnecessarily, it the responsibility of navies. So, when one reads that a navy ship has reported a coronavirus outbreak, and is returning to port, one is concerned. You may recall that the USS THEODORE ROOSEVELT, a nuclearpowered aircraft carrier with those testing positive above 615 sailors according to reports. The commanding officer of the vessel was relieved of command for asking for help to contain the outbreak. In the midst of the controversy, an Acting US Navy Secretary resigns his appointment. As naval ships worldwide seek to mitigate the threat of the disease without undermining their operational effectiveness, there was a report of coronavirus outbreak on board CHARLES DE GAULLE, a French nuclear-powered aircraft carrier. The 1,081 cases diagnosed among 2300 sailors on the French Navy’s nuclear-powered aircraft carrier and its accompanied ships exceeded that of USS THEODORE ROOSEVELT. This was followed by reports that at least 18 sailors of a destroyer, the USS KIDD, have tested positive to the pandemic. Several sea power experts have warned it was impossible to eliminate risk on naval vessels with cramped living quarters in which social distancing was impossible. From basic seamanship, naval ships try to avoid contagious disease outbreak because they work at it by striving to keep their vessels clean regularly from stem to stern. Unfortunately, aforementioned naval ships could not withstand the pandemic and they are back in harbour. When those who are charged to maintain law and order at sea are

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COVID-19 has wreaked havoc on trade, economy and shipping worldwide. As expected, the whole world has been focusing on the spread of the coronavirus which is of humanitarian concern. The financial markets globally have been under a lot of pressure while the impact on shipping industry has so far been substantial

falling to the ferocious attack of the pandemic, the oceans and ports are put in tight spot. That was responsible for mixed reactions displayed by maritime analysts when the Governor of River State, Nyesom Wike, was reported to have closed seaports in River state. Some analysts say, may be the governor drew inspiration from what happened at Marseilles in 1720. Please, permit me to render a flimsy on the Plague at Marseilles. In 1720, a ship was quarantined at the port in Marseille, South of France, because a strange infection was killing people on the ship. It was an imported virus which was brought into the country by sailors because authorities in Marseilles could not afford to lose all valuable goods on the ship as it was considered that the economy may collapse. So, the Deputy Mayor of Marseille lifted the quarantine in order to “help the economy”. Unfortunately, more than half of Marseille died. A pity, you may say. As the COVID-19 hovers across the oceans, we have seen its impact on board a few war ships across the globe. There could be other cases neither reported nor made public. As we ease lockdown, relevant agencies need to pay utmost attention to Nigeria’s sea ports across the country and to enforce the quarantine order of Mr President that: “Only ships at anchorage/quarantine for 14 days may be allowed to come into the ports to discharge their goods.” All protocols in dealing with the pandemic must be strictly adhered to at our seaports. Most importantly, all sailors and imported goods must pass through a cleansing station at our seaports before coming ashore. Why? Global trade must continue in a safe, secure and environmentally friendly manner during and after the pandemic. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

From the blogs

This May Day, we remember the work of caring for the world

his year International Workers’ Day, or Labour Day, invites us to think about several different topics that the coronavirus crisis has brought to the fore: how there are so many good people in the world; how progress needs to respect nature even while making use of it; how dependent we are on one another; how vulnerable we all are, and how society needs to show solidarity if it is to be truly human. In the response to the pandemic, the caring professions are constantly being spotlighted. Care-related words like accompany, mourn, protect, listen, and many more are in the headlines all the time. This helps us to reflect on the how and why of any job. We have come to understand better that service is the soul of society, and is what gives work its meaning. Work is more than a need or a product. The book in Sacred Scripture that tells about the origins of mankind says that God created man “to work” and to care for the

world (Genesis 2:15). Work is not a punishment but the natural situation of the human being in the universe. When we work, we establish a relationship with God and other people, and can develop better as persons. The amazing response of so many professionals, whether believers or not, to the current pandemic, has highlighted this dimension of service. It helps us see that the end recipient of any job or profession is someone with a name and surname, someone who possesses inalienable dignity. All honest work ultimately boils down to the task of “caring for people.” When we try to work well with a concern for our neighbour, our work – any work – takes on a completely new meaning and can become a path to an encounter with God. It does a lot of good to integrate this perspective of the person into our work, even the most routine kind, because it is a perspective of service that goes beyond what we are in duty bound to do. As in the early times of Christianity, towww.businessday.ng

day too we can see with special clarity the potential of lay men and women who strive to be witnesses to the Gospel, working shoulder to shoulder with their colleagues, sharing a passion for their job, and showing humanity amidst all the suffering currently caused by the pandemic and uncertainty about the future. Every Christian is “Church,” and in spite of our personal limitations, in union with Christ we can take God’s love “to the bloodstream of society.” This was an image used by St. Josemaria Escriva, who preached the message of seeking holiness through ordinary work. With our work and our service, we too can show the reality of God’s care for every person. Labour Day this year also brings with its new concerns about the future, because of job insecurity in the short or medium term. We Catholics turn especially to the intercession of St. Joseph the Worker, asking that no one will lose hope and that we will all adjust to the new situation. We beseech Saint

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Fernando Ocariz

Joseph to enlighten decision-makers, and to help us understand that work is for the good of the person, not the person for work. In the months and years ahead, we should often call to mind Pope Francis’ words and remember how “we have realized that we are on the same boat, all of us fragile and disoriented, but at the same time important and needed, all of us called to row together.” May this First of May bring with it the hope that the freedom we recover when the lockdown ends may truly be freedom in the service of others. Then our work will become what it was in God’s plan right from the beginning: care for the world, starting with the people who inhabit it.

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BUSINESS DAY

Tuesday 19 May 2020

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In focus: Six smart security trends to have on your radar

Ghassan Azzi

mart security is moving beyond the static surveillance we’re accustomed to, to real-time video analytics - thanks to new capabilities enabled by artificial intelligence (AI). AI and smart video promise to extract greater insights from security video. As more of these always-on systems are rolled out, edge computing will play an important role in capturing, collecting, and analysing higher resolution data and there are some key trends you can expect to see as a result of this evolution. Moving beyond the standard security camera When security technology is brought up in conversation, the topic of security cameras is rarely far behind. These systems have focused on streaming a video feed from a fixed security camera to some central location where it is either being observed in real-time or recorded for future reference. This has become the standard people expect for security, but today, we’re seeing an evolution of smart cameras through the emergence of artificial intelligence. Thanks to AI, cameras are no longer simple, static lenses, they’re being tasked to do more – pattern matching and focusing on specific zones or movements. Cameras that used to catch shoplifters after the fact can now identify shoplifting in real-time and these devices can even be used to analyse shopper habits. For example, what types of shoppers enter

a store and what aisles do they go to? By gaining new insights into buyer habits, stores can help to inform the decisions behind more enjoyable and profitable shopping experiences. But in order to carry out the above, these smart security cameras require intelligence and storage within the device itself. In addition, there are many more types of cameras being used today, such as body cameras, dashboard cameras, and new Internet of Things (IoT) devices and sensors. Video data is so rich nowadays, you can analyse it and deduce a lot of valuable information in real-time, instead of post-event. Edge computing and smart security As public cloud adoption grew, companies and organisations saw the platform as a centralised location for big data. However, recently there’s been opposition to that trend. Instead we are now seeing data processed at the edge, rather than in the cloud. There is one main reason for this change in preference: latency. Latency is an important consideration when trying to carry out real-time pattern recognition. It’s very difficult for cameras to process data – 4K surveillance video recorded 24/7 – if it has to go back to a centralised data centre hundreds of miles away. This data analysis needs to happen quickly in order to be timely and applicable to dynamic situations, such as public safety. By storing relevant data at the edge, AI inferencing can happen much faster. Doing so can lead to safer communities, more effective operations, and smarter infrastructure. Smart surveillance in the smart factory Factories are always a hive of activity. In times gone by, this would mean numerous different parts operating separately to one another. Today, thanks to the rise in IoT technology, these elements are inter-connected and often work in unison. From the design stage, to the assembly line, and everything in between – AI & IoT is central to the smart factory. And that means smart surveillance, too.

The business of the modern factory requires a high-definition, 360 smart surveillance that can monitor all activity. In addition to the obvious security uses, smart cameras can be deployed to help analyse the efficiency of warehouse processes and the functioning of the product line. But these extra technological demands require a large amount of data to operate 24/7 and storage of this footage is of course of paramount importance. UHD and storage AI-enabled applications and capabilities, such as pattern recognition, depend on high-definition resolutions such as 4K – also known as Ultra High Definition (UHD). This detailed data has a major impact on storage – both the capacity and speeds at which it needs to be written, and the network. Compared to HD, 4K video has much higher storage requirements and we even have 8K on the horizon. As we know, 4K video has four times the number of pixels as HD video. In addition, 4K compliant video supports 8, 10, and 12 bits per channel that translate to 24-, 30- or 36-bit colour depth per pixel. A similar pattern holds for HD — more colour using 24 bits or less colour using 10 or 12 bits in colour depth per pixel. Altogether, there is up to a 5.7x increase in bits generated by 4K vs. 1080-pixel video. Larger video files place new demands on data infrastructure for both video production and surveillance. Which means investing in data infrastructure becomes a key consideration when looking into smart security. Always-on connectivity Whether designing solutions that have limited connectivity or ultra-fast 5G capabilities, most smart security solutions need to operate 24/7, regardless of their environment. Yet, on occasion, the underlying hardware and software systems fail. In the event of this, it is important to establish a failover process to ensure continued operation or restore data after a failure, including everything from traffic control to sensors to camera

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The traditional, fixed-place security camera has been a reliable servant but it has its shortfalls. Smart security today is about utilising AI and edge computing, to deliver an always-on, high-resolution security provision that can keep people safe 24/7

feeds and more. Consider the example of a hospital with dozens or even over a hundred cameras connected to a centralised recorder via IP. If the Ethernet goes down, no video can be captured. Such an event could pose a serious threat to the safety and security of hospital patients and staff. For this reason, microSD™ cards are used in cameras to enable continuous recording. Software tools – powered by AI – can then “patch” missing data streams with the content captured on the card to ensure the video stream can be viewed chronologically with no content gaps. Sophisticated device analytics Self-monitoring has become a critical tool in enabling better uptime, proactive support and efficiency for many systems. Whether in smart factories or enterprise settings, an entire system can fail simply due to one component malfunctioning. A hard drive can fail due to a broken fan causing its internal temperatures to rise dramatically, for example. By designing an intelligent platform to track device health, systems can be built to work proactively. With this in mind, companies need to look at investing in hard drives that can monitor a variety of parameters, including temperature, to help administrators take immediate action before reliability is compromised. The traditional, fixed-place security camera has been a reliable servant but it has its shortfalls. Smart security today is about utilising AI and edge computing, to deliver an always-on, high-resolution security provision that can keep people safe 24/7. These trends increase the demands and importance of security monitoring, which means requirements of the supporting data infrastructure improve to match that, including the ability to proactively manage the infrastructure to help ensure reliable operation. Companies just need to make sure they have the requisite storage capabilities to enable this. Azzi is the senior sales manager, Western Digital

COVID-19: Can we overcome this health matter soon?

hat is an act of God? The Students Companion defines an act of God as a happening, usually sudden and unexpected, for whom no human can be held responsible. So, as earthquakes, deluge, and volcanic eruption are acts of God, so are pestilences, epidemics, and pandemics. Pandemics, as natural phenomena, have been occurring on earth from times indefinite. However, a pandemic has no forerunner. In the distant past, Bubonic fever and Spanish flu caused the deaths of millions of people of the world at different times. Between the time the last pandemic occurred and now, diseases like HIV/AIDS, Malaria, and Tuberculosis had claimed millions of human lives, globally. These diseases still have high mortality rate despite the fact that humans have pushed back the frontiers of epidemiology and medical science. But, sadly, late last year, China was caught unawares by the outbreak of the corona virus disease in the Wuhan province of China. It killed thousands of peoples there. But the Chinese political leadership rose up to the occasion and executed measures aimed at stemming the tide of the spread of the deadly disease. While China witnessed the abatement of the disease, it spread to countries like Iran, Greece, Italy, Spain, and Great Britain where it caused deaths of thousands of people. Even America, the superpower country of the world, has not been spared the morbid and deathly bite of COVID-19. It struck in the densely populated area of New York and mowed down thousands of people. America with its technological knowhow was caught napping.

President Trump of American has alleged that China’s covert handling of the CoVID-19 matter and its dilly-dallying in making disclosures about it caused the spread of the disease, globally. And there is the conspiracy theory making the rounds that China manufactured the virus in its laboratory. But, is China truly complicit in the creation or outbreak of the viral disease? But, had it acted promptly and alerted the rest of the world in no time about the existence of the disease in Wuhan, China, the colossal damage it caused to the world in terms of loss of human lives would have been averted. In the wake of the global spread of the disease, not a few countries executed measures such as lockdown of their countries, physical distancing, and maintenance of personal hygiene to thwart and impede the onslaught of the disease. Here, in Nigeria, our political leaders delayed in shutting our airspace and locking down the country. Consequently, we are suffering the effects of our leaders’ missteps now. We waited until the dreaded disease entered the shores of Nigeria before our leaders banned incoming flight into Nigeria and locked down parts of the country. Our leaders’ mishandling of the COVID-19 matter is symptomatic of bad political leadership, which has been the bane of Nigeria since we became a sovereign country. But, then, the lock-down of Nigeria hasn’t stopped the spread of the disease. Our people’s non-adherence to WHO’S guidelines on how to avoid contracting the disease is one of the reasons behind the rapid spread of the disease in Nigeria. And the myths woven around it have

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strengthened some people’s belief that the COVID-19 is non-existent. But the stark fact is that the lockdown of the country, then, inflicted immense economic hardship on many people as millions of Nigerians whose businesses were stopped depend on their daily earnings to survive. Again, the desultory sharing of palliatives to people caught in the maelstrom of the lockdown failed to address holistically and comprehensively the fallout of the lock-down, which is starvation. So, angry and hungry people would defy the lockdown order to engage in their private endeavours. This had resulted in people’s clashes with security operatives, which caused the deaths of people. So, some states eased the lockdown order while the ban on interstate travels still persists and exists. However, the suspension of the lockdown order, as argued by people, is very premature and portends ill omen to the country. To make matters worse, social distancing and maintenance of personal hygiene, which are ways by which people can avoid contracting the disease, are observed more in the breach in the country. Consequently, there is spike in the number of people who have contracted the disease in Nigeria, instead of us witnessing an abatement of it, as we expected. Unlike in other countries whose scientists are working assiduously and conscientiously to produce vaccines and drugs for the treatment of the disease, here we are pussyfooting and waiting for white people to produce COVID-19 drugs for us. It’s surprising that Madagascar has produced vaccines and drugs which are said to

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CHIEDU UCHE OKOYE be efficacious for the treatment of the corona virus disease. Here, we are dismissive of people who come up with claims that their drugs can cure people with Corona virus disease. But it is disheartening that our leaders do not deem it necessary and appropriate to subject their drugs to clinical and laboratory tests to ascertain the truth of the matter. The COVID-19 health issue has brought to the fore the issue of our neglected health-care delivery system, which needs urgent revamping and rehabilitation. So, if we continue to neglect our health-care delivery system, it will be at our own peril. Our leaders should up their ante in this fight to exterminate COVID-19 in the country as it has the potential and capability to decimate our huge population. We are not unconscious of the fact that Nigeria’s huge population is an incentive and fillip to her developmental initiatives. Human labour, especially skilled labour, is critical to the development of a country. Nigeria should key into global efforts to stamp out the COVID-19 monster in our country. Okoye is a poet

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Tuesday 19 May 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

Nigeria’s 2020 budget needs a rethink Continued from front page

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

dramatically. Though the new budget is based on $25 per barrel, more than half the $57 Nigeria earlier projected its Bonny light would fetch in the market, it plans to produce 1.94 million barrels per day. An arrangement among OPEC, the oil cartel Nigeria belongs to, and other oil producing countries will see each country reducing the amount of oil pumped daily – the quota of Nigeria is 1.4 million. The current revised 2020 budget only places Nigeria in a position to keep borrowing to meet the budget deficit and compounds our problems as the cost of servicing debt keeps mounting, eating up an already shrink-

ing revenue. How Nigeria plans to get the revenues, from plunging oil prices and paltry taxes (one of the lowest in the world) during a recession, remains a mystery. It’s unrealistic to think that loans from domestic and international markets will work a miracle; most of it will be used to repay debt we already owe. And in trying times like this, lenders will be wary of chronic debtors like Nigeria with doubtful revenues, more than half of which is for paying interests. Saudi Arabia which produces more oil than Nigeria, commands a bigger market share and foreign exchange reserves 12 times the size of Nigeria’s took bold, decisive and necessary austerity measures to prevent a rapid deterioration of its economy.

Saudi Arabia, an oil-producing nation like Nigeria, plans to triple its value-added tax from 5 percent to 15 percent in July, suspend its cost of living allowance for public sector workers, cut and delay part of its Vision 2030 projects, a multi-billion dollar initiative aimed at diversifying and reforming the Saudi economy. Total government spending cuts is roughly 10 percent of total expenditure from its original 2020 national budget (that of Nigeria is 0.6%). A meagre 0.6 percent reduction in the revised 2020 budget is no adjustment at all compared to numbers budgeted for recurrent expenditures. This is a time to spend on what is necessary while cutting down significantly on costs that have no justification like the outrageous salaries and other luxury ben-

efits of public officers which accounts for a larger chunk of recurrent expenditures. Prior to revised 2020 budget, the federal government’s recurrent expenditure was N4.49 trillion – 42 percent of total expenditure – in which personnel cost alone was N2.82 trillion as against N2.47 trillion for capital expenditure. The COVID-19 pandemic has not only upended global oil demand, it has triggered a long underlying fiscal crisis. It has also exposed a poorlyfunded and neglected health sector and a fragile economy yet to recover from the 2016 recession. The 2020 budget must be revised further to reflect reality. Oil prices aren’t going to rise anytime soon and we can’t borrow our way out of this problem.

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property&lifestyle Experts explain why real estate investors should rethink strategies amid Covid-19 CHUKA UROKO

undamentally, the world has changed, no thanks to coronavirus, whose ravaging impact has brought hardship and dislocation in the economic and social lives of individuals, households and organizations. Given the massive hit on the pockets of people and on the finances of businesses, discerning and smart minds are already reinventing themselves and rethinking their respective situation. The current situation has not only compelled people to rethink, but also to re-imagine and refocus their strategies. Experts are, however, of the view that the situation also offers opportunities for informed investors who also need to rethink and re-imagine the future or work and of business. The experts who spoke at a Webinar hosted by Fine & Country West Africa in Lagos, noted that, in tune with pre-

sent realities, certain tailors and fashion designers are now making masks for people; caterers and restaurants are actively delivering food and chemists are even considering drug manufacturing. The Webinar with the theme, ‘The Impact of Covid-19 on Real Estate Investment’ was an online version of the company’s annual Refined Investors Series which, according to the authorities of the company, is a conversation they have put together with their knowledge partners. “We are in an unusual time which has lots of uncertainty, complexity and anxiety; at a time like this, it is important to inspire confidence in investors by providing information and market intelligence so that they can make informed decisions, Udo Okonjo, the company’s CEO, explained in her opening remarks. The CEO stressed that now “is the time to rethink, reimagine and refocus,” adding, “we are here to advise

•Ajogwu

•Okonjo

•Nevin

and provide a roadmap for investors on how to navigate not just real estate but other sectors too.” But in making their investment decisions, the investors owe it as a duty to themselves to think and imagine things differently to reflect current market and economic realities. “If tailors or fashion designers, caterers and chemists are rethinking their strategies in line with the opportunities Covid-19 has presented to them, there is no reason stakeholders in the real estate market should

not also be rethinking their strategy in the direction of the opportunities that may also lie in the sector,”said Bola Adesola, Vice Chairman for Africa, Stanbic IBTC Bank. Adesola explained that many businesses would still need offices despite work at home; manufacturers would need factories and warehouses while e-commerce companies would need logistics such as sortinganddispatchcentersand this is why developers should still build commercial premises. But she has a piece of ad-

vice for such investors and/or developers. “When we rethink the real estate sector, the starting point would be to explore the key typical drivers of the sector. These drivers include market forces (demand, supply and pricing), economic factors and business confidence,” she said. The subset of these drivers, according to her, weigh heavily on profit margins and they include interest rates and access to finance, unemployment and real income, government policies, infrastruc-

Owerri building collapse: Professionals urge govt agencies to go beyond plan, design approvals CHUKA UROKO

s the people of Imo State count losses in terms of human and material resources following the recent collapse of a 7-storey building still under construction in the state, professionals in the built environment have urged government ministries and agencies responsible for giving building plan and design approvals to go beyond that brief in order to nip incidents like this in the bud. The professionals note that investigations conducted on many collapsed buildings in Nigeria reveal that inappropriate management of building production on site has been the major cause, pointing out that quacks or impostors, who lack professional competence,

have always succeeded in superintending over the very technical and complex process of building production. “This Owerri building collapse is a clarion call to all ministries charged with physical planning and urban development in Nigeria to extend their strict assessment and vetting of building projects beyond building plan approval,” Kunle Awobodu, National President, Nigeria Institute of Building (NIOB), said. Building plans and design documents, Awobodu noted, are to all intents and purposes, just in the design and preconstruction stage of building projects. It is expected that the ministries and agencies responsible for physical planning and urban development should

The 7-storey building on Musa Yar ‘ Adua Drive, Owerri before it collapsed on 30th April, 2020. www.businessday.ng

devote greater attention to the practical stage, which is the actual building construction and the NIOB president advised that any company or individuals that will handle construction of a building should be thoroughly investigated to ensure that round pegs are inserted in round holes . He was of the view that the sensitive building production processes should be managed by a professional builder who, by his or her training, will not compromise on standards or competence. “It really boggles the mind why building collapse has become a recurring decimal in a nation endowed with many trained and licensed professional builders, whose statutory responsibility is to technically manage building production on site to a successful delivery,” said Awobodu whose views were contained in a statement obtained by BusinessDay at the weekend. “It is unfortunate that people who do not have requisite ability to carry out a task ignore the inherent risk for the tempting, anticipated monetary gains, thereby endangering lives and property. The delicate process of transforming the architectural, structural and services designs and drawings to satisfactory building products requires expertise that professional builders possess,” he said. Building professionals posit that when participants in building delivery process abide by their areas of specialisation with a clear under-

standing of their limitations and refuse to go beyond or exceed the bounds of their training or competence, building owners will definitely get value for their money. They agree that there must always be a collective intention of consultants on a building project to ensure that those who will manage the building production process are qualified to do so in order to prevent a collapse that could smear the consultants’ reputation. “The exquisitely designed architecture and professionally designedstructuresofabuilding might be subjected to ridicule if the Architect and the Structural Engineer do not insist on quality building production,” contending that most clients would not want to invest wrongly if they are sincerely guided. To curb the incessant collapse of buildings which usually arises from construction errors, he recommended that building control agencies across the nation should ensure that a Registered Builder that could be held accountable for quality production is on site. “There is a subsisting building regulation in Lagos State that supports this approach. Whenever such an individual is charged and found derelict in his or her duty, the regulatory body, Council of Registered Builders of Nigeria (CORBON) will withdraw the person’s practising license. The fear of losing such a license and the accompanying loss of reputation always compel that builder to be very cautious,” he said.

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ture, yields on investments, population, demographics location, occupancy rates, quality of properties, etc. She noted that all these factors influence demand and supply side of the sector and the real estate ecosystem as a whole, advising further that smart thinking investors on residential properties should take a holistic view of the entire market. Adesola noted that the further the Covid-19 pandemic persists, the greater its impact on the world economy, believing that the extent of the aftermath would most likely be kindest on individuals and businesses that are seeking more opportunities to tap in the midst of the crisis. “Therefore, whilst we focus on our lives and our livelihood and even our liberty in the midst of the lock down, we need to think smart,” she advised, stressing that “opportunities exist even for tenants and property transactions will always happen even in this trying time.”

Propertymart intervenes in COVID-19 fight with food items for communities CHUKA UROKO

s the fight to defeat Covid-19 at both national and state levels rages, intervention and support have continued to come from individuals and corporate bodies among which is Propertymart Real Estate Investment Limited. The frontline real estate investor and developer made its intervention recently with food items which it donated to its immediate community of Shangisha and environs as a demonstration of love and care for the residents of the areas. This intervention, according to a statement from the company at the weekend, is coming on the heels of public sensitization and awareness campaign on COVID-19 which it carried out not long ago in those communities. As part of efforts to mitigate the negative impact of the COVID–19 pandemic on homes in the neighbourhood, the company shared foodstuff to well over 200 households. Officials of the property development firm also visited the palace of the Oba of Shangisha, Oba Jamiu Adetola Ajibola Lawal and left food items with him, showing that nobody was left out of the palliative as even security guards in some premises got food items. “This is a thoughtful gesture, and we are grateful to Propertymart. They could have chosen to go elsewhere, @Businessdayng

but they decided that their immediate community should benefit first. God will continue to prosper the company,” one of the beneficiaries who introduced herself simply as Mrs Joy said. Abimbola Arasi, Business Head at Propertymart, explained that the donation was a continuation of the company’s corporate social responsibility initiatives aimed to help people over the lockdown period. “Though people prepared for the lockdown, there’s no doubt that their stocks would have diminished. That was why we took it upon ourselves to help members of our immediate environment in Shangisha by replenishing their homes with these foodstuff. We all need assistance, and this is a continuation of our little effort to complement what the federal and state governments are giving,” he said. Arasi, who assured that the company would not reduce its corporate social responsibility initiatives, urged people to abide by all the laws put out to reduce the spread of the virus with the gradual easing of the lockdown in Lagos Propertymart, a leader in Nigerian real estate sector since its incorporation in 2008, has delivered over 6,000 housing units and serviced plots to families and individuals in Lagos, Ogun and the Federal Capital Territory (FCT), Abuja. Some of its key projects include Citiview Estate, Arepo; Mitchel Mews, Magodo; Edensville Estate, Simawa.

Tuesday 19 May, 2020

BUSINESS DAY

Media business Why NUJ sent letter to Buhari, requesting for media industry bailout … Experts say such intervention may result to interference Daniel Obi

he Nigerian traditional media industry plays a big role in national socio-economic development. It is agent of information transportation on various subjects and builds public opinion. Its role in the attainment of Nigerian independence, democracy and civil rights is sine qua non. The media is a fighter for social justice and its present role in the fight against Covid-19 is fundamental. But the same media is presently challenged not only by plethora of complex media devices but by harsh economic environment occasioned by slow economic growth at 2.27%, which has compelled businesses to cut advertisement budgets. The recent oil price collapse from over $70 to $30 in the international market and the continuous economic slow-down triggered by the Coronavirus pandemic are not helping matters and this situation is predicted to last for

some time. The media which is also facing high operating cost is simply going through excruciating times as revenues are steadily declining leading to months of unpaid salaries. Worried by this development, exacerbated by the unfortunate emergence of Covid-19 late last year which

has further upended industries, Nigerian Union of Journalists, NUJ last week, therefore appealed to President Muhammadu Buhari to save the crucial industry from collapse. In a letter addressed directly to the President, Muhammadu Buhari, the union requested for urgent interven-

tion of Federal Government to arrest the unfortunate trend considering the role of the media in nation building. Specifically, the union in the letter signed by its president, Chris Isiguzo appealed for financial bailout for the media industry through the Nigerian Press Organisation, NPO, and Broadcasting Or-

NIMR partners Mobihealth on Covid-19 home testing in Nigeria

he Nigerian Institute of Medical Research (NIMR) has concluded plans with Mobihealth International, an innovative telemedicine and digital healthcare platform, to launch the country’s first home tele-consultation guided do-it-yourself (DIY) Covid-19 swab sample collection for Nigerians who want to confirm their Covid-19 status, a statement has said. NIMR, whose mandate stipulates that it shall conduct research into human health problems in the country, notes that the research and development (R&D) initiative is aimed at facilitating the fight against the corona virus disease in the country by taking the containment efforts right to individuals in the comfort of their homes. According to Babatunde Lawal Salako, Director-General of NIMR, in the statement, “This do-it-yourself initiative which addresses

the clamour of Nigerians for wider testing for Covid-19 has many advantages, including speeding up sample collection and testing, reducing the spread of infection especially among health workers, save time and reduce the stress on health institutions, save cost and reduce stigmatizations that hospital testing may bring about, among others.” Funmi Adewara, Founder and Chief Executive Officer of Mobihealth International, in the statement said that the company runs a similar initiative in the UK where people, who are unable to access the Covid-19 testing through the

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National Health Service (NHS) platform of the government, enlist on the Mobihealth platform for the test. She explained how the initiative works: “Interested Nigerians who desire to know their COVID-19 statuses only need to download the Mobihealth App from their respective device play stores, register and enter the discount code to book teleconsultation with a doctor within minutes. An online video guide on how to swab will be sent to the candidate. Also, a test kit will be despatched to the candidate’s address by a trained courier and the ID is confirmed

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to match the test kit.” She went on to disclose that the candidate, on receipt of the kit, will follow a live video guide to conduct the swab and validate the right person is taking the swab test, seal the bag and return it to a trained Courier, who will be waiting outside. The exercise normally takes 10 minutes but extended to 15 minutes for this pilot. The trained Courier delivers specimen to the NIMR laboratory and the results would be made known to the client by email in 24-48 hours of arrival of the sample at the NIMR laboratory. “If the candidate tests positive to the corona virus disease, NIMR or Mobihealth International will escalate for appropriate care and attention” Adewara said. She called on Nigerians to take advantage of this initiative for a better management of their healthcare in this period of the COVID-19 pandemic.

ganisation of Nigeria, BON for the privately owned media organisations in the country. The letter did not put figure required for the industry bailout. The letter told President Buhari that “this is a crisis situation of monumental proportion and “we plead for your urgent intervention to avert a catastrophe”. In the letter, the union reminded President Buhari that today, “the role of the media in national development has become more elaborate and clearer more than ever before despite the little funds available to them. Because of shrinking advertisement, cost of operation, media houses can no longer comfortably pay these costs and offset staff salaries and emoluments. “It is instructive to note that without the media, the Covid-19 could have gone completely out of control by now”, the letter entitled ‘Convulsions in the media industry’ and dated May 13, 2020 said. The letter expatiated that the social duties of journalists in Nigeria include the advancement of the right to

freedom of expression, access to information, conflict transformation and peace building. “These are prerequisites for open governance and development, the fight against corruption among others which ultimately serve the public interest” According to the letter, there can be no freedom of expression and freedom of the press where journalists work under precarious situations and are exposed to poverty and fear. “Media organisations are daily being asphyxiated as a result of the economic downturn occasioned by the Covid-19 pandemic”, the letter said. But according to analysts, any possible bailout from government may result to interference, a development that may jeopardise credibility of information. A media expert simply said that “such bailout will likely shut the mouth of the owner of the media organisation”. Any possible bailout from government can amount to gap of the press. “They pay your bills, they also dictate what you do”, a media practitioner said.

Jumia, Mastercard incentivize consumers on cashless payments

umia, e-commerce platform and Mastercard havey announced a partnership to incentivize the use of cashless payments platforms as people look for safer ways to pay in the wake of the Covid-19 pandemic. “Through this initiative, consumers who purchase essential products using their Mastercard on the Jumia platform will receive up to a 10 per cent discount on their order, encouraging consumers to safely transact using digital payment channels and avoid human-to-human contact, in line with recommendations from global and regional health authorities and governments”, according to statement. “We are proud to partner with Mastercard as part of our social commitment and business responsiveness to the global pandemic. We are also happy to support our @Businessdayng

customers by offering them a strong incentive to use cashless payments and providing access to essential products with affordable prices during this challenging time. This incentive will help drive more consumers to adopt JumiaPay, the safe and digital payment method,” said Sami Louali, EVP Financial Services at Jumia in the statement The discount offers from Mastercard and Jumia will be available in five countries including Nigeria, Egypt, Kenya, Côte d’Ivoire and Ghana.

Tuesday 19 May 2020

BUSINESS DAY

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Tuesday 19 May 2020

BUSINESS DAY

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The emerging business ecosystem and 9mobile’s refocused channels strategy Jumoke Akiyode Lawanson

o remain competitive and relevant in the ever-evolving marketplace, businesses must create that suitable platform where robust insights from its partners and customers are harnessed. Effective engagement with partners and stakeholders helps to translate stakeholder needs and expectations into operational objectives while creating the strategic alignment required for business growth. A key aspect of a company’s operations that underscores the overarching imperative of effective stakeholder engagement is how propositions are channeled to reach final users. Businesses often adopt a mix of options in order to achieve optimum product penetration outcomes. This may be directly through corporate outlets or indirectly through wholesalers, retailers or franchised and non-franchised dealers. However, given the vast population density and land area of a peculiar market like Nigeria, it is easy to see why structured businesses engage a highly efficient distribution network of dealers who have immediate access to the brand, receive products directly and then service wholesalers and/or retailers. This complex challenge that businesses face with product penetration is now further complicated in most emerging markets due to the crippling structural disclocations of the ongoing Covid-19 pandemic that have forced cuts in physical and social contacts by almost 90%! Therefore, it can be said that dealers and distributors are an extension of the brand’s living or working structure because they enjoy first-hand access to information and updates concerning the brand. They also provide the critical linkage with customers that help to build loyalty and ultimately promote increased sales turnover, making it pertinent that brands constantly rethink its relationship with this vital stakeholder group for efficiency to ensure that the desired business outcomes for both parties are realized. This evidently motivated mobile operator, 9mobile, into hosting its

L-R: Muyiwa Asagba; divisional CEO digital commerce, Interswitch Limited, Phillips Oki; chief financial officer, 9mobile, Nonso Osinike; MD/CEO Lustre Communications Ltd, Stephane Beuvelet; acting managing director, 9mobile, Samson Isah; managing director Clickatell, Ore Olajide; company secretary, 9mobile, and Oluwatosin Olulana; director, sales, 9mobile, at the 9mobile Channel Partner Conference 2020 held at Radisson Blu Hotel, Lagos in March 2020.

partners and stakeholders earlier in the year to a conference tagged “Facing the future together.” A close look at the theme of the conference would reveal that its aim was to tap into the unbreakable spirit that binds 9mobile and its partners to craft and deliver a new and effective strategy for its distribution value chain. Speaking at the 9mobile Channel Partner Conference, Idorenyen Enang, the CEO at Corporate Shephards Limited, stressed the essence of effective partnership between a brand and its dealers. Idorenyen Enang said, “Collaboration is very essential, there is absolutely no way you won’t win if everyone contributes their strengths to the common goal. Win-win is about winning together. The strength of partnerships is what makes things work and guarantee enduring success. It is clear that taking the future calls for more collaboration.” Brands are increasingly realizing that it is not just enough to have channel partners, it is also important to equip them with the right tools and resources that help them become stronger and more efficient businesses, more knowledgeable about the

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brand and become top sellers. This was equally underscored at the 9mobile Channel Partner Conference by Oluwatosin Olulana, the director of sales at 9mobile, while commenting on the telco’s business outlook for 2020. He assured partners that, “there will be more focus on simpler propositions, staying true to our promise of delivering better service in terms of data quality and pricing. With the recent expansion of our 4G network, we have increased capacity, which means that we need to do more in terms of deployment. There is a huge potential that we can take advantage of, and we are very optimistic about meeting our expectations this year.” Another noteworthy point in this discourse is that brands are better off when they welcome feedback and input from partners in shaping key business decisions. Communication as we know it is a two-way street, and it is important that brands listen and get valuable feedback from their distribution networks. This valuable feedback system has been a strong part of the culture at 9mobile. In her remarks at the 2020 Chan-

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nel Partner Conference, Teniola Stuffman, the business development director of Vas2Net Technology Limited, said, “our deliberations have been very constructive and l like that the introduction was very focused. It is a step in the right direction for us and I have the confidence that with what we have heard we are expecting 2020 to be much better. There are some demands that we have made, and the brand has promised they will respond and there are some commitments from our own side as well.” “It is teamwork and if we are both collaborating well, we should be able to achieve our target by the end of the year. Sustainability is very key, and the element of focus makes it obvious that we are all on the same page. Also, the fact that all concerns have been taken to mind is very key,” she said. Another partner at the conference, Olajide Samson, the managing director of Sonite Communications Limitedsaid, “9mobile has been resilient despite all the challenges and have come out stronger with a formidable management team who are receptive to the needs of its partners. They are innovative and proactive to the aspirations of dealers and customers.

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9mobile is a company with a bright prospect.” The event highlighted why today’s brands must create opportunities for interactions with their channel partners so as to learn of their challenges first-hand and identify what support they need to be more effective. These stakeholders can be most successful when they feel valued and know that the brand appreciates that their contributions impact the overall bottomline of the business. Samson Isa, the managing director, Clickatell, restated the long history of his partnership with 9mobile as well as their supportive disposition. “It is one of the telcos that is customer-centric. They are concerned about the profitability of our partnership. We are here to strategize on our partnership, look for more opportunities for growth and align with the network’s business objectives. One of the things I appreciate about the management team of 9mobile is their honesty. 9mobile is constantly exploring better financing options to strengthen the business fundamentals, while prioritizing network improvement, pricing strategy and improved service quality. I am convinced that we are on the right track and that 9mobile will bounce back strongly and do very well in the telecommunications market.” Stephane Beuvelet, acting managing director, 9mobile, re-emphasized the rationale behind the Channel Partners Conference while highlighting the company’s resolve to foster value-driven relationships among its channel partners. “The idea behind this conference is to converge with our channel partners and dealers to create the energy and momentum that we need to grow in 2020 and beyond. We have fixed the challenges we had in the past, and now we are in the right trajectory to succeed,” he said. “We have started on the right footing with the deployment of our infrastructure and 4GLTE across the country. We have also slashed down our prices, and people have realized that 9mobile is the preferred network. We have also created this new demand that will favour our partners and sales dealers,” he said.

Tuesday 19 May 2020

BUSINESS DAY

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Ransom payment doubles cyber attack recovery cost for organisations - SophosLabs report ...As survey pegs average cost of recovery at $1.4million when ransom is paid and $730,000 with no ransom payment Jumoke Akiyode-Lawanson

ophos, a global leader in nextgeneration cybersecurity, recently announced the findings of its global survey, The State of Ransomware 2020, which reveals that paying cybercriminals to restore data encrypted during a ransomware attack is not an easy and inexpensive path to recovery. In fact, the total cost of recovery almost doubles when organizations pay a ransom. The survey polled 5,000 IT decision makers in organizations in 26 countries across six continents, including Europe, the Americas, Asia-Pacific and central Asia, the Middle East, and Africa. More than half (51 percent) of organizations had experienced a significant ransomware attack in the previous 12 months, compared to 54 percent in 2017. In Nigeria, 53 percent of the organizations surveyed mentioned a ransomware attack in the last one year. Globally, Data was encrypted in nearly three quarters (73 percent) of attacks that successfully breached an organization, while in Nigeria, it was 74 percent. The average

cost of addressing the impact of such an attack, including business downtime, lost orders, operational costs, and more, but not including the ransom, was more than $730,000. This average cost rose to $1.4 million, almost twice as much, when organizations paid the ransom. More than one quarter (27 percent) of organizations hit by ransomware admitted paying the ransom. The survey also revealed 38 percent of the organizations that were

attacked in Nigeria admitted to paying the ransom. “Organizations may feel intense pressure to pay the ransom to avoid damaging downtime. On the face of it, paying the ransom appears to be an effective way of getting data restored, but this is illusory. Sophos’ findings show that paying the ransom makes little difference to the recovery burden in terms of time and cost. This could be because it is unlikely that a single magical decryption

key is all that’s needed to recover. Often, the attackers may share several keys and using them to restore data may be a complex and timeconsuming affair,” Chester Wisniewski, principal research scientist, Sophos, said. 56 percent of the IT managers surveyed were able to recover their data from backups without paying the ransom compared to 44 percent in the Nigeria. Globally in a very small minority of cases (one percent), paying

Konga partners Frontier Technology Livestreaming to empower rural farmers across Nigeria Jumoke Akiyode-Lawanson

-commerce company, Konga has partnered with UKAid funded Frontier Technology Livestreaming to deploy the power of e-commerce in reaching rural farmers across Nigeria’s vast landscape. The partnership will see Konga – a major player in Africa’s biggest market – leverage its huge technology backbone, considerable network of branches across Nigeria, its considerable delivery capacity and ability to reach the last mile in empowering the beneficiaries to do more. The company revealed that the partnership involves implementing a pilot through the Frontier Technology Livestreaming Programme, a UKAid funded programme established in 2016 that is designed to help innovators apply frontier technologies to the biggest challenges in development. Specifically, Konga emerged as the technology

partner for the project after it came out tops in a rigorous selection process. The ecommerce giant is expected to deploy its various assets in ameliorating or trouble-shooting supply chain issues which hamper the output of rural, smallholder farmers in Nigeria. These include their access and time to market for critical agricultural inputs, as well as their pricing and the quality of these goods. Through Konga, the pilot aims to enable rural farmers to be reached more effectively, seamlessly and quicker with farming essentials such as crop seedlings, fertilizers and much more. This is expected to significantly improve the quality of grown crops, further translating to better margins and revenue for beneficiaries. In addition, these smallholder farmers can now reach consumers and markets in the metropolises or urban centres with their harvested products in record time through K-Xpress – Konga’s internallyowned, technology-driven logistics company which boasts www.businessday.ng

advanced competencies in delivery. Equally important and beyond the pilot, farmers are expected to be able to take advantage of Konga’s online marketplace to reach a bigger audience of potential consumers of their products by setting up their stores and listing their farm produce on the platform. Also, the platform will afford them a chance to structure their pricing, while leveraging Konga Pay, a Central Bank of Nigeria (CBN) licensed e-wallet to receive payments from customers. Nick Imudia, co-chief executive officer at Konga Group said; ‘‘Through this landmark partnership between Konga and Frontier Technology Livestreaming, we expect to play a central role in not only empowering but also positively changing the narrative for rural farmers across Nigeria. The world as a whole has been making progress towards improved food security and we cannot deny the crucial role that agriculture plays in the

process of overall national development.” ‘‘In fact, rural farmers are central to the achievement of the aforementioned ideals, especially in view of their indispensability in the system of things. However, these smallholder farmers are beset by a number of challenges which hamper their ability to scale. ‘‘This is where Konga and Frontier Technology Livestreaming come in, backed by DFID. Through this project, we aim to see these farmers take advantage of the power of e-commerce and technology, by extension, in boosting their contributions to the task of achieving food security in Nigeria,’’ he said.” Imudia said Konga will provide the much-needed assets – access, our marketplace platform, delivery vans, bikes and lorries, payment wallet and more – for the achievement of these objectives while Frontier Technology Livestreaming will bring essential innovation, governance and programme management expertise to bear on the project.

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the ransom did not lead to the recovery of data while in Nigeria it was in 10 percent of cases. This figure rose to five percent for public sector organizations. In fact, 13 percent of the public sector organizations surveyed never managed to restore their encrypted data, compared to six percent overall. However, contrary to popular belief, the public sector was least affected by ransomware, with just 45 percent of the organizations surveyed in this category saying they were hit by a significant attack in the previous year. At a global level, media, leisure and entertainment businesses in the private sector were most affected by ransomware, with 60 percent of respondents reporting attacks. Attackers increase pressure to pay SophosLabs researchers have published a new report, Maze Ransomware: Extorting Victims for 1 Year and Counting, which looks at the tools, techniques and procedures used by this advanced threat that combines data encryption with information theft and the threat of exposure. This approach, which Sophos researchers have also observed being adopted by

other ransomware families, like LockBit, is designed to increase pressure on the victim to pay the ransom. The new Sophos report will help security professionals better understand and anticipate the evolving behaviors of ransomware attackers and protect their organizations. “An effective backup system that enables organizations to restore encrypted data without paying the attackers is business critical, but there are other important elements to consider if a company is to be truly resilient to ransomware,” said Wisniewski. “Advanced adversaries like the operators behind the Maze ransomware don’t just encrypt files, they steal data for possible exposure or extortion purposes. We’ve recently reported on LockBit using this tactic. Some attackers also attempt to delete or otherwise sabotage backups to make it harder for victims to recover data and increase pressure on them to pay. The way to address these malicious maneuvers is to keep backups offline, and use effective, multi-layered security solutions that detect and block attacks at different stages,” he said.

Tech Explainer:

Deep learning and machine learning Jumoke Akiyode-Lawanson

eople may wonder how Google is able to translate an entire web page to a different language in a matter of seconds, or how their phone photo gallery groups images based on the location where the pictures were taken. These are all products of deep learning. Deep learning is a subset of machine learning, which in turn, is a subset of Artificial Intelligence (AI). AI is a technique that enables a machine to mimic human behaviour, while machine learning is a technique to achieve AI through algorithms (a process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer)trained with data. Deep learning is a type of machine learning @Businessdayng

inspired by the structure of the human brain. In terms of deep learning, this structure is called an artificial neural network. How is deep learning different from machine learning? With machine learning, human intervention is needed to tell the machine features needed to differentiate between two or more different items. For example, a machine developed to separate yams from potatoes has to be told the unique features of both items to enable it separate them. However, with deep learning, the features are picked out by the neural network without human intervention. That kind of independence comes at the cost of having a much higher volume of data to train a machine. Deep learning is the most efficient way to deal with unstructured data.

Tuesday 19 May, 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Use COVID-19 Holiday to Study for major exams, TRCN tell students REMI FEYISIPO, Ibadan.

tudents preparing for major examinations have been urged to use the opportunity of COVID-19 lockdown to study well. Registrar/Chief Executive, Teachers Registration Council of Nigeria (TRCN), Segun Ajiboye who gave the advice in Ibadan stated that students in Nigeria must acknowledge the present challenge to education and be ready for postCOVID season where they may have limited period for revision before taking their major examinations. Ajiboye, a Professor who featured on a radio program monitored in Ibadan said that parents must support and monitor their children to study on their own in the

Segun Ajiboye, registrar/chief executive, TRCN

absence of their teachers. “Our teachers and children are at home. students need to use this compulsory holiday to prepare well for their exams and parents must support them with the right motivation and monitoring to ensure that they are ready for their WAEC, NECO or Junior

WAEC. “. Ajiboye who stated that Nigeria must leverage on technology to redesign her educational system added that the pandemic caught the industry unawares. He disclosed that at least 62million teachers are affected by COVID-19 while about 1.7billion children globally cannot attend schools because of the pandemic. He disclosed that the TRCN was planning massive digital literacy program after COVID-19 has gone to impart new training and teaching skills in Teachers in Nigeria “We cannot be the same again after COVID-19 has gone. We need technology. We need to invest in it. The world is moving and will not wait for us. We must invest in technology to solve most of our problems.

etermined to equip public primar y school teachers with relevant skills to ensure continuous learning in the face of COVID-19 interferences to the education ecosystem, Teach For Nigeria has partnered ProFuturo to train12,000 public school teachers in Ogun, Lagos and Kaduna States. This innovative training programme that will run till 2021aims at positioning these 12,000 teachers as classroom leaders, enhancing both their pedagogical and digital skills through a very practical and structured curriculum that provides them with teaching tools and peer-to-peer support. Folawe Omikunle, chief executive officer, Teach For Nigeria, a non-profit organisation focused on expanding life opportunities for children in under-served schools in Nigeria says as the world continues

to combat the coronavirus pandemic, it is imperative for the education sector to find creative ways to ensure continuous learning. To maximise and achieve results, the training will be delivered through Teach For Nigeria fellows who will then cascade the formation delivering a quality training to public primary school teachers across the different Teach For Nigeria states of operation - Ogun, Lagos and Kaduna. Magdalena Brier, general

Folawe Omikunle, chief executive officer, Teach For Nigeria

manager, ProFuturo, a digital education programme f ou n d e d by Te l e f ó n i ca Foundation and “La Caixa” Foundation and Empieza por Educar, a non-profit organisation that works to achieve educational equity observes that Schools throughout the world have been closed, but education cannot wait. According to Brier, the future of millions of children depends on it. In this context, we must resort to the power of remote digital education, which today has more meaning than ever. “I am confident that this initiative will, in many ways, contribute to the development of the Nigerian education sector and ensure that all children, regardless of their background, receive quality education for better life outcomes in the future”, Omikunle said. Commenting further on the partnership, Brier says the company is happy to put their expertise to good use in this joint programme., add-

•As board members carry out out mid-term monitoring of schools in Benue MARK MAYAH

xecutive Chairman, Benue State Universal Basic Education Board (SUBEB) Comr. Joseph Utse , has assured that the board will continue to uplift the standard of education in Primary Schools across the state. Utse gave the assurance last at the weekend in Makurdi, while inspecting renovation work at RCM Primary School, Agbaikyor and St Catherine’s Primary School, Makurdi. He stated that the standard of education in all the primary schools across the state was

(Prof ), is to head the institution’s Health services as Director. The vice Chancellor has also approved the appointment of Shuaibu Shehu Aliyu (Dr) as Director Of Arewa House, The Centre for Research and Historical Documentation under Ahmadu Bello University Zaria, located www.businessday.ng

in Kaduna. Doko Ibrahim (Prof), is the Director, Directorate of University Advancement, While Shaibu Junaid of the department of Computer Science is the Acting Director, Iya Abubakar Institute of Information Communication Technology (IAACI) Muhammad Yakasai Fatihu

not negotiable no matter the circumstances, stressing that the Board through the State Government and UBEC would continue to uplift it in earnest. He commended the Governor for always paying the UBEC counterpart funding timely and also commended the Agbaikyor community for using the money released judiciously. Meanwhile, Deputy Director, Social Mobilization, Wilfred Gbatsorun, pointed out that the two schools visited are the Special cases of Universal Basic Education Commission (UBEC) intervention in the state under the School Based Management Committee-

School Improvement Program SBMC-SIP. Gbatsorun said that Benue was allocated two slots because of the outstanding performance of the Executive Governor, Samuel Ortom emphasizing that usually it was only one slot per state. Gbatsorun who is also the Desk Officer, School Based Management Committee (SBMC) said that St Catherine’s Primary school, Makurdi was renovated by Ortom in conjunction with UBEC.He said though, UBEC is yet to pay its second tranche of counterpart funding, the Governor had gone ahead to complete the renovation of the school.

NAPPS commend Ortom over uplifting education standard MARK MAYAH

he National Association of Proprietors of Private Schools (NAPPS), Benue state chapter has commended Gov. Samuel Ortom over his

laudable achievement in the education sector. They made the commendation on Fiday when they paid a courtesy call on the commissioner for education, Dennis Ityavyar (Prof), at the Ministry’s Headquarters in Makurdi. Earlier in his speech, the

state chairman Philip Ominyi (Dr), commended the Governor for his efforts in uplifting the quality of education in the state, while noting that education which is the live wire of a nation has been given a boost and the attention it deserves by this administration.

Osun varsity replies ASUU, says union lacks basis to tag its matriculation a scam ing all the partners must all work together to prevent the already existing educational gap from widening due to a new digital gap. Also, Teach For Nigeria has partnered with the Ogun State government to deliver class lessons through electronic platforms - TV and Radio. All students, regardless of their backgrounds are able to access these platforms to learn. This comes as part of efforts to ensure continuous learning, despite federal and state government directives to temporarily shut down schools in a bid to limit the spread of COVID-19. As we continue to observe social distancing rules and restrictions placed on movement due to COVID-19, the training will be delivered via relevant digital platforms. This will ensure that the training is not further delayed and that teachers can acquire relevant skills to ensure continuous learning and contribute to mitigate the effects on education of the closure of schools due to COVID-19.

ABU VC appoints Prof Ibrahim, others into key positions

he newly appointed Vice Chancellor, Ahmadu Bello University ( ABU) Zaria, Kabir Bala (Prof ) has appointed Yahaya Ibrahim (Prof) of the department of Quantity Surveying as the Director, Directorate of Academic Planning and Monitoring. Similarly, Mohammed Isa

Human Capital

Standard, quality Education is our priority, says SUBEB boss

Covid-19: TFN, ProFuturo train 12,000 teachers in Ogun, Lagos, Kaduna KELECHI EWUZIE

Higher

(Prof ) of the department of Veterinary Pathology is the new Dean of Students Affairs , replacing Bambale Isa (Prof), while Binta Abdulkareem (Prof ) of the department of Science Education is the new Director, Institute for Development Research and Training (IDR&T) Ahmadu Bello University Zaria.

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REMI FEYISIPO (Ibadan) & JOHN OLANIYI (Osogbo)

he management of Osun State University, Osogbo, has insisted that the virtual matriculation it organised for its students remains valid, contrary to claims by the Academic Staff Union of Universities (ASUU) that the matriculation was a scam. The university said the academic union has no basis to define its virtual matriculation as a scam, insisting that the matriculation was a success. The Osun State-owned university said all the requirements for a matriculation ceremony were met in the virtual ceremony that it conducted as 99 percent of matriculating students connected and participated in the exercise. ASUU had on Friday faulted the virtual matriculation organised by the Osun State University, alleging that Labode Popoola, the vice chancellor, was aiming to use the matriculation to get financial favour from the Federal Government. Ade Adejumo, Ibadan Zonal coordinator of ASUU, in a press release on Friday described the virtual matriculation as a charade, saying the Osun State University had succeeded in exposing the hapless students whose parents are experiencing non-payment of salaries, amputated salaries, disengagement and rightsizing due to the ongoing COVID-19 pandemic ravaging the world to exploitation by by cybercafe operators. Ibadan Zone of ASUU comprises University of Ibadan, Ladoke Akintola University, University of Ilorin, Kwara @Businessdayng

State University and Osun State University. “We suspect the motivation here is financial rather than altruistic. Is this another antic to undermine ASUU that the VC knows is currently on strike? To this, we say anyone who works at cross-purposes with our union’s patriotic struggle to improve funding of public universities is an enemy of the people,” Adejumo said in the statement. “Anyone, in the guise of being a vice-chancellor, who subverts the current struggle of the union, through organising of phoney teaching arrangement which the Nigerian public universities cannot effectively deliver, is living in self-deceit and a fool’s paradise. “But for ASUU’s historic struggles, will characters like Labode Popoola have any meaningful public university to preside over as vice-chancellors? For avoidance of doubt, this struggle will succeed like others before it to the eternal shame of characters in the mould of the vice-chancellor under reference here,” he said. But in a swift response, the management of Osun State University described the virtual matriculation, which it said was the first of its kind in the history of Nigerian university, as a success. “ASUU’s statement has no valid fact and evidence, so we consider it as baseless. All the requirements of a matriculation ceremony were met in the virtual matriculation ceremony that we conducted and we had 99 percent of the matriculating students connected and participated in the matriculating exercise,” the university said in a statement signed by Ademola Adesoji, its public relations officer.

Tuesday 19 May 2020

BUSINESS DAY

Transforming telemedicine to combat a health crisis Amwell’s founders had to rapidly expand the company to meet a surge in demand for virtual doctors HANNAH KUCHLER

do Schoenberg was travelling in China in midJanuary when he became aware that the coronavirus — as yet, unnamed — was going to become a “real problem”. The older brother of the duo that runs US telemedicine provider Amwell also saw that it was an opportunity that could transform their business — if they could expand quickly enough to meet demand. “It was clear that the need was going to ramp up dramatically,” he says. “It’s not only about treating the virus. It is very much about the fact that most of the rest of healthcare is unavailable. So a lot of chronically ill patients are afraid or unable to leave their homes.” His younger brother — and co-CEO — Roy chimes in. “The last place you want to be is in the waiting room of a hospital,” he says. The brothers, who are both doctors, have run a company together before — healthcare software maker CareKey — with Ido, 55, heading up sales and Roy, 52, creating the technology. They spent 13 years building Amwell, complaining of getting grey hairs as they struggled to convert people to telemedicine. Before the Covid-19 crisis, the tide was already turning: they served more than 2,000 hospitals and 55 insurers, which have more than 80m members. Amwell sells its platform as a subscription service to healthcare providers to put their medical professionals online. It also runs

its own service, with directly employed doctors for urgent care, mental health and other specialities. But the tidal wave of demand hit Amwell as lockdowns started in the US, and hospitals closed to anything but Covid-19 patients and other emergencies. The number of scheduled appointments shot up 30-fold and the amount of on-demand visits soared 15-fold. “February was bad. It was horrible. But March was crazy. It was really unbelievable,” Ido says. “It was a period where I don’t think anyone slept in our company for a few weeks.” The phones started ringing off the hook. Existing healthcare providers wanted to increase their capacity — and new clients were desperate to sign up and implement projects that would normally take nine months, in just four days. “These are exact numbers,” says Roy. This meant bringing thousands of doctors on to the platform. Amwell had to increase the number of doctors on their own service four- to fivefold. Many doctors who had been forced to shut up shop joined the platform. The company also needed to help 60,000 doctors from external providers join the platform. At Cleveland Clinic, one of the most prestigious US healthcare providers, just 2 per cent of their clinical staff had been using Amwell, now, suddenly, it was three-quarters. Amwell tripled the number of staff in customer service but they still needed the help of technology. Luckily, there had www.businessday.ng

been a “pet project” to create an automated system to get doctors up and running on the platform, which a team had been toying with for 18 months. They accelerated it. Then Amwell had to add other features to deal with the flood of patients who were now having to wait to be seen: video call back and text message updates of where they were in the queue. They were changing the technology so fast they got providers’ permission to update it overnight. All these changes to the technology helped doctors and patients, but the system was overloaded. “The routers were fried. They just can’t handle the load and they begin to behave in an erratic fashion,” Roy says. A normal buffer would be able to handle a 50 or 100 per cent surge, he says. “If you build a system to handle 30 times its usual load, people will just blame you for throwing money out of the window.” He called his friend Chuck Robbins, chief executive of Cisco, the networking equipment maker. “He said something along the lines of, ‘Listen, I’m going to get equipment and put it on trucks. Give me the address,’” Roy says. The Schoenberg brothers believe they could not have handled it without the help of partners who stepped up, including Optum, a healthcare company that lent them staff from its technology group, and companies Accenture, Amazon and Salesforce. “This was a very, very different world of camaraderie with the understanding that the mis-

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sion that we have in tele-health, at least for the time being, isn’t about improving efficiency and convenience of healthcare. It’s about saving lives,” Roy says. They also enjoyed camaraderie within their company, albeit at a distance. Even the brothers were separated, with Roy in Boston, where Amwell is headquartered, and Ido in a village in the north of Israel. “We’ve been interacting with our fellow colleagues and employees in the middle of the night, seven days a week, which puts you in a position to see people in pyjamas and bad hair days,” he says. The work has been hard but they are fortunate to have the funds to pay for it. The company has raised more than $500m from investors including Anthem and Allianz, both health insurers, Teva, a pharma company, and Philips, the medical device maker. Technology costs, such as hosting, rose, but they believe the growth in utilisation will more than compensate. Once the crisis abates, an initial public offering could be on the cards. Amwell meets the “litmus tests” of when to go public, Roy says, including a market that recognises the company is going to have a “critical and sustainable role”, he says. “The opportunity is definitely there.” One of the biggest stumbling blocks to the growth of telemedicine in the US has been regulation. Amwell realised this on day one in 2008, when it tried to open its service in Hawaii, only for the state medical board to warn any doctor who participated that they would be stripped of their @Businessdayng

licence. They have battled pharmacies that did not want to fill prescriptions prescribed online, health insurers who refused to reimburse for telemedicine, and traditionalist physicians who thought if you didn’t touch a stethoscope to your patient’s chest, it didn’t count. Rules were already loosening. Late last year Medicare, the government-sponsored health insurance for seniors, said it would pay for tele-health. But walls have fallen during the crisis: doctors can practise across state lines, when before they had to be licensed state by state; insurers are reimbursing at the same rates as for physical appointments; and there have been some new grants for tele-health. The Schoenberg brothers expect some of these changes to be rolled back after the pandemic, but see a bright future for telemedicine, where more and more can be done outside the doctor’s office. They hope new habits will stick. Roy turns to biblical metaphors to describe the change. For 10 years it was like “Jewish people coming out of Egypt”, he recounts, “preaching, being a missionary, trying to evangelise the notion that this can actually deliver safe and valuable care”. But now, he says, it is like the Garden of Eden. “A lot of people have taken a bite of the apple. And had the epiphany. You can’t go back,” he says. “Who in their sound mind is going to say, ‘Hey, you know even though you’re afraid. You have to physically go to the office now’. Why would you do that?”

Tuesday 19 May 2020

BUSINESS DAY

Executive education must retool for the post-pandemic world Coronavirus will have a deep impact but will it trigger a fundamental paradigm shift? ANDREW JACK

f coronavirus marks the beginning of a “new normal” for business schools, then this year’s executive education rankings are a watershed: they reflect the crystallisation of longstanding trends before the great disruption of the pandemic took hold in 2020. While it started in China, the spread of the disease underlines the extent of contemporary globalisation. Its impact was felt before Covid-19 had even been officially named: not only in disruption to domestic institutions but also among Chinese students stranded abroad and those of other nationalities taking courses in China. Within three months, infections and deaths had mounted sharply around the world, leaving even the most locally oriented training centres affected by government-imposed lockdowns, self-isolation and a desperate rush to shift in record time to teaching exclusively online. The impact of coronavirus will be profound and long lasting, and the repercussions for executive education — as for so much else — very significant. Less clear is how far it triggers an acceleration of existing trends, a partial reversion to old habits or a fundamental paradigm shift. In the short term, business schools have been rushing to cope with the practicalities of staff and student health and welfare; the rapid switch to virtual learning, research and management ; and the deferment and cancellation of training contracts. The pain has been considerable and will get worse as clients cut back on non-essential activities. The consequence of the virus and the efforts to limit its spread was a halt in face-toface contact and travel. In the medium term, the economic downturn that is now under way will be still more funda-

Students in central London in March, as the coronavirus epidemic escalated © Richard Baker/ Getty Images

mental in changing — and almost certainly reducing — demand for business education. As we point out in this report, executive education programmes risk being badly hit, although history would suggest that taught business school qualifications such as MBAs may be better protected in a prolonged period of economic restructuring and recession as people who lose their jobs or consider career changes seek to reskill. The crisis will drive extra demand for new and relevant wisdom that already sits in business schools Opportunities will emerge from the current crisis. Faculty and participants alike are seeing that engaging online can offer greater flexibility and new ways to learn. Awareness and familiarity with technologically enabled forms of communication are also helping to address concerns already long simmering over the extra amount of time, money, inconvenience and the carbon footprint involved in so much unnecessary travel. www.businessday.ng

“Zoom fatigue” from so many work meetings conducted from home over an extended period risks dampening participants’ willingness to use their laptops for executive education sessions. Yet while older students are not always comfortable with their enforced extra dose of online communication, it is more natural for Generation Z. Schools will have to rethink the ways in which they teach online, blended with classroom and client-based learning; develop new partnerships and ways of working with different institutions around the world; and explore the tradeoffs between price, duration and numbers of participants in their courses. The crisis will drive extra demand for new and relevant wisdom that already sits in business schools, and create ways for leaders to bring in fresh external experts and insights. There will probably be a renewed focus on sectors such as healthcare — already one of the world’s biggest economic

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drivers — and how best to manage it and apply business skills. That is illustrated by one student case study in this report, of a doctor in China. More broadly, there is growing appetite for topics such as supply chains, crisis management and virtual working practices. In the words of Jean-François Manzoni, head of IMD, which the FT again ranked top this year for open enrolment programmes (Iese topped the custom course table), the case for continued executive education will be based on persuading clients that providers are offering “aspirin not vitamins” — must-have rather than niceto-have offerings. In the months ahead, there will be considerable uncertainty, distractions and competing priorities. Despite the inevitable pain, post-pandemic demand for training offers a way for the best providers — those highlighted in this report — to differentiate themselves still more clearly. Editor’s note The Financial Times is making key coronavirus coverage @Businessdayng

free to read to help everyone stay informed. Find the latest here. Rankings, alongside broader data, tools and insights including our reporting on important trends, can continue in future years to play an important role in guiding prospective clients to the right institutions and helping schools themselves with useful benchmarks. But the FT is sympathetic and sensitive to the practical pressures on executive education providers. Coronavirus will affect many aspects of schools’ performance. Size, revenues, structures and client assessments will inevitably change. As we prepare for the 2021 rankings in the coming months, we are keen to hear the views of business schools — as well as past, current and prospective clients and other interested parties — on what is useful to teach; how offerings are evolving in practice; and how best to assess them. Please email us at executive@ft.com with your thoughts.

Tuesday 19 May 2020

BUSINESS DAY

INTERVIEW Pandemic viruses usually spread for about 6 to 18 months - Anjorin ABDULAZEEZ ANJORIN (PhD), molecular virologist and lecturer, Lagos State University, Ojo, is a trained Fellow on Molecular Virology from the Luxembourg Institute of Health, Grand Duchy of Luxembourg. He is a member of many international bodies including the World Society for Virology (WSV), International Society for Infectious Diseases (ISID), American Society for Microbiology (ASM), African Network for Influenza Surveillance and Epidemiology (ANISE), among others. In this interview with TELIAT SULE (BusinessDay Research Unit-BRIU), he explains the right steps taken so far by the Presidential Task Force (PTF) on COVID 19, the tendency of COVID-19 to spread for the next three months or even more, as well as other things the committee should have done better. Excerpts:

irology is a major discipline that has been on the front burner since the outbreak of coronavirus. What is this discipline all about? Virology officially began in 1892 as a discipline. It is a special discipline in microbiology that deals with the study of everything about sub-microscopic obligate intracellular entities capable of reproducing themselves in a living susceptible host cells. Virology as a discipline is special because of the unique properties of viruses, their mechanisms of survival and the processes of causing diseases. They are obligate intracellular entities because they live primarily inside any cell by coercion to survive within that cell. Viruses can also multiply, that is having progenies because they possess either DNA or RNA and never both unlike in other organisms. This makes them unique as RNA or DNA viruses. Mind you, the reproduction or survival can only be achieved in the hosts that agree to terms with the viruses. That is, susceptible, otherwise the virus will not marry such a cell and will rather quit the system. The discipline is also special because the objects in question, I mean the viruses cannot be easily grown and studied like other common agents like a bacterium or fungus that can be grown on common laboratory chemical materials. Viruses are grown or cultured in living materials like monkey or kidney cell-lines and even in bacteria, mosquitoes or human cell-lines before they can be studied. We have different disciplines with specialists e.g. viral genomics, viral pathogenesis, viral epidemiology, viral proteomics, phylogeny, etc. that branch into different areas including animal virology that studies arboviruses, i.e. arthropod or insect borne viruses like dengue or yellow fever viruses. We have human virology where deadly viruses of man are studied be it Ebola, Lassa or HIV. There is also environmental virology, plant virology and many more. Nigeria has been on the edge since February 27. What is this novel coronavirus all about? What does this Covid 19 share with past pandemics? Generally, coronaviruses (CoVs) are members of the family of coronaviridae that derived their name following common etymology from the Greek word corona, meaning crown-like appearance being their structure under electron microscope. The first CoV was isolated by Fred Beaudette in 1937. The novel coronavirus is the new baby in that family that was unknown to our immune system before now and that is why it’s R0, meaning transmission and death rates are alarming because no one has ever been immune to the virus before. The novel coronavirus now known as SARS-CoV-2 causing COVID-19 is a single stranded RNA virus that is positively sensed. That means, it can start reproducing itself directly without any conversion once it enters any host cell, making it very easy for the virus to multiply

like the laboratory of Prof. SA Omilabu that detected the index case here in the country. The virology laboratories can be best situated in the universities whose core mandates are to do serious research. It is the same way every governor must partner the Nigerian Virologists, the Nigerian Society for Microbiology and others for the same in their various research institutes and universities. We need a breakthrough in viral and other microbial surveillance for prompt detection and diagnosis, genomics, proteomics, molecular epidemiology, molecular docking for drug design and vaccine production. Any serious government must be interested in funding cutting-edge research in any of these areas that can lead to massive industrialization of its economy e.g. diagnostics and equipment manufacturing, pharmaceutical, agricultural and other industries for the advancement of the country.

Abdulazeez Anjorin(PhD), Lagos State University, Ojo.

unlike those that are negatively sensed. It belongs to the Order Nidovirales and Genus betacoronavirus unlike the others that belong to the alpha, gamma and delta genera. The novel coronavirus/SARS-CoV-2 has a pleomorphic and circular structure with a diameter of about 60-140 nm that can be easily transmitted from human-to-human by respiratory droplets from sneezing, coughing and aerosols, with symptomatic people being the major source of transmission. Also, it has a dynamic incubation period of about 7 to 14 days. Yes, the COVID-19 pandemic and past pandemics of viral origin are similar because their agents happened to be respiratory tract viruses with common transmission dynamics but the COVID-19 pandemic is nothing compared to the mother of all pandemics, the Spanish flu, which occurred about a century ago in 1918. The Spanish flu infected one third of the world population. That is, 500 million people out of the 1.5 billion world population and killed between 50-100 million of our great grandparents globally in 3 different waves. It was the worst of all pandemics. Some people believe coronavirus was made from a laboratory. What distinguishes a man-made virus from a natural virus? Where would you classify coronavirus? A man-made virus can easily be spotted by virologists and other biomedical scientists as it will never have all the evolutionary origin and phylogenetic relatedness of the known viruses. If it has some traces, it will never be as high as the features and characterisation observed in this very viwww.businessday.ng

rus where research has shown to us using one of the standard tools of evolutionary determinants for tracing the origin of any agent in the field of medical science called molecular phylogeny. In actual fact, it is not a genetically modified or laboratory made virus like some people have opined but rather a new mutant as a result of evolutionary changes. Available studies showed that the novel coronavirus has 96.2% similarity to a bat SARS-related coronavirus recently isolated in China and this discovery went well with all the comparative evidences including historical and human life-style in that part of the world. What have we done right and what could we have done better in the handling of Covid-19? Oh, what we have done right? The President should be applauded for constituting the presidential task force (PTF) with its attendant daily briefings, the different restriction orders, the NCDC expansion of our laboratory testing facilities, the recent ministerial experts’ advisory committee and a few other things. What could we have done better? The travel ban on the 13 countries considered to be of high risk for COVD-19 on the 18th of March 2020 was late. All borders ought to have been closed long before that time. The presidential task force and the ministerial nominees ought to contain at least 50% respiratory tract virologists who are experts on respiratory viruses especially coronavirus. Every state must have at least 3-5 molecular virology laboratories with trained virologists to be engaged in active disease surveillance and serious research on viruses to detect circulating viruses even before any outbreak

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Daily, the confirmed cases are rising, what do we need to do as a people to flatten the curve? We just need to be proactive, change our attitudes and improve on our strategies. I will quickly give some suggestions that we can try to flatten the curve: There is need for the federal and state governments, as a matter of urgency, to expand and establish at least 3 molecular virology research laboratories in every state in the country. The need to include experienced medical/ molecular virologists in the presidential task force and in every state COVID-19 committee to better assist and give directions on how to handle and control SARSCOV-2 in the interest of the country and every state of the federation. This is not the time to play politics but rather to allow the professional and most qualified experts when it comes to viruses and virological matters to guide the nation on what should be expected and how to tame/ handle the deadly particles. The government and Nigerians in general should expect more cases for the next 3 months as it is known with pandemic viruses that usually spread for about 6 to 18 months hence all hands must be on deck to engage more medical/ molecular virologists to lead on what is expected and how to fight the viral war. The immediate need for expert opinion, meetings and pre-index case plans in every local government of the federation for more preventive strategies since prevention they say is better than cure. The need for serious research on point of care testing kits and antiviral studies on severe acute respiratory syndrome corona and other viruses including Lassa and monkey pox that is endemic in Nigeria. These must be funded by the Nigerian government, concerned individuals and donor agencies in order to look inward for potential antiviral candidates by our professors, medical, animal, and plant virologists. Other medical microbiologists and health care practitioners.

@Businessdayng

Tuesday 19 May 2020

BUSINESS DAY

INTERVIEW ‘Our regulatory system is too weak and faintly connected with our overall economy’ GBITE ADENIJI was a senior technical adviser to the minister of state for petroleum resources between 2015 and 2018. In that role, he advised the government on policy development such as Nigeria’s National Petroleum Policy, National Gas Policy and other regulations and reforms in the petroleum sector. In this interview with STEPHEN ONYEKWELU and DIPO OLADEHINDE, ADENIJI, who currently advises investors, multilateral institutions and governments on matters in the mining, petroleum and electricity sectors, speaks on the challenges facing foreign direct investments in Nigeria’s oil and gas sector, the impact of lower excess crude account and the need to leverage on gas for economic growth. Excerpts:

ince the outbreak of the novel coronavirus that is ravaging the world, oil prices have fallen below the budget benchmark. What will be your short and long-term pieces of advice to the government? I think the horse has bolted. Let me start by saying this was a predictable problem when you are a country whose revenues are largely dependent on hydrocarbons or minerals. You stand the risk of the cyclicality of the pricing of your minerals because you are part of a global market. Many events are happening in the global economy that affects pricing, which is why you must always prepare for that day - the day always comes. In my lifetime I’ve seen shocks in 1973, 1979, 1984 and there was another shock in the ’90s. When I got into office, we were in 2015; we were at a very low oil price scenario. So this is eminently predictable. As a country, you have to prepare your buffers. The first buffer which is what sensible countries do is that they have a fund; they put money away for this kind of day. Now the question is where is our fund? Our fund is gone; we never really had one; we claim to have something but we have nothing. Norway that produces far less oil than we do has over a trillion dollars saved from oil revenues. That is what countries do to protect themselves. Secondly, we ought to have taken a closer look at the cost of our oil production; and this is one of the things we were looking at doing when I was in office. Nigeria is one of the highest cost environment as far as oil production is concerned; a lot of it artificial. Our regulatory system is too weak and doesn’t seem to be connected with our overall economy. You are in a country with a galloping population whose revenue is too sensitive to its growth and you have regulatory agencies that must keep watch to prevent revenue leaks. We need to strengthen those agencies; we have good people in those agencies but they need support. We need sector and regulatory reforms. That brings us to the petroleum industry legislation which is 20 years due. How does it take a country 20 years to reform its legislation? It’s shocking! If some of these things had been done on time, we could have been ready for this day. You mentioned the cyclicality of the oil industry and the need to build buffers for the rainy day. We have

through the entire bureaucracy, because they are a lot of mischievous people in the bureaucracy, as much as there are good people. We need to have a system that punishes people who get in the way of investors doing their business, so we can send a signal that says certain behaviour would not be accepted. Now moving specifically to the petroleum sector, until we overhaul our legislation by enacting a new one that promises a new day and a new way (which is what people are hoping to get from the petroleum industry legislation), there will still be this perception overhang on Nigeria.

Gbite Adeniji

the Excess Crude Account which is currently in the region of about $70 million. It has been said that there is no legal backing for the ECA. Without the required legal framework, what can be done to prevent a recurrence of this current situation? All it takes is political will. These people must understand that you must prepare for the rainy day and therefore craft the legislation required. They just need to wake up, sit down and agree in the interest of the people they claim to represent, and enact the legislation. How come they still haven’t wrapped their heads around the issue since 2014 to lock money away for times like this? So let’s understand what we are dealing with here. It’s just an absence of political responsibility by those elected to lead the people, at all levels. It would be wrong, to ascribe the blame to one person, as that the entire political system should take the blame for this problem. Resource owning nations must know that they must put money away for the rainy day. Otherwise, what you should also do is to broaden the economy and we can’t just keep putting lip service to this. We have industrial minerals in abundance in this country, we have crude oil and we have natural gas, these are the bedrock of any economy that could be supremely industrial. In the last couple of years, we have seen many International Oil Companies divesting from Nigeria. What do you think we can do to attract investment into the sector? Let me first say that no Internawww.businessday.ng

tional Oil Company is leaving. Nigeria is probably the most explored country on the continent as far as oil is concerned the resources are abundant both in terms of oil and in terms of gas. No IOC leaves a place like this lest its space is occupied by its competitor. At best there will be a technical hold. If they leave, it reflects in their company value. Interests are joined. We’re both sunk in this. Indeed, it is our responsibility as a host country to make sure that the environment is more attractive to investors and that’s where we are falling short. So what could be done to make this country a more attractive destination? For me it’s very clear, we need to improve the governance of our country generally. Nigeria needs to be more secure for everyone that lives in or visits the country. This apprehension of fear that we all have when we go on our roads, needs to go. Our security situation needs to improve. You’re talking to someone that had to wind down investment in mining in Zamfara as far back as seven years ago because of banditry. Zamfara is 10 times more dangerous now than it was then and this is replicated all over the country and you can see the implication. So, who would want to make any major or fresh investment in the country, or in the northern region? And that’s the part of the country that needs investment the most. So, you see security is an issue. Two, we have to develop the culture of respecting agreements as a country. You can’t go on a roadshow looking for investments, and investors believe in you and come to the country, make their investments and all of a sudden, they start hitting roadblocks

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How do we get the right people in? That is, what needs to be done to put square pegs into square holes? Everything goes back to the politics of the country because the resources are there in abundance and it is also very clear and Nigeria has probably the best human capital on the continent; not just within its shores but spread all over the world. We don’t have issues with competent people; we just have to make sure we appoint them to run our institutions, that is all I am saying. This country belongs to all of us and we should all be able to speak to those in power, to all that we elected to represent us and to run our country responsibly. If that doesn’t happen, we should expect that we would go into the third league of countries and remain there, while those with fewer endowments who use their brains will surpass us. Some of us are being called to advise other countries on this same continent; they look for Nigerians. So those that you choose not to use will go and advise other countries and over time these countries will move ahead. We need to wake up, and the answer ultimately lies with all the political leaders; the governors, legislators and executives need to sit up and do their work because people are entrusting them with their lives. Let’s talk about gas, how can we leverage on gas to support the economy? I’ll give a very short answer. There’s something akin to a business plan for the country, it’s called the National Gas Policy, which cabinet has approved; it has been gazetted. All the answers are in that document. It is the official commitment of the government of Nigeria on how it’s going to use its gas resources to pivot away from oil; to use gas to achieve significant @Businessdayng

industrialisation and to position Nigeria literally as an Eldorado. That’s a plan. The next thing goes back to my previous comment; we have to ensure that we implement faithfully and competently. If you don’t put competent people to run things, you’re not going to achieve your desired result. Behind every major investment in gas is a lot of money you have to pull. Developing a gas project is pretty more complex than oil; oil is easy but gas has many dependencies. Qatar cracked it too; Namibia is waking up to it. It really is not rocket science, but to pretend that this is not important will be very costly for the country. Nigeria is currently being given another opportunity, and this is its last opportunity by the way because gas is transition fuel. Has there ever been a time that we intentionally went looking for gas? Never, all our 204 trillion standard cubic feet of gas that is our official reserves were discovered in the process of searching for oil; it’s an amazingly blessed country. That’s the promise of this resource; it’s a very strong endowment and I’m sure we are going to find more if we deliberately go looking for it. So, it’s possible that in exploring for oil in Northern Nigeria we find gas, and I’m a proponent for hydrocarbon discovery in Northern Nigeria; from a pure security point of view. You cannot have a major part of our geographic territory so blighted and deindustrialised and expect peace; it’s not going to happen. Left to me, we should have some development agenda for Northern Nigeria, to calm tensions down, energy security is a key part of this; it’s too expensive to run anything on energy fuels in Northern Nigeria today. A key issue, therefore, is how we get gas up north in the most efficient way. Gas will always be cheaper than petroleum product and I’m one also for minimising petroleum product in our energy mix. When things get cheaper, over time you start seeing industries spring up in Northern Nigeria, you get all these idle youngsters employed and calm the tensions down. What you need is prosperity for all in a manner that doesn’t stop economic activity elsewhere, because that also will be disastrous; we have to balance things. So, if they find more gas up north, I’m all for it you see some power plants and industries come up quick and you see more people getting into the job market.

Tuesday 19 May 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Otakikpo Field: Will Schlumberger go all the way? ISAAC ANYAOGU

chlumberger’s decision to pull its $724million funding for the development in Oil Mining Leases (OMLs) 83 and 85 (the Madu/Anyala field) and its depature from the Fortuna NLNG project off Equatorial Guinea provides a basis to ask if its recent foray into Lekoil’s Otakipo field development will proceed as planned. It was just 17 months after the oil service giant had inked a tripartite agreement to be financier and technical service provider on the project, which had Nigerian Independent First E&P, operator of the asset, and state-owned NNPC as partner when it walked out. Schlumberger was involved in the Fortuna LNG project through OneLNGSM, a Schlumberger/Golar LNG joint venture partnership with which operator Ophir Energy had signed a binding Shareholders’ Agreement, to develop the 2.2 million Tonnes Per Annum Fortuna NLNG facility. OneLNGSM owned 66.2% of the $2billion project of which $1.2billion was to be debt financed. Schlumberger did say it pulled out of OneLNGSM because the Fortuna project was

unable to finalise attractive debt financing in time. Less than a month after the mighty Schlumberger withdrew from OneLNGGSM, Gabriel Lima Obiang, the the country’s Minister of Mines and Hydrocarbons (MMH), said the government could bring in some other investors to the project to replace Ophir. He referenced the expiration of the Block R licence at the end of 2018. The Minister did not renew the licence, effectively tossing out Ophir Energy’s five-year appraisal drilling, FEED studies, and three-year widely publicised effort to raise finance. Faced with the loss of its biggest development on the continent,

Ophir has since exited its entire portfolio in Africa. First E&P did not suffer the same fate as Ophir. It has struggled too, though, and scaled down the number of wells needed to drill to get to first oil by more than half. In its case the state has been more benevolent: the Madu/Anyala development has benefitted from ready cash call payments by NNPC. The Otakikpo field is operated by Green Energy International Limited (GEIL), which has the London listed LEKOIL as financial and technical partner. Although, there is no official response yet from Schlumberger on its next steps with respect to the Otakikpo fields.

However, industry sources farmiliar with the company’s operation, say that the Schlumberger’s financial exposure in the two projects: Otakikpo and Madu/Anyala are dissimilar, even though the terms are different. Whereas the Madu/Anyala project was to be executed under Schlumberger Production Management SPM, in which the company is an investor and recoups its investment on production, the deal on Otakikpo is being consummated under the company’s Asset Performance Solutions (APS) scheme, in which case Schlumberger is not putting a single dollar on the table, but using its brand to help the partners pull in financiers. “Schlumberger’s involvement in Otakikpo is a support by way of investing sweat equity and integrity”, sources say. Still, there’s something unnerving about a partner who has dropped out of two hydrocarbon field developments inside of the last two years. GEIL signed a Memorandum of Understanding (MoU) with a consortium of international financiers for a package of more than $350million, to take forward the second phase development of Otakikpo. The consortium includes an international bank based in London,

a crude oil off-taker and an EPC contractor. The Field Development Plan FDP of the project involves the drilling of seven additional wells (there are two producing wells already) and expansion of the crude processing infrastructure. The plan also includes the construction of a 1.3million barrels onshore terminal and a 17 kilometre export pipeline to connect the terminal to an offshore loading system. GEIL director of corporate affairs, Olusegun Ilori, noted that the company intends to increase production from 6,000 barrels per day (BOPD) to 20,000BOPD. Anthony Adegbulugbe, chairman GEIL has been quite enthusiastic about the work programme and vocal in the media about the financial and technical partnerships he has attracted on board of this expansion project. With COVID-19, there may be delays, the cost of debt financing may go up and the project may have to be phased, but Otakikpo expansion looks likely to go on. The one other worry is, as Schlumberger is the main subsurface service vendor, and its services come at premium cost, continual benchmarking with the rest of the industry is key. After all, this is the era of bare bone cost of production.

Nigeria may need to kill unprofitable FPSO’s in this downturn. Here’s why DIPO OLADEHINDE

ue to the impact of lower oil price, Nigeria might need to do away with some of its loss-making floating production, storage and offloading (FPSO) projects most of which analyst has forecasted will end with negative cash flow this year. Current lower oil prices due to the effect of coronavirus pandemic is causing economic headache for many FPSO operators but other challenges might also compound the problems. Nigeria has four planned and five possible FPSO projects, representing 45 percent of planned and possible projects in Africa putting it ahead of its African peers however an impact analysis report by Rystad Energy has revealed the current oil price crash will reduce free cash flow of FPSO fields, which have

produced above threequarters of their original resources at just $2.20 per barrel this year. “This is a jaw-dropping decline from 2019’s $11.10 per barrel,” Independent energy research and business intelligence company Rystad Energy said. Rystad Energy estimated that at least 40percent of the 96 assets which have produced more than 75percent of their origiwww.businessday.ng

nal resources will end 2020 with negative cash flow. Rystad Energy expects oil price recovering next year and into 2022 which will take cash flow back to 2019 levels, however, as these mature fields see production stagnate, free cash flow will quickly return to a decline, ultimately threatening the profitability of many FPSO assets. Estimated at over $23.5

billion, the FPSO projects in Africa’s biggest crude oil exporter were expected to assist the Federal Government of Nigeria to move the needle from 37 billion barrels to 40 billion barrels of oil reserves target and daily production of four million barrels per day (b/d). “A concern arising for operators is whether the profitability of producing fields will degrade to such an extent that premature-

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ly shutting down ageing fields will prove to be the most rational decision,” says Aleksander Erstad, a Rystad Energy service analyst. The report noted that fields utilizing leased FPSOs are in the worst position, with around 70percent of late producing assets estimated to have net present values below zero which may not only put operators in an uncomfortable position but also FPSO suppliers, who are faced with two possible outcomes – none of which are favourable. Current dire market conditions mean that upcoming FPSO sanctioning is at a minimum, and few opportunities remain for FPSO suppliers to find new work and redeploy their vessels. “This essentially forces suppliers to accept a dayrate reduction in order to keep their vessels working,” Rystad Energy said. The Net present val@Businessdayng

ue (NPV) which is the difference between the present value of cash inflows and the present value of cash outflows for late producing fields with leased FPSOs is currently estimated at -$2.90 per remaining barrel, while the overall figure for all FPSOs stands at $3 per remaining barrel. “A l t h o u g h p o s i t i v e overall, our analysis of the 96 FPSO fields that have already produced more than 75percent of their original resources shows that 30percent to 40 percent of those are estimated to have negative NPV,” Rystad Energy said. FPSOs range in size from 50,000 barrels tankers with capability to process 10,000 to 15,000 b/d to Very Large Crude Carriers (VLCC) size units able to process more than 200,000 b/d and store 2 million barrels (such as the Bonga FPSO off Nigeria will be able to produce 225,000 b/d).

Tuesday 19 May 2020

BUSINESS DAY

ENERGY INTELLIGENCE

How Nigeria lost position as West Africa’s refining hub duna project was started. “From 1990 – 91 Nigeria was completely self-sufficient in all products and was exporting to West Africa. Bet w e e n 1 9 9 1 a n d n ow , t h e refineries lost steam for lack of maintenance, as and when due,” Alexander Ogedegbe, former managing director, NNPC Port Harcourt & Kaduna Refineries said. “As we speak today all the refineries have been shut down, not one is producing anything today.”

STEPHEN ONYEKWELU

nce upon a time, Niger ia refine d all the petroleum products it consumed and set sight on becoming West Africa’s refining hub but this ambition was short-lived. With the novel coronavirus pandemic dislocating supply chains around the world, shutting down economies and decreasing commercial demand for energy resources such as crude oil, Nigeria has been caught out again unprepared. Ability to refine locally could have saved Nigeria so much economic exposure to external shocks at this point in time. As of April, Nigeria had up to 70 cargoes of Qua Iboe and Bonny Light, two of Nigeria’s biggest crude grades and offered to sell at discounts of more than $3 to benchmark Brent, which was lower than what Africa’s biggest oil producer sold its crude during the 2008 financial crises, a Bloomberg report said. Nigeria’s economy mirrors the movement in crude oil prices. And the prices of crude oil have been a moving target since early March falling to an 18 year low after prices fell below $30 a barrel. Some of the implications of falling, oil prices are widening of budget deficit due to a shortfall in revenue from crude oil sales. Debt servicing becomes a challenge. Shortage of foreign exchange means Nigeria may not be able to fund the import of goods and services which include petroleum products.

The three tiers of the government that depends solely on sharing from the Federal G overnment w ill be chal lenged, commercial activities in the states will reduce, many governments will be reduced to just being figureheads, purchasing power will be hampered, production in factories will contract, that means there will be job losses. If only Nigeria’s economy managers kept the doors of the refineries open and working. Africa’s most populous nation will be able to refine some of its crude oil. Local refining implies that the country will not spend its foreign exchange on the import of petroleum products. How did Nigeria get here? The first refinery was built in 1960 by Shell and British Petroleum with each owning 50 percent stake. They decided to do this because they were the main marketers of petroleum

products (downstream products) in Nigeria – petrol, kerosene, liquefied petroleum gas (LPG) before any refinery was built in Nigeria. As soon crude oil was found in commercial quantities, Shell been the largest producer joined forces with BP to build a refinery. At that time they started with 38, 000 barrels per day because that was all they needed to meet the needs of the Nigerian economy. Two years after that they increased to 60, 000 barrels per day. Shell and BP still owned the refinery, neither the Nigerian National Petroleum Corporation (NNPC) nor any local government or player was involved. Soon after, Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) and the organisation asked all member states should own at least 60 percent of all the major oil companies in the country. This was how the government stepped in,

took 60 percent and gave the oil companies 40 percent. From about 1978, the NNPC decided to increase its shareholding of the Port Harcourt refinery owned by Shell and BP (at 50% each) to 100 percent. The refiner y was nationalised essentially. Even then, petroleum imports were heavy and not meeting the required standards. This was when the Federal militar y government decided to site a new refinery in Warri. The feasibility studies that were done for Warri refinery showed that Nigeria will have to build new refineries to meet the growing demands. The demand was growing at about 16 percent per annum for petrol, 12 percent for kerosene; diesel and others were about 12 – 14 percent. Fifteen percent growth of product consumption every year as of 1975 – 76 resulted in War r i refiner y been completed in 1978. Immediately after that, the Ka-

The way forward In the past, there have been talks of bringing partners to help refurbish the refineries and run them. The petroleum refining business is capital intensive. To repair the Port Harcourt refinery today will cost at least $1 billion, Ogedegbe said. If a company forms a partnership with the government or NNPC and brings in $1 billion, or even half a billion dollars, they will want equity. Equity means to want control of how the place is run. “Nobody will be touching those refineries without equity control,” the former Port Harcourt & Kaduna Refineries MD said. This means the government needs to sell some shares. This is privatisation where 80 percent of equity belongs to a private party. Even if the government does not bring its contribution, the refinery will run, such as the Nigeria Liquefied Natural Gas (NLNG) Limited. This simply means the government gets no dividend for not contributing. It is also important that the right private investors get it.

Remove bottlenecks stifling gas, power sectors to drive private investment, expert tells FG JOSEPHINE OKOJIE

hukwueloka Umeh, CEO, Century Power Generation Limited has called on the Federal Government to remove all bottlenecks stifling the gas and power sector to drive private investments and economic growth in the country. According to him, the government can only successfully and effectively diversify its economy away from crude oil to agriculture and manufacturing when it can adequately provide its power needs for industrialisation and growth. Umeh said that it is still unthinkable that despite the fact that Nigeria has the world’s ninth largest gas reserves, it still grapples with power generation and distribution issues in spite

of millions of dollars spent on foreign experts, countless committees and public-private stakeholder meetings, among others. He said investors are not ploughing the much-needed resources into gas and power projects for several reasons, including constantly changing regulations, difficulty in enforcing agreements, ease of doing business, and unrealistic tariffs. “The Federal Government needs to relax its regulations enough to allow a real gas and power sector to come into existence and actually grow in a measurable form, driven by the private sector in partnership with the government,” he said during an interactive webinar recently with journalists. “It is time to do things differently. We should stop the www.businessday.ng

endless committee meetings, conferences and engagements,” he added. He urged the government to pick a set of regulations, such as the ones that birthed the only project-financed power plant in the country -Azura power, respect contracts and the rule of law to give local and foreign investors confidence to invest. He says that market forces and competition should be allowed to drive gas and power tariffs rather than allowing the prices to be set by a regulator. Umeh argued that government’s role should be limited to providing appropriate regulations that will catalyze private entities to drive the much needed diversification in the country. He cited the example of sev-

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eral private estates in Lagos where steady, uninterrupted power is being supplied to as a result of the cost reflective tariffs that the residents pay, which is far less than what they would have paid to operate fuel or diesel generators with the related health and safety hazards they come with. He stated that such model can be replicated on a larger scale across the country if the companies within the entire gas and power value chain are allowed to work under relaxed regulations as well as charge cost-reflective tariffs. Speaking further on the issue, Umeh praised the government efforts so far to deregulate the power sector, but urged them to do more and do it with more urgency to help stem the @Businessdayng

alarming growth in unemployment rate in the country. Umeh argued that once the power industry is working and adequate power supply is guaranteed, investors will begin to see the country as an investment destination. “We must however understand that the privatization of power does not guarantee immediate availability of power because it takes at least three years to build a power plant from ground breaking to actual generation,” he said “Private companies should be encouraged and incentivized to build power plants as well as strengthen transmission and distribution networks knowing that their investments will eventually be recovered through cost reflective tariffs,” he added.

Tuesday 19 May 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Wall Street opens sharply higher on vaccine and economic hopes Investor sentiment boosted by positive early stage results from US biotech company Moderna HARRY DEMPSEY, PHILIP GEORGIADIS, PHILIP STAFFORD AND HUDSON LOCKETT

lobal stocks surged on Monday as investors took heart that the gradual easing of lockdowns in Europe would stimulate global economic growth, while also drawing encouragement from a US trial for a Covid-19 vaccine. Trader optimism was underpinned by comments from Federal Reserve chairman Jay Powell over the weekend that the central bank had more in reserve to support the US economy if required. Hopes of rising economic demand also pushed the price of US crude oil to its highest level in two months, reflected in a Monday morning tweet from the US president: “Oil (energy) is back!!!!”. Wall Street made strong gains in early trading, with the S&P 500 climbing almost 2.5 per cent to approach its highest level since early March. The Dow Jones Industrial Average rose almost 3 per cent, while the tech-heavy Nasdaq Composite jumped 1.8 per cent. “With low government yields everywhere, investors can even justify some of the steep price-toearnings multiples [on stocks] that have raised so many eyebrows,” said Christopher Smart, head of the Barings Investment Institute. “Even if some markets look overly optimistic about the grim recovery ahead, next quarter will likely be better than this quarter, and next year will likely be better

Expectations for an economic rebound have helped stock markets rise sharply since their lows in late March © Corbis via Getty Images

than this year,” he said. Investor sentiment was also boosted after Boston-based biotech company Moderna said its potential coronavirus vaccine had delivered positive results in early small-scale human trials. Expectations for an economic rebound from the pandemic, coupled with strong central bank support, have helped drive recent sharp rises in equity markets. The S&P 500 is up more than 25 per cent since hitting lows in late March. European shares gained on optimism that a gradual easing of the lockdowns across the region had not yet caused a significant fresh outbreak of infections. London’s FTSE 100 rose 3.1 per cent and the continent-wide Stoxx

Europe 600 climbing 3.6 per cent. Frankfurt’s Dax Xetra soared 4.1 per cent after the German central bank declared “a recovery is under way” in Europe’s largest economy. The Bundesbank activity index, which measures economic activity based on real-time indicators such as toll road traffic and electricity usage, stood at minus 4.6 per cent for April — a level that points to a shallower recession than many economists had forecast. “Although measures of services activity remain depressed across Europe, we have started to see tentative improvement in high-frequency activity indicators in countries that have already lifted restrictions,” said Sven Jari

Stehn, an economist at Goldman Sachs. Investor confidence was bolstered by remarks from Jay Powell, the Federal Reserve chair, on the 60 Minutes programme, that the central bank “wasn’t out of ammunition by a long shot” to support the economy at a time when states loosen their restrictions on movement and social contact. However, in the interview on Sunday, Mr Powell also warned that a full US economic recovery might take until the end of next year and require the development of a Covid-19 vaccine. “It does feel like we’re in the middle of a phoney war at the moment with all of us waiting to see how efficiently the various

economies are able to reopen given all the social distancing that will be required,” said Jim Reid, strategist at Deutsche Bank. Futures on West Texas Intermediate, the US crude benchmark, rose more than 10 per cent to $32.41 a barrel on Monday as oil demand showed signs of picking up and supply cuts led by Opec began to take effect. It was the first time the contract had risen above $30 since mid-March. A month ago, US crude prices collapsed into negative territory for the first time as a lack of storage capacity forced producers to pay buyers to take barrels off their hands. Fears of a similar price collapse ahead of the expiry this week of the US crude futures contract for delivery next month appear to have subsided. “The relative improvement in sentiment toward crude and easing concerns over whether storage was reaching tank tops should prevent a repeat of last month’s hysteria,” said Edward Bell, commodity analyst at Emirates NBD. Brent crude, the international benchmark, rose 7 per cent to $34.76. In Asia, stocks edged higher, with Japan’s benchmark Topix rising 0.4 per cent despite data confirming the country slipped into recession in the first quarter. Hong Kong’s Hang Seng index gained 0.6 per cent while China’s CSI 300 index rose 0.3 per cent. Gold prices climbed to a seven-and-a-half-year high, before gains were reduced to 0.3 per cent at $1,745 per troy ounce.

Huawei says new US sanctions put its survival at stake Chinese telecoms company warns it will find it hard to maintain networks around the world KATHRIN HILLE

uawei has warned that its survival is at stake following the US government’s latest efforts to cut the Chinese company off from international semiconductor supplies. In its first official reaction to last Friday’s announcement by the Department of Commerce of the planned new restrictions, Huawei called Washington’s decision “arbitrary and pernicious”. While the company said it was too early to define the consequences of the US’s planned stricter export controls for its business, it indicated that Washington’s move would deal a heavy blow. “We will now work hard to figure out how to survive,” said Guo Ping, rotating chairman, at Huawei’s annual analyst conference. “Survival is the keyword for us now.” The US government, which

Huawei rotating chairman Guo Ping speaks at the company’s headquarters in Shenzhen on Monday © AFP via Getty Images

believes that Huawei is helping the Chinese government conduct cyber-espionage and technology theft, put Huawei on an export control list a year ago, a move aimed at curbing the company’s access to US-made and designed www.businessday.ng

semiconductors needed for products including telecoms network gear and smartphones. But existing US export control rules contain enough loopholes for such supplies to continue. One key avenue has been through sales

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of chipsets manufactured outside the US, first and foremost by Taiwan Semiconductor Manufacturing (TSMC), the world’s largest contract chipmaker. Washington now intends to amend the rules in a way that any foreign chip manufacturer aiming to sell semiconductors to Huawei using US-made equipment will have to apply for an extra licence — which industry sources expect to be denied. The Department of Commerce has said it will “narrowly and strategically target Huawei’s acquisition of semiconductors”. Huawei missed its original revenue target for last year by $12bn due to restrictions resulting from last May’s listing and reported revenues of $123bn for 2019. But the company argued that the US’s latest move would have a significantly bigger impact. “This new rule will impact the @Businessdayng

expansion, maintenance and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries,” it said in a statement. “To attack a leading company from another country, the US government has intentionally turned its back on the interests of Huawei’s customers and consumers. This goes against the US government’s claim that it is motivated by network security.” It also claimed the US’s campaign against Huawei would damage the global semiconductor industry. Earlier on Monday, Richard Yu, head of Huawei’s consumer electronics unit, accused the US of fighting to defend its “technology hegemony”. “The so-called cyber security reasons are merely an excuse,” he wrote on WeChat.

Tuesday 19 May 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Bundesbank sees early signs of recovery in German economy Central bank expects easing of lockdown to boost activity in Europe’s largest economy MARTIN ARNOLD

ermany’s central bank has detected signs that “a recovery is under way” in the countr y’s economy even after a further sharp contraction in April. The Bundesbank said a new real-time indicator it has developed suggested that Europe’s largest economy slumped 4.6 per cent in April with activity continuing to remain subdued in both the domestic-focused services sector and the more export-orientated manufacturing industry. But it said this was partly offset by “comparatively robust” activity in Germany’s construction industry, which managed to keep many building sites operating despite the coronavirus lockdown. It added: “There are also positive impulses from government activities,” after German authorities announced €1.8tn of fiscal measures in response to the pandemic, including loan guarantees, business support, healthcare spending and tax deferrals. The central bank has developed a weekly activity index to measure how the economy is

People sitting outside closed restaurants in Munich. The central bank said consumer spending had been ‘particularly affected’ by the measures taken to curb the pandemic © AP

doing based on various realtime indicators, such as toll road traffic, electricity usage, air pollution, flights, Google searches, employment and cash circulation. The Bundesbank said while restrictions on households and businesses were steadily being eased “social and economic life in Germany is still very far from what was previously considered normal”. Consumer spending had been “particularly affected” by the measures taken to curb the

pandemic and it predicted this was unlikely to rebound quickly even after the restrictions were eased. But it added: “There is currently much to suggest that overall economic developments will move up again in the course of the second quarter as a result of the easing measures and a recovery is under way.” Germany’s chancellor Angela Merkel and French president Emmanuel Macron were on Monday afternoon due to discuss a planned European

recovery fund to help the region to come out of its worst postwar recession. The Bundesbank said its realtime index fell to minus 2.2 in the final week of March, when the country’s full coronavirus lockdown took effect, implying a 1.9 per cent decline in the economy in the first quarter. The preliminary estimate of German gross domestic product released on Friday, showed a fall of 2.2 per cent in the first quarter — the biggest drop for 11 years but far less than other

large eurozone economies, such as France, Spain and Italy, which have had stricter lockdowns. For April, the Bundesbank index stood at minus 4.6 per cent, which the central bank said indicated there had been a “further sharp fall” in the period up to mid-May. Yet that still points to a shallower recession than many economists expect — for instance Deutsche Bank recently forecast a 14 per cent decline in German GDP in the second quarter. Germany’s federal statistics agency said on Friday that the economic downturn in the country accelerated in the second quarter, pointing to the 11 per cent drop in the volume of heavy-goods traffic on German toll roads in April and the 15.6 per cent drop in new manufacturing orders in March. The Bundesbank said there was still “a very high level of uncertainty about future economic developments”. It added: “This depends, among other things, on the further course of the global infection process and the containment measures taken, but also on changes in consumer and investment behaviour that are influenced by this.”

Pound sinks to bottom of G10 league table as Brexit fears return Growing discussion of negative interest rates is hurting sterling EVA SZALAY

he pound is the worst-performing major currency this month, as renewed concerns about a no-deal Brexit combine with talk of negative interest rates to push the currency to its weakest since March’s dramatic sell-off. Sterling has lost nearly 4 per cent of its value against the dollar in May — putting it at the bottom of the G10 performance table — and has slipped nearly 3 per cent against the euro. The pound hit an overnight low at $1.2073 before regaining some ground to trade at $1.2139 by Monday lunchtime in London. It is the third-weakest major currency this year, with only the New Zealand dollar and Norwegian krone faring worse. The pound came under renewed selling pressure at the end of last week after the third round of talks between the EU and UK on their future relationship stalled. Investors have become increasingly concerned about the lack of progress. The UK, which is in a standstill transition period until

the end of the year, has previously ruled out an extension and said it would walk away from negotiations if there were no clear outline for an agreement by June. “The last thing the UK and eurozone economies need right now is another negative shock from a no-deal Brexit,” said Lee Hardman, a currency analyst at MUFG www.businessday.ng

Bank in London. Vasileios Gkionakis, head of FX Strategy at Lombard Odier, said the deteriorating state of the UK’s finances and the coronavirusinduced decline in economic activity call for an urgent deal with the EU. Without a deal, he said, the pound could drop to parity with the euro and to historic lows

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against the dollar. Barclays analysts said the pound could “comfortably” trade below $1.20 by the end of June, due to Brexit risks and the weakening economy. The Bank of England has predicted the crisis could push the UK into its worst recession for 300 years. Discussion of negative interest @Businessdayng

rates has added to the downward pressure. Andy Haldane, the Bank of England’s chief economist, said in an interview with the Sunday Telegraph that the central bank was “looking at” the option of cutting its key rate into negative territory. The BoE has already reduced interest rates to their lowest level on record at 0.1 per cent and launched a bond-buying programme to lessen the economic impact of the pandemic. “It would be a surprise if the BoE introduced negative rates, [but] it would increase downside risks to our outlook for the pound,” said Mr Hardman, who nevertheless expects the pound to trade at about $1.29 by the end of the year. Dominic Bunning, a senior currency strategist at HSBC in London, cut his forecast on the pound because of the possibility of a no-deal Brexit and the UK’s rising level of debt-to-gross domestic product, which the bank estimates could move above 100 per cent. Mr Bunning expects the pound to trade at $1.20 by the end of the year, down from the $1.35 exchange rate he had previously forecast.

Tuesday 19 May 2020

BUSINESS DAY

news

MTN subscribers send over one billion free text messages in April Jumoke Akiyode-Lawanson

TN’s Q1 financial results show that over one billion free text messages were sent by customers within the first four weeks of introducing its free SMS package in response to the Covid-19 pandemic. The offer allows MTN Nigeria subscribers across the country to send 10 free SMSs daily for 30 days to all networks. MTN Nigeria and Airtel decided it was best to offer free SMSs to their subscribers as a way to ease the income strain on Nigerians during lockdown. While MTN was clear on the number of 10 free SMS messages per day for 30 days, Airtel’s offer came with the caveat that “a Fair Usage policy applies to prevent network congestion at this time when network stability is paramount to keeping all of us connected.”

Online critics posited that MTN and Airtel should have instead offered reduced or free data tariffs. However, five weeks after the introduction of the company’s Y’ello Hope package, it appears that the free-SMS route may have been the way to go as reports from MTN’s Q1 financial results show that over one billion free text messages were sent by MTN’s 70 million customers within the first four weeks of introducing the offer. At the standard rate of N4 per SMS, it means that MTN has incurred an estimated N4 billion on text messages between March 30 and the first week in May. MTN says that the premise to offer SMS incentives was based on statistics that show that over 30 percent of its customers are not data subscribers and are among the most vulnerable Nigerians being severely impacted by the virus outbreak.

AXA Mansard offers free insurance cover to motor insurance customers

XA Mansard Insurance plc, a member of AXA, a global leader in insurance and asset management, has announced its offer of a two-week free insurance cover on all renewals of its comprehensive motor insurance policy. This two-week free cover offered by the company commenced May 1, 2020 and will run till December 31, 2020. In a statement issued by the company, it was stated that all AXA Mansard motor insurance customers will receive a two-week free insurance cover upon the next renewal of their policy. That is, upon renewal, customers will pay for 11.5 months while cover will be given for 12 months. The prorated premium for the two weeks is to be deducted from the amount to be paid as premium, the company said. Speaking about this initiative, Kunle Ahmed, CEO at AXA Mansard Insurance, said, “We understand that the COVID-19 pandemic has taken a toll on many Nigerians beyond just their physical or mental wellbeing. To provide support to our customers during this unprec-

edented time, the company has decided to subsidize the premium payable by our motor insurance customers, whilst they get the full benefits of the cover purchased.” AXA Mansard offers a variety of motor insurance options that fit your needs as a woman, man or parent. With its flexible payment option, first responder service and 24/7 contact centre support, The First Responder Service is an initiative that provides immediate assistance to customers on AXA Mansard’s retail motor insurance plan right at the scene of an accident. AXA Mansard gives you rest of mind as you drive your valuable cars. Ahmed said by saying that “we implore all our customers to seize this opportunity to enjoy the benefits of total coverage whilst saving some money to attend to other personal needs. As we continue to fight this global pandemic, you can continue to count on the dedication and support of the AXA Mansard team to ensure we provide valuable assistance during these trying times and beyond.”

Muhammad Bello (l), minister of the Federal Capital Territory, presents the site location map of the land allotted for the NNPC health facility to Mele Kyari, group managing director, NNPC, during the minister’s visit to the NNPC Towers in Abuja.

FDC expects 8% slump in Nigeria’s GDP for next 6 months ENDURANCE OKAFOR

… unemployment to jump to 35%

n a situation where the coronavirus outbreak in Nigeria becomes more severe and business activities are halted, the economy could contract by as much as 8 percent in the third quarter (Q3) of 2020, according to estimates by Nigerian research and advisory firm, Financial Derivatives Company (FDC). That would be a growth decline of about 11 percentage points from the country’s 2.27 percent GDP growth in 2019. “If the worst happens, it will get to -8% with economic disruption becoming unbearable,” Bismarck Rewane, CEO, FDC, said. An economic contraction of that magnitude would mean that Nigeria’s GDP will see a reduction of approximately $180 billion. That could rip off the country’s current title as the largest economy in Africa, con-

sidering as its GDP would drop to $295 billion from the $475 billion reported in 2019. “Current and forward indicators confirm that 2020-21 will be the toughest year in decades,” Rewane said, adding that Nigeria’s journey from a dismal performance to full recovery will be painful and depend on its ability to maintain economic discipline in the adoption and management of a flexible exchange rate that is competitive relative to those of its trading partners. While FDC expects Africa’s real GDP growth to slide into negative territory (-1.6%) in 2020, its recent report: ‘Make Hay While the Sun has Set’ expects oil-dependent economies like Nigeria and Angola to be badly hit by the twin shocks of COVID-19 and dwindling oil prices. Out of about 4.8 million Ni-

Josephine Okojie

… as Axiom set to launch challenge

gerians who entered the country’s labour market between 2015 and 2018, about 635,000 jobs were created within the period, indicating only a job was available for every eight people who joined Nigeria’s economically active workforce. A higher unemployment level is likely to accompany an economic recession Rewane said, projecting that Nigeria’s “unemployment will jump to 35 percent in 2020.” According to FDC, Q1 2020 GDP would be a sordid preview of a limping economy, and in Q2 and Q3, Nigeria’s GDP could contract by -3.5% to -8% depending on the severity of the pandemic. Nigeria on Sunday confirmed 338 new cases of COVID-19, as the number of infected people pushed to 5,959. This came two weeks after the country began a gradual easing of a

lockdown imposed to control the spread of the virus. With the contraction rate projected by the Lagos-based research and advisory firm, the highest crude oil-exporting nation in Africa will be witnessing its worst growth in decades. Nigeria reported its largest contraction in 25 years in 2016 when it reported a growth of -1.62 percent Meanwhile, the global consulting firm, McKinsey & Company had projected in April that in scenarios in which the outbreak of coronavirus is not contained in Nigeria’s, its GDP growth rate could fall to -8.8 percent for 2020. The crash in the price of crude oil and dwindling revenues as a result of the impact of the coronavirus pandemic on the global economy is a risk that may fuel a contraction for Nigeria in 2020.

Zenith General Insurance’s PBT tax Experts call for collaboration, partnership to tackle educational issues post-COVID-19 rises 16% to N3.67bn BALA AUGIE

enith General Insurance Limited has released its full-year financial statements for the year ended December 31, 2019. A review of the results shows positive improvements on a year-on-year basis with profit before tax (PBT) rising by 16 percent from N3.16 billion to N3.67 billion, while profit after tax (PAT) rose by 10 percent up from N2.79 billion to N3.06 billion. The company also maintained a robust balance sheet closing the year with total assets of N40.1 billion and a shareholders’ fund of N25.9 billion. Commenting on the financial results, Kehinde Borisade, managing director/CEO, said, “We are reaffirming our mission statement that Zenith General Insurance Ltd exists to en-

sure peace of mind and also create value to people in a world of uncertainties. “This is evident in our strong financial performance showing improvement across the board through increased premium income, underwriting profits and investment income despite the economic headwinds witnessed in various sectors of the economy. We also ensured prompt settlement of claims with total claims payment of N3.8 billion for the year and an average settlement turnaround time of three days.” Gross premium grew by 17 percent year-on-year from N13.7 billion to N16.1 billion, while there was a 46 percent growth in underwriting profit from N2.77 billion to N4.06 billion. The company made substantial gains from reduced claim expenses and healthy growth in gross written premiums. www.businessday.ng

quitable collaborations and partnerships are vital in ensuring that Africa tackles its educational challenges post-COVID-19, experts say. The experts who at the concluding part of a four series webinar with the theme ‘Disruption and Innovation: Reshaping Education in Africa Post-COVID-19’ organised by Axiom Learning Solutions, urge African governments, schools and other critical stakeholders in the education sector to collaborate in improving learning on the continent while providing solutions to key issues. They state that the closure of schools and the disruption of teaching due to the pandemic is a drawback to the educational sector on the continent. They note that it is imperative for policymakers, stakeholders and other actors in the sector to seek collaboration to

deliver blended learning opportunities for children and students. “In everything we do, we need to collaborate to achieve results. There is a bit of disconnect in the educational sector which can be resolved effectively through partnerships,” Ani Charles Bassey-Eyo, cofounder, Axiom Learning Solutions, says. “We need to come together to ensure that the educational sector becomes streamline,” Bassey-Eyo states. He advises African leaders to adopt educational technologies that do not create a divide among students, noting that radio remains one of the most effective learning tools that can effectively reach students in remote areas. He urges educational businesses to imbibe the spirit of collaborations as it helps them reduce their resource constraints.

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He states that Axiom Learning Solutions is set to launch a post-COVID-19 educational challenge as part of its effort to drive partnerships and collaborations among stakeholders in the sector. The challenge involves four stages, which include - collaborative design thinking, competition, entry evaluation, and selection, he notes, and calls on individuals to visit the organisation’s website to make their contributions on eligibility and criteria. Also speaking, Frank Lukyamuzi, executive secretary, Wakiso Educational Consult, Kampala – Uganda, says partnership will enhance access to assistive devices for children with special needs and ICT tools as well as management resources. Lukyamuzi says also that collaborations will help support research on how best to manage the impact of the pan@Businessdayng

demic on the sector. On his perspective of the profession post the global pandemic, he urges leaders on the continent to provide adequate ICT infrastructures, while calling on teachers to re-learn and un-learn. Speaking on why partnerships are important, Danny Gilliland, head of growth at Hundred, says partnership helps in aligning similar organisations to accomplish more together. He says partnerships also give growing organisations the ability to increase their effectiveness while enabling their easier spread to new contexts and geographies. On how funders are reacting to the sector, Gilliland states that it is a mixed reaction, saying, “Education is always third in terms of investing after the economy and health, but there are some funders that are very proactive in investing in education to address the challenges.”

Tuesday 19 May 2020

BUSINESS DAY

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Tuesday 19 May 2020

BUSINESS DAY

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Tuesday 19 May 2020

BUSINESS DAY

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SystemSpecs announces Children’s Day essay competition, calls for entries SEGUN ADAMS

ystemSpecs, provider of innovative technology solutions – Remita, Paylink and HumanManager, has announced a call for participation in its 2020 Children’s Day Essay Writing Competition open only to children from age 9 to 16 who school and live in Nigeria. Themed “Nigeria of my Dream: Making it Happen with Technology” and in junior and senior categories, participants are to submit entries by email to participate@systemspecs. com.ng on or before noon of May 26, 2020. With only one entry allowed per participant, the email should also bear an attachment of participants’ passport photograph. Entries into the junior category are for children between ages 9 and 12 and should not exceed 1,000 words, while entries into the senior category

are for children between ages 13 and 16, and with a maximum of 1,500 words. Expected to be typed in Microsoft Word, double spaced with a font size of 12, entries must be participants’ original ideas – not their parents’, guardian’s or any other influence. Each entry should include a cover page that bears participants’ full name, date of birth, contact address, submission category, school name and parent’s/guardian’s phone number. Cover page details will not be included in essay’s total word count. “The SystemSpecs Children’s Day Essay Competition is part of our broader corporate social responsibility goal of advancing capacity development for Nigerians across various levels,” said Akor Akpenyi, SystemSpecs’ CSR programme administrator. “We believe that it is important to stir up the passion of younger Nigerians to take advantage of the abun-

dant technology opportunities of the future.” Also commenting, ’Deremi Atanda, executive director at SystemSpecs, said the firm had had a first-hand experience of the transformative impact of technology, especially based on its involvement in many national, state and private initiatives where its software solutions had been deployed over the years. “We believe the right use of technology provides an excellent opportunity for Nigeria to thrive. Hence our decision to actively encourage the fertilisation of bright ideas from young Nigerians,” he said C o m i n g f ro m Sy s t e m Specs, a 28-year-old household name on the fintech and human capital technology scene in Africa, the 2020 edition of the Children’s Day Essay Competition would birth many bright ideas for the future directly from young innovators.

NAFDAC DG urges MSMEs to interact directly with agency on product registration MICHAEL ANI

ational Agency for Food and Drugs Administration and Control (NAFDAC) has urged micro, small and medium scale enterprises (MSMEs) to deal with the agency directly in getting their products registered, as opposed to going through various consultants and middlemen. Director-general of the agency, Mojisola Adeyeye, who noted this, explained that consultants and middlemen had been the reason for the increasing problems and high cost of registration faced by the MSMEs in easily getting their products registered. “Part of the problem we have had in the past regarding high registration costs is due to interactions of MSMEs with consultants hence, we urge them to deal directly with the agency,” Adeyeye said in an interview

on Sunrise Daily, a Channel TV breakfast show in Lagos. NAFDAC over the weekend launched a palliative for MSMEs, reducing registration cost as a way of easing the pains of the coronavirus on small businesses, known to be the engine of growth of the economy. The agency slashed as much as 80 percent in tariffs from a previous 50 percent discount, for the registration of micro and small enterprises products for a period of three months, as well as zero tariffs for the first 200 micro and small companies to register their products on the launch day. It also gave waivers on administrative charges for late renewal of expired licenses for products of micro and small businesses. With the new reduction, the average cost of tariff is now around N7,000 as opposed to the average cost of N21,000 two years ago, Adeyeye said. The main reason for this, she

explained, was to give the needed form of support to small businesses which would in turn stimulate job creation in the economy. She noted that businesses can now get products registered and inspected on the e-registration platform of the agency. According to her, the agency has moved to strengthening the communication link between businesses and agencies by setting up virtual assistants to communicate with MSMEs who uses the platform. “We have been certified by International Organizations for Standardization, making us an agency that is customer focused,” she said. Meanwhile, the food and drugs agency boss, says NAFDAC has set up a committee made up of about 40 researchers and herbalists, in a move that is aimed at supporting both the production of orthodox and home grown vaccines for the coronavirus pandemic.

FX turnover rises by 117.14% as naira stabilises at black market Hope Moses-Ashike

he foreign exchange daily turnover at the Investors and Exporters (I&E) forex window rose by 117.14 percent to $40.28 million on Monday compared with $18.55 million on Friday. In the market, maira lost N0.33k as the dollar was quoted at N386.33k on Monday as against N386 closed on Friday last week, data from FMDQ indicated. Earlier Monday morning, the market opened with an indicative rate of N387.10k

per dollar, the same rate as on Friday. The foreign exchange market opened the week with the naira indicating stability across various market segments. Nigeria’s currency maintained stability as traders are selling the dollar at N455, the same as on Friday at the black market. At the retail Bureau, naira closed unchanged at N456.00 per dollar the same as on Friday. The official rate at the Central Bank of Nigeria (CBN) window also was stable at N361.00k per dollar.

Nasarawa offers Lafia Cargo Airport operational base for NAF Special Forces ... set to wipe out bad elements in North-Central states Solomon Attah, Lafia

s the special forces of the Nigerian Air Force (NAF ) 22 Quick Response Command commences operation, the emerging cases of banditry, cattle rustlings and farmers and herders clashes being witnessed in the states of North-Central zone would soon be history. President Muhammadu Buhari, who approved the establishment of the NAF special force to tackle security challenges in the affected states, arrived Lafia, the capital of Nasarawa State, with a commitment to restore peace and flush out all criminal elements in the zone. To this end, the Nasarawa State government has offered the Lafia Cargo Airport as an operational base for the NAF 22 Quick Response Special Forces. The deployed NAF forces are to work in hand with the ‘Operation Whirl Stroke, with the view to boost security in the state as well as the entire North Central geopolitical zone. The state governor, Abdullahi Sule, who was at the air-

port to receive the troops, commended President Buhari for the prompt attention to tackle the security situation in not only the state but the North Central zone. Governor Sule thanked the Federal Government for the swift response, and assured that, the state would support the troops to ensure that all forms of crimes were eliminated from the state. The Chief of the Air Staff (CAS), Air Marshal Sadique Abubakar, urged them to be professional in their conducts and to ensure that the zone was free from security troubles. “I urge you to be professional and uphold the core NAF values of integrity, service before self and excellence in all you do,” he said. Abubakar, who was represented by AVM Charles Ohwo, the Air Officer Commanding Special Operations Command, told the Special Forces that they were deployed to complement and add value to the already existing security apparatus on ground. “You must cooperate with Operation Whirl Stroke. Your deployment not only for Lafia, but for the North -Central,” he said. www.businessday.ng

L-R: Seyi Makinde, governor,Oyo State; Folarin Ayoola, son of deceased; Olukemi Ayoola, widow; son, Beel’loluwawi Ayoola; Olubamiwo Adeosun, secretary to the state government, and Ololade Agboola, head of service, during a valedictory executive council session for the late commissioner, Kehinde Ayoola, held at Government House, Ibadan, yesterday.

Oil price hits $35 on hopes of demand rebounding, output cuts paying off DIPO OLADEHINDE

rent crude rose 2.65 percent to $35.77 a barrel on Monday evening, reflecting production output cuts and traders responding to signs demand was recovering with parts of Europe and North America beginning to ease some virus-related restrictions. The price of West Texas Intermediate crude oil jumped to a two-month high, trading 7.1 percent higher at $31.80 a barrel while Brent, which is also the benchmark of Nigeria’s crude oil, rose to its highest levels of $35.77 since March when Russia and Saudi Arabia waged a bitter oil-price war. “Clearly, the fundamentals in the market are improving, but we continue to believe that the market is rallying too much too soon, with the risk that further strength will only prolong the

supply and demand imbalance,” ING strategists Warren Patterson, and Wenyu Yao, said in a note on Monday. Naeem Aslam, a chief market analyst at Avatrade, said it was turning out to be a “remarkable day” for both WTI and Brent. A month ago, prices collapsed into negative territory for the first time as a lack of storage capacity forced producers to pay buyers to take product off their hands. “The global economy is reopening and the oil glut has eased off,” Aslam said. Aslam said, “It is still unclear if the prices can continue their upward journey at the current pace, and especially if we have a valid reason for the crude price to top the $35.” Jeffrey Halley, OANDA’s senior market analyst for Asia Pacific said the combination of global production curbs and recovery expectations has been driving oil prices higher.

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“However, a repeat is unlikely when June contracts expire as market forces are pushing prices higher,” Halley said. The June WTI contract expires on Tuesday, but there was little sign of WTI repeating the historic plunge below zero seen last month on the eve of the May contract’s expiry amid signs that demand for crude and derived fuels is recovering from its nadir. Also, several countries including Italy, Iran, Spain, Israel, and Germany that previously enforced strict lockdowns on their populations are in the process of easing them. Several US states are also lifting lockdowns. Georgia, South Carolina, and Montana had eased restrictions as of May 15 and others including Texas, Maine, and Illinois have partially reopened. Analysts welcomed Monday’s gains but questioned whether prices will remain stable in the long term. @Businessdayng

Markets remain in a “tug-ofwar pattern” where it remains unknown “whether the damage will be a lot worse than feared or the recovery will be much swifter,” Neil Wilson, chief market analyst at Markets.com, said in a morning note. The Organisation of Petroleum Exporting Countries (OPEC) and its allies reached a deal to cut oil production by 9.7 million barrels per day in May and June to shore up the price of the commodity. The world’s top exporter Saudi Arabia announced last week that it would cut an additional 1 million barrels per day in June, while OPEC+ wants to maintain existing oil cuts beyond June when the group is next due to meet. Kuwait and Saudi Arabia have agreed to halt oil production from the joint Al-Khafji field for one month, starting from June 1, Kuwait’s Al Rai newspaper reported on Saturday.

Tuesday 19 May 2020

BUSINESS DAY

Tuesday 19 May 2020

BUSINESS DAY

abujacitybusiness

Comprehensive coverage of Nation’s capital

SEC is implementing a 10-year master plan to make Nigeria Capital Market world’s most deepest, Africa’s largest – DG In this interview, Mary Aduk, the Acting Director-General of Security and Exchange Commission (SEC) said the agency is collaborating with all relevant stakeholders to implement the 10-year Capital Market Master Plan with the aim of making Nigeria’s capital market one of the world’s deepest and most liquid as well as the largest in Africa by 2025. She also spoke on other programmes of the Commission. Excepts:

ou held a roundtable on commodities ecosystem last October, what was the ob-

jective? The objective of the roundtable was to obtain the buy-in of policy makers and agencies of government and to get perspectives of stakeholders towards encouraging investments and get more participation in the commodities market. Capital Market Master Plan did an analysis of where we are and where we want to be as the leading capital market in Africa and one of the areas is the Commodities market which is very important, but one of the least developed. The Nigerian economy is mainly agrarian driven, all states of the federation have exportable quantities of commodities and we have some of the highest grades in the world. Government wants to diversify to agriculture and so we need to be able to export some of these commodities. If the farmers do very well, the earnings of the country will be boosted. These commodities can be exported, while on the other hand industries can be set up that will employ a large number of our teeming population. If we can develop this very well, our country will be better for it. What we need now are better pricing, transparency and better quality and these are what we set to achieve with the farmers and that is why the Commodities Exchange is important. The crude form they are trading now does not provide the farmers the benefit of price discovery, transparency among others. The only way to achieve these is to have an exchange hence the need arose to set up the Technical Committee to look holistically at all the issues, the nation needs to harness the full potentials in the Commodities market. How did this all start? The Commission in 2017 constituted a Technical Committee (TC) to develop a commodity roadmap. The Committee submitted a robust report in 2018 with about 40 recommendations to be implemented in 4 phases spanning an eight (8) year period from 2018 – 2025. Subsequently, an Implementation Committee consisting of relevant stakeholders was constituted to implement recommendations of this report. This new Committee is currently imple-

menting the recommendations in the first phase; this roundtable being one of the key recommendations. As many of you are aware, the Commission is collaborating with all relevant stakeholders to implement the 10year Capital Market Master Plan with the aim of making Nigeria’s capital market one of the world’s deepest and most liquid as well as the largest in Africa by 2025. One of the crucial initiatives of the Plan is to develop a thriving commodities trading ecosystem. Nigeria is well endowed in agricultural, metals and energy commodities. Currently, our potential as a nation is grossly underutilised in the area of commodities. There is therefore the need for these commodities to be efficiently harnessed to the benefits of our consumers, industries and governments. We believe that if we can develop and institutionalise a vibrant commodities trading ecosystem in Nigeria, we can substantially address problems such as lack of storage, poor pricing, non-standardization as well as low foreign exchange contribution affecting our agriculture and other commodities sub-sectors. What does the SEC hope to achieve in all these? The aim of SEC is to have an efficient commodities exchange because right now that sector of the capital market is dormant and that is why the Commission is leading other capital market stakeholders on capacity building and public enlightenment campaigns. We have already commenced capacity building for stakeholders and the public on commodities exchange to bridge the current knowledge gap to ensure we reap the benefits of trading in commodities, all these are part of the implementation of the report of its Technical Committee on Commodities Trading Ecosystem What would you say of the Federal Government’s efforts so far? It is necessary, first, to recognize and applaud the Federal Government’s actions in diversifying the Nigerian economy and moving us away from an overreliance on one commodity. Agriculture remains an important part of that plan holding the potential of delivering on the country’s food security needs, providing jobs and increasing our foreign exchange earnings. Despite this potential of the sector to deliver on these important metrics, credit to the www.businessday.ng

sector has remained less than 5% of bank lending for the past 10 years severely hampering its development. The capital market has the capacity to unlock better access to credit and finance for the sector through innovative financing structures and products. This is also true for Nigeria’s abundant minerals, especially the solid ones. Many of these minerals are presently dug up on a subsistence basis and sold in markets around the world in disorderly fashion. It is high time we created a market where they would be traded in an orderly manner, to the benefit of the Nigerian economy. A structured market for commodities will provide a fairer playing field for local market participants, while providing the required infrastructure for the international market to be exposed to Nigerian commodities. It will also provide price discovery to market participants – producers and consumers alike – leading to efficiency and better decision making. Why did the SEC decide to host the International Conference on Commodities Market last month? The three existing commodities exchanges in Nigeria backed by robust public participation from key stakeholders notably financiers, donors, public stakeholders’/ government officials, and international commodity exchanges as well as the larger Nigerian retail investment community can unlock a vast amount of capital in the short to medium term. These important points and benefits have dictated the Commissions’ decision to host the International Conference on the Nigerian Commodities Market 2020 with the theme “Commodities Trading Ecosystem: Key to diversifying the Nigerian Economy.” The ICNCM2020 gathered relevant stakeholders in the commodities ecosystem to consider the most pertinent issues in growing the ecosystem in Nigeria, with the end goal of creating an enabling environment for the deployment of innovative solutions that improve processes, products, productivity, and the partnerships available in the market as well as enable investors to access various investment opportunities across the value chain. The Commission has been implementing its 10year Capital Market Master Plan, in collaboration with relevant stakeholders, with the aim of making Nigeria’s

L-R, Mary Uduk, acting director General Securities and Exchange Commission (SEC) Babangida Ibrahim, chairman, House Committee on Capital Market, Zainab Ahmed, minister of Finance, Budget and National Planning.

capital market one of the world’s deepest and most liquid, as well as the largest in Africa by 2025. One of the key initiatives of the Master Plan is the development of a thriving commodities trading ecosystem as part of the capital market’s contribution to the national economy. can you tell us the importance of the just concluded conference and how it’s going to boost Nigerian’s economy? One of the most important part of this conference has been the ability to bring different stakeholders together to be able to discuss the issues of the commodities ecosystem, on how you bring the farmer, enlighten them, how you get them to get access to finance. Not just finance but long tern finance, how you get them to partner with capital market to access long term finance, how can you also enlighten them and get them understand that subsistence farming is not it. But we have to find a way of having agric to make impact in our economy, for instance, the presentation that was made by the MD of NISRA where small farmers are being organized together to be able to make impact in the larger economy by giving them funding and get enough land that would enable them farm and make a living out of it not the one they go from hand to mouth. So I believe that the importance of this conference have been to get the various stakeholders to see value chain that the agric sector can

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bring to bear in the economy and we also looked at what is happening in other countries, how other countries are making it with agric. What they have done that has impacted sufficiently in their GDP and their economy, so we are hoping that this is the beginning and that going forward other stakeholders would be able to know the importance that agric sector can bring to bear in economy. What is the strategy that the stakeholders agree upon to leverage on agriculture? You heard them talked about warehouse receipt, if the warehouse receipt system is developed, already as we speak SEC has rules on warehouse receipt and you know a situation where the warehouse can be used to raise money. One of the panelist spoke on the benefits of the warehouse receipt and how it can help funding for the farmers. They would not just have to sell but can raise funds using the warehouse receipt and if the product is properly standardizing such that they can easily export. They don’t necessarily have to have money, they can just deposit it at the warehouse and with the receipt they can go to the bank and get funding and that is very important of the issues they spoke about. In terms of the conversation around Africa when it comes to commodities exchanges, what further regulations do you think commodities exchanges need that would @Businessdayng

help mainstream commodities exchanges not just for Nigeria but around Africa? I know that they have spoken a lot about issues whether this is time to have multiple commodities exchanges, but like they said we are just beginning, we need to put structures in place because if you do not put this structures you won’t really know what the full potentials would be in future. For instance we have had one of the commodities exchanges for so many years, it hasn’t developed but look at another one that just came “yesterday” they are focused, they have been able to do a lot of things, they have being able to develop a lot of standards, transparent pricing system so what am seeing right now, this is not the time to say oh what would it be around Africa. Nigeria is just starting, we can really say that we have a developed and established commodities exchange right now all of them are just starting. So we need time for them to grow and then at the end of it we would now say do we really need to merge them or do we get them to continue in the path they are going specialized in different commodities like some other peoples are saying or may be one exchange doing multiple commodities. So I think what we should do is to encourage them to grow as the SEC put the structures that would enable them grow and everybody putting hands together to help them grow. I would like to talk about your conference that focused on the commodities market, a lot was discussed at gathering in Abuja, tell us what is the thrust? What do you really intend to achieve focusing on Commodities Exchange at this time. Nigeria is an economy that does

a lot about agriculture and have solid minerals and we don’t have a robust commodities market and that is what the SEC saw and decided to build a Commodities ecosystem. The market, the players, the rules and everything around ensuring that we have a vibrant commodities market in Nigeria, the Commodities market would cover that area that we have, it will cover solid minerals even oil, it’s unfortunate that we have these commodities and they are not traded in our market, so what that conference did was to bring up the stakeholders together so that we discuss the way forward. Before that conference, the Commission set up a Committee that looked at the road map towards building this ecosystem am talking about and they came up with a very good report and comprehensive and everything we need to do to ensure that we have a commodities market that is working and that conference was one of the things we are supposed to do, we trying to implementing all the other things. Commodities are traded in our market and most of them spot, we still have three exchanges trading in our market but what we want to do is to ensure that every aspect of the market is covered such we can grow this commodity here, mine the commodities here and sell them here and have a market that fits us and our people. For instance, for the agricultural sector, one of the problems they have is the issue around price determination. They are not able to know what the prices of their commodities would be by harvest time. But when you have a market, a features market you would gauge the price and make cropping decisions. So this

are the things we want to put in place. We also think that it backs up Federal Government moves towards diversifying the economy. The government have invested a lot and we think that this market will move that effort by government and at the end of the day we would all be better for it. What is the take home from that conference, may say we should work the talk, I was impress with the quality of men I saw in that gathering, what do we expect from that conference as we move on, Short term and long term? There are areas we did not look at but people brought them up, so one of the take out is we are able to involve all the right stakeholders and we now know what they different players in the commodities market would like, what they would want for things to work. We know who to talk to, we know what the stakes are, we know what factors to put in place. We have itemized these things and we need to have an enabling laws, we have to have the rules and regulations for the market to function, we have to get everyone on board, the solid mineral side, the ministry, the central bank all

to work and we are working from our homes. When the lock down is over we are going to hit the ground running so all the exchanges would be involving and the entire market would be involved. As we speak we are setting up the rules and regulations, we are putting things in place to ensure that we have the enabling laws, we are speaking to the stakeholders and so everything we need to build the market that we need to build. What does this portend for the capital market? While it is clear that Nigeria is well endowed with agricultural, metals and energy commodities, our potentials in these areas are unrealised. The good news however, is that the capital market can be used as an avenue to unlock these potentials and diversify the nation’s economy, while providing jobs, creating values and contributing to governments’ revenue. We believe that if we can develop and institutionalise a vibrant commodities trading ecosystem in Nigeria, we can substantially address problems such as lack of storage, poor pricing, non-standardization, as well as low foreign exchange earnings affecting

administration’s agenda. It should be recalled that Nigeria began the process of establishing a commodity exchange in 1989 when an Inter-Ministerial Technical Committee was set-up to examine the possibility of setting up a commodities exchange in the country. However, it was only in 2001 that the Federal Government directed the conversion of the then Abuja Stock Exchange to a commodity exchange called Abuja Securities and Commodities Exchange, which was later renamed Nigerian Commodity Exchange. While the Nigerian Commodity Exchange is still undergoing some re-structuring and re-capitalisation required for it to become fully operational, the Commission registered the first private commodity exchange, AFEX Commodities Exchange in 2014, and the Lagos Commodities and Futures Exchange early this year. But we still have a lot to do. We have the challenging task of transitioning from a grossly informal commodity trading system to one consummated on the platforms of commodity exchanges. Currently, the transactions through com-

vourable government policies and strengthening of legal and regulatory frameworks. What do you really intend to achieve focusing on Commodities Exchange at this time? Nigeria is an economy that does a lot about agriculture and have solid minerals and we don’t have a robust commodities market and that is what the SEC saw and decided to build a Commodities ecosystem. The market, the players, the rules and everything around ensuring that we have a vibrant commodities market in Nigeria, the Commodities market would cover that area that we have, it will cover solid minerals even oil, it’s unfortunate that we have these commodities and they are not traded in our market, so what that conference did was to bring up the stakeholders together so that we discuss the way forward. Before that conference, the Commission set up a Committee that looked at the road map towards building this ecosystem am talking about and they came up with a very good report and comprehensive and everything we need to do to ensure that we have a commodities market that is working and

L-R: Babangida Ibrahim, chairman, House Committee on Capital Market; Zainab Ahmed, minister of Finance, Budget and National Planning; Mary Uduk, acting director-general, Securities and Exchange Commission (SEC), and Mariam Katagum, minister of state for Industry, Trade and Investment.

players and we have itemized what we need to cover every sector. So what that conference did was to expose things that we did not think about. Right now we have the entire set of actions we need to take to ensure that we build the market of our dream. At times goes on we are going to be seeing a lot of things happening, the Covid19 lockdown have slowed down everything but we are not worried, we are still working behind the scene as you may know SEC continues www.businessday.ng

our agriculture and other commodities sub-sectors. How do we achieve vibrant commodities exchange? In achieving this, the roles of commodity exchanges are very critical. They bring price transparency and value addition to farmers; they ensure quality products for buyers, provide investment opportunities across the value chain, provide additional class of asset for investors and help diversify the nation’s economy in line with the current

modity exchanges are insignificant compared to what take places in the informal markets, even among industrial commodities users. In laying down the foundations of our formal commodities market therefore, we have to ensure that the spot commodity market is efficient as we move into the futures market. No doubt, this will entail a robust education and enlightenment process, continuous engagement and cooperation among key stakeholders, fa-

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that conference was one of the things we are supposed to do, we trying to implement all the other things. Commodities are traded in our market and most of them spot, we still have three exchanges trading in our market but what we want to do is to ensure that every aspect of the market is covered such that we can grow this commodity here, mine the commodities here and sell them here and have a market that fits us and our people. For instance, for the agricultural sector, one of the @Businessdayng

problems they have is the issue around price determination. They are not able to know what the prices of their commodities would be by harvest time. But when you have a market, a features market you would gauge the price and make cropping decisions. So this are the things we want to put in place. We also think that it backs up Federal Government moves towards diversifying the economy. The government has invested a lot and we think that this market will move that effort by government and at the end of the day we would all be better for it. What is the takeout from that conference, I was impressed with the quality of men I saw in that gathering, what do we expect from that conference as we move on, Short term and long term? There were areas we did not look at but people brought them up during the conference. So one of the take-away is we are able to involve all the right stakeholders and we now know what they different players in the commodities market would like, what they would want for things to work. We know who to talk to, we know what the stakes are, we know what factors to put in place. We have itemized these things and we need to have an enabling laws, we have to have the rules and regulations for the market to function, we have to get everyone on board, the solid mineral side, the ministry, the central bank all players and we have itemized what we need to cover every sector. So what that conference did was to expose things that we did not think about. Right now we have the entire set of actions we need to take to ensure that we build the market of our dream. As times goes on, we are going to be seeing a lot of things happening. The Covid19 lockdown has slowed down everything but we are not worried, we are still working behind the scene as you may know SEC continues to work and we are working from our homes. When the lock down is over we are going to hit the ground running so all the exchanges would be involving and the entire market would be involved. As we speak we are setting up the rules and regulations, we are putting things in place to ensure that we have the enabling laws, we are speaking to the stakeholders and so everything we need to build the market that we need to build.

Tuesday 19 May 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday Monday 27 18 April, May 2020 2020

Top Gainers/Losers as at Monday 27April, 18 May 2020 LOSERS

GAINERS Company

Opening

Closing

Change

Company

Opening

Closing

Change

OKOMUOIL MTNN

N55.05 N104

N60.55 N104.9

5.5 0.9

GUINNESS NB

N17.5 N34.5

N31.05 N17

-3.45 -0.5

MTNN GUARANTY

N109.5 N19.3

N111 N20

1.5 0.7

MAYBAKER GUINNESS

N3.12 N18.9

N18.55 N3

-0.12 -0.35

UNILEVER UBN

N12.7 N6.55

N13.7 N6.75

0.21

ETI

N4.6 N5

N4.9 N4.5

-0.1

WAPCO ZENITHBANK

N14.05 N10.7

N11.35 N14.2

0.65 0.15

FIDELITYBK CILEASING

N1.8 N5.1

N1.74 N5

-0.06 -0.1

GLAXOSMITH OANDO

N6.35 N2.3

N2.39 N6.8

0.45 0.09

UACN SKYAVN

N6.95 N1.52

N1.42 N6.9

-0.05 -0.1

ASI (Points)

23,941.75 22,616.28

DEALS (Numbers) VOLUME (Numbers)

5,544.00 3,354.00 2,929,331,578.37 108,120,797.00

VALUE (N billion) MARKET CAP (N Trn)

2.929 1.332

Global market indicators FTSE 100 Index 6,048.59GBP 5,846.79GBP +248.82+4.29% +94.56+1.64% S&P 500 Index 2,951.72USD 2,875.58USD +88.02+3.07% +38.84+1.37% Generic 1st ‘DM’ Future 24,438.00USD 23,954.00USD +921.00+3.92% +296.00+1.25%

12.477 11.786

Nikkei Deutsche 225Boerse AG 20,133.73JPY German Stock Index DAX +96.26+0.48% 10,659.99EUR +323.90+3.13% Deutsche Boerse AG German Nikkei 225 Stock Index DAX 11,058.87EUR 19,783.22JPY +593.70+5.67% +521.22+2.71% Shanghai Stock Exchange Composite Index 2,875.42CNY 2,815.50CNY +6.96+0.24% +6.97+0.25%

Mixed sentiment trails equities despite positive start to new week expect market players to react to more first-quarter (Q1) 2020 earnings released. “In the absence of any negative news (both domestically and globally) that is capable of weakening i nv e s t o r s’ c o n f i d e n c e, we expect the market to continue on an upward trend Tuesday, given that most bellwether stocks remain below their fair value. The banking names should also continue to dominate market turnover given the level of liquidity in the sector”, said equity research analysts at Lagosbased Vetiva. Following gains in large cap stocks such as MTNN,

Stories by Iheanyi Nwachukwu

hough the Nigerian stock market opened this week on a positive note, its direction at the end of the week’s session remains unclear. Already, analysts have expressed varied views on the market which could be possible when either the foreseen positive or negative factors come to play. “We expect the equities market to remain tepid as the global and macroeconomic environment remain lukewarm. However, we

NSE demutualisation receives boost as court sanctions scheme of arrangement

he Fe deral High Court, Lagos has now granted an order sanctioning the Scheme of Arrangement for the demutualisation of Nigerian Stock Exchange (NSE). Commenting on this development, the Chief Executive Officer of NSE, Oscar N. Onyema, said: “The NSE demutualisation process is moving ahead in line with the expected sequence of events, following the conclusion of its Extraordinary General Meeting and Court Ordered Meeting (COM) in March 2020. Understandably, in current circumstances, some of the legal and regulatory steps required have taken a little longer than originally expected, but today we have received court sanction for the results of the EGM, in particular the Scheme

of Arrangement and we are looking to secure the reregistration of the Exchange as well as the approval of the Securities and Exchange Commission within the coming months.” Members of the N S E h a d a p p rov e d t h e demutualisation scheme of The Exchange at an EGM in March 2017. This was followed by the signing of the Demutualisation of The Nigerian Stock Exchange Bill into law in August 2018. In D e cemb er 2019, the Securities and Exchange Commission of Nigeria in a No Objection letter, gave its consent to the NSE to hold the COM and EGM that would facilitate its conversion from a notfor-profit entity limited by guarantee into a profitma k i ng, pu b l i c l i m i t e d liability company owned by shareholders. www.businessday.ng

Oscar N. Onyema

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Lafarge Africa the NSE ASI kick-started this new week with a positive performance, rising 0.58percent to close the day at 24,010.19 points, from 23,871.33 points. The value of listed stocks increased to N12.477trillion from preceding trading day low of 12.441trillion, up by N36billion. Okomu Oil led the gainers table after its share price moved from N55.05 to N60.55, adding N5.5 or 9.99 percent. It was followed by MTNN which rose from N109.5 to N111, after adding N1.5 or 1.37percent. Stock investors in 5,544 deals exchanged 331,001,743 units valued N2.929billion.

Lafarge Africa grows Q1’20 profit by 156.5%

a fa rg e Afr i ca Pl c has released its unaudited results for the first quarter (Q1) ended March 31, 2020. The company grew revenue by 9.79percent to N63.69billion from N58.01billion in Q1 of 2019. Its profit before tax of N9.38billion in Q1’2020 represents 104.52 percent increase from N4.58billion in Q1’19. The company’s Q1’20 profit after tax of N 8.06billion aga i n st N 3 . 1 4 b i l l i o n i n Q1’19 represents increase by 156.5percent, according to the result at the Nigerian Stock Exchange (NSE). Khaled El Dokani, Country CEO of Lafarge Africa stated: “I am proud of the plan Lafarge Africa hasimplemented to protect the health of our people while supporting our partners and communities. The first quarter results confirm that our turn around initiatives are effective and our strong

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balance sheet ismitigating t h e r i s k s b o r n e by t h e pandemic that has started hitting our country in March.” On the outlook, he said “Covid-19 impact on the 2020 results cannot be reasonably estimated at this stage, but long-term prospects remains positive.” The company expects that the public safety measures issued by the federal and state authorities in Nigeria a n d a ro u n d t h e w o r l d will adversely affect the company’s results in second quarter (Q2), 2020. “ D e s p i t e s h o r t- t e r m disruptions, Lafarge Africa Plc is however confident in the underlying resilience of its businesses and operating model as the company has developed robust cost and cash optimisation initiatives. The Lafarge Africa’s strong balance sheet and reduced cost base will also help minimize the negative effects of the Covid-19 pandemic,” he noted.

Tuesday 19 May 2020

BUSINESS DAY

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BUSINESS DAY Tuesday 19 May 2020 www.businessday.ng

CEO in focus

Chidi Etoniru: Bridging Nigeria’s housing deficit through affordable and smart real estate products Segun Adams

ith more than a decade of p ro f e s s i o na l experience in facility management, estate survey and real estate construction, Chidi Etoniru, the CEO of Joe Etoniru and Associates, a lifestyle real estate firm that provides holistic real estate services is one of the industry players working towards bridging Nigeria’s housing deficit. Etoniru, a chattered Estate Surveyor and Valuer with the Nigerian Institution of Estate Surveyors and Valuers (NIESV) has led Joe Etoniru and Associates to deliver more than ten real estate projects in eight years. From a real estate career that started in 2008 as the head of the facility management unit in Prime Atlantic Cegelec (PACE), an oil and Gas Company in Victoria Island, Lagos Chidi has grown to become an industry leader through his experience in the real estate industry. He holds an undergraduate degree in estate management and an MSc. in facility management both from the University of Lagos. He is also a member of the Certified Institute of Auctioneers. He was once responsible for the facility management of Epsilon Estate a subsidiary of C&M exchange limited. In managing facilities, Etoniru developed an eye for standard and quality in properties and real estate construction. Conversely, he saw a need to provide home seekers with access to quality rental and sales properties that ensure they get the best deals on their capital. In 2012, he launched Joe Etoniru and Associates in Lagos State to meet this need. Joe Etoniru and Associates is an organization of seasoned real estate surveyors with proven experience providing premium real estate services. Launched in Lagos some eight years ago, Joe Etoniru began operations with a focus on real estate brokerage but has over the years systemically grown its operations to include property valuation, construction services, real estate advisory and property management services. At Joe Etoniru and associates, growth has been as a result of prioritizing attention to client needs, gaining market insights

Etoniru

and trends and translating these insights to products and services that meet demand. Meanwhile, data by the National Bureau of Statistics (NBS) shows that the real estate sector reported the fastest growth yet since 2016 at -2.36 percent for the year ended December 2019. Despite ending 2019 in contraction mode, the growth reported by the property sector last year was 4.5 points better than the -6.86 percent recorded in the comparable period of 2016, the year NBS started collating data for the industry. The adjustment to the new balance between property buyers and sellers was one of the factors why the property industry outperformed its growth performance in the last three years, as compiled from an industry survey. While the aforementioned

helped the property industry to exit its 12 consecutive quarter recession in the first quarter of 2019, the slow economic growth, lack of liquidity and dampened purchasing power in most of 2019 pushed the sector to end the year with a negative expansion. Analysis of the NBS report for Q4 2019 revealed that the real estate’s contribution to Nigeria economy was down 0.39 percentage points in the review quarter from 6.60 percent in Q4 2018 to 6.21 percent in the corresponding quarter of last year. Nigeria’s property industry which has a housing deficit of more than 20 million requires an estimated N170trillon to N200trillion to bridge this gap. Faced with the challenges of low purchasing power fueled by Nigeria’s slow economic growth, lack of functioning mortgage system and poor income level,

‘‘

Having the highest population in Africa at 200 million, Nigeria’s homeownership of 25 percent is a laggard when compared to the 84 percent in Indonesia, 75 percent in Kenya and 56 percent in South

more than 64 million employed Nigerians cannot acquire the expensive properties largely constructed by most real estate developers. Individual efforts at increasing the stock by way of developing more houses, coupled with talk shows offering insights into possible solutions have not helped to reduce the demandsupply gap or increase the ownership level. Despite its large-size population and the self-acclaimed biggest economy in Africa, Nigeria is crawling behind its peers in terms of homeownership level. Largely driven by Nigeria’s young population, the surge in the urban growth at 4.3 percent is one of the factors cited by industry players to spur growth in the industry as housing anywhere in the world is a basic necessity, which in the order of human needs, ranks third after food and clothing. Having the highest population in Africa at 200 million, Nigeria’s homeownership of 25 percent is a laggard when compared to the 84 percent in Indonesia, 75 percent in Kenya and 56 percent in South. However, the recent realization by property developers to bridge the supply-demand gap with a focus on the smaller unit apartment is an initiative expected by industry experts to help provide Nigerians with the desired real estate products. Etoniru, described as a serial entrepreneur with ownership of Move Smart, Bugboss and Clean smart businesses launched ideas that can help provide affordable real estate products to Nigeria’s excluded population. JEA projects is one of such services. A subsidiary company of Joe Etoniru and Associates, JEA projects was launched based on a demand for luxury but affordable smart home properties that meet international standards. With the youth in Nigeria accounting for more than half of her population, Chidi is of the opinion that real estate products and services must be targeted at meeting the demands of this emerging market. At Joe Etoniru and associates, this is what the company considers to be the future. Joe Etoniru is systemically expanding its offerings to provide quality, affordable and smart housing to upwardly mobile millennials in Nigeria, integrat-

ing flexible payment options that take into consideration the purchasing power of individuals in this unique market. Through the launch of JEA projects, the real estate company has been able to complete projects span across residential estates along the Lekki axis including Megamound Estate and Pinnock beach Estate, with the latest project- The Sixtus, currently ongoing in Lekki Phase 1. Describing the luxury project which comes at an affordable rate, Joe Etoniru and Associates said the Sixtus consists of ensuite rooms, smart lighting, smart access control by Alexa, automatic blind control, smart locks and automated gate control. The project which offers a 12-month payment plan has smart living facilities that include blinds, electronics, lights, doors, and Closed-circuit television (CCTV). Some of the past projects delivered by the real estate company include a set of luxury fivebedroom fully detached house with penthouse in Pinnock Beach Estate, Osapa London and has facilities like swimming pool, carport and fully fitted kitchen with gas cooker. The real estate firm has also delivered luxury 5-bedroom fully detached house with a room BQ in Megamound Estate, Ikota, and was built with an indoor 6-seater cinema, fully fitted kitchen with gas cooker, automated smart home controlled by Alexa Air conditioner, and a fire hydrant for emergencies. From off-plan sales to customized projects and advisory services, JEA projects has been instrumental in introducing smart home technology into the property development space, making it a viable option for both property developers and end-users. Also, Move Smart, Clean Smart and Bug boss are a set of subsidiary companies set up by Joe Etoinru Associates to provide after-sales/ leasing services to clients. These businesses evolved from a demand for services that ease clients into the occupation of their new homes seamlessly. From moving of client’s items into their new homes to cleaning and fumigation of official and private residences, Joe Etoniru and associates has become a one-stop-shop for accessing end to end real estate services.

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