BusinessDay 20 Feb 2020

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news you can trust I ** thursDAY 20 february 2020 I vol. 19, no 503

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Market

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

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3M 0.00 2.56

NGUS jan 27 2021 365.40

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0.00 3.85

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NGUS jan 29 2023 374.57

@

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NGUS jan 29 2025 379.81

g

… as NIS increases fee by 200%

NAICOM may force mergers to avert liquidations in ongoing recapitalisation

IFEOMA OKEKE

Modestus Anaesoronye

System breakdown disrupts visa on arrival at Lagos airport

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isitors coming into Nigeria from various parts of the world are experiencing difficulty of obtaining the visa on arrival at the Murtala Muhammed International Airport (MMIA) as a result of major system breakdown which has lingered for about one week now.

BusinessDay’s checks show that visa on arrival which takes an average of 10 to 20 minutes to process at the airport is currently taking between three to five hours because the printers and internet at the Lagos airport are not working.

The situation has been compounded for visitors who were not informed by the Nigeria Immigration Service (NIS) of the major increase in visa fee from $45 (N16,200) to $135 (N48,600), showing a significant increase by 200 percent.

A Kenyan visitor who craved anonymity said he came into the country on Tuesday but spent over four hours at the airport just to obtain the country’s visa.

“I landed at MMIA on Tues-

T

he National Insurance Commission (NAICOM) says it will as much as possible avoid going into liquidation of failed companies in the ongoing insurance industry recapitalisation.

Considers soft landing for failed companies

The commission said rather than liquidating those that fail to recapitalise, it is considering forced mergers that will make them become one big company.

Sunday Thomas, acting com-

missioner for insurance/CEO, NAICOM, who dropped the hint during the Insurance Industry 2020 Economic Outlook in Lagos, said the cost of liquidation was high for the commission.

Thomas said NAICOM may apply regulatory forbearance to ensure it does not go through that route at the end of the Continues on page 38

Continues on page 38

Inside

Here are 3 ways Nigeria can shore up FX reserves P. 2

Christopher Kolade (l), former Nigerian high commissioner to the United Kingdom, and Olayinka David-West, academic director, Lagos Business School (LBS), at the 11th inaugural lecture of Olayinka David-West with the theme ‘if I build it, will they come’, in Lagos, yesterday.

Pic by David Apara

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news FG threatens to dump DisCos over inefficiency … as power privatisation faces dilemma TONY AILEMEN, Abuja

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he Federal Government on Wednesday threatened to dump the power distribution companies (DisCos) over continuing epileptic power supply, blaming the situation on the DisCos’ inability to distribute stranded power.

Saleh Mamman, minister of power, lamented that the government has injected as much as N1.74trn to help the electricity distribution sector, saying “government cannot continue to lose money”.

While briefing State House correspondents after the weekly Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, Mamman said the government cannot continue to subsidise the DisCos. The minister said his ministry has already forwarded a memo to the FEC to decide the fate of

DisCos that have failed to honour their commitments to buy and distribute adequate power generated for them by the generation companies (GenCos).

“There is a lot of work to be done in distribution companies and the government is now willing to take up the matter immediately. The government cannot continue to subsidise what they are doing. They collect 3,000 megawatts and pay for only 1,000 megawatts, that is 15 percent of what they are collecting, so government is the one completing the payment. So we cannot continue like that,” Mamman said.

Although he declined to give details of his recommendations to FEC, Mamman stressed that in view of the situation, the DisCos may have to quit and give way to more capable operators if they are not able to fulfil their obligations as agreed with Continues on page 38

JTF denies invading Niger Delta community over killing of 4 soldiers SAMUEL ESE, Yenagoa

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he Joint Military Task Force (JTF) in the Niger Delta on Wednesday refuted reports that the military invaded a community in Ekeremor Local Government Area of Bayelsa State to retaliate the death of four soldiers.

The four soldiers were killed in an ambush by unknown gunmen at Letugbene in Bayelsa State while carrying out their routine duty within their area of responsibility on February 16, at about 6 pm, the JTF confirmed, saying investigation was ongoing to ascertain the persons or groups behind the attack.

Following the killing of the soldiers on Sunday, online reports emerged that the coastal town of Letugbene was on Monday evening invaded by the military in search of the alleged killers of four soldiers and a civilian tugboat captain.

The reports claimed that no fewer than four houses and two suspected pirate camps were razed in the coastal enclave on the Atlantic shores of the state by troops.

But Victor Olukoya, spokesman of the joint force code-named Operation Delta Safe (OPDS), in a statement assured that the military would never invade any community in the Niger Delta region.

“It is important to state

here that contrary to an online report, the men of OPDS did not invade any community in Ekeremor LGA of Bayelsa State as a result of the incident,” he said.

Olukoya reiterated that the mandate of the JTF is “protect oil and gas infrastructure, deter and prevent militancy, sea robbery, crude oil theft and other forms of criminality within the Joint Operations Area that could impact negatively on economic activities in the Niger Delta”.

“The Nigerian military is an organised and disciplined force and all its operations are guided by codes of conduct and rules of engagement,” he said, adding that the military “cannot be seen to behave in the manner that was described by the online reporter”.

The commander Operation Delta Safe along with commander 16 Brigade and commander Sector 2 on operational visit were in Letugene, Beneside, Ogbotobo and Tunu among other communities in Ekeremor LGA and observed citizens going about their lawful duties without any hindrance, Olukoya said.

He said the JTF commander has urged the good people of Ekeremor to remain law abiding, as the command would fish out the perpetrators of the ungodly act and ensure a secure environment for all. www.businessday.ng

L-R: KLM Rao, group finance director, Enpee Group; Seyi Soetan, head, financial institutions, RMB Nigeria; Madhuka Khetan, CEO, Agro Allied Resource Processing; Niraj Purswani, head, supply chain, Agro Allied Resource Processing; Tosin Olatunji, senior trade finance transactor, and Afeez Rabiu, finance executive, Indorama Eleme Petrochemical Limited, at the GTR West African Trade Conference sponsored by Rand Merchant Bank in Lagos.

Here are 3 ways Nigeria can shore up FX reserves … N4.5trn OMO bills to be redeemed Q1 … Coronation says FDI important to address GDP growth HOPE MOSES-ASHIKE, BALA AUGIE & ENDURANCE OKAFOR

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igeria is seen to have a good chance of raising enough money to shore up its reserves in 2020, sufficient to prevent a devaluation of the currency this year, according to Coronation Merchant Bank Limited.

Guy Czartoryski, head of research, Coronation Asset Management, said with proceeds from the Nigerian National Petroleum Corporation offshore, the proposed Eurobond issuance, and Open Markets Operations (OMO) bills, the country can realise $6 billion in the early part of this year.

Czartoryski said this in a paper titled ‘Re-Risking the Financial System’ presented at a breakfast session organised by Coronation Merchant Bank in Lagos.

Stakeholders at breakfast session unanimously agreed that the Lekki Free Trade Zone, the recent introduction

of Long-Dated FX Futures by the CBN and the FMDQ and bilateral loans could spur Foreign Direct Investment (FDI) even as the country is bedevilled by a myriad of challenges undermining economic growth.

Banjo Adegbohungbe, acting managing director, Coronation Merchant Bank, said several factories would spring up at the Free Zone area, and the landscape in there would be fully transformed.

“The amount of jobs and the multiplier effect that we will have on the economy will be quite significant. Some of them might even earn foreign exchange for the country.

Don’t forget that some of these challenges are long term and will need solutions that have long-term perspective,” Adegbohungbe said.

With increasing exposure to external vulnerabilities, Nigeria is at risk of a higher current account deficit and declining reserves which have remained highly defenceless to capital flow reversals.

For an oil-dependent na-

tion like Nigeria, plunging oil price fuelled by the Coronavirus outbreak could mean additional shock for Africa’s most populous nation as the decline in global oil demand and the consequent fall in prices may throw the country’s 2020 revenue projection in disarray.

The increased dollar sales by the CBN to defend the naira in the face of high dollar demand by foreign portfolio investors exiting the nation’s fixed income market has been the key culprit responsible for the continued decline in the country’s external reserves.

The reserve which has maintained downward trend in the last eight months worsened last week by a 49 percent decline from $37.73 billion the week earlier to N37.23 billion as of 13th February 2020, data by the CBN show.

The management of FX reserves is linked to the CBN’s setting of market interest rates.

Currently, Nigeria has a dual interest rate system, with the CBN’s OMO bills available only to banks’ proprietary

books and to foreign portfolio investment.

If the CBN cannot sell sufficient OMO bills to foreigners in early 2020 then this could, in analysts’ view, present challenges to its FX reserves management and distrust the current N362.50/US$ exchange rate.

Iyobosa Sorae, head, trading & FI, Coronation Merchant Bank Limited, said to reach the goal of attaining FDI, there are certain things that should be put in place, which she said the CBN is already doing but remains the fiscal side.

“If you look at the tax reform that was recently announced, if you look at certain incentives even from the CBN towards the real sector of the economy, if you look at the Lekki Free Trade Zone, those are the things that are needed to ensure that in the long term we begin to get these FDIs and before those things begin to materialise, we have to survive as a country that is import dependent,” Sorae said.

World Bank approves $2.2bn for 6 projects in Nigeria ... to help NIMC register up to150m citizens ONYINYE NWACHUKWU, Abuja

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he World Bank has approved $2.2 billion for some six projects which border on economic development and expanding human capacity in Nigeria’s public and private space.

The approval is specifically to support Nigeria’s development priorities focused on improving immunisation, providing an enabling business environment for private sector, expanding the digital economy to promote job cre-

ation, and increasing capacity of public and private sector on governance, social and environmental safeguards.

“The World Bank is ramping up its support to Nigeria in its efforts to lift 100 million Nigerians out of poverty,” said Shubham Chaudhuri, World Bank country director for Nigeria, in a mailed statement on Wednesday.

“These projects are focused on delivering better services to Nigerian citizens.

This means ensuring that children are immunised and sleep under mosquito net,

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improving rural mobility with better roads and providing citizens with a unique identification number to be able to better target social safety nets,” Chaudhuri said.

According to the bank, the approved programme of support in fiscal year 2020 comprises Immunization Plus & Malaria Progress by Accelerating Coverage and Transforming Services (IMPACT) which will strengthen health systems to deliver effective primary health care and improve immunisation, malaria control, and child and maternal health @Businessdayng

in selected states.

The project aims to improve vaccination coverage, the percentage of children under five who sleep under insecticide treated nets from 28 percent to 41 percent, and increase the percentage of women who receive post-natal check-ups from 47 percent to 55 percent. The project is financed under concessional terms through an International Development Association (IDA) credit of $650 million.

Another is the Nigeria Ru-

Continues on page 38

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news

Cummins affirms superior customer We boost IGR through speedy issuance Edo, IOM strengthen ties in fight against human trafficking support for all market segments of Land title documents - Oyo ... build pineapple processing factory to support returnees

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ollowing the successful opening of its $35 million ultra-modern facility in Ikeja business district, Lagos, November last year, Cummins West Africa Limited (CWAL), a power systems distribution company, has assured its customers of excellent support services for its product portfolios: industrial and engines segment, power systems segment and components segments.

Ade Obatoyinbo, managing director of CWAL, at the first customer forum for the year 2020 at the weekend, said a key objective of the organisation was to “differentiate through superior customer support by pushing resources closer to the customers and leveraging Cummins regional footprints”.

Further to his multimedia presentation on the 101 years journey of Cummins’s history of worldwide innovation, Obatoyinbo said, “Cummins sees itself not just as a power generation brand, but as a company that builds innovative engines that sustains economic growth”.

In his presentation to the customers who had come from Lagos and beyond, Obatoyinbo said CWAL was privileged to be part of the global Cummins organisation, which for the past 101 years had been a global leader in power systems manufacture, distribution and

customer support.

“This enables us to leverage innovative technology, global dependability, manpower resource and training, fully integrated parts catalogue website that is accessible globally and easy to use,” among others, he said.

According to Obatoyinbo, the new world-class facility in Ikeja, which sits on a 25,000 square meter land space, is one of the biggest in the Cummins Group and demonstrates the importance Cummins attaches to its West African operation, which has Nigeria as its main hub.

The customers were taken on a guided tour of the ultramodern facilities where they learnt first-hand the processes that lead to the production of the generators. Some of the departments visited included: administration and marketing offices, which run on a “free sitting” arrangement for employees allowing them to have more interaction with diverse employees and be more collaborative in managing tasks.

Cummins West Africa, which started operation in Nigeria in 2012 with headquarters in Lagos, regional offices in Abuja and Port Harcourt, has its sales and services spread across all the states of Nigeria and the Federal Capital Territory.

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REMI FEYISIPO, Ibadan

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yo State government says it has established a new era in the state’s Internally Generated Revenue drive through speedy issuance of land title documents.

Abiodun Abdu-Raheem, commissioner for lands, housing and urban development, stated this at a day retreat organised by Private Networks Nigeria for officials of the Ministry, held at Park Inn by Radisson Hotel, Abeokuta, Ogun State, explaining that since the inception of the present administration of Governor Seyi Makinde, the Ministry had been able to improve on its revenue generating strength through recovery of over 200 plots of lands, which had been reallocated for interested members of the public.

Also, the Ministry has introduced N300,000 as an expression of interest application fee for housing developers as well as settlement of pending litigations against the state government on land matters, among other things.

Abiodun pointed out that the retreat, which focused on issuance of Land title documents such as Home Owners’ Charter and Certificate of Occupancy (C of O), would help the Ministry fashion out ways to let people obtain their documents easily and affordably.

“I wish to state here that the

state government under the leadership of His Excellency, Governor Seyi Makinde is establishing a new era where land title documents would be timely and accurately delivered to justifiable applicants,” he said.

According to Abiodun, Oyo State is blessed with resources and latent revenue opportunities, which is needed to be unlocked.

“As a major stakeholder in revenue generation for the state government, we are here to strategize on how to move the state forward, because the state is blessed with resources and latent opportunities that need to be unlocked”, he said.

He said a cursory review of previous years’ performances showed that over N2 billion was being generated annually since the past three years through Land Use Charges, but this was far less than what was expected from the Ministry.

While speaking, commissioner for finance, Akinola Ojo, described the Ministry of Lands, Housing and Urban Development, as a major stakeholder in revenue generation for the state government.

He commended the Ministry’s initiative to take part in the retreat, while he also assured that the Ministry of Finance would provide all necessary support at ensuring that the Revenue Generation initiative of the state government was not jeopardised.

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he Edo State government and the International Organisation for Migration (IOM) have commenced deliberations to fine-tune strategies aimed at deepening efforts in the fight against illegal migration and human trafficking in the state.

Edo State Attorney General and Commissioner for Justice, Yinka Omorogbe, disclosed this to journalist in Benin City, when she received the IOM Chief of Mission, Frantz Celestin, and his team, who were on a courtesy visit.

The commissioner reassured that the state government will not relent in the fight against human trafficking, illegal migration, and other vices in the state.

Omorogbe expressed appreciation to the IOM’s team for supporting the government in the fight against the menace, noting “The symbiotic relationship that has existed between the IOM and Edo State government started from onset because their message resonates with our desire for our people; hence we have to key into it.”

The commissioner said the support by the European Union and IOM had assisted the state government in tackling human trafficking and illegal migration.

@Businessdayng

Omorogbe noted that the opening of the Pineapple Factory at Iguobazuwa in Ovia South West and Ehor in Uhunmwonde Local Government Areas, was momentous and in line with the objectives of the Governor Godwin Obasekiled administration.

Earlier, Celestin reaffirmed the commitment of the IOM to work with the Ministry of Justice and the Edo State Task Force Against Human Trafficking, noting, “We have an ongoing partnership. Our presence here is to reinforce and strengthen the relationship we have with the Ministry and Task Force.”

The IOM Chief of Mission continued, “We always welcome partnership especially from a government entity that is credibly active.

“When you have such a partner, your work will be easy.

We will do everything we can to support the efforts of the Edo State Government. There is quite a lot to do because about 42 percent of our returnees are from Edo State.”

He noted, “The essence of our visit is to ensure that we continue to move from strength to strength; to look at specific areas and also at the comparative areas of advantage so we can put programmes and initiatives together to better serve the people.”

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FG, states, LGs share N647.35bn for January

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ederal, states and local governments on Wednesday shared a total of N647.35 billion for the month of January, as the Federation Account Allocation Committee (FAAC) meeting ended in Lagos.

The News Agency of Nigeria reports that the N647.35 billion shared is 9.63 percent lower than the N716. 29 billion shared in December 2019.

Mahmoud Isa-Dutse, permanent secretary, Federal Ministry of Finance, Budget and National Planning, made the announcement while briefing newsmen after the meeting.

He said the reduction in the allocation was due to what was provided by the Nigerian National Petroleum Corporation (NNPC) and the Federal Inland Revenue Service (FIRS) for the month.

Isa-Dutse said the FIRS had explained that the shortfall of revenue was due to the reduction in economic activities which usually occurs in January, add-

ing that revenue generation would improve as the months go by.

He said the N647.35 billion comprised Statutory Revenue, Value Added Tax (VAT), Exchange Gain, Non-Oil Revenue and Excess Bank Charges recovered.

The permanent secretary said as at Feb. 19, the balance in the Excess Crude Account (ECA) was $71.81 million.

Isa-Dutse said: “The gross statutory revenue for the month of January 2020 was N525.25 billion. This is lower than the N600.31 billion received in the previous month by N75.06 billion.

“For the month of January 2020, the gross revenue available from the Value Added Tax (VAT) was N104.75 billion as against N114.80 billion in the previous month, resulting in a decrease of N10.04 billion.

“Exchange Gain yielded a total revenue of N1.04 billion, while the Non-Oil revenue was N16.29 billion.”

He said from the N647. 35 billion, the federal government got N267.38 billion, the state governments received N176.92 billion, and the local government councils received N132.94 billion.

Isa-Dutse said the Oil Producing States received N46.19 billion as 13 per cent derivation revenue and the Revenue Generating Agencies received N23.90 billion as cost of revenue collection.

According to a communiqué released by FAAC, a breakdown of the distribution showed that from the gross statutory revenue of N525.25 billion, the federal government received N243.70 billion, the state governments received N123.61 billion and the local government councils received N95.29 billion.

“Also, the Oil Producing States received N46.07 billion as 13 per cent derivation revenue and the Revenue Collecting Agencies received N16.56 billion as cost of collection.

Reps hail Dangote Refinery’s local content implementation ... score firm 90% on compliance, assure on support

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embers of the House of Representatives Committee on Local Content have commended Dangote Petroleum Refinery and Petrochemicals for its strategic implementation of the Nigerian Content Act in the construction of the refinery and fertilizer projects.

Vice chairman of the Committee, Ibrahim Hamza, who Wednesday, led other members on oversight visit to the refinery, fertilizer and jetty, said the committee members were satisfied with the standard of facilities and local content input at the facilities.

Specifically, the House Committee members scored Dangote Refinery and Fertiliser almost 90 percent on compliance to local content development, and praised Aliko Dangote’s multi-billion dollars’ investments in the refinery as well as his vision for the growth of Nigeria’s downstream sector.

He assured Dangote of the National Assembly’s support for the construction of the refinery and petrochemical projects, while also promising to create an enabling environment for businesses in Nigeria to thrive.

Hamza stated: “We came to the refinery site assess the progress of the construction of the refinery and fertilizer plants. I can say that Dangote has almost 90 per cent compliance in local content development Act, which is beautiful and we are proud to be associated with Dangote Group of companies.

“What we have seen today is really perplexing and we hope to give him every little encouragement he will require from the National Assembly.

“In my 17 years of profes-

sional practice as an architect, this is one of the best plants inspections I have ever had.

I will like to congratulate the management of Dangote for the brilliant work. I heard about this project several years ago and never thought that it is this big. I assure you that the National Assembly will really give him all the backings that he may require. With the calibre of young talents that we see here today, I can assure you that the future of Nigeria is bright.”

In her presentation to the House Committee, head, learning and development, Dangote Petroleum Refinery, Ebele Oputa said the company was training 900 Nigerian engineers in India who were expected to run the refinery and fertilizer plants.

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She disclosed that the young engineers spent about six months in a refinery in India and acquired knowledge on how to manage refinery operations.

She said the training became imperative due to the commitment of Dangote Group to promote local content in the development of indigenous capacity. “The engineers are expected to also transfer the skills acquired to other Nigerians when the refinery becomes operational,” she said.

She also disclosed that the company has also embarked on providing vocational skills in plumbing, welding, iron bending, auto mechanics and electrical works to the teeming youth population in its host communities.

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RESEARCH&INSIGHT A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

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In association with briu@businessday.ng

08098710024

How the three tiers of government shared N4.4 trn ISAAC ESOWE

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iscal policy closely correlates with the character and dynamics of any federal arrangement.

Resource disbursement is a fundamental fiscal issue in the practice of Nigeria federalism. The federal, states and local governments which constitute the three tiers of government in Nigeria are each given tax-raising powers.

The responsibility of disbursing the funds accrued in the common pool account is the perquisite of the federal government.

“The Revenue Allocation Act provides for the distribution of federation funds. Section 1 of the Act provides that, “the amount standing to the credit of the Federation Account, less the sum equivalent to 13 per cent of the revenue accruing to the Federation Account directly from any natural resources as a first-line charge for distribution to the beneficiaries of the derivation funds in accordance with the Constitution is distributed among the Federal and State Governments and the Local Government Councils in each State of the Federation”, Nigeria Extractive Industries Transparency Initiative, stated in one of its documents.

Under the current sharing formula, the federal government takes the major stake of 52.68 per cent from the federation account.

And the 36 states with 774 local governments are left with 26.72 per cent and 20.72 per cent respectively.

Findings by BusinessDay Research and Intelligence Unit (BRIU) reveals that a total of N629.12billion was distributed as Federal Allocation for the month of January 2020 by the Federal Account Allocation Committee (FAAC) among the federal, state and local governments.

This represents N87.17 billion or 12 per cent decrease against N716.29 billion disbursed in December 2019. The allocation for the said period comprised revenue from the Value Added Tax (VAT), exchange gain and the statutory revenue.

Source: NBS, BRIU

There has been a noticeable fluctuation in revenue allocation.

The recent declined in revenue could be attributed to the recent development in the global oil market. On February 6, crude oil price for OPEC basket closed at $55.72 per barrel, should the price remain constant and accompanied with the market uncertainty, allocations to the federal, state and local governments will decline further.

This is not good for the 2020 appropriation bill.

For the 2019 fiscal year, the three tiers of government received a total allocation of N8.2 trillion.

A breakdown of the distribution reveals that the federal, state and local government received N287.929 billion, N192.302 billion and N143.698 billion respectively for December 2019.

Allocation of revenue for the second half of 2019 A communique issued by the Federation Account Allocation Committee (FAAC) specified that

from the total revenue of N716.298 billion generated in December 2019, the federal government received N287.929 billion, the state governments received N191.302 billion, and the local government councils received N143.698 billion.

The gross statutory revenue for the period was about N601 billion.

This was higher than the N492 billion received in the previous month by N108 billon. The gross revenue available from VAT was N114.8 billion as against N90.2 billion distributed in the previous month, an increase of N24.6 billion.

For the month of November 2019, a total of N702.02 billion was disbursed to the three tiers of government from revenue generated in October 2019. According to the National Bureau of Statistic (NBS) report The Federal Government received a total of N295.74billion from the N702.02billion. States

Source: NBS, BRIU

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received a total of N192.70billion and local governments received N144.99billion. The sum of N49.16billion was shared among the oil-producing states as their 13 per cent derivation fund.

Revenue generating agencies such as the Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.97billion, N9.12billion and N4.34billion respectively as cost of revenue collections.

Further, breakdown of revenue allocation distribution to the Federal Government of Nigeria (FGN) revealed that the sum of N228.02billion was disbursed to the FGN consolidated revenue account; N5.33billion shared as a share of derivation and ecology; N2.66billion as stabilization fund; N8.95billion for the development of natural resources; and N6.30billion to FCT Abuja.

Similarly, the Federal Government received a total of N293.80 billion from the N693.52 billion.

States received a total of N186.81 billion and local governments received N140.86 billion. The sum of N51.53billion was shared among the oil-producing states as 13 per cent derivation fund from October 2019 revenue.

Further breakdown of October FAAC disbursement reveals that the sum of N226.21 billion was disbursed to the FGN consolidated revenue account; N5.32 billion shared as a share of derivation and ecology; N2.66billion as stabilization fund; N8.94billion for the development of natural resources; and N6.17billion to the Federal Capital Territory (FCT) Abuja.

In September 2019, a total of N740.87billion was disbursed to the three tiers of government from revenue generated in August 2019.

The amount expended consist of N610. 04billion from the Statutory Account, N20billion from Forex Equalisation Account, N1.754billion from Excess Bank Charges Recovered for the Month, N88.08billion from VAT and N1billion exchange gain differences.

Federal Government received

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a total of N310.97billion from the N740.87billion. States received a total of N193.57 billion and Local governments received N146.23billion. The sum of N48.74billion was shared among the oil-producing states as 13 per cent derivation fund.

For the month of August, a total N769.53billion was disbursed from the revenue generated in the month of July – federal, state and local government received N299.80billion, N190.38 billion and N143.57billion, while the sum of N51.63 billion was shared among the oil-producing states as part of the 13 per cent derivative fund.

The amount disbursed encompassed of N607.37 billion from the Statutory Account, N94.16billion from VAT and N999.99 million exchange gain differences. In addition, revenue-generating agencies such as – NCL, FIRS and DPR received a total of N21.86 billion which gets N5.70billion N11.14 billion and N5.02 billion respectively as cost of revenue collection.

For the month of July, a total N762.6billion was disbursed from the revenue generated in the month of July – federal, state and local government received N309.43billion, N201.16billion and N151.38 billion, while the sum of N38.70 billion was shared among the oil-producing states as part of the 13 per cent derivative fund.

The federal government spent a total of N22.92 as cost of revenue collection to NCS, FIRS and DPR for the month of July, each of the agencies gets N4.90billion, N13.92billion and N4.10billion respectively.

Further findings show that the sum of N250.71billion was disbursed to the FGN consolidated revenue account; N5.58 billion shared as a share of derivation and ecology; N2.79billion as stabilization fund; N9.37 billion for the development of natural resources; and N6.58 billion to the Federal Capital Territory (FCT) Abuja. Approximately N4.4 trillion was allocated to Federal, State and Local government for the second half of 2019.

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Nigeria: Still one huge emergency case & A selfish, ungrateful generation

ik MUO

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n February 12, 2020, the House of Representatives urged the president to declare an emergency on Nigerian security. A few days later, the National Council of MDs of Registered Clearing Agents called on government to declare an emergency on our ports. Not long after that, the NMA declared that it would take N90 billion to fight cancer alone, an indication that the health sector was/is also an emergency case. The Federal Government had last year declared an emergency on the Apapa Traffic, and set up a special taskforce (or is it taxforce) to tackle the emergency.

Governor Sanwo Olu had declared an emergency on Lagos roads (14/10/19) just as Senator Bassey had asked the federal government to declare an emergency on federal roads (15 10/19).

In 2018, President Buhari declared an emergency on corruption Check out the social and mainstream media and you see calls from several concerned quarters to declare emergencies on various sectors of the Nigerian economy.

I have a feeling that the people making these calls have not been in Nigeria all along because Nigeria as a whole is ONE HUGE Emergency, and this did not start today Twelve years ago, I used the eye of an elder to examine the situation in and of Nigeria and declared that Nigeria as a whole was an emergency case (Nigeria: An emergency case. BusinessDay, 25/4/08). Read on, bearing in mind that these thoughts were penned down 12 years ago I want to be an optimist; I want to prophesy, believe and think positively about Nigeria; I want to acknowledge that we are making reasonable efforts in many aspects of life and consequently I wish to start with that cliché: things are looking up, in and for, Nigeria! With

24 consolidated banks which are now among the biggest in the world (never mind that their impacts are felt more through promotional gymnastics); with $60 billion in foreign reserves (but we need just a third of that to dent our power and road problems); with more than 50million telephone lines(never mind that the networks are horrible) and being one of the largest oil producing countries (but we depend on imported fuel) we are indeed doing well!

But leaving the realms of optimism and positive thinking and coming down to harsh realities, Nigeria is nothing but one large emergency case! The servant leader himself was aware of this when he decided to declare an emergency in the power sector within 100 days of 29/5/07. The fact that he has not declared the emergency 300 days later has only heightened the emergency status of that sector. Well, that sector cannot but be an emergency when we spent $ 4 billion or $7 billion or 10 billion or $13 billion or $16 billion in the last 8 years during which power generation fell from 4000 to 2000 megawatts in a country that needs 50000 megawatts and the only thing to show for such expenditures are excuses and newspaper advertorials! Of course, in the process, Nigeria became (and is still) the largest generator market in the world!

Nigeria’s external reserves now stands at an enviable $60 billion (among the highest in the world); with single digit inflation, macroeconomic stability and a destination of choice for all sorts of DFIs. Our budget, even when denominated in dollars, is intimidating and the price of oil continues to soar. But we are facing a poverty/hunger emergency. Government statistics agree that about 60 percent of Nigerians are living in absolute poverty but if we consider those that are just poor, it may well be in the region of 85 percent. And now, there is no food on the table! The government has released its strategic grains reserve (I have not seen the grains); the National Assembly has summoned the Minister of Agriculture to explain what is happening and a bag of rice has gone beyond N10,000.

Other food items have followed suit and the number of people feeding from the dustbins will surely increase. Nigeria is the second largest rice importer in the world (next to Philippines) and is estimated to spend $2 billion on it this year. Nigeria is 20th on the Global Hunger

Index and has not met up to 50 percent of the MDG target on hunger.

The Niger Delta is an emergency case. Years of criminal neglect by the various tiers of government, looting of the resources due to the area by their own representatives and feeding fat on the people’s misery by the elite (their own kith and kin) has led to a situation of a war of all against all. The political, economic, security and social consequences are already taking their toll on the area and the nation which is no longer able to meet its OPEC quota; business activities in Warri has collapsed and PH is going the same way.

The roads also constitute another emergency case. 10 years ago, Lagos to Benin –by road- was a three-hour journey; today, it lasts as long as it pleases the gods and the same is true of all the federal roads across the nation. People die in accidents; robbers waylay people in the numerous bad spots; the ‘life expectancy’ of the various already distressed Tokunbo vehicles are further shortened, valuable man/woman hours are wasted and people spend agonizing hours on our roads just to make a trip.

Nigeria has the highest concentration of TB patients in Africa and 5th in the world; The Director General of NISER recently categorised Nigeria as a crises territory due to unemployment which was affecting 25 percent of graduates (Punch, 19/3/08,p17); and just the other day, Orji Uzor Kalu called for a state of emergency on Nigerian sports because it was in a failed state(Independent, 30/3/08,pd8) Meanwhile, the hospitals which the “coupists” termed mere consulting clinics have turned full circles; they have become mortuaries: where people go to die and this has forced the Nigerian Medical Association to call for a declaration of an emergency in the health sector just like the ASUU has called for the declaration of an emergency in the educational sector.

Nigeria is indeed, one huge emergency and the sooner the leaders realise that we are in a total emergency situation, the better for everybody.

This was 12 years ago. Look around today; recall what you have seen and what you have read. Check the current situation of all variables that I mentioned 12 years earlier: inflation, reserves, poverty, unemployment, hospitals, education, roads and infrastruc-

‘

Nigeria is indeed, one huge emergency and the sooner the leaders realise that we are in a total emergency situation, the better for everybody. This was 12 years ago. Look around today; recall what you have seen and what you have read

ture, hunger, insecurity and the cost of a bag of rice. When you do so, you can only weep for Nigeria, the potentially BIG country that has mismanaged itself into the last quartile in all indicators of socioeconomic progress. Indeed, Nigeria is one huge emergency case.

Other matters: A wicked, selfish and ungrateful generation Last week, my other matters dwelt on parental wickedness, the recrudescence of inexplicable acts of raw wickedness perpetrated against children by their own parents. This week, I am focusing on the wickedness of children against their own parents, as well as their ingratitude to these parents and general me, myself and I paradigm On Wednesday I was at Asaba for the Delta State Entrepreneurial Summit and met a friend whom I saw last more than 20 years ago. In the course of our general discussion, I recalled how life was with people of our generation and regretted that the children of this generation were having it rough time because even those who are employed could not adequately take care of themselves, not to think of their parents and other family members. He responded that while it might be true, that the real problem was (is) that the children of nowadays are selfish and ungrateful! I then remembered the post I had seen in the ubiquitous social media about one mother who trained 10 children but cannot be taken off by these 10 children!

This is a generation of wicked, selfish and ungrateful children.

Just the other day, one Michael Okhide murdered his father and mother while the Sister narrowly escaped.

Children have beaten up their parents (as an Ichie, I have handled one of such cases), dispossessed their parents used them for rituals and neglected them, when what those parents needed was just their presence. I know a young man returned home after missing for years, he hanged around for a few days and sold the only asset of his widowmother, one ancient huge tree to wood dealers, pocketed the proceeds and disappeared again.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

3D drone mapping and GIS analysis as an indispensable tool in litigation surveys

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echnological advancement in the field of aerodynamics has triggered the invention of drones. Drone mapping is the use of drones to carry out precise 3-dimensional mapping of areas (especially areas in dispute or areas that are inaccessible) that could be used in preparing a litigation survey plan. A litigation survey plan is a pictorial representation of the claims of parties with reference to features and boundaries of the land in dispute based on a chosen scale and specific measurements. Images and other information acquired by the drone are analysed and presented as a litigation survey plan using a Geographic Information System (GIS) software.

When preparing a litigation survey plan, the surveyor knows it is essential to show features that will fortify the evidence. These features could be old existing features or real time captured features. In most cases superposing or charting of one feature over another by the surveyor is highly recommended. This is done in order to establish a proper relationship in his evidence as presented in a litigation survey plan. This could be achieved to a very sound accuracy by employing drones to capture the

aerial view of the land in dispute. Thereafter, a critical analysis and representation of the information acquired are accomplished using a GIS platform.

In most land dispute cases for the safety of the surveyor, it might not be best interest to physically carry out surveys and measurements on ground. Especially if the surveyor is not accompanied by security operatives but he could adhere to remotely acquire information about the land through drone mapping.

Drone mapping is built on the integration of Global Positioning System (GPS) and 3D aerial drone capture to produce a digital boundary map (includes also digital elevation model, tree canopy height model, contours etc.) referenced to a geographic coordinate and drawn to scale, employing a sound cartographic skill. This is usually done by surveyors trained on drone piloting and GIS analysis.

The use of drones for mapping removes the risk of physical assault on the surveyor and his team members while they are conducting their surveys on ground.

During the course of land dispute cases, litigation survey plans are admissible in court as an evidence with respect to the identity of

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a land. A piece of land is usually identified by its features and boundary beacons. These features include rivers, mountains, hills, grasslands, ditches, trees, centre of roads and other physical features. Quite a few parcels of land under contention have their property survey plans prepared earlier. A 3D digital map acquired in real-time by a drone plays a vital role in representing all these features, subsequently the features are plotted by a surveyor and drafted into a survey plan. However, as Surveyor Edward Ejiofor Ezeanaka rightly puts it: “At times, there may be features of evidential importance whose minuet size may not be captured or identified by a drone. Then ideally a proper ground truthing must be done to represent these key features in the survey plan”. When there are features that could not be capture by the drone, the surveyor is required to make an extra effort to capture these small details and show them accordingly in the litigation survey plan.

In most litigation survey plans; the third dimensional attributes and contours are rarely represented. While they could form an undisputable point if rightly presented in the litigation survey plans. Survey beacons serve

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EKENE OKOROAFOR J. as a boundary indicator and has a penal effect if tampered with. To this effect if the third dimensional attribute (orthometric height value or contour value) is attached to these beacons in the litigation survey plan, it could serve as an addition to validate the position of the survey beacons whenever it has been fiddled with.

Following the reasoning that boundary beacons could be moved off from its original position but the actual topography of land is always maintained. It will be to a greater advantage if topographic survey plans are incorporated as one of the registrable land instruments for acquisition of certificate of occupancy and certificate of ownership (Corruptissima republica plurimae leges). What else could form a better representation of the landed property than an actual replica of its topography on paper?

Surv. Okoroafor is a licensed surveyor and GIS consultant. He works with GeoCarens consult Limited. +2348135539554 ekeneokoroafor@yahoo.com

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Thursday 20 February 2020

BUSINESS DAY

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Again, power without responsibility CHRISTOPHER AKOR

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n Monday, a memo purportedly written by the National Security Adviser, Babagana Monguno, to the service chiefs to desist from taking further directives from President Buhari’s Chief of Staff became public further drawing attention to the dysfunction, power struggle and the existence of a powerful cabal that has captured and exercises presidential powers without taking responsibility for any of their actions.

Monguno, who was clearly irked by what he saw as undue and dangerous interference and meddlesomeness of Abba Kyari on matters of national security, accused the Chief of Staff of “issuing directives to the service chiefs without the knowledge much less approval of the president”, a practice he said has added to the government’s inability to contain insecurity.

The “Chief of staff to the president is not a presiding head of security, neither is he sworn to an oath of defending the country,” Monguno warned in the December 9, 2019 memo.

“As such, unprofessional practices such as presiding over meetings with service chiefs and heads of security organisations as well as ambassadors and high commissioners to the exclusion of the NSA and/or supervising ministers are a violation of the Constitution and directly undermine the authority of Mr

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President.”

For avoidance of doubt, Monguno Monguno went ahead to define the Chief of Staff’s role in national security matters: “his job as it relates to security stops at conveying Mr President’s written directives.”

The existence of this cabal around President Buhari has been an open secret since 2016. Indeed, as the initial appointments of the president showed, virtually all members of this cabal are from just one section of the country.

The president justified this by saying they are people who have been with him through “trying times”, and were being rewarded for their “dedication and suffering”. Again, he said they are people that will work closely with him.

But even more unfortunate is the existence of a more powerful individual(s) who holds no formal office but wields perhaps even greater powers than the president himself. These buccaneers, it is claimed with good evidence, have completely walled the President and serve as “gate-keepers” between the president and the country.

President Buhari empowered this group early in his administration to be the clearing house and policy centre of his government. If there was any doubt as to the role of this powerful group, the President himself cleared that doubt during a retreat organised by the Presidency for the then Ministersdesignates. The President ordered that “all communications and appointments from you (ministers) to the Presidency should be routed through the office of the Chief of Staff as it is the normal (procedure) in this presidential system.” In effect, ministers are not allowed access to the President and must pass any communications through his Chief of Staff and also receive instruc-

tions through that same medium. One can only imagine how powerful Abba Kyari has become since then. Naturally, and as is usual in our climes, this untrammelled and extreme power without accountability breeds corruption.

There was a strong allegation that Abba Kyari demanded and collected N500 million as part of a deal to reduce the hefty fine of over $5 billion imposed on MTN by the NCC for contravention of a SIM registration directive. Despite being cleared by the Presidency, MTN got the fine reduced and the issue has long been settled with the Nigerian authorities.

So complete is the takeover of the government by this shadowy group that even Buhari’s wife felt completely side-lined and left out of the scheme of things that she was forced to take the unprecedented step of going public with her discontent when she accused a powerful cabal of hijacking her husband’s government.

But if she was expecting her outburst to change anything, it achieved the exact opposite as her husband firmly reminded her, in Germany, that she “belongs to his kitchen, his living room and the other room” and should have no business with or role in governance.

But despite this take-over, no one is effectively and totally in charge of the country meaning constant clashes among and between these shadowy figures has continued to define this administration. The war between the Economic and Financial Crimes Commission, EFCC, and the Directorate of State Security, DSS, formerly headed by his kinsman, Lawan Daura, is well known. Twice the president sent the name of Ibrahim Magu as substantive Chairman of the EFCC to the Senate

‘ But there should be no mistake about it; our democracy or whatever remains of it, has been captured by an amorphous group who exercise untrammelled powers but with zero responsibility for the powers they wield

and twice, on the advice of the DSS, the Senate rejected his nomination.

Buhari had tried but failed to mediate in the war and hasn’t been able to rein them in.

In January 2018 when Benue state was under the sustain siege of herdsmen, President Buhari directed the then Inspector General of Police, Ibrahim Idris, to relocate to Benue to stop the killings. But in March of that year when he finally visited Benue, the president learnt for the first time that the IG disobeyed his orders and spent only a day in Benue and left for Nasarawa subsequently. “It is only now that I am hearing this. But I know that I sent him here,” Buhari retorted in shock to General Atom Kpera (rtd) who pointedly challenged him that the IG did “not do the work you sent him. He stayed for less than 24 hours in Benue and relocated to Nasarawa, and then said what he saw was a mere communal clash...” This is despite the fact the news has been public knowledge for two months.

With this knowledge, it should naturally be expected that the president will discipline the IG for disobeying his orders. But nothing happened to the IG. In fact, while the President’s media team were trying to impress the public that disciplinary actions were being taken against the IG, the IG issued a statement rubbishing that claim. Till he retired with much thanks from the President – and even enjoying an extension of tenure – the IG was not disciplined or even reprimanded by the president, at least not publicly or officially.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng

Nigeria: When shall the state of the country get better?

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nly an honest, visionary, patriotic political leader with leadership qualities can make a country great.

Great political leaders, who possess probity, vision, fealty, and leadership qualities, can imagine the types of countries they want and work assiduously and conscientiously to achieve their lofty dreams. And, such political leaders, as I have mentioned, will subsume their primordial sentiments and selfish interests beneath the common good and national aspirations. Sadly, since our attainment of political sovereignty in 1960, good and purposeful political leadership has continued to elude us. That’s the reason Singapore, Malaysia, Brazil, Indian, and Japan have surpassed Nigeria in the areas of economic and technological advancement, although our country has more natural and human endowments than they’ve.

The monstrous culture of imposition of leaders on us, which is our heritage from our colonial master (Britain), and the ineffectiveness of our electoral body, are the chief reasons behind the emergence of third-rate political leaders at all tiers of government in Nigeria. In today’s Nigeria, our current political leaders cannot hold a candle to such political avatars of yore such as Nnamdi Azikiwe, Obafemi Awolowo, Tafawa Balewa, Nwafor Orizu, J.S Tarka, and others in the area of political leadership. A political leader without probity, intellectual acuity, political ideologies, fealty, and leadership qualities will be overwhelmed by the pressures, demands, and challenges of that exalted office. And he cannot navigate his country to greatness owing to his intellectual and moral vacuity.

However, before Muhammadu Buhari became our executive President in 2015, the mere mention of his name would inspire hope in our hearts because he evinced the characteristic traits of a patriotic leader when he was Nigeria’s

head of state between December 31, 1983 and August 27, 1983. The stories about his legendary probity and incorruptibility were retailed with relish by a majority of Nigerians. And, then, we believed him to be the political Messiah that would right the wrongs in our political polity, entrench national unity in our country, and set Nigeria on the path of irreversible greatness.

Sadly, President Buhari’s ascension to the loft of political power in Nigeria in 2015 has led to his demystification. And, the mystique of infallibility woven around him has been punctured owing to his inactions, misdeeds, and indiscretions. So, not unexpectedly, not a few Nigerians are disillusioned and disenchanted with his political maladministration of Nigeria.

It is regrettable and sad that President Buhari has not weaned himself of provincialism, ethnic jingoism, and religious bigotry. For example, ethnicity, party affiliation, and religion are factors he used for the recruitment of people into his government. So, then, in his first term in office, some of his ministers were square pegs in round holes.

The ministers of sports, Solomon Daulung and that of finance, Adeosun readily come to mind.

Can a minister perform higher than his abilities?

And, President Buhari formed an economic team whose inability to formulate and implement pragmatic economic policies caused Nigeria to slip into recession. Happily, Nigeria got out of that recession soon after it slipped into it. Now, in his second term in office, President Buhari’s economic team has not been able to fashion out economic policies, the implementation of which will lead to the diversification of our economy and acceleration of its growth. Our contracting economy is the reason why millions of young Nigerian graduates are unemployed.

Those young unemployed Nigerians have been reduced to sub humans, which was occasioned by their impecunious state.

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More so, even those who are employed by various state governments are paid paltry sums of money each month. What they earn monthly cannot be called a living wage. That’s why the Nigerian Labour Congress (NLC) had a longdrawn battle with the federal government over proposed increment in workers’ wages. Today, they have reached a consensus or agreement on the issue. However, some state governments have defaulted in the implementation of the new minimum wage bill while some state governments have reneged completely on it.

Nobody is unconscious of the stark fact that the civil service is the fulcrum and engine room of governments at different levels. Not only to do they formulate policies for government, they also help to implement them. But, while civil servants have been rendered impecunious owing to their poor remunerations by government, law makers in the national assembly earn mind-boggling jumbo wages. This inequity, which has existed in Nigeria for a long while, is very irksome and unacceptable to the generality of Nigerians. It is a tinderbox that can ignite anarchic situation in Nigeria.

But, is Nigeria not nearing an anarchic situation now, what with the festival of blood-letting and mindless killings, which are being executed by the Boko haram insurgents? The Boko Haram insurgents, who want to enthrone Islamic theocracy in Nigeria, roam freely in the northeast, from Yobe to Borno, and to Adamawa. The more the federal government tells us that the Boko Haram group has been decapitated, the higher the number of victims of Boko Haram insurgency will become. Recently, one of the leaders of Christian Association of Nigeria (CAN) in Kaduna state, Lawan Andimi, was murdered.

His killing has the potential of pitting Muslims against Christians, and throwing Nigeria into a sectarian violence. Against this background of

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Chiedu Uche Okoye ceaseless orgies of murders, which are being executed by the Boko Haram group, the members of the House of Representatives passed a resolution calling for the sack of the Service Chiefs.

More so, the federal government’s helplessness and inability to secure Nigeria propelled the governors of the southwest to form AMOTEKUM for the protection of that region.

At present, their lawmakers are working hard to domesticate a bill that will make AMOTEKUM legal. If Nigeria is a true federation, what the Southwest governors did could not have generated uproar.

So, it is incumbent on President Buhari to speedily set up a committee that will be charged with the onerous duty to restructure Nigeria and enthrone the true practice of federalism here. It will be a panacea to our national ills, and open up Nigeria for rapid economic and technological development.

Again, I would like President Buhari to know that Nigeria is trapped in the abyss of underdevelopment. He should up his game, and use the remainder of his days in office to offer us qualitative leadership, which will improve our living conditions, and take Nigeria to a great economic and technological height. Let him know that posterity will judge him based on his performance in office.

Okoye, a poet, wrote from Uruowulu- Obosi, Anambra State

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12

BUSINESS DAY

Thursday 20 February 2020

Editorial Frank Aigbogun

Buratai’s depressing verses

editor Patrick Atuanya

Citizens want an end to Boko Haram, not nit picking between security and defence

Publisher/Editor-in-chief

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

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hief of Army Staff Lieutenant General Tukur Yusuf Buratai recently engaged in the military art of deflection on the matter of the failure of the Army to end the Boko Haram siege on North East Nigeria and related challenges. Buratai invited Nigerians to the academic exercise of differentiating between insurgency and terrorism as well as national defence and national security. His summation is that the responsibility for internal security belongs to the Nigerian Police Force and not the Nigerian Army.

Buratai then left Nigerians with a depressing message. We should not expect terrorism to end soon, even as the Army has defeated the insurgency. More pointedly, he notified Lagosians of the presence and threat of Boko Haram in the nation’s commercial capital and home to 20million people. The Chief of Army Staff frightened rather than reassured citizens.

We took up the Buratai challenge on behalf of our readers. We checked definitions and examples.

National defence, according to a dictionary, is “a military or defence

advantage over any foreign nation or group of nations”. National defence is also “a defence posture capable of successfully resisting hostile or destructive action from within or without, overt or covert”.

National security is often used interchangeably with national defence.

It is the security and defence of a nation, including its citizens, economy, and institutions. Government has primary responsibility for national security. According to Wikipedia, “Originally conceived as protection against military attack, national security is now widely understood to include also non-military dimensions, including the security from terrorism, minimisation of crime, economic security, energy security, environmental security, food security, cyber-security etc. Similarly, national security risks include, in addition to the actions of other nation states, action by violent non-state actors.”

Nigeria faces severe security challenges from the “violent action of non-state actors” such as Boko Haram and the Islamic State in West Africa Province (ISWAP). The government under which Buratai serves has requested and received additional funds supposedly to tackle the men-

ace. It was the centre point of their campaigns in 2015 and 2019.

General Burati commands an Army that undermines its men. The Nigerian Army recently released 1, 400 captured Boko Haram terrorists with the claim that they have repented, and the Army has rehabilitated them. The action dampened the morale of the fighting men, in addition to several issues around their welfare.

While the Army Chief splits hairs between the role of the Army and that of the Nigerian Police, ISWAP is growing in influence in the North East. Reports indicate that the group is steadily entrenching itself in the area with actions that the communities consider more beneficial than what the Nigerian state offers them.

ISWAP, according to the International Crisis Group, has established “symbiotic relationships” with the communities around the Lake Chad region.

The Crisis Group report noted, “The group treats local Muslim civilians better than its parent organisation did, better than its rival faction, Jama’tu Ahlis Sunna Lidda’awati walJihad (JAS), does now, and in some ways better than the Nigerian state and army have done since the insurgency began in 2009. It digs wells, polices

cattle rustling, provides a modicum of health care and sometimes disciplines its own personnel whom it judges to have unacceptably abused civilians. In the communities it controls, its taxation is generally accepted by civilians, who credit it for creating an environment where they can do business and compare its governance favourably to that of the Nigerian state.”

Both terrorism and insurgency are forms of asymmetric warfare that deploy terror to achieve political objectives. Across the world, many nation states continue to date to battle terrorism without any of their security chiefs raising their arms in defeat or claiming that the nation can do nothing about it.

We call on the nation’s security chiefs to come together, strategize better and defeat these groups they had earlier assured Nigerians were ragtag and lacking the capacity to overcome our forces. Security requires a combination of actions and strategies beyond those of the army that Buratai leads. The Federal Government should do more, including relieving tired officers of their command positions so they do not undermine national confidence with their rationalisations.

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BUSINESS DAY

Thursday 20 February 2020

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The example of Enyi Abaribe The Public Sphere

CHIDO NWAKANMA

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ourage is the word that first comes to mind as you contemplate the phenomenon and exciting trajectory of Enyinnaya Harcourt Abaribe, senator representing Abia South in the National Assembly. Courage came to mind as he spoke with love in his heart for his people on Friday, February 14, 2020. The event was the final obsequies for Eze Israel and Lolo Ugoeze Sally Kanu, parents of the leader of IPOB, Nnamdi Kanu.

Abaribe led a star cast of outstanding Igbo politicians that showed up bravely to identify with Nnamdi Kanu in the best exemplification of Igbo culture. Ndigbo end all wars, disagreements and quarrels in the face of death. Death is the price all men must pay, so our people see it as final and deserving of love to the survivors and respect to the departed.

I join in the salutations to Peter Obi, former Governor of Anambra State, Victor Umeh, Tony Ukasoanya, Empire Kanu, Uchenna Madu of MASSOB and all those high visibility persons who mourned with Nnamdi. Well done,

Nzuko Umunna. Governors of the five states of Abia, Anambra, Ebonyi, Enugu and Imo – victims of the cruellest vilification of IPOB- could not find the moral courage nor respect Igbo tradition to be part of the event. Governor Okezie Ikpeazu fixed the roads as a diligent host ahead of the funeral.

Enyi Abaribe stood up for the count as surety for Nnamdi Kanu when it seemed suicidal. Kanu, of course, went on to disregard the terms of his court agreement to the discomfort of the Senator. Presidential spokesman Garba Shehu deployed Kanu’s misbehaviour in his tirade against Abaribe only recently.

Yet here was the man standing to represent his people at the funeral.

Such display of courage has marked the trajectory of Enyi Abaribe, the politician and Enyi, the man who stands by his friends through thick and thin, over the years. This 4th Republic commenced in 1999 with Abaribe as Deputy Governor to Orji Uzor Kalu. They soon fell out on principle. Abaribe would not compromise but chose the courageous path.

Twice the Abia State House of Assembly sought to impeach him in 2000, setting the building blocks for the shameful practice of houses of assembly doing a fool’s errand for governors. Ahead of their third attempt in 2003, Abaribe sent in his resignation by courier. He suffered a denial of benefits and perquisites of office, discouragement, and abuse for his stand.

He was the victim of the combined efforts of Governor Orji Uzor Kalu and his then Chief of Staff Theodore Ahamaefula

Orji to bring him down and end his political career in disgrace. In 2007, Abaribe bounced back as a Senator, a seat he has occupied since then with repeated victories at the polls. His traducers then sought places in the Senate after doing so much damage to Abia State for a combined 16 years and earning their seats in the Evil Forest. Recent events must sound like justification. Ndi Abia watched in disbelief as they all took photos in the Senate chambers with the man, they sought to destroy many years earlier.

Enyi Abaribe has earned his honorifics. Ndigbo hail him as Mma Agha, the battle-axe. Others call him Otuonu after the movement he led for equity in Abia State. He is at the frontline in all matters concerning the Igbo and speaks without equivocation. He takes on pitched battles against an imperial presidency that seeks to portray as the act of an infidel any criticism of President Muhammadu Buhari. Many have retreated into silence even in the protected chambers but not so Enyi Abaribe. He represents in High Fidelity the idea of a Senator as a person who brings wisdom, courage and deliberation to matters for the benefit of society. Members of the Ime Obi, as the Igbo would call a place such as the Senate, ought to be fearless and bring vast experience and knowledge to their tasks.

Abaribe, an Old Umuahian, also brings training as an economist and private sector manager to bear in his contributions. Behind his gentle exterior is an inner core of steel and breeding. I stuck my neck out when Richard Ikiebe

‘

We need more examples such as Enyi Abaribe in the South East, men of fortitude who can stand for their people as Nigeria travails under President Muhammadu Buhari. Steady hands, clear heads and courage are desiderata

ducation gives civilization and helps in the development of human minds and the capacity to tolerate others. I am impressed with Governor Babagana Zulum of Borno state unscheduled visit to Shehu Sanda Kyarimi Primary School as early as 6.30 am.

According to the video narratives, the governor met Mrs Obiagelli Mazi, a teacher waiting for her students to come at 6.30 am. On enquiry, Governor Zulum discovered Obiagelli to have been teaching in the same primary school for 31years without any record of being promoted.

Zulum gave Obiagelli N100,000 in appreciation of her dedication and ordered her condition of service to be reviewed. Obiagelli who is from Abia state but found her home in Jere local government of Borno state was promoted from a class teacher to an assistant headmistress within 24hours as a reward for her dedication amid insecurity. Her love is for her job is beyond survival, but a determination to be part of a community by giving herself to develop the young pupils.

There is no way Nigeria will be battling with the records of the past killing of innocent Nigerians due to religious banditry and bigotry if leaders have made education that civilizes people their priorities. But we have placed ethnicity and religion ahead of civilization needed to make life better for Nigerians. While other countries like Singapore, Malaysia, Brazil focused on education, industrialization and development postindependence, we concentrated on religion and ethnicity. No wonder we have the largest population of worshippers, yet with high poverty index. The result of our leaders’ focus and power wrestling is what we are earning with the Boko Haram, banditry and herdsmen killings across the country. I salute Governor Zulum and urge him to focus on educating his people and reward excellence. Afterall, Obiagelli origin or religion is not an issue for her service of 31years to be recognized in 24hours.

An event that showed a defeat of religious bigotry happened in Kano recently. In my article Kano versus Dubai-the difference, I wasn’t kind

with the leaders who made my Kano the way it is and regularly travel to Dubai as their shopping and holiday haven. Dubai was once a desert, more deserted than Kano. The difference was a visionary leader who transformed the city to what it is today. It is not religion or ethnicity than transforms nations but the vision of the leaders and the people.

A young man named Isah Sulaimon met an American woman from California on Instagram a year ago. They started an online dating that culminated in the 46years old American woman, Janine Sanchez visit to Kano to ask for the hands of Isah in marriage despite the age difference. For Isah, a 23years old man who just finished his secondary school and lives in Panshekara, a suburb in Kano to have opened an Instagram account and found love is a sign of great civility in fear of Boko Haram. More indication of civility followed the visit of Janine when Isah parents did not object the request of the elderly mother of two to take their young boy away in marriage to California.

I was initially afraid of the unrest this could cause when the news broke out. If you think my fear is unfounded, you need to remember many Nigerians who had lost their lives in the numerous riots and killings linked to religious bigotry in the north of Nigeria since 1953. The memories of religious riots cannot be wiped out of the families of the victims of the Kafanchan and the Kano riots caused by the Mohammed Marwa (Maitatsine) and his Yan Tatsine followers.

Those who lost their lives when the hell broke out following the German evangelist Reinhard Bonnke crusade still licks their wounds. Between 2000 and 2002, many innocent lives were lost when Sharia was introduced in Kaduna and during the Jos riots. We cannot forget the Miss World riot when Muslims Islamists murdered over 250 Nigerians across the north of Nigeria due to the article written by Isioma Daniel.

The list of the religious-related killings before Boko Haram in 2009 is endless and the victims aside being Christians and people of the other ethnic groups are Nigerians. We have used religion to kill ourselves. Thanks to our leaders

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who had focused on our difference and used the ignorance of the uneducated idle youth in the north to destroy and divide Nigerians.

Boko Haram has taken the lead since 2009 defiling the odds against the Nigeria state. The promise of the present administration to defeat the sect in weeks while campaigning for power is now a nightmare. The Boko Haram sect has turned our presidents since the days of Jonathan to people who issued condolence statements daily with empty promise to investigate and stop the killings of the poor and innocent Nigerians.

I first feared that the decision of Isah Sulaimon to make public his secret online dating by allowing Janine to visit Kano would lead to similar reactions because his action is Boko Haram. After all, Instagram and its usage by Isah is western education. But instead that witnessing riots in Kano, Kaduna, Sokoto, Maiduguri and other towns against what would have termed a sin, the reverse was the case. No one sees the age difference between Janine and Isah as a problem. No religious group is demanding for the ban of the proposed marriage because Janine is a Christian and a mother of two children. Miyatti Allah has not issued a threat that no cow will be made available for Isah and Janine’s wedding ceremony. The Sharia police known as Hisbah was involved and no fatwa issued that the relationship is unholy. Isah’s rights to associate and be associated with was not questioned. The parents of the young Isah made a mild demand on their proposed wife and daughter in law. They wanted her to ensure Isah further his education in the United States and if possible, for her to convert to Islam.

I don’t care if you call the relationship a survival mechanism and see going to America to have subjugated our religious feelings. What I see is the heroism in the gut of Isah to embrace education beyond the walls of his school in Kano. In the middle of substantial threats against exposure to western culture, this young man has defied the odds to win an America lottery for himself through love. His motive notwithstanding, he has shown the true meaning of education. To be educated is to be able to

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was to launch Voices Beyond the Newsroom by suggesting we invite the then Chairman of the Senate Committee on the Media. I reached out to him through my childhood pal and his trusted aide Uchenna Awom. A few days later, we got word that he would attend the event. On the appointed day, Enyi Abaribe flew into Lagos to honour his commitment. There was the additional reason of knowing Dr Ikiebe from many years in the past.

Courage is the choice or willingness to confront agony, pain, danger, uncertainty or intimidation. Moral rather than physical courage is the virtue best associated with man and speaks to the ability to act rightly in the face of widespread opposition, shame, scandal, discouragement or personal loss. Courage shows in the most challenging times as the Igbo philosophy recognises that mberede ka eji ama nwoke (Difficult situations reveals the character of the man).

We need more examples such as Enyi Abaribe in the South East, men of fortitude who can stand for their people as Nigeria travails under President Muhammadu Buhari. Steady hands, clear heads and courage are desiderata. Beyond crying at the shame unfolding before us, it is crucial to recognise exemplars such as Enyi Abaribe. Ji de nke ijei, Mma Agha.

Salutations.

Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

At last, civility is rising above religious bigotry

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Positive Growth with Babs Babs OlugbemI get what you want in life legitimately without killing, maiming or violating the rights and lives of others. Isah will be going to America legally after his wedding because he’s not a religious bigot and uneducated citizen unlike most of the youths in his region.

Isha’s family and community will end up being the benefactors of the same religion many have been killed in the north for practising peacefully. It is the same America that has been condemned as infidels that will now be the home of Isah from Kano.

One takeaway from this event is the fact that our leaders and those who use their positions of influence to cause violence are not likely representing the interest of the people but that of their pockets. If someone has died for Sanni Abacha on the basis that he was a Muslim leader and head of state from the north, Abacha loots being recovered showed he was a leader for himself and his family.

It is time for our leaders to correct the failure of the past, especially in the north of Nigeria. It is time we stop producing large family we are not ready or cannot cater for except for the religious right for the breeding children through many wives. We should educate our children to see others as citizens, not as infidels because their faith is different. We should breed more Isahs who will be in schools and be educated beyond schools. To me, Isah Sulaimon’s gut and action is a score in favour of civilization and a defeat for religious bigotry created by the culture, and the craving for power by our leaders.

Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

@Businessdayng

14

Thursday 20 February 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

ECONOMY

Three things to note from January’s inflation at 21-month high SEGUN ADAMS

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he consumer price index (CPI), which measures inflation, rose by 12.13 percent (year-on-year) which is the fastest in almost two years, according to data released by the National Bureau of Statistics.

Food inflation accelerated to 14.85 percent in January, the highest since March 2018.

The increase in VAT from 5 percent to 7.5 percent which took effect in February alongside expected electricity tariff hike will continue to pressure consumer price in the near future.

Inflation is sticky downwards Consumer price rose for the fifth straight month which is the longest unbroken upward trend since a 15-month steady rise in inflation which ended in January 2017.

This suggests that the impact of the border closure is weakening slower than expected, especially since the January inflation figure

exceeded expectations of several analysts.

Inflation has gone from its lowest in 43 months in August (before the border closure forced food price up), to the highest level in 21 months.

The CBN’s Monetary Policy Committee (MPC) in January called on the fiscal authorities to join in the fight to stem the surge in price levels.

Inflation seen neutral on equities While a 500 basis point increase in the mandatory percentage of deposit (Cash Reserve Ratio) that banks kept with the CBN at zero interest triggered a sell-off on banking stocks in January and dampened sentiments on equities, the jump in inflation will unlikely lead to higher CRR, analysts say.

Gbolahan Ologunro, equity analyst at Lagosbased CSL Stockbrokers told BusinessDay the Central Bank would likely maintain its CRR at 27.5 percent to avoid contradicting its policy to boost lending in the economy.

Instead, the analyst said

CBN would employ other methods - including unconventional ones to address inflation, noting the limitation of the apex bank given the supply-sided factors responsible for the recent surge in inflation.

Analysts at Cordros Capital and Chapel Hill Denham shared a similar view, with the latter not seeing any increase in Monetary Policy Rate in March.

A hike in CRR late January crunched liquidity and forced NTBill rates up as money market rates adjusted to limited liquidity for banks, thus luring investors back to the short-term bonds market.

The CBN had moved to raise the CRR in a bid to rein on rising inflation, now 313 basis points above CBN’s preferred maximum.

While there are minimal risks to equities from a CRR or MPR hike, analysts say investors are concerned about weak corporate earnings already reported amid a challenging economy even though higher inflation has lowered real returns on bonds.

Bauchi has the highest inflation, Kwara least Consumer price rose by 15.88 percent year-on-year in Bauchi, the most among the 36 states including Abuja for January.

Sokoto noted the secondhighest inflation rate nationwide at 15.2 percent while Kebbi, Niger and Anambra saw inflation print at 14.37 percent, 14.23 percent and 14.13 percent each.

O n the other hand, states with the lowest rate are Kwara (9.49%), Benue (9.61%), Delta (9.95%), Borno (10.44%) and Abuja (10.71%).

L-R: Ejile Aibangbee, FIRS board member South South; Muhammad Mamman Nami, chairman, Federal Inland Revenue Service (FIRS); Babajide Sanwo-Olu, Lagos State governor; Rabiu Olowo, commissioner for finance; Sam Egube, his counterpart for economic planning and budget; Ayodele Subair (right behind), chairman, Lagos Internal Revenue Service (LIRS), and others, at the FIRS chairman courtesy visit to the Governor at Lagos House, Alausa, Ikeja.

OIL&GAS

From AP Petroleum to Forte Oil Plc, shareholders rebrand company’s name to Ardova Plc ...targets 25% revenue from renewable sources in next 3 years DIPO OLADEHINDE

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or the second time in 10 years, following recent exit by Nigerian billionaire, Femi Otedola, Forte Oil PLC has officially changed its name to Ardova Plc. “The most important quality we bring to the market right now is our history and legacy of more than five decades in the energy downstream sector,” said Ardova Plc’s CEO, Olumide Adeosun.

Under the leadership of Adeosun, Ardova is targeting a 25 percent revenue from low carbon and renewable sources within the next three years.

“Our long and proud legacy gives us a vantage position from where we can see things differently about how en-

ergy is consumed today.

It is from this platform we are building a new

brand geared to lead to a future where energy is consumed differently,

such that we are poised to deliver energy for a brave new world,” Adeo-

sun said.

Shareholders and the public are expected to see rebranding of the company’s retail outlets across the country with Forte Oil fuel stations becoming Ardova Plc. The new changes will be the second branding strategy and ownership structure in almost 10 years. In December 2010, African Petroleum (AP) changed to Forte Oil following divestment by NNPC’s Pension Fund, making Femi Otedola the company’s core investor.

In June 2019, the Nigerian business tycoon, Femi Otedola, sold all his stakes – direct or indirect in Forte Oil Plc to focus and consolidate on the Chris Ngige (2nd r), minister of labour and employment, presents Labour Policy materials to Mary Beth gains of his power genLeonard, (m), United States ambassador to Nigeria; Festus Keyamo (r), minister of state labour and eration business, Geregu employment; William Alo (l), permanent secretary, and others, at the courtesy visit of the Ambassador to Power Plc. the Ministry.

Ardova, was coined from a combination of the Dutch/Arabic word: Aarde, meaning earth and the word ‘value’ mirroring the company’s ambitions to build a brand that has at the heart of its corporate strategy, sustainability leadership.

The new logo features a hexagram styled icon as the leading visual concept and takes on the moniker (AP) which creatively connects the company to its rich history and heritage, a design approach the company took to help create a nexus between history and modernity.

The company has existed in Nigeria for 56 years, starting as British Petroleum (BP), trading almost exclusively in fuels and lubricants.

Thursday 20 February 2020

BUSINESS DAY

COMPANIES&MARKETS

15

Business Event

FUNDS

AFRICA’S female fund managers to receive major boost with launch of multI-million dollar fund MICHAEL ANI

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frican leaders are putting women front and center of efforts to drive the continent’s economic growth through a gamechanging fund that invests in women fund managers and also provides technical assistance.

The launch of the African Women Leadership Fund (AWLF) will provide capital to both first time and experienced fund managers in support of UN Sustainable Development Goals 5 (Gender Equality) and 8 (Decent Work and Economic Growth), and African Union Agenda 2063.

The ground-breaking partnership, formally signed at the weekend in Addis Ababa between the United Nations Economic Commission of Africa (ECA) and Standard Bank Group, will be transformational in breaking down structural barriers to inclusive investing in Africa.

Over $20 million was raised for the fund on Saturday that has a current goal of $100 million. President Paul Kagame of Rwanda was instrumental in leading the way, pledging $500,000. Senegal’s President Macky Sall committed $500,000. South African President Cyril Ramaphosa also pledged to contribute to the fund. The private sector participants pledged the rest.

Prime Minister Justin Trudeau of Canada pledged

$10 million to the African Union to boost gender parity. Norway Prime Minister Erna Solberg pledged $8 million to AU initiatives. A portion of these resources will be earmarked for the women’s initiative.

Among the world leaders who witnessed the official launch of this innovative impact investment fund were UN Secretary-General, Antonio Gutteres, African Union Commission Chairperson, Moussa Faki Mahamat, Ethiopian President Sahle-Work Zewde. Former Liberian President Ellen Johnson Sirleaf was also in attendance, as were a number of former African heads of state.

“We are turning the tables and making women the decision-makers of investable money in Africa. We want women to be on the supply side of money, not only on the demand side,” said Dr. Vera Songwe, UN Under-Secretary General and Executive Secretary of ECA. A key goal of the fund is to empower women financial leaders who will drive economic growth, job creation, and create prosperity.

In Africa women-owned funds and businesses struggle due largely to lack of successful fundraising, insufficient exposure to systems and procedures, and lack of track records, among others. They also contend with gender-based social expectation, resistance to women in leadership roles and lack of a support network. The fund will empower

Africa’s women by giving them access to financial resources and investment management expertise.

Sola David-Borha, Chief Executive of Africa Regions at Standard Bank Group, says the fund aligns with the Bank’s purpose to drive Africa’s growth and “presents an opportunity for Standard Bank to leverage our footprint and expertise on the continent, and the relevant experience of our asset management arms, Melville Douglas and STANLIB Multi-Managers, to build Africa’s economies. Africa is our home, we drive her growth”.

Women fund managers will receive a deployment of capital, and subsequently invest in majority female-owned businesses. Even though the fund is sector agnostic, priority sectors will be education, manufacturing, healthcare, clean energy and agriculture. Additionally, technical assistance for fund managers and entrepreneurs will be offered through the initiative. This ranges from building capacity, direct mentoring to leveraging technology in health and education.

Songwe emphasized “The goal here is to give women-led financial investment activities a huge injection of jet fuel to bear out the proven positive correlation between gender balance, higher financial returns and developmental impact.”

In his remarks, SecretaryGeneral Gutteres said, “power is not usually given, it must be taken.”

L-R Felix Okolo, Economics 400 Level; Kamsiyochim Okpala, information Science and Media Studies 300level; Folashade Adefisayo, commissioner of Education; Munachimso Okpala, Information Science and Media Studies 300 level, and Boluwatife Akindele, MassCom 100 level, Students of the Pan-Atlantic University receiving an award for best paper presentation at the just concluded Univ Nigeria conference held at the Pan-Atlantic University from the commissioner of education

L-R: Segun Adejoke, representative of the comptroller general of Nigeria Immigration Service; Nyesom Wike, governor of Rivers; his wife, Eberechi, and Dandeson Jaja, chairman, Rivers State Traditional Rulers, at the inauguration of Rivers State Official Roll-out of the Enhanced Passport (E-PASSPORT) in Port Harcourt. NAN

CSR

Dufil commits investment to improve lives in elderly, Orphanage Homes KELECHI EWUZIE

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anufacturer and distributor of inst a nt n o o d l e s, Dufil Prima Foods Plc as part of its commitment to improve the lives of less privileged persons in Nigeria has donated food items, educational materials and several cartons of its products to selected orphanages and homes for the aged to commemorate valentine with the children and the senior citizens.

Tope Ashiwaju, Group Public Relations and Events Manager for Dufil, says the company believes in giving a reasonable proportion of profit earned back to the society, which it does through various corporate social responsibility initiatives and which he noted have far-reaching effect on the lives of Nigerians.

Ashiwaju while speaking after the visit of the company to the Heart of Gold Children’s Hospice

in Surulere, Holy Family Home for the elderly, Regina Mundi Catholic Church in Mushin, Modupe Cole Memorial Child Care and Treatment School, Akoka said the visit is a continuous endeavour for management of the company to put smiles on the faces of children and the senior citizens of the country.

According to Ashiwaju, “The donation is an avenue for the company to show love to the less privileged in the society including the orphans by putting a smile on their faces. In the spirit of this season, the management and staff of Dufil Prima Foods Plc want everyone to have something to cheer about during this season of love.”

Ashiwaju further stated that “In the past, we have donated medical equipment to hospitals to take care of children and mothers, refurbished town halls, donated laboratory equipment in schools and granted scholarship funds

at different levels of education.”

He added that Indomie will continue to seek ways to make life better for people in various areas of human endeavour.

Receiving the Indomie team at the Holy Family Home for the elderly (Regina Mundi Old People’s Home of the Regina Mundi Catholic, Archdiocese of Lagos), the home coordinator, Reverend Mother Anthonia Adebowale, eulogised Dufil for their regular support and encouragement towards the home. She expressed that the gesture will give a sense of belonging and make the elderly feel loved during the season. “We are grateful to Dufil Prima Foods for their kind gesture and we hope other corporate bodies and individuals will tow the path of Dufil in reaching out to the needy.”

The donations aside from Lagos were equally carried out in key cities across the country.

L-R: Ebrima Faal, director, Nigeria country office, African Development Bank (AfDB); Oyebanji OyelaranOyeyinka, senior special adviser on Industrialization to AfDB president, and Mohammed Sabo-Nanono, minster of agriculture and rural development, at a Special Agro-Industrial Processing Zones Inception Workshop in Abuja

L-R: Clem Agba, minister of state for budget and national planning; Mojisola Bakare, GM, corporate banking, Sterling Bank Plc; Senator Dino Melaye, and Paul Obazele, founder, Legends of Nollywood Awards, at the Legends of Nollywood Awards in Lagos

16

Thursday 20 February 2020

BUSINESS DAY

cityfile Oil dealer charged with N2m fraud

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5 3 - y e a r- o l d o i l dealer, Oluwafemi Gbadesire, has been docked before an Igbosere Magistrate Court in Lagos for allegedly obtaining N2 million under the pretext of supplying diesel.

Gbadesire, whose residential address was not given in court, is standing trial on a three-count charge bordering on fraud and stealing.

The prosecutor, Francis Igbinosa, told the court that the defendant committed the offences on January 16, 2019, at Badagry, Lagos.

Igbinosa alleged that the defendant and others still at large fraudulently obtained the sum of N2 million from the complainant, Samson Mubo, under the guise of supplying twomillionlitresofdieseltohim.

Monica Ugwuanyi (r), wife of Enugu State governor, administering oral polio vaccine on a child, at the inauguration of National Immunisation Plus Days (NIPDs) at Ibegwa Aka Primary Healthcare Centre in Igboeze South Council Area in Enugu.

NAN

Road accidents claim 84 in Edo, Delta, Anambra IDRIS UMAR MOMOH, Benin

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ighty-four persons are said to have lost their lives in road crashes in Edo, Delta and Anambra States between October and December 2019.

Kehinde Adeleye, the zo na l c o m ma n d e r o f zone Rs 5 of the Federal Road Safety Commission (FRSC), disclosed this in Benin on Tuesday. The zone Rs 5 comprises Edo, Delta and Anambra.

Adeleye said that within the period, 150 road traffic crashes were recorded in the zone with 303 people sustaining varying degrees of injuries.

A breakdown of the crashes showed that 24 people died in 38 road accidents recorded in October, while 47 people were injured.

In November, the zone recorded 18 deaths in 41 crashes with 75 people injured, while in December, 42 people were killed in 71 crashes with 181 injured.

“Specifically in Edo, we recorded 37 people dead in 59 crashes with 143 people injured between October and December,” said Adeleye.

According to the commander, the trend showed that the `ember’ months recorded higher road traffic crashes with fatalities.

He noted, however, that

“operation zero tolerance” embarked upon by the commission had helped greatly in reducing crashes during the `ember’ period.

Adeleye said that the major challenge faced by the FRSC in the zone was a lack of tow trucks, saying that there were only four tow trucks in the zone.

“We have only four tow trucks – one big tow truck donated by the Delta State government and three other small ones.”

The commander said with the availability of heavy-duty tow trucks, broken down vehicles on the roads would be evacuated without them causing obstruction to vehicular movements and accidents.

He warned travellers against embarking on night journeys, describing such trips as risky in every sense.

Adeleye said that motorists often drove at higher speed at night, explaining that these were some of the reasons why people were advised against night trips.

He said that FRSC commands in the zone had been mandated to ensure that broken down vehicles on highways were removed within the shortest possible time.

Adeleye warned parents against allowing their under-aged children to drive, saying that such parents would be prosecuted.

EFCC foils father’s attempt to smuggle in hard drug for detained son in Ibadan REMI FEYISIPO, Ibadan

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he Economic and Financial Crimes Commission (EFCC) has arrested a 60-year Muyiwa Otuyalo for attempting to smuggle in substance suspected to be hard drug for his son, Damilola Otuyalo, who is currently in the custody of the commission.

The older Otuyalo, a fish farmer, was at the premises of the EFCC in Ibadan on Monday, supposedly to visit his son. But while discussing with the

son, an officer noticed that he brought out a sachet of tablets and handed same to him.

The officer subsequently raised an alarm which led to the confiscation of the drug. The in-house nurse was called upon for assessment of the content and it was discovered that the said item was Rohypnol, a tranquilizer used under strict prescription for treatment of severe insomnia and assist in anesthesia.

The drug is said to possess high sedative effect www.businessday.ng

and is rarely used except when prescribed by licensed medical officers.

The younger Otuyalo was recently arrested after a criminal case of money laundering detected in the United Kingdom was reported against him.

The case which involved £45,000 was a fragment of a wider one involving about £500,000 for which he has been declared wanted by the London’s Metropolitan Police.

The suspect has been on the wanted list of the International Police (In-

terpol) before the petition was filed at the EFCC, Ibadan zonal office.

Officers of the Nigerian Interpol were already in contact with the commission in respect of the said case before the suspect’s father attempted to smuggle in the hard drug for him.

While further investigations are ongoing, the commission intends to hand him over to the National Drug Law Enforcement Agency (NDLEA) for possible prosecution of the suspected narcotic case.

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The prosecutor said the defendant knew that the representation he made to the complainant was false.

“The defendant did not supply the diesel and he did not refund the said money to the complainant,” Igbinosa said.

He said that the offences contravened Sections 287, 314 and 325 of the Criminal Law of Lagos State, 2015. The defendant pleaded not guilty.

The magistrate, F. F. George, however, granted bail to the defendant in the sum of N500, 000 with two sureties in like sum.

George ordered that one of the sureties should be a blood relation of the defendant and the sureties should show evidence of tax payment to the Lagos State government.

She adjourned the case until March 18 for mention.

NSCDC arrests 2 for vandalism and cultivating cannabis

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igeria Security and Civil Defence Corps (NSCDC), Anambra command, has arrested one Amobi Okafor for cultivating cannabis.

The corps also arrested another suspect, Sunday Chukwuneta, for vandalising iron roofing frames belonging to the Federal Government.

David Billie, the state commandant of the NSCDC, paraded the suspects in Awka on Tuesday.

He said that Okafor was arrested on February 13 at Nri, Anaochalocalgovernmentarea, while Chukwuneta was apprehendedinAwkaonFebruary14.

According to the commandant, Okafor, 45, was arrested at 12:00p.m., for allegedly attacking, matcheting and injuring one Mathias Ajoagu, a 71-year security man, at Lake City Secondary School, Nri. “Upon credible intelligence report, operatives of NSCDC discovered that Okafor was alleged to be growing a large expanse of cannabis in a palm plantation at the back of the secondary school where Ajoagu works,’’ he said.

He said that preliminary investigation by the command revealed that the suspect had been in the business for many years now.

The NSCDC official said that his operatives recovered machete, fresh leaves suspect-

ed to be that of cannabis sativa and other incriminating items from the suspect at the scene.

Billie also said that his men on February 14 at about 4:34p.m., arrested one Sunday Chukwuneta,50, for vandalising and stealing iron roofing frames being used for the construction of the Federal Secretariat in Awka.

He said that the suspect was apprehended within the secretariat behind Ekwueme Square, opposite Anambra State Secretariat in Akwa.

Billie said both suspects had confessed to committing their crimes.

He said that Okafor would be handed over to the National Drug Law Enforcement Agency (NDLEA), while the corps would prosecute Chukwuneta.

Okafor while answering questions from journalists said that he was not aware the weed growing in his plantation was cannabis.

According to him, the NSCDC officials told him the weed was a psychotropic substance.

Also, Chukwuneta said that those who sold the iron frames to him gave him the impression that the property belonged to them.

“This deal that led to my arrest was the second. I paid them N14, 000 in the first one, before this second trip,’’ he said.

Kano Fire Service rescues 70-yr-woman from well

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70-year-old woman, Binta Kabir, has been rescued from a well by officials of Kano Fire Service.

Kabir was said to have fallen into the well at Tudun Wuzirchi in Kano.

Spokesman of Kano State Fire Service, Saidu Mohammed, said that the incident occurred at about 12.40p.m on Tuesday.

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“We received a distress call from one Faruku Sani at about 12.40 pm that an old woman had fallen into a well. On receiving the information, we quickly sent our rescue team to the scene at about 12.47p.m,” Kabir was rescued alive with injuries and taken to Murtala Mohammed Specialist Hospital for treatment.

Thursday 20 February 2020

BUSINESS DAY

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243.89

1,952.68

1,180.26

1,055.85

367.35

129.45

510.79

242.21

1,912.48

1,189.50

1,042.87

-0.21

-2.16

-6.47

Week open (07– 2–20)

28,067.09

14.618 trillion

2,352.39

1,129.57

734.99

Week close (14 -2–20)

27,755.87

N14.456 trillion

2,352.39

1,108.92

734.99

Percentage change (WoW) Percentage change (YTD)

-1.11 3.40

-0.39 10.72

-1.83 -3.72

0.00 0.00

-1.30 3.83

2.95

2.89

-13.84

NSE Lotus II

-0.69

-2.06

-7.74

4.24

NSE Ind. Goods Index

NSE Pension Index

-6.47

-1.23

10.59

-1.06

Tier-1 banks’ results may spur buying interests in stocks …as weak sentiments dominate domestic equities market Iheanyi Nwachukwu

I

f the results of tier-1 banks come in stronger than expected, it may stimulate buy sentiment at the Nigerian bourse.

The Board of Directors of Access Bank Plc met on February 10 and approved the group’s audited financial statements for the year ended December 31, 2019 and the payment of a final dividend.

Also, the Board of Directors of GTBank had met on January 22 to consider the audited financial statements for the year in review.

Issues relating to full year dividend were also discussed in the meeting.

The Board of Directors of United Bank for Africa Plc met on January 27 and considered, amongst other matters, the audited financial statements and Reports for the year ended December 31, 2019 as well as proposals for the Final Dividend.

On the same audited results and payment of final dividend, the Board of Directors of Zenith Bank met on January 28; while FBN Holdings Board of Directors met on January 30.

These banks results submitted to the Central Bank of Nigeria (CBN) for approval are expected at the Nigerian Stock Exchange (NSE).

“Although investor sentiment has slightly improved, full year 2019 financial results will be a major factor in sustaining interest over the coming week, in our view”, analysts

at Coronation Research said in their February 17 note.

“We persist with our strategy to be underweight brewers, food and fast moving consumer goods companies on weak medium to longterm real growth and stiff competition from unlisted brands. “Having taken punishment for our bank-heavy orientation, we are minded to await full year 2019 results, at least, before considering a change in strategy,” the Coronation research analysts said.

Nigeria equities market has maintained losing streak lately, eroding the gains recorded earlier this year that hitherto placed the

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Nigerian Stock Exchange as world’s best performing market.

Though driven by persistence sell-off on market bellwether stocks as investors sentiment remains low, the market still offers opportunity for investors to acquire value stocks that are currently priced at their new lows.

The stock market had last week sustained losing streak as bearish sentiment prevailed in three of the five trading sessions. The market opened this week’s trading sessions in the red, as evidenced in Monday’s record dip of -0.67percent which reduced the year-to-date (ytd) positive return to

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new low of +2.72percent.

Nigeria stock investors lost N162billion in the trading week ended Friday February 14, 2020. The review week was filled with a mix of cherry picking and profit taking activities.

This happened comes despite that 19 equities appreciated in price, higher than 15 equities in the preceding trading week. Contrarily, 35 equities depreciated in price, lower than 49 equities in the preceding week, while 109 equities remained unchanged, higher than 99 equities recorded in the preceding week.

Amid declines across major sub-

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sectors and weak investor sentiment, some market watchers expect no major deviation from the current dismal trading pattern.

“Amid the uninspiring earnings results posted so far by many of the medium and large capitalised companies, we expect investors’ sentiment to remain flat in the trading week”, GTI Research analysts stated in their February 17 note.

However, they believe the expected earnings result of the five biggest lenders - First Bank, UBA, Zenith, GTB, and Access, if released this week and print strong, may spark modest buy sentiment.

“With last week filled with a mix of cherry picking and profit taking, we envisage a cautious trading strategy this week in anticipation of other earnings reports,” according to Lagos-based Vetiva equity research analysts.

“We expect the influx of audited financial reports of companies that had not released unaudited result earlier to drive performance as the result of some of the tier 1 banks is expected to spur buying interests”, said United Capital research analysts.

In the view of Cordros research analysts, the trend witnessed last week will persist this week, “as weakening market sentiment and the absence of positive catalysts are expected to pressure market returns.”

Nonetheless, they advised investors to take positions in fundamentally justified stocks.

18

Thursday 20 February 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equities market: Sell sentiment persists

T

he weekly performance of the equities market took a southward turn once again as the all share index shed 1.1percent to close at 27,755.87 points.

Although, the year to date (YTD) returns moderated to +3.8percent, the local bourse remains the best performing amongst the other African exchanges under our coverage.

In terms of activity, the value and volume traded decreased by 28percent and 38percent to an average of 2.4billion and 182.4million respectively.

We observed negative performances across 4 of the 5 sectors under our coverage.

The consumer goods sector (-6.5percent) declined the most, driven by a significant loss in NESTLE (-10percent).

Notably, Nigerian Breweries (NB) published its audited 2019 result, Revenue and PAT fell by 0.4percent and 17percent yearon-year (y/y) to N323billion and N16.1billion respectively.

Nigerian Breweries declared a final dividend of N1.51/share, resulting in 2.9percent dividend yield. The oil and gas sector (-0.7percent) also reported a w/w decline amid sell offs in Oando (-4.7percent). The Insurance sector (-2.2percent)

of companies that had not released unaudited result earlier to drive performance as the result of some of the tier 1 banks is expected to spur buying interests.

Money Market : N1.3tn maturity buoys overall liquidity levels The financial system liquidity transitioned from a tight position (below N100billion) at the start of the prior week to close the week at a buoyant level (above N900billion). This was driven by inflows from OMO (N516.9billion), FGN Treasury Bills (N154.4billion), Bonds (N606.4billion) and final coupon payments on maturing bonds (N47.1billion) during the week.

M e a n w h i l e, o u t f l o w s which came in the form of OMO (N214.9billion) and FGN Treasury Bills s auctions (N154.4billion). Accordingly, average interbank funding rates Open Buy Back (OBB) and Over Night (O/N) rates crash from double-digit levels (over 15percent) to close the week at 3percent.

At the primary market segment, while all maturing treasury bills (N154.4billion) were rolled over, the CBN only mopped-up 41.6percent of the OMO bill maturity that came in

also declined on the back of Linkage Assurance (-25.8percent) and Royal Exchange (-8percent). Finally, the banking sector (-0.2percent) closed lower amid losses in Access Bank (-1percent) and FBNHoldings (-0.8percent). On the other hand, the Industrial goods sector (+0.8percent) gained on the back of BUA Cement (+1.1percent) and Cutix (+0.7percent).

Market sentiment improved slightly, as market breadth increased from 0.3x in the previous week to 0.5x.

Specifically, 15 stocks gained against 31 decliners. This week, we expect the influx of audited financial reports

on Thursday. Notably, demand at the Nigeria Treasury Bills (NTBs) auction was strong (Total Bid to Cover: 1.9x) compared to an underwhelming outing at the OMO auction (Total Bid to cover: 0.9x).

Also, while average stop rates at the NTB auction fell by 32bps (91-day: 3percent; 182-day: 4percent and 364day: 6.54percent; previously 3.5percent, 4.5percent, and 6.5percent respectively), the CBN only reduced the stop rate for the 364-day OMO bills by 1bps to 13.04percent.

At the secondary treasury bills market, the buoyant level of liquidity in the system triggered a bullish sentiment, driving

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average treasury bills and OMO yields down 6 basis points (bps) and 28bps w/w to 3.8percent and 13.25percent respectively.

This week, we expect the CBN to mop-up some of the existing liquidity via CRR debits and OMO sales. However, with sizable OMO maturity (N627.2billion) scheduled to hit the financial system on Thursday, we expect overall liquidity level to remain buoyant and pressure rates at the secondary market lower.

Bond Market : Nigeria to return to the Eurobond market in Q1-2020 Activities at the secondary bonds market declined in the prior week amid as liquidity inflows that came in late in the week. According to FMDQ data, total value of bonds traded on the exchange fell by 16.8percent week-on-week (w/w) to N465.9billion. In all, average yield fell 7bps w/w to end the week at 10.2percent.

In the Eurobond space, we saw a renewed interest in the FGN dollar notes as Brent prices recovered, closing the week above Nigeria’s Budget benchmark of $57/b. As such, yields dipped across the curve, down 21bps w/w on average to 5.8percent. Similarly, sentiments were bullish in the corporate Eurobond space as yields on all outstanding notes declined, down 6bps w/w on average to 5.1percent.

Also, according to media reports, Nigeria is set to return to the Eurobond market in 2020, having stayed off the market in 2019. This is as foreign investors’ appetite for highyielding African debt remains strong despite fears of a global slowdown and commodities market volatilities.

Also, this was evidenced by the strong demand for Ghana’s recent Eurobond issue with subscription rate at 5x the offer (issued in three tranches; $1.25bn of 6-year at 6.4percent, $1billion of 14-year at 7.9percent and $0.75billion of 41-year at 8.8percent) at an average coupon rate of 7.7percent.

This week, we expect activities in the secondary bond market to track the outcome of the Feb-2020 bond auction as players look to new issuances at the auction, wherein the DMO plans to raise N140billion via re-opened 5-year (N45billion), 10-year (N45billion) and 30-year (N50billion) notes.

Notably, we see stop rates falling from their previous auction levels on the back of the excess level of liquidity in the system.

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Vetiva Research

Stronger margins lift Guinness to profit

G

uinness Nigeria Plc showed a stronger performance in its second quarter (Q2) 2020 results, coming off a loss position in first-quarter (Q1) 2020. The brewery giant reported significant growth in topline as revenue increased 54percent quarter-on-quarter (q/q) to N41.4 billion, translating to a 1percent year-on-year (y/y) growth in half-year topline (H1’20: N68.3 billion, H1’19: N67.8 billion).

While we recognise that Q2 is usually their strongest quarter, given the festivities in the period, we specifically note management’s continued drive to strategically shift volume focus to the Spirit segment of the business which is a high margin segment and now contributes over 19percent to revenue (+1percent y/y) as at half year (H1) 2020.

Despite this, Gross margin declined 1percent y/y, dragged by lower margins in Q1’20. In addition to this, the company reported that they had increased prices across Lager, Beer and Mainstream Spirits.

These increments are following another round of excise duty increases in the Beer and spirit segments (Beer: N0.30/cl to N0.35/cl, Spirits N1.50/cl to N1.75/cl). We recall that management had backpedaled on price increases - when excise duties were first increased – to maintain

competitive pricing and market share. However, even with the price increases across board, the company reported 56percent y/y volume growth in the Mainstream Spirits segment for H1’20.

There was also a marked improvement in operating efficiency in the quarter as the company’s OPEX margin declined 5percentage points (ppts) q/q and 0.3ppts y/y, however, this was dragged by the poor performance in Q1’20 as Opex margin in H1’20 rose 0.17ppts y/y.

Meanwhile, Guinness had been able to halve its finance costs in this quarter (from N1.2 billion in Q1’20 to N0.6 billion in Q2’20), paying down most of its short-term debt holdings, such as its bank overdrafts and its letters of credit, presumably to take advantage of the current interest rate realities in the fixed income environment.

Overall, profit after tax (PAT) declined 49percent y/y from H1’19, majorly due to the loss recorded in the first quarter.

Spirits to remain the support system Although we have seen quite an impressive Q2’20 performance, we slightly adjust our FY’20 PAT forecasts downward to N4.7 billion.

Whilst we have increased our Revenue forecast based on the expected price increases across the spirit and beer segments -

adjusted for a balancing effect on volumes - we make slight revisions to forecasted Cost of sales, given the H1’20 run rate and expect Cost of sales to decline only 1percent y/y (previous: 6percent y/y).

That said, Spirits remain the favoured child as we still expect its contribution to Revenue to hover above 19percent for the period amidst still strong competition in the beer segment. Meanwhile, given our outlook for increased inflation in the first half of the year, we made slight adjustments to our expectation for full year (FY) 2020 operating expenses to N30.62 billion (-3.1percent y/y, previous: -7percent y/y).

Despite this, we expect operating profit to grow slightly by 2percent y/y to N8.3 billion. Furthermore, we expect the continuous re-financing of current debt holdings to translate to significantly reduced finance costs for the remainder of the year, although the line item is expected to grow 13percent y/y to N2.9 billion in full year (FY) 2020 (given the run rate from Q1). We therefore foresee a slightly depressed PBT of N6.9 billion for the year (FY’19: 7.1 billion), and project a full year 2020 PAT of N4.7 billion (FY’19: N5.5 billion). All in, we revise our target price downwards to N43.53 per share but maintain our “Buy” recommendation.

Allianz Nigeria changes the game with 60 minutes claim settlement Modestus Anaesoronye

O

ne of the fastest growing insurance companies in Niger ia, Allianz Nigeria Insurance plc has launched a new initiative called “The 60 minutes Revolution” which ensures that customers experience faster claims resolution within 60 minutes.

It will no longer be business as usual as customers will now have their motor claims settled within 60 minutes given that they send all the required documents.

We u n d e r s t a n d t h a t complete customer satisfaction is not solely about giving competitive rates or swift delivery of policy documents but also how quickly we can have claims resolved; how quickly we can help our customers get back on track, added Owolabi

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Salami, executive director.

Customers no longer have to worry about how long a claim will take or when they will get paid, It will only take us 60 minutes to have your claim resolved, what we require to enable us achieve this is a filled claim form, picture showing full view of vehicle and estimate of repair commented Adedoyin Dickson, head of Retail Claims.

Explaining further the rationale behind this initiative, Wa l t e r B o s s m a n , c h i e f marketing and strategy officer for Allianz Nigeria notes that “in a society as fast-paced as ours where every aspect of life seems to be competing for your attention, a delayed motor claim should not be on the list.Hence, our resolve to revolutionize the industry by making sure that our customers are not inconvenienced any further by paying their claims within 60 minutes”. @Businessdayng

The Allianz Group is one of the world’s leading insurers and asset managers with more than 92 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 764 billion euros on behalf of its insurance customers.

Furthermore, their asset managers PIMCO and Allianz Global Investors manage more than 1.6 trillion euros of third-party assets. Thanks to our systematic integration of ecological and social criteria in their business processes and investment decisions, Allianz holds the leading position for insurers in the Dow Jones Sustainability Index.

Thursday 20 February 2020

BUSINESS DAY

19

Investor Helping you to build wealth & make wise decisions

‘We are resolving legacy issues causing unclaimed dividends’ Mary Uduk, acting Director General, Securities and Exchange Commission (SEC) spoke to senior journalists in Lagos including Iheanyi Nwachukwu. Excerpts Do you think the courts are aiding the SEC to do its work? do believe that they court helps us to do our work, because they too are set up to protect everybody and help SEC to do its job.

We do not have any power to prosecute and when we need to, we take them to court and the courts will do their work. Both the court and SEC have their work.

The SEC has confidence in the court systems; we use the court to get injunctions that further the work of the SEC. There is no doubt that the courts aid the regulatory objectives of the Commission. We are happy with the judicial system.

Are there policies you think the Government should initiate to support the capital market?

I want to say that we appreciate government in initiating of the Finance Bill, for those of you that read the Finance Bill you know that there are a number of initiatives that are in support of the capital market. We had expected more because we have been working on those initiatives for many years with Federal Inland Revenue Service (FIRS) and other relevant stakeholders.

The government has through the Finance Bill answered some of our prayers. There are others that we thought they would have done like the issue of taxes but they gave us what they thought we should have.

We will continue to push for more tax reductions in different areas. We also expected that government will give us some other palliatives for some companies to encourage them to come to the market. We are still working with government to ensure those are done and this is just the beginning as the Finance Minister said. You don’t have to wait for government or National Assembly to repeal some bills or come up with new ones, it will take years but now with this Finance Bill and with what they have done we will start again to work towards next year.

The focus is driving investments and for us to do that we must bring capital into key areas, the issue of tax incentives is very critical.

Infrastructure funds, government can’t fund infrastructure so private sector would do that so we should be able to have infrastructure funds; and investments should enjoy tax incentives.

Private Equity Funds (PEF) that also drive investments in SMEs, Venture Capital etc these are critical areas and the government can look at. Private equity funds operators who invest in core areas of the economy like mining, agriculture should be granted certain incentives. These incentives

I

Mary Uduk

will drive inflows of capital into those areas.

What do you think the regulator should do to increase new issues in the market?

As we speak, we have a market Committee going round engaging some of these companies to come to the market. We also have a standing market committee that is encouraging and engaging other companies to come and list in the market.

Don’t forget that these companies are private companies; some are family companies, it takes a lot to get them to come to the market. We also found out that other jurisdictions have same issue. I remember discussing the same issue with Saudi Arabia when we had Africa and Middle East Regional Committee (AMERC) meeting and one of the things they said was they had to reduce lots of their requirements to get these companies to come and list by starting them with what we call equivalent of our second tier market and then gradually moving them into the main market. We are also looking at what the requirements are that the companies find hard or difficult to comply with.

We will work with them to ensure that we see what they can work with to bring them to the market.

I n a d d i t i o n , w e a re a l s o working with the Exchanges, in other jurisdictions. They also have something like a clinic where the exchanges and regulator would assist those companies to comply with those requirements, especially on the issue of governance because that is very key.

The exchanges and the regulator will work with those companies to assist them to comply on the issue of governance. We would also engage other government agencies like those with government holding www.businessday.ng

and they are willing to comply with the listing requirements. Some of those companies are almost ready to comply with the listing requirements.

On the issue of governance, I know in some instances they have to comply with all of the governance provision, some jurisdictions are looking at it critically with a view to determining what aspect of governance they could step down for some of these new companies. Maybe we should begin to do same. In respect of LNG, we have been engaging NNPC and we had a meeting with LNG and I am sure when they are ready they will come.

Where are we on unclaimed dividends?

For new dividends issued now, we don’t have problems with them.

What we have are the legacy issues that have been there and also the issue of multiple subscriptions of those days.

As long as people don’t come to claim their shares it will be difficult to wipe out unclaimed dividends. We have been working with the brokers to get in touch with these people who bought shares in different names to come forward and claim their shares.

It will be difficult to wipe out those unclaimed dividends.

If I have shares and I don’t come forward to claim them either because I had forgotten the names with which I bought them, as long as they are not claimed it will be difficult to know where to send these dividends to.

They are still the legacy issues that we are trying to combat. But for the new dividends today that are being issued, we don’t have problems there.

For that reason, we have been working with the registrars, we have been working with the brokers to get in touch with these people who bought shares in different names to come

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forward and claim their shares. I know that we have had a lot of engagements with the brokers and registrars in respect of that.

We are trying to resolve the legacy issues and to this end, we are engaging the registrars, Central Securities Clearing System (CSCS), the brokers to update the records in the system.

Last year, in November we issued a circular directing all stakeholders to update their records in respect of their clients and that information should include the BVN. At the time the shareholders invested their money there was no BVN, we have now directed the brokers to update their information.

This information will be sent to the registrars and CSCS and the issues will be addressed.

We believe that if that is concluded, the issue of unclaimed dividends will be addressed. Most of the issues we are having are with legacy issues and the only way we can solve it is if we update our own records and the stockbroking firms are updating their records. We also said in that circular that if any client does not update his records he will not be allowed to trade.

When are we likely to see the listing of the DISCOs and GENCOs? The DISCOs and GENCOs were supposed to operate for 5 to 7 years because government had reasoned that at that time they would be ready to come to the market.

We know that government is doing a lot to clean them up, to bring them up to speed, and to get them ready for the market. It is only when they come to the market to raise long term financing that they will have the money to operate well and be attractive to investors. But for now they are not ready, since you are all in this market, when they are ready you will all know. We are engaging them and working with Bureau of Public Enterprises (BPE) for them to be able to come to the market.

Demutualisation of the NSE, what stage is it now?

They have demutualisation plans and everything is being taken step by step. We just gave an approval in principle and they have a court order to hold an Extraordinary General Meeting (EGM) and a notice has been published. We are following the principles and the rules as the SEC had issued and also the demutualisation Act, let us be patient as we are waiting for it to take place.

Are there plans for recapitalisation of capital market operators (CMOs)?

Recapitalisation should happen for the market to be better. If we have say 20 or 50 big firms playing as opposed to what we have now which @Businessdayng

is 255, the market would be better. We want strong firms, it is something that should happen, well capitalised firms as opposed to the situation we have now. Let us work towards what will make it happen.

A number of other sectors are recapitalising; we are asking our CMOs to think about it because sooner than later it would have to happen.

What is the SEC doing in the area of investor protection?

For investor protection, we ensure that no one takes your money away in an illegal manner and the protection is not that somebody will compensate you. A regulator will also tell you try to diversify your portfolio, try to talk to experts and their different vehicles of investments. In one way or the other they will have effect of the market cushioned on their wealth.

Is the SEC concerned about price movements of equities market?

For the regulator, what we are interested is do you have an efficient market? Do you have a liquid market so that transaction cost will be reasonable so that someone does not take advantage of another person? Market can move up or move down, all we can do as a regulator is to ensure that people do appropriate disclosure so that one doesn’t have information and hide it and then use that information at other people’s detriment.

If all those are done and market moves up or down there is almost little or nothing we can do about it and that is the essence of investment.

But for investor protection, we ensure that nobody takes your money away in an illegal manner. The protection is not that somebody will compensate you when the market moves down. When market moves up it is an advantage to some people and when it comes down it is also an advantage for some people to buy.

The cardinal of the market is buy low and sell high, when it moves up, there are some people who are ready there to take profit. That is why we say market goes down on the back of investors taking profit.

Whichever way the market goes, as long as investors’ monies are not taken illegally the cyclical movement of market is just a natural way that a capital market operates.

That is where we need the press to support our initiatives in terms of creating a derivatives market. It will help reduce the volatility seen in our market. It is one of the efforts we are making at ensuring we have a more efficient market. If we have a market where derivatives are working, we can short sell. We have securities lending and all that, we will have a much more efficient market and we will not see the spikes we are seeing now.

20

Thursday 20 February 2020

BUSINESS DAY

INTERVIEW Interview with Private Sector Leaders

‘We have de-risked the business side that In her last semester at Harvard Business School, MIRA MEHTA, CEO, Tomato Jos Incorporated, which owns Tomato Jos Farming and Processing Limited, took what was then just an idea as her independent project, to determine whether it was a viable company to start. Six years after starting, the company is now establishing a tomato paste factory that plans to produce 10 percent of Nigeria’s demand, holds a 500-hectare land, and has grown farm yields from 8 tons per hectare to 36 tons per hectare, many times more than the average yield in Nigeria. A number of tomato processors have failed in Nigeria, and in almost all cases, supply of raw materials was their bane. Mehta in a Skype interview with CALEB OJEWALE speaks about how the company has addressed this challenge and what other players can learn. Excerpts:

H

ow did you come about the idea for tomato production and processing in Nigeria?

I used to work at Aminu Kano Teaching Hospital and we would drive from Abuja, which is where I lived. I noticed around January and February in 2009 while we were driving to one of these small hospitals around Kano, that as I looked around everywhere was red because it was covered in Tomatoes; The Road, next to the road, the Rocks next to the road. Everywhere I looked I could see tomatoes and dried onions on the side of the road, it was just this amazing sight, and I was so surprised I asked the driver, what’s going on? Why is this happening? And he said well, there’s an oversupply so the farmers can’t sell the tomatoes. The price was not favourable (at that time of the year) so they are trying to dry the tomatoes and maybe sell them in the rainy season.

I thought within me, there must be something else that can be done with the tomatoes. Coincidentally, at the same time I was learning how to cook Nigerian food such as stew, Jollof, Moi Moi and all these different things, many of which required using tomato paste. Then it dawned on me; I just saw all these tomatoes on the road so why can’t we be making these tomatoes into paste? That was how the idea first came to me. That idea came to me in 2009, but I really did not do anything about it until 2013 and 2014 when I actually started the business.

Did you start the business with production of tomatoes or were you processing to solve the problems of those guys you noticed in 2009?

I left Nigeria in 2012 to go to Harvard Business School and in my second year at business school, I was talking to some of my friends who are Nigerians about the idea I have had for a tomato Factory.

One of them told me “go look up tomato processing in Nigeria on Google because Dangote is doing what you’re saying”. And I said, “What! No way”. So I went on Google and I suddenly saw all these articles and I was like, wow, this could actually be a real business. If the richest man in Africa thinks there’s an opportunity, maybe I should do my homework too.

During the last semester of business school, I really was just trying to put together a business plan to understand tomato processing and if the operational and financial feasibility make sense.

I went to visit different processing facilities, for instance in California then had phone calls with processors in Italy. I also talked to a few guys who process in China.

Every single person I talked to told me “Mira the most difficult part of this business is the farming. The processing is actually not as difficult as the farming”.

That was why I decided to start with farming first. I was told if one could farm the right yield, the right quality, the right type of tomato, and the right price then you can add a factory to that business and it will make sense.

But you should start with farming, and that is

how I started with farming.

The first step was how to farm commercially, the right quality tomatoes at the right price points. Once we achieved that we decided to teach small holder farmers how to farm the right type of tomatoes and achieve the right price points. Now that we have also achieved that, the next step that we are finally taking is to actually put the processing facility in place.

When you started, what expanse of land were you cultivating?

When we started farming I didn’t have a lot of money. I found a very generous farmer who had a feed mill in Nasarawa State who told me I could farm on his land. I had a three-hectare plot of land and in the first year, we only farmed one hectare. It was a very small project at first because that was what I could afford.

We did one hectare and now we have grown significantly, but that was how we started.

You have grown from one to how many hectares now?

We now have a 500-Hectare allocation. We have about 40 hectares under irrigation for tomato farming and we are installing another 80 hectares of land this year. By August, we will have 120 hectares of tomato farmland under irrigation.

Post-harvest losses in tomato have been put at 40 percent, which probwww.businessday.ng

ably is why the farmers you saw had to dry their tomatoes by the roadside.

Interestingly, on one hand we have post-harvest losses, on the other hand Nigeria has a huge deficit. When coming into this business, what opportunities did you see around resolving these issues of post-harvest losses and harnessing value to meet the deficit?

An interesting thing about tomatoes in other countries is that before farmers even start producing, they know whom they are growing for. Whether they are growing for the fresh market or for a factory, they know in advance. In Nigeria because there are so few factories most farmers are trying to grow for the fresh market. However, most consumers with higher purchasing power are not close to the production belts that tend to be in the north. Because tomatoes are so perishable, you run into challenges because by the time they for instance move from Kaduna to Lagos or from Katsina to Port Harcourt, you end up with damages because it is such a long journey by road.

We are coming in as a processor so we can actually take fruits that are bruised fruits, that do not look, or even small. The only thing that we really care about is the colour of the fruit and the sugar content of the fruit, and to a certain extent how mouldy it is. Even if it’s broken, we can still process it because we’re

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going to cook it!.

We see that as a big benefit because to start with, farmers won’t have to move their product so far, as they can move it closer to a factory. This will prevent losses and secondly, the range of acceptable tomatoes that we can take that a consumer might not take is wider so we can actually stem post-harvest loss from two different angles.

How have you prepared to be able to succeed where others have seemingly failed with tomato processing?

One of the important things is that our farming team has learned over the years. Tomatoes are much harder to grow than maize or rice or soy.

They are very technical. They are very prone to disease and all kinds of problems. Because they are grown in the dry season, they have a requirement for irrigation. We are very fortunate to have a team that includes an agronomist from the US who has farmed Tomatoes very productively on farms that sell to processors. We also have local agronomists who understand Nigerian conditions and what kinds of materials and resources are available in Nigeria.

For three years, a lot of it was figuring out how do we map out the best practices from California and make them appropriate for Nigeria. You cannot just take exactly what you did in California, copy, and paste in Nigeria. You have to figure out which things you take over and which Nigerian things you add in so it took us three years to try and figure out what our protocol should be.

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Thursday 20 February 2020

BUSINESS DAY

21

INTERVIEW

made tomato processors fail in Nigeria’ The first three years was really doing that for ourselves and then the following three years was; how do we now take what we have learned on a commercial farm and break it down for a smallholder farmer. This is because smallholder farmers also need to learn and change a lot of their farm practices. They need to understand how to use a different type of seedling and irrigate in a different way. We had to learn how to become teachers because we had been doing it ourselves and now needed to teach a lot of people who think they know it all already. Being farmers for 20 to 30 years, there was the perception; “What can we teach them?”

It has been a long process and a lot of people didn’t take me seriously. They are like, “oh she’s just farming, she’s doing some small thing”, but what I was doing was gaining knowledge that we now have that will enable us to become successful at the larger scale.

There is also fertilizer. Just like people, plants need to have nutrients in order to grow.

They need to have food in order to grow. The genetic variety, which is the type of plants that you’re growing also matters. There is also use of pesticide, land preparation etc and generally, what we found is that you cannot just do it in one season.

There has been this talk of Nigerian tomatoes not being appropriate for production into paste. What can be done to change this?

The two most important things about tomato suitable for paste are how much sugar is in the tomato, and the colour of tomato. Typical varieties that local farmers use tend to produce tomato with low sugar content.

I recall seeing in your fact sheet after the groundbreaking ceremony that you are targeting 10 percent of Nigeria’s consumption?

That is not with this factory. It is going to be with the next one. This current factory could do just about one percent of the market share.

This makes them less desirable for processing because it means you need many more tomatoes to get the same amount of paste. They call paste concentrate because it is concentrating the sugar. If you have less sugar to start with, you have to concentrate much more to get the same amount of paste.

The thing that can really improve the sugar content and colour is introducing new and better varieties of tomatoes for farmers. They also have to be convinced not to keep reusing their old seeds, but to buy the new improved varieties every once in a while. The farmers have to actually use the better seeds in order to get better sugar and colour.

When will this factory start producing?

We are expecting to come start production by this time next year. The groundbreaking was to signify the commencement of the Civil Works.

We are placing the order for our equipment very soon within this week. We will start to put up the physical factory, bring in the equipment and assemble it so that we can Commission in January of next year then do our product and launch it in the second quarter.

Does size also matter?

It matters more for the fresh market but for processing not quite. Processing could use a small sized tomato that is denser and has more sugar in it. When you cut the tomato open, you see a lot of flesh instead of a lot of water coming out of the fruit, and that is really important for us. Size does not really matter because you are going to end up cooking it anyway, what matters is the weight.

What have you been doing with all the tomato grown in the last six years? Have you been selling to the fresh market or other processors?

We have been selling it primarily to the fresh market so far. This year we are talking with a few different processors to see if we can sell to them.

We have been selling at mile 12, major markets in Kaduna, Ibadan, Onitsha, Port Harcourt. We sell Tomatoes by the truckload, and we get a lot of people who request tomatoes from us, but we’re like “listen if you want to buy 10 kilograms we have got ten tons for you”.

We have been selling B2B into the bulk markets.

Apart from tomato, are there other crops you have been cultivating in all your years of farming in Nigeria?

Tomato is a dry season crop, but during the

What is the planned capacity of your processing facility?

The capacity is going to be 84 tonnes a day of raw tomato and about 2,000 tons of finished product per annum.

rainy season, of course, we need to keep making money on the land and we also want to keep engaging our Farmers. So in the rainy season, we grow soy and maize. It is also not good for the land to plant the same thing repeatedly every year, otherwise the land gets used up. We started a practice of finding alternatives we could grow every three years.

This year we are growing wheat, dry season soy, spices in May, and we are also growing sunflower. In the past, we have grown cabbage, eggplant, pepper, garden egg, and sweet potato. We do a lot of things with our lands but the main crop remains tomato. For us, full utilisation of the land all year round is very important. Also, understanding what we can grow on our soil is something we use to our advantage.

You have been in Nigeria running your business for six years, what has the experience been like for you?

Nigeria is extremely relationship based, and understanding this is very important to be able to do business successfully. I found that to be the case when I worked in America as well. We have also found that doing something when you have promised to do it goes a long way in building credibility.

There are a lot of people who promise things and then don’t follow through. We do not like to make big announcements because we do not want to say something unless we are sure we are going to do it, and I think that has worked in our favour.

Also in doing business in Nigeria, there is a lot of red tape sometimes. It is especially hard for farming where a lot of support services do not exist. For instance, when we have tractor breakdown, the dealer does not have spare parts in their inventory, so it takes forever to get it fixed. When any of our special equipment breaks down, it is hard to get it back up and running. There is also the lack of infrastructure, and I think every business owner faces that challenge. It is really hard to work without power, really hard to work without (good mobile) network coverage. Those kinds of situations are challenging, but you just have to learn how to be resourceful and to work around them.

What advice would you give to other foreigners hoping to invest in Nigeria in order to get it right?

You have to live here first and understand what you want to do. I think it is really hard to be successful if you just parachute in and not have any clear knowledge or context of the country. Even though I was working for a non-profit, the fact that I lived and worked in Nigeria for four years before I started this company helped me so much. At least for me, it was learning by doing and I think it’s especially hard in Nigeria to come in if you haven’t worked for somebody else here before and had some experience, or you hire local people with good experience because there has to be local knowledge.

Farm yields are generally low across Nigeria, but what has been the experience on your farm?

In the first year when we were farming on one hectare, our yield was eight tonnes per hectare.

We were very discouraged because we thought we were coming in with all this special knowledge from California and we ended up just performing the same as the average farmers or just barely better than them. However, over the years we have steadily increased and this past year, our yields were 36 tonnes per hectare.

Almost everyone interviewed in the agric sector complains of access to credit. To start with, have you been able to access any of these opportunities from the CBN, considering they have talked so much about it in recent years?

We are very excited to start working with the CBN now that we are going into processing and have equipment coming in. Now that we are finally putting in equipment, we believe it is now the right time to start partnering with the CBN and accessing some of the available facilities. We are really excited about

How were you able to go from 8 to 36 tonnes per hectare?

It has taken us five years to achieve this but essentially, with tomatoes there are no silver bullets to getting a higher yield. There is not just one thing that you change and magically your yield will increase. It is a combination of many things. There is irrigation, which is really important. You need to have enough water for your plants. www.businessday.ng

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the support they are giving to the sector, and while some of the facilities were previously not appropriate for us, now that they are, we are confident that we will be working with the CBN. Are there specific government policies or programmes you expect will be beneficial?

There is a specific provision for processors, where they are supposed to benefit from a fund pooled from fees paid by those importing tomato paste into the country. I believe this fund is available in some format for local processors to enable them grow their businesses.

Are there other sources you’re exploring in terms of credit access, perhaps, even Private Equity?

We are in the process of closing our Series A equity raise. Our expansion plan will be financed by a combination of equity and debt, and hopefully within the next month we will be able to make an announcement about some capital raising we are currently working on.

What gives you the assurance of success in this delicate business?

What really gives us the confidence is the six years of farming that we have on our back.

We did not look to make multi-million dollar investments in equipment until we had confidence that we would be able to provide the raw material from our own network of farmers. Now that we have that network of farmers, and have achieved success on our commercial farms, we have confidence that we can achieve success with the processing.

The challenge that the inactive processors face is a raw material challenge. They do not have enough tomato or also cannot get it at the right price. We have de-risked that side of the business and I think that’s the difference.

In five years, we will be souring 150,000 tonnes of tomatoes for our factory and will be able to use that to make 10 percent of Nigeria’s tomato paste. We will also be an 80-milliondollar company in terms of revenue, which is still very small compared to some of the larger companies out there but for us that would be a huge achievement.

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22

Thursday 20 February 2020

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

Two Takeaways from a tour of Facebook’s NGHub FRANK ELEANYA

A

quick check of the Google map will situate NG_Hub by Facebook along Montgomer y, Sabo, Yaba, a commercial hotspot in Lagos with direct links to two major universities in Nigeria, University of Lagos and Yaba College of Technology. A few streets away from Sabo is a National Library and a state library.

Launched in 2018, the threestory edifice is managed by the Co-creation Hub. The hub brings together developers, startups, and the wider community to share their ideas, skills and time.

Facebook says it is part of its efforts to turn Nigeria into a hotbed of high-tech entrepreneurialism.

“So for startups and students focusing on advanced technology such as AI, machine learning, and extended reality, we’re launching an accelerator programme to turn their ideas into reality,” the company noted on its website.

On this particular day, several startups providing solutions that cut across many sectors have been brought together to showcase their innovations and ideas to a gathering of some of the prominent people in Nigeria’s technology space. Among them is Funke Opeke, CEO of MainOne and the chairperson of the presidential committee on National Broadband Development Plan 2020.

So much more to offer in tech While NG Hub’s proximity to CcHUB - also located in Yaba - may be to provide it with seamless support, its closeness to the two popular tertiary institutions also makes it an ideal location for young people bubbling with bright innovative ideas.

The startups displaying at the Innovation Showcase Week 2020, as the event was themed, did not come

to disappoint.

Bosun Tijani, co-founder and CEO of CcHUB described them as those with the most practicable solutions capable of driving societal change.

“The innovation that we are showcasing is not just for showing these guys what is possible, it is bringing people that are important within the innovation ecosystem together to see what people are doing,” said Tijani. “What it would do is inspire them to understand how they would put more resources and energy and support behind ensuring that their information can thrive in Nigeria. That is what the showcase is about, showing the possibilities.”

They range from bluey-eyed entrepreneurs with loads of ideas eager to sound off on anyone willing to listen, to those whose solutions have passed the stage of ideas and ready for crunch talks with investors. Their ages notwithstanding, their ambition and zeal to succeed

are tangible from the moment they open their mouth.

A irsyng founde d by thre e young people is arguably the most ambitious. The technology uses balloon satellite and intelligence software for automated assessment of surveillance feeds giving rise to real-time monitoring, event detection, analytics, live-logging, etc. The balloon satellites which cost $15,000 each to deploy are built with mostly recyclable materials many of which are sourced locally. The company sees an oil and gas industry where pipeline vandalism and fire are drastically reduced using its inflated balloons as surveillance.

There is also Gricd which uses rechargeable and trackable cold boxes to transport temperaturesensitive items like vaccines, perishable foods, medical supplies.

The Gricd devices are equipped with real-time GPS modules that allow for real-time monitoring and location tracking of commodities in

transit. The boxes can fit on top of any motorbike or can be conveyed on the back with batteries lasting for about 24 hours keeping the iceditems safe.

Vinsighte’s innovation, in many ways, stands out as one of the best innovations on showcase.

Developed by students of University of Ibadan, Kolawola Tomisin, Erioluwa Morenikeji, Caleb Oyolola and Dairo Tosin, Vinsighte is a computer vision and sonar technology that aids the visually impaired, in navigating (through a guiding aid), environment, independently and read books, convenient and independently. Their products include Viri, a technology that assists the visually impaired to navigate their environment, independently, through the sensing of obstacles ahead and alerting the user; and Visis a smart reading glass that aids, the visually impaired, in reading books conveniently, by converting texts to the audio input, for the user, to listen to.

Tech Journalism fellowship Beyond empowering entrepreneurs in the tech ecosystem in Nigeria and Africa, Bosun Tijani says the tech ecosystem would not be complete without the people telling their stories. Hence, the CcHUB plans to create more opportunities for storytelling for Nigerian journalists covering the tech space.

“How do we help storytellers within the technology space to be better equipped, to tell stories in ways that could benefit the society because what we do within the technology space is not enough if you cannot get the people that work within the space to also understand what we do,” he said.

He says a lack of understanding of the ecosystem is behind policies that affect tech entrepreneurs and their businesses negatively.

Conversely, the rest of the world seems to be more knowledgeable of the potential in the tech space in Nigeria and this is partly because of the contributions of international platforms like TechCrunch which deploys enormous resources to covering the space. While this is not the case within the country, the journalists who represent the bridge between those innovating and those who need to know about it can be empowered to tell similar stories in a better way.

I think we are going to start a fellowship programme for journalist where we pick probably between 15 to 20 journalists every year and we try to pair them with the best journalists in the technology space in the world to give them access to modern thinking and how you tell technology stories and the resources that will empower them,” Tijani said.

Although he said the plans for the fellowship will start soon after the showcase programme, he did not specify when it will finally kickoff.

Three tech products facing disruptions from Coronavirus FRANK ELEANYA

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s the world continues to make frantic efforts to contain the deadly Coronavirus, technology devices, and accessories manufactured in Chinese factories are facing various production disruptions.

A new report by TrendForce highlights some of the technologies and innovations that could become scarce should the virus defy all containment plans. Should the supply of these innovations become scarce consumers around the world including in Africa would be affected.

Wuhan, seen as ground zero in the coronavirus outbreak, is where some of the most important technology products and innovations are manufactured. Touted as China’s ‘Optics Valley’, Wuhan is among other things, home to China’s indigenous memory chip companies, including NOR flash maker Wuhan Xinxin Semiconductor Manufacturing (XMC) and Yangtze Memory

Technologies Company (YMTC), a 3D NAND flash memory specialist.

In the wake of the coronavirus outbreak which has weakened over 73,100 people in Asia, with at least 1,869 people dead according to statements from health officials in China.

Africa has so far reported one case of the virus in Egypt.

While the four technologies highlighted below are not the only innovations listed in the report, they are selected for their direct impact in markets like Nigeria: Smartphones Smartphone production in the first quarter of 2020 is predicted to drop by 12 percent year-on-year, making it the quarter with the lowest output within the past five years.

TrendForce notes that this is because the smartphone supply chain is highly labor-intensive. The report highlights that smartphone parts in the upstream supply chain, including passive components and camera modules, are also showing shortages, which can potentially continue to

negatively affect smartphone production in the second quarter of 2020 if the outbreak is not contained by the end of February.

Already, Apple has warned that there was a “slower return to normal conditions than we had anticipated” pointing to issues around its supply and demand.

TrendForce also agrees that product demand might be affected with consumers having to contend with higher prices in the long-term should the outbreak intensify.

“Because of the interconnectedness of the global economy, the progression of China’s outbreak damages not only China’s GDP but also the overall global economy, leading to a reduction of consumer purchasing power and subsequently presenting a difficult challenge for the overall smartphone industry,” the report noted.

It further predicted that 2020 smartphone production will reach 1.381 billion units, a 1.3 percent decline YoY and the lowest output since

2016. Still, due to the outbreak’s mercurial nature, it is entirely possible for 2020 smartphone production to fall below this forecast.

5G technology For countries like Nigeria expecting to launch commercial 5G technology in 2020, the report sees a roadblock ahead. This is because Wuhan is home to the world’s largest manufacturers of 5G infrastructure such as PCB and optical fibers.

Given that Wuhan is ground zero of the outbreak, the 5G supply chain is expected to be negatively affected.

“The delay in 5G infrastructure build-out, limited smartphone replacement demand, and postponed work resumption at fabs will collectively decrease the shipment of Chinese 5G smartphones,” said TrendForce.

Notebooks, LCD monitors, and LCD TVs The outbreak of the virus and the consequent restrictions may have hit manufacturers of Notebooks, LCD monitors and LCD TVs the most, ac-

cording to the report. This is because even after the virus is contained and things begin to go back to normal, the operator’s work resumption rate is low, all types of materials and components are in shortage thereby affecting productivity.

Hence, TrendForce predicts that TV set shipment will fall from the previous prediction of 48.8 million units to 46.6 million units for the first quarter of 2020.

For Notebooks, TrendForce explained that to assemble a NoteBook set requires complicated key components. At the current stage its batteries, hinge, and PCB already experienced shortage or out of stock. This factor might cause some brands’ shipment quantity to remarkably drop from the previous prediction (35 million units) to 30.7 million units in 1Q20.

“The pandemic not only negatively affected the product’s supply chain, but it also hurts China’s consumer confidence and reduces endmarket demand in the short and long run, respectively,” TrendFore said.

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

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Thursday 20 February 2020

BUSINESS DAY

23

BUSINESS TRAVEL Nigeria does not need a government owned carrier - Quest Richard Quest is CNN’s foremost international business correspondent and the established airline and aviation correspondent at CNN. In this exclusive interview with IFEOMA OKEKE, Quest speaks on the future of ‘Inside Africa’ Programme and shares his thoughts on Nigeria’s aviation sector.

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about it and they didn’t put the pilots in charge. They made a system that was too powerful and they didn’t tell anyone about it. So they broke all their own creed of integrity.

If the Federal Aviation Administration (FAA) declares the Boeing 737 MAX aircraft okay to fly, would you fly it?

Of course, I will fly the aircraft. The product will still excel because people have got short memories.

The DC-10 had problems; the 787s had batteries that set on fire. People had forgotten these quite quickly.

The Boeing 737 MAX aircraft is a very good aircraft.

Rebranding is not a good idea because what happens is that if the first airline flies the 737 Joy for instance and someone points out that it is a MAX aircraft and that they have hidden it; it is not worth it. It is better-off saying this is a MAX, it is safe and we are flying it. If you don’t want to fly it, fly another aircraft.

Apart from Ethiopian Airlines, why do you think African airlines haven’t really succeeded over the years, like the American and European carriers?

The government of Nigeria should not be in the airline business. What you do is that you deregulate your air space, allowing in those who can run the routes for you. You might want to put in some restrictions for regionally important routes or if you’ve got Instrument Landing Systems, (ILS) that needs to be serviced, you can do that. There are some other things you can do to protect certain areas that need protecting. Africa is a land of huge potentials in aviation.

There are multiple airlines flying across different countries like the Easy Jets.

I think of Easy Jet as a British Airline but it operates in various countries. The sooner the continents airlines are free to fly where they want to, when they want to and where they www.businessday.ng

Richard Quest

can economically make money, the better. The three big players are Ethiopian Airlines, Kenyan Airways and South African Airways.

Ethiopian Airlines is a government-owned airline but very well run, Kenyan Airways would probably be taken back into public ownership and South Africa. When Fast jet wanted to start off, it faced difficul-

‘

The sooner the continents airlines are free to fly where they want to, when they want to and where they can economically make money, the better

‘

What is your opinion on the US travel ban extended to Nigerians by President Trump? his is not like the other travel bans. It doesn’t relate to people going on holidays, it doesn’t relate to people going on business visas. It is purely about student and immigrant visas amongst others. It is very limited in its effect and I am guessing that the US tried to get Nigerians’ attention and they succeeded. The US is obviously being concerned with the way these visas are being abused and they want to put a stop to it and that is what they have done. I don’t know the exact issue but from my own understanding, there were some issues about overstay but the Nigerians are now talking to the Americans about it and I guess that is what this is all about.

Do you see the travel ban being lifted anytime soon?

No. The US is very hardnosed at the moment. When they have decided to do something, they are not changing their minds.

The usage of Boeing 737 Max has been suspended for the past six months. Do you see the aircraft coming back anytime soon?

Yes, it will come back soon because they are making all necessary adjustments. They have repaired the Maneuvering Characteristics Augmentation System (MCAS) software.

They have dealt with the other issues. You need to remember that the piece of software involved called MCAS was very specific for certain limited number of occasions. Unfortunately, they didn’t build it very well.

There is nothing wrong with what it does and there is nothing wrong with the concept. The problem is the way they built it. Boeing broke their own rules. They didn’t put redundancy in it, they didn’t give pilots the final word, they didn’t tell pilots

ties just flying between the different countries. So you need to deregulate so that Kenyan Airways and other airlines can fly wherever they want and stop protecting national carriers that are just draining governments’ money. Open skies is the future. Intra-African aviation and domestic aviation is not as easy as in Europe.

You don’t have as many airports and they are not all well-equipped. This means the flying time is limited.

So here in Nigeria, there are lots of airports where you can’t land in bad weather or nights.

This immediately cuts down aircraft utilisation.

For Easy Jet, the movement from one airport to another is easy. The planes are working from morning to night. In Nigeria, this may not happen. There are issues which of course can be addressed. Infrastructure spending is needed.

The government needs to be spending money on airports, runways and capacity. This isn’t rocket science.

But we should stop protecting national cows or sacred cows. Nigeria has proven that it can do very well without an airline. Nigeria isn’t

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suffering because it doesn’t have an airline. It has Emirates, Qatar, Etihad, South African Airways, Virgin and many more.

Are you saying Nigeria does not need a national carrier?

Nigeria does not need a nationally owned carrier.

You don’t need the government starting an airline. It will be very nice if investors in Nigeria decided to put their own money into an airline. South African Airways is a good example of an airline that is in deep financial trouble that you have to question its right to exist. It has so much government’s money poured into it and it has failed to turn profitable. Eventually, you have to say this thing will never be profitable, close it down.

How do you think Nigeria can leverage its geographical and population advantage to become an aviation hub for West Africa?

You need infrastructure; you need reliability and choose an airline that will be the hub carrier. That will be starting your own airline which is fine if its private enterprise but disastrous if it is government owned. Or you say to another airline like Emirates if it will like to build another hub in Nigeria. Nigeria can give it fifth freedom rights from Nigeria but open skies requires people to be able to fly from here to anywhere else but Nigeria will have to give licences to those other airlines to be able to run routes from out of here.

So, Nigeria may not worry about being a hub.

There are plenty of places Egypt is trying to do a hub and is better positioned.

You’ve already got Kenya running a hub on the Eastern coast, which is not really working. South Africa has not been able to run a hub.

The next one is Ethiopian Airlines which is running a good hub. It is possible to run a hub in Nigeria but you have to build infrastructure, @Businessdayng

start an airline or you have to invite a foreign airline and give them the right to operate out of here. For instance, Emirates could start Emirates Nigeria based in Nigeria. But the last person to try this was Richard Branson with Virgin Nigeria and that did not go well.

I suggest before worrying about hubs, Nigerian aviation authorities can concentrate on getting the main airports up and running and less chaotic. The chaos is just phenomenal when you come to the airport and I am thinking why it has to be this way. It is simple. Those with visas, those without visas and those with visa on arrival should be told where to stand, so they can be checked one by one. It took my colleague three hours just to do the visa on arrival at the Nigerian airport.

So concentrate on getting those things right because they will unleash business potentials. Concentrate on getting the regional airports up-to-speed so that people can land in the middle of the night or first thing in the morning.

What is the future of Inside Africa?

Inside Africa is excellent. It is very good. Inside Africa is going to be the programme of contemporary Africa. We are making some changes but it is going to be the sort of programme that reflects people’s lives; where they go, how they dance, how they eat and what they do during spare time. This is what Inside Africa is going to be in the future.

If the spread of corona virus is not curtailed, what threat does it pose to the travel industry world-wide?

It will be a disaster. Corona virus is serious but nearly 300,000 people yearly die from flu. It is looking like it is going to turn into a pandemic. It will be in more countries, it will be out there until it is summer and until it blows itself out. But it doesn’t kill young healthy people. It is hitting the older people more.

24

Thursday 20 February 2020

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Seplat’s ANOH gas project to unlock over 1,200MW of electricity olusola Bello

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eplat Petroleum Development Company Plc said the Assa North-Ohaji South (ANOH) gas and condensate processing plant in Imo State slated to commence operations in 2021, will further boost the power generation in Nigeria by over 1,200 megawatts.

Okechukwu Mba, general manager, Gas at Seplat, disclosed this at the Nigerian International Petroleum Summit (NIPS) 2020 held in Abuja.

Speaking during a panel session dubbed: ‘Charting the Way Forward for Gas’ said strategically the company is positioned to access Nigeria’s main demand centres, adding that current well stock delivering was around 300 Million standard cubic feet per day (Gross).

With over $300m invested in Oben Gas Plant Expansion Project, which is another gas plant run by Seplat, he said the company currently contributes about 30% of gas to

power generation in Nigeria, adding that: “ANOH project has the capacity to unlock over 1,200MW of gas constrained power generation capacity.”

However, despite the huge gas reserves, the country has been unable to translate its resources to effectively boost the economy, Mba said highlighting that the key challenges the industry faces to-

day in translating reserves to value were: Lack of adequate infrastructure (constraint on gas transmission distribution); funding constraints for upstream, midstream and downstream sectors; and sub-optimal institutional and regulatory framework including extensive and bureaucratic process for obtaining licenses and approvals, weak corporate governance and

policy inconsistencies.

In addition, he said uncertainties around changes in fiscal framework, local community crisis, mismatch in currency (gas revenue in Naira versus costs in United States Dollar), and Domestic Supply Obligation (DSO) gas pricing constraints were prevailing challenges.

The Seplat GM said growth in gas demand was wide-

Olusola Bello

… As corporation commits to sustainable funding of project

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h e Nig e r i a n Na tional Petroleum Corporation (NNPC) and its Joint Venture Partners of Shell Petroleum Development Company (SPDC), Total Exploration and Production of Nigeria (TEPNG) and Nigerian Agip Oil Company (NAOC), have disbursed $360million towards the Ogoniland Clean-Up project as recommended by the United Nations Environment Programme (UNEP).

G ro u p Ma na g i ng D i rector of the NNPC, Mele Kyari, made this disclosure during a presentation to the House of Representatives Committee on Environment and Habitat at the National Assembly Complex in Abuja on Monday, a release by the corporation’s Group General Manager, Group Public Affairs Division, Mr. Samson Makoji, has said.

The NNPC boss who was represented by the NNPC Chief Operating Officer, Upstream, Roland Ewubare, stated that funding was not the challenge of the OgoOlusola Bello, Team lead,

niland clean-up project, stressing that NNPC and its JV partners were up to date in their financial remittance to the clean-up project fund based on the United Nations Environment Programme (UNEP) framework.

“O goni clean-up is a massive issue and NNPC a n d i t s J V p a r t n e r s a re ready to fund the project as prescribed by the UNEP Report. We have so far disbursed $360million out of the $900million recommended. The disbursement was based on the standards set which required that we release funds based on the

Graphics: Joel Samson.

implementation parameters of the clean-up exercise,” Mallam Kyari said.

He noted that though NNPC and its JV partners were not responsible for the implementation of the clean-up, all stakeholders must come together to ensure that the project was carried out successfully.

Kyari added that the implementation of the cleanup was very important as the exercise would enable the restoration of land, water and the economic well-being of the people in the area.

He decried the misinformation about the Ogo-

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for energy use, emissions, and energy security.”

The Africa Case Scenario, he noted, was built on the premise of “Agenda 2063”, established by the Heads of State and Governments of the African Union in 2015, and “in this case, faster economic expansion is accompanied by the full achievement of access to electricity and clean cooking, in line with Sustainable Development Goal 7.”

Mba said Nigeria could save significantly on CO2 emissions by replacing diesel generators with natural gas plants - potentially reducing CO2 emissions by 18.2 million metric tonnes per year, adding that this would, in turn, improve the standard of living of Nigerian citizens through reduced exposure to Greenhouse Gas and noise pollution from generators.

“Natural gas is a cleaner fossil fuel and as such can help Nigeria achieve her developmental aspirations by increasing power generation efficiently with relatively low climate damage thus delivering a win-win scenario,” he noted

Nigeria is not investing enough in refineries – Iheanacho

NNPC, JV partners disburse $360million for Ogoni clean-up Olusola Bello

spread, increasing in some countries and regions; of which the increase is driven in broadly equal amounts by use in power and industry.

He said: “Africa’s natural gas production, demand, and exports are poised to accelerate, led by Mozambique, Nigeria, and Egypt. Gas is the only fossil fuel expected to grow through 2035. Global gas demand is expected to grow at 0.9% per annum between 2018 – 2035 driven by many regions’ power/ gas-intensive industry and China’s residential/commercial sectors citing McKinsey report, 2019.

“The continent can fuel an economy four-times larger than today with only 50% more energy driven by a major shift towards energy sources such as renewables and natural gas and efficiency improvements.

“Stated Policies Scenario reflects the impact of existing policy frameworks and today’s announced policy intentions. The aim is to hold up a mirror to the plans of today’s policymakers and illustrate their consequences

niland clean-up and urged the Hydrocarbon Pollution Remediation Project (HYPREP) to ensure that the narrative was corrected for the effective implementation of the project.

A member of the House Committee who was a former Minister of Environment, Aishatu Jibrin Dukku, applauded the NNPC and its JV partners for their commitment to the Ogoni clean-up project and urged all other stakeholders to join hands with HYPREP to ensure the successful cleanup of the area.

In his remarks, Chairman of the House of Representatives Committee on Environment and Habitat, Hon. Joh ns on O ghu ma, expressed the commitment of the current leadership to ensure full implementation of the UNEP Report on Ogoniland for the common good of the people of the area.

It would be recalled that the UNEP Report on Ogoniland clean-up had estimated an initial clean-up costs of over $1billion for the first five years of a 25 to 30-year process.

T

he Executive Chairman, Integrated Oil and Gas Limited, Emmanuel Iheanacho, has called on the federal government to enable more refineries to be built in the country. Iheanacho, a former Minister of Interior, made the call at 2020 edition of Nigeria International Petroleum Summit (NIPS) in Abuja.

“We are not investing enough in refineries. Instead of waiting on OPEC to give us a quota of 2 million barrels per day (bpd), we can produce 4 mbpd and build refineries to refine and add value to our crude” he stated.

Iheanacho compared the Nigeria downstream market structure and that of the United States of America, a non-member of the Organization of Petroleum Exporting Countries (OPEC).

“The US is has a population of 327 million with a total of 139 refineries with the refining capacity of 16.7mbpd. Texas, a state in the US has a population of 28.7 million with 47 refineries and a refining capacity of 5.7 million barrels per day.

Compare these numbers with Nigeria that has a population of 200 million people with 4 refineries with installed refining capacity of 520,000bpd but

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is only able to refine 5 percent of installed capacity.”

He decried the plight of the country that has not been able to get things right despite having been in the oil and gas business for over 60 years. He further implored the government to take a second look at the market structure in terms of cost and efficiency.

“Open market competition creates efficiency in the system. In that vein, government must take a look at the subsidy regime and regulation. The subsidies do not really benefit the common people” he said.

In his presentation, titled ‘Sustaining Industry Momentum in the Downstream – What new strategies, tactics and innovative partnership’, Huub Stockman, Managing Director of OHV Energy stated that refining is a catalyst for the rest of the oil and gas industry.

Stockman noted that refining has the power of changing Nigeria from net importer to self-sufficiency adding that while increasing Nigeria’s refining capacity is of central importance, attention must be given to other drivers of the downstream sector such as better customer experience that comes from improved staff training, improved quality, and safety of trucks as well as further investment in terminals and pipelines.

Thursday 20 February 2020

BUSINESS DAY

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Legal practitioners need to ascertain the security of client information and the integrity of where it is warehoused – Yomi Adebanjo Legal Analysts have said that by the year 2036, One hundred and fourteen thousand (114,000) legal services/jobs for lawyers would be automated. As data and technology continues to drive infrastructural developments across sectors, many legal practitioners wonder about the impact of these developments on legal businesses. In this edition, LegalBusiness Associate, ONYINYE UKEGBU sits with the General Counsel of MainOne, ABAYOMI ADEBANJO to discuss, the impact of technology on the legal industry, legal tech innovation, strong regulations on data residency, the Africa Continental Free Trade Agreement (AfCFTA), the Finance Act 2020, as well as his new role as MainOne’s General Counsel. EXCERPTS… such as LinkedIn learning. We have an internal tool called the MainOne Academy, which is a virtual learning space that has been created where internal resources are able to contribute knowledge in order to bridge the knowledge and skills gaps within teams. In terms of legal tools, we’ve focused on self-creating tools; because we

Counsel?

I cover four main areas: commercial, which encompasses sales, contracts, and negotiations; regulatory; company secretarial, where I have oversight functions; and general corporate by which I mean structured corporate work that is not necessarily related to our general day to day commercial contracting process, for instance, capital raising,, project financing, mergers & acquisitions etc.

We have footprints across West African particularly, Cote d’ Ivoire, Ghana, Nigeria and Senegal with our submarine cable infrastructure terminating in Sexial, Portugal. We have branching units we have not developed heading to Tenerife, and Morocco. So, my day typically is overseeing those four core activities across the various jurisdictions.

Sounds Busy.

Yes, it’s quite busy. MainOne is a 10-year old company and we position ourselves as a leading communications service provider across WA. At present, we will continue to focus on developing our footprint across West Africa first, then we’ll decide how we want to conquer the entire continent.

What would you like to accomplish in your new role?

My objectives are to drive efficiency within the team. To ensure

our contracting process. So we’re leveraging on Enterprise Resource Planning systems that enable us to drive efficiency, reduce the business risk as well, and enables us to service both our internal and external stakeholders in an efficient way. Because we are technology company, there is a constant drive to keep on self- innovating so can

‘

In this jurisdiction, knowledge is individualized, as opposed to other markets where the institutional knowledge is far greater that the individual’s. Tech has been used as a repository to collect, archive, and commercialize knowledge. As a result, law firms in other jurisdictions are better able to generate and turn around docs, provide clients with legal advice because they have both the knowledge banks and data to do so speedily. that the legal unit would be an enabler for business, ensuring that we achieve key strategic objectives without exposing the business to risk. In order to do that, we’re placing great emphasis on efficiency, learning and development, and ensuring that there is integration between commercial, sales and legal.

As the General Counsel for a leading technology infra-

structure company, how is the legal department utilizing technology or Alternate Legal Service Providers for its needs?

I’d like to say across three core functions: on the learning and development side, we found the use of technology quite useful.

Since I’ve come, I’ve seen that there’s stronger emphasis on leveraging knowledge using tools

‘

W

hat is a typical workday as MainOne’s General

have a lot of knowledge about the business, it’s really more about making sure that the knowledge is institutionalized and also that there’s access to that knowledge, that’s more of a focus really for our space. On the commercial sales side, there is a lot of emphasis on automation for us, like automating

drive efficiency, because we’re just going through a big automation process right now, where we’re really just trying to overhaul our services to better serve our internal and external stakeholders and the ability to sell and the customer’s

Continues on page 26

LEGAL BUSINESS TEAM

THEODORA KIO-LAWSON

CHUBA AGBU

ONYINYE UKEGBU

Head, Legal Business

Legal Business Associate

Legal Business Associate

www.legal.businessday.ng legalbusiness@businessday.ng

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Thursday 20 February 2020

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INTERVIEW

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LegalBusiness

Legal practitioners need to ascertain the security... ability to buy.

So, in this current dynamic, where do you see a place for external counsel?

So, it’s interesting, I got an email from a guy who is trying to convince me of the value proposition of a platform he created for interacting with external counsel.

Is there a need for that kind of technology? I guess so. What is happening generally across the Nigerian legal industry is that there is significant price erosion because of the macro-economic situation and the proliferation of boutique law firms, which is good if you’re on the buy side of the dynamic. We tend to, which I think is the reality of time, do as much as we can, internally. However, there are certain things we will not do internally, for instance, where expert perspective or a governance solution is required. We’re really focused on optimizing our existing assets and right now there isn’t much need for external counsel. However, what we consider when choosing external counsel is knowledge experience at a very good price that can deliver within an excellent timeframe. So, fundamental external counsels are still very important for our business especially for areas where we think expert opinion/services is required or to mitigate certain risks and liabilities.

Data and technology is driving a lot of infrastructural developments, currently.

How do you foresee that these sorts of developments will have an impact on the legal business industry?

The changes that have been technology- driven thus far have been very good for both the legal industry and the consumers of legal business; law firms have better access to market and consumers can reach law firms across borders. Tech has been good for the (Nigerian)legal business but where we still need a lot of development is in the area of knowledge management and data analytics.

In this jurisdiction, knowledge is individualized, as opposed to other markets where the institutional knowledge is far greater that the individual’s. Tech has been used as a repository to collect, archive, and commercialize knowledge. As a result, law firms in other jurisdictions are better able to generate and turn around docs, provide clients with legal advice because they have both the knowledge banks and data to do so speedily. I think people are slightly missing it by making the conversation about whether or not lawyers will no longer be needed because of machine learning. I think the focus should be on things like these, data analytics, knowledge management and talent management. How do use technology to

help you both manage and retain talent? Are you able to work remotely? Improve productivity?

And a big part of this conversation hinges on our core product offerings: connectivity, co-location and cloud services. Connectivity, which is about greater broadband penetration enables this sort of decisions; cloud services ensure you can work remotely and access your documents from anywhere, and the knowledge is gathered, collected and archived as data and kept it in a location that is safe and secure. That’s where I think technology should really be a driver for the legal space.

On the same note, one of the chief concerns of legal tech and its evolution is privacy and client confidentiality.

As MainOne offers a bedrock of infrastructure that is required to enhance the propagation of legal tech in

digital, do you have strong malware in place? Who is the host?

Is the host offshore or onshore?

Especially, because there has been a significant increase in cybersecurity breaches. What we offer for instance, on the cloud and colocation side, we have the biggest co-location center in West Africa, here in Lagos, it’s a 600 rack, 4 megawatts tier-3 data center, providing co-location, cloud services and extra malware protection for those that want. The legal industry needs to start considering both from a business and a risk perspective, the location, safety and security of customer data, especially since most of the information is digitalized and susceptible to cyber threats and breaches. As we move away from physical paper to digital, localizing information within personal servers or on other people’s servers, the kind of security architecture in place will continue to be a thematic occupa-

‘

What is happening generally across the Nigerian legal industry is that there is significant price erosion because of the macro-economic situation and the proliferation of boutique law firms, which is good if you’re on the buy side of the dynamic.

‘

Continued from page 25

West Africa, could you speak to the validity or otherwise of these concerns?

The legal profession does impose confidentiality obligations on lawyers, and that position has been further strengthened by the global emphasis on data privacy. NITDA came up with NDPR, our version of GDPR, which also focuses a lot of ensuring the protection of a data subject’s information. So, in addition to the Legal practitioners’ practice obligations, we also have regulations that require that we put in place all necessary protections to keep the information safe.

Most people within the legal industry have to scrutinize how they process and share information because I think that on a superficial level we talk about it, but on a more in-depth level there is still a lot that could be done in terms of ensuring protection of client’s data and information especially because there hasn’t been any obvious consequence of breaches in confidentiality within the Nigerian space. By this, I mean, are documents properly password-ed and taken off-premises without jeopardizing confidentiality? Are client’s documents archived in a digital or physical repository? If www.businessday.ng

tion when it comes to the issue of privacy and confidentiality

Tech regulation is still developing; we find that to afford the company its best protection, a lot of detail must be taken during the contract stage; things like offences that haven’t been delved into by regulation.

Still, some advocate for loose regulations to support innovation and others more.

What would you consider a happy medium?

I think they are two different issues. On the innovation side of the spectrum, regulation doesn’t spur innovation, however, as a consequence of innovation strong regulations are required to protect investment. With respect to data privacy and protection, I definitely think that the NDPR provides a very good regulatory framework for the industry. I’d like to see more regulation on data residency, and I’d explain to you why. I had mentioned that as legal practitioners we need to ascertain the security of client information and the integrity of where it is warehoused, and an obvious ramification of l not doing so, is suscep-

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tibility to breach. Besides that, if it is in a location where access isn’t guaranteed, it puts you at risk.

Right now, a significant portion of digital information is being stored offshore which poses a huge security risk. There are a number of agencies that store their data offsite whereas that data should be resident in Nigeria. There are data residency prescriptions in the EU for instance that ensures that data relating to EU citizens is kept within the EU and they do that both from a security and sovereignty perspective, because you want your information and those of your citizens to be local, not susceptible to any manipulation.

An added benefit is that it grows the local economy; If your data is resident in-country, it means there are more data centers, so to speak, that are able to provide data warehousing services which means more revenue for them.

Also, the individuals are able to route their transactions a lot faster because they can do peer-to-peer and point-to-point communication. It also encourages foreign direct investment. Sovereignty and security are the big considerations and a lot more focus should be on data residency.

In your view, what are the least understood aspects of the Finance Act, 2020?

I think it’s the early days and those grey areas will be clarified by further circulars, case law and industry engagement. The act does talk about “significant economic presence” as the yardstick for taxing offshore technology companies that have a presence in Nigeria but uses a very subjective yardstick- “subject to the Minster’s discretion”- for determining what that is. Easily, the most misunderstood is the exact impact of the increase in VAT, a lot of businesses have been arbitrarily applying the 2.5% increase across board on all their products and services without looking at the Act to see that there are a number of items that are non-vatable items. For the operators within my sector, it does mean an increase in the tariff structure which will be borne by the consumer. But on the whole, it’s the biggest reform we’ve ever done, and there is an unnecessary amount of focus on the increase without looking at the other incentives that the law provides.

Nigeria recently signed on to the Africa Continental Free Trade Agreement (AfCFTA), which envisions a single African market. How has MainOne positioned itself to take advantage of this?

There is still a lot of conversation around the implementation of AfCFTA, looking at the different sectors and how we’re all going to compete on favourable terms. For the tech industry, I mean I won’t talk about MainOne, but because of the way technology business is, you already have most of the key @Businessdayng

players in different jurisdictions.

We are already in four jurisdictions, and growing, as long as there is a business case and an incentive to be in a market, definitely we would go there. Would AfCFTA accelerate that decision? It may, if there’s sufficient incentive that drives the business. So, we welcome AfCFTA to the extent that it provides an incentive for us to do business in other countries.

It’s been said that by the year 2036, 114,000 jobs that lawyers do now, would be automated. What is your strategy for ensuring that MainOne’s legal department stays ahead of the curve?

I think we should focus on more technology being an enabler to drive more efficiency, to drive more revenue for businesses, to expand, because I think the Nigerian legal space is not where it should be, there is still a lot of reform that needs to happen. One of the biggest reforms that there needs to be certainty in terms of our adjudicatory process. If there isn’t we’d continue to rely on English law and do transactions based on English governing law, and to the extent that that keeps on happening, we can’t make Nigeria a hub for West African dispute resolution which if we could, would mean more business for Nigerian lawyers, and more inflow of investments as well. Are we able to use technology as a way of reforming our court system? Enabling more business for our law firms? Those are things I’ll rather have conversations about, instead of talking about how technology is going to make lawyers extinct. Where we are now, our problems are quite different from developed markets who have pretty much figured these issues out. So, in 2036, I’d like to assess how we have been able to use technology to answer these questions Abayomi Adebanjo has a postgraduate degree in Mergers and Acquisitions from the College of Law, England and Wales and a master’s degree in Business Administration from Lagos Business School. He is a member of the Nigerian Bar Association (NBA) with an International Certificate in Financial Securities & Corporate Finance from London School of Economics & Political Science, and a Certificate in International Finance Law from the University of Oxford/Euromoney. He has a first degree in law (LLB) from Obafemi Awolowo University, Ile-Ife. Prior to joining MainOne, Abayomi was Co-Head of the Financial Services Sector of Jackson, Etti & Edu, and also headed the Banking & Finance Unit of the firm. Abayomi was nominated and ranked yearly as a “Rising Star” by ILFR from 2013 – 2019 and has been recognized as a “Leading Lawyer” by Chambers Global. Recently, he won the African Legal Rising Star award at the 2018 African Law Digest Awards.

Thursday 20 February 2020

BUSINESS DAY

THEBAR

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Nwadioke appointed head, NBA Lagos duty solicitors’ scheme

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igerian Bar Association, Lagos Branch has taken a major step to promote access to justice with the appointment of leading human rights advocate, Emeka Nwadioke as Chairman of its Police Duty Solicitors Scheme (PDSS).

Announcing the appointment at the last meeting of the branch Human Rights Committee (HRC) on Wednesday, the HRC Chairman, Okey Ilofulunwa said the committee would drive implementation of sections 33 and 34 of the Administration of Criminals Justice Act 2015 (ACJA).

“The Committee will domicile its members in police detention centres among others to offer free legal services to detainees and help in stemming the filing of frivolous charges which congest our courts,” said Ilofulunwa, who is also the Vice Chairman of the branch. “It will also accompany chief magistrates to oversight detention facilities in the Lagos area towards ensuring compliance with human rights standards.”

A former Publicity Secretary of the branch, Nwadioke was a member of the NBA Criminal Justice Reform Committee. More recently, he anchored a highly acclaimed relaunch of the Branch annual “Human Rights Summit,” attracting such civil rights heavyweights like Femi Falana SAN, Prof. Chidi Odinkalu, Ayo Obe and Monday Ubani among others.

Emeka Nwadioke

Nwadioke is a consummate rights advocate who has been involved in many campaigns to promote access to justice and the pro bono culture. He has successfully defended some indigent detainees in criminal trials especially under the “Prison Reform Project.”

Anchored by Prisoners’ Rehabilitation and Welfare Action (PRAWA),

the project was a collaboration between PRAWA, the UK Foreign & Commonwealth Office, Federal Government of Nigeria, Nigerian Prisons Service and Legal Aid Council of Nigeria.

He is a member of several lawyers’ networks targeted at fostering access to justice, including campaigns on petty offences, freedom

of information, death penalty, press freedom and humane treatment of indigent drug arrestees.

Aside from his role as Secretary General & Head of Publicity of Legal Advocacy Response to Drugs Initiative (LARDI), a project implemented by the United Nations Office on Drugs and Crime (UNODC) and funded by the European Union (EU), he is also a member of “Capital Defence Lawyers Network,” a pro-life campaign supported by Avocats Sans Frontieres France/ Lawyers Without Borders, Embassy of France, Embassy of Belgium and Embassy of Australia. wAn award-winning journalist, Nwadioke is committed to offering free legal representation to journalists in distress through the “Coalition of Lawyers for Press Freedom,” an initiative of Premium Times Centre for Investigative Journalism (PTCIJ) in partnership with The Media Defence Legal Initiative (MDLI). The objective of the project is the pursuit of legal options for the entrenchment of press freedom rights as guaranteed by the Nigerian constitution.

As a member of the “Freedom of Information (FOI) Legal Response Network,” a Rapid Response Team (RRT) of lawyers established by Media Rights Agenda (MRA) and supported by Open Society Initiatives for West Africa (OSIWA), he is currently providing pro bono legal representation to some media organizations/journalists to enforce their access to information rights and challenge violations of their media rights.

Nwadioke has canvassed strong advocacy against the petty offences regime. In 2017, he presented a paper on Nigeria’s petty offences legal architecture at the “Regional Conference on the Decriminalisation of Petty Offences in Africa” in Sierra Leone.

He was a member of the legal team that represented the NBA in the highly contentious “SCUML Case” (Registered Trustees of the Nigerian Bar Association v Attorney-General of the Federation and Central Bank of Nigeria), a strategic litigation lawsuit by the bar association challenging Nigeria’s money laundering law.

Both the trial and Appeal Court gave judgements in favour of the NBA. He also served as a member of the Local Organising Committee (LOC) for NBA’s flagship Annual General Conference (AGC) in 2017.

A former banker and Notary Public for Nigeria, Nwadioke was in 1999 appointed by Nigeria’s President as a member of the National Y2K Committee saddled with containing the millennium bug. His views are routinely sought on legal issues by the news media, while he has appeared as a guest analyst on several radio and television stations including CHANNELS TV, ARISE TV, TVC, PlusTvAfrica and WAZOBIA TV among others.

Lagos Branch hosts some of Nigeria’s most high-profile detention centres including those of the Federal Special Armed Robbery Squad (FSARS), Economic and Financial Crimes Commission (EFCC), Special Fraud Unit (SFU), Zone 2 of the Police Force among others.w

DOCKET

Alleged N32.8bn Pension Fraud: Court grants EFCC leave to amend charge IKENNA UWADILEKE AND

A

buja, Feb. 17, 2020 (NAN) Justice Hussein BabaYusuf of an FCT High Court on Monday, granted leave to the Economic and Financial Crimes Commission (EFCC) to file amended charge against a director in the Police Pension Office, Atiku Kigo and five others, charged with alleged N32.8 billion police pension funds.

Others charged are Esai Dangabar; Ahmed Wada; Mrs Veronica Onyegbulam; Sani Zira; Uzoma Attang and Christian Madubuike before Justice Baba-Yusuf ordered the EFCC to file the amended charge in which the name of the seventh defendant as well as the counts 19 and 20 have been removed.

He then adjourned the case until , Feb. 18 for the defendants to take their plea.

They were charged with conspiracy and criminal breach of trust in the misappropriation of

police pension fund to the tune of N14billion.

NAN reports that Dangabar (1st defendant) died on July 24, 2019 in the course of the trial .

At the resumed hearing of the case , EFCC counsel, Mr

Oluwaleke Atolagbe, informed the court that there were two further amended charges filed by the prosecution before the court.

The charges, according to him, were dated Dec. 5, 2019

and Dec. 20, 2019 respectively.

He prayed for the withdrawal of Dec. 5, 2019 charge , the peayer was granted.

Atolagbe told the court that pursuant to Sections 216 and 218 of the Administration of

Criminal Justice Act (ACJA), the charge filed on December 20, 2019 be admitted as further amended charge and be read to the defendants.

Counsel for Onyegbulam, Mr Earnest Ikeji, however, drew the attention of the court to the fact that a new defendant, John Yakubu Yusuf, was added to the defendants as the seventh defendant but he was not present in court.

He, therefore, sought the intervention of the court on whether the defendants could take their plea in the absence of the seventh defendant.

Responding , Atolagbe told the court that Yusuf had been convicted and since he (the seventh defendant) was involved in the scam his name could not have been removed from the charge.

He, however, applied that the court strike out both the name of John Yakubu Yusuf and counts 19 and 20 of the amended charge from the face of the charge.

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Thursday 20 February 2020

BUSINESS DAY

INDUSTRYFILE

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LegalBusiness

AfCFTA: Legal and economic experts frown at delay in ratification … Says lawyers should plan for risk mitigation/management THEODORA KIO-LAWSON & CHUBA AGBU

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egal, economic and financial experts at the Africa Trade Roadshow organised by global law firms, Baker McKenzie and Templars in Lagos on Tuesday, have said that Nigeria must begin to think of innovative ways to cushion the consequences of a late ratification of the Africa Continental Free Trade Agreement (AfCFTA) if and when it is indeed ratified and domesticated.

Speaking about global geopolitical concerns such as trade wars, Brexit, China’s BRI; the influence of U.S and China on Africa; impact of the coronavirus on the Chinese economy and trade, escalation of global trade tensions, amongst other things, at the event, Herman Warren, director, Africa Corporate Network, of The Economist, highlighted the importance of forming alliances towards achieving global economic goals, “The US-China trade war/ conflict is in fact, not a trade battle but one for dominance, while on the other hand, Putin, continues to work hard to establish Russia’s dominance on the global stage.” he said, noting President Trump’s role in heightening anxiety rather than calm in the mix of things.

Making a case for Climate Change, Warren established its essence to economic growth globally, adding that globally, people have also become more protective of their local environment.

He further cited the more stringent EU data privacy rules, stating that there will be more to come in the nearest future.

The panel session at the event provided a global perspective on the Africa Continental Free Trade Area (AFCFTA) in relation to Nigeria, while touching on global and local legal/regulatory hurdles including sanctions, export controls, customs and excise, etc.

Speaking about the effects and outcome of AFCTFA, Virusha Subban, Partner and Head of Indirect Tax Baker Mckenzie, Johannesburg, announced that its implementation is bound to come with consequences.

“It is an inevitable outcome and the smaller businesses would have to bear the brunt of this consequence.” she said “but we should be looking more at the long term benefits that the treaty would provide.”

She thus suggested that the most reasonable response would be to form trade unions as the government would be more likely to listen to unionised concerns as opposed to a solitary voice.

However, in proffering solutions, Kerry Contini, a partner in Baker McKenzie’s International Trade Practice Group, Washington DC, ad-

viced that there was need for companies and businesses with trade deals with the United States, working with their lawyers to prepare and gain more knowledge for risk management..A partner at Templars corporate and commercial practice group who also a panellist, Ijeoma Uju held the opinion that infrastructure will be a big barrier for Nigeria if it hopes to play big under the AfCFTA. According to her, the Africa Free Trade Area Agreement (AfCFTA) is an ambitious treaty and Nigeria must begin to match the ambitions of AfCFTA with reality.

“With the infrastructure deficit in the country, what is our competitive advantage?” she asked. “If we ratify and domesticate the treaty without preparation and readiness, the unemployment we speak of today, will only get deeper. We have to be ready with our transport sector. We have to be ready with manufacturing, electricity etc. Our industries must be positioned to compete favourably,” Uju said.

Professor Jonathan Aremu of International Economic Relations at Covenant University, offered no succour either when he declared that the AFCFTA would not succeed without mutual agreements amongst the parties.

“As we move to phase two, there must be a good understanding of trade in services amongst all parties, as this phase will require a lot of legal work, such as intellectual property issues, issues of completion law, investments amongst others.

On the other hand, Jesuseun Fatoyinbo, Head of Trade at Stanbic IBTC Plc., who took a more positive stance stated that the benefits of the trade agreement would see things such as infrastructure fall into place.

According to him, one of the key benefits for Africa is that the continent would become more attractive to foreign investors due to the ability to expand the business to other parts of Africa with significantly reduced resistance.

Fatoyinbo disclosed that the AfCFTA is a great opportunity for Africans and Nigerians to realise their potential, while attracting good investments; noting that significant trade will be driven by competition and documentary tools such as risk mitigation tools, financial advisory services etc.

“AfCFTA as an idea has come at the right time and financial advisory services will become key component of the treaty, “ he said.

The Baker McKenzie and Templars roadshow was aimed at giving a macroeconomic overview of cross regional trade for Africa and to discuss issues affecting trade across Africa, with particular reference to the Africa continental free trade area.

Mattias Hedwall, partner/Global chair, international commercial and trade, Baker McKenzie, Stockholm speaking fielding questions from journalists at the Africa Trade Roadshow organized by Baker McKenzie and Templars in Lagos.

Olumide Akpata, senior partner, Templars.

Jesuseun Fatoyinbo, head of trade, Stanbic IBTC plc

Herman Warren, director, Africa Corporate Network, The Economist at the Africa Trade Roadshow organised by Baker McKenzie and Templars, in Lagos.

Olumide Akpata (l) and Osayamon Michelle Ogbegbor of Central Securities Clearing System (CSCS) Plc.

Herman Warren, director, Africa Corporate Network, The Economist; Virusha Subban, partner/head of indirect Tax, Baker McKenzie, Stockholm; Khadija Osammor, Senior Associate, Templars and Kerry Contini, partner, international trade practice group, Baker McKenzie, Johannesburg.

Olumide Akpata (l) with a Guest.

L-R: Virusha Subban, Kerry Contini and Ijeoma Uju, partner, corporate and commercial practice group, Templars

R-L, Dayo Okunsami, Zelda Akindele

L-R: Herman Warren, director, Africa Corporate Network, The Economist; Virusha Subban, partner/head of indirect Tax, Baker McKenzie, Stockholm; Kerry Contini, partner, international trade practice group, Baker McKenzie, Johannesburg; Mattias Hedwall, partner/Global chair, international commercial and trade, Baker McKenzie, Stockholm; Olumide Akpata, senior partner, Templars; Ijeoma Uju, partner, corporate and commercial practice group, Templars; Jonathan Aremu, professor of international economic relations, Convenant University, Nigeria, and Jesuseun Fatoyinbo, head of trade, Stanbic IBTC plc.

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Thursday 20 February 2020

BUSINESS DAY

LEGALINSIGHT

BD

LegalBusiness

Implementation of the Finance Act 2020: what arbitrators, other professionals must know SHOLA OSHODI-JOHN, TIMI OLAGUNJU AND ODEN OONU

Members of the public may be awakened to the fact that opening of bank accounts will be impracticable following the provisions of the finance law, as Tax Identification Number is a prerequisite for opening a bank account in Nigeria.

O

n January 13, 2020, the President of the Federal Republic of Nigeria signed the finance bill into law.

The finance bill is a welcome development, as it seeks to reflect the economic heights Nigeria hopes to attain in the comity of nations.

It is imperative to understand the practical points the government hopes to achieve with the finance law as full implementation begins.

The finance law has five strategic objectives in terms of achieving incremental, but necessary, changes to our fiscal laws. These are: promoting fiscal equity by mitigating instances of regressive taxation; reforming domestic tax laws to align with global best practices; introducing tax incentives for investments in infrastructure and capital markets; supporting micro, small and medium sized businesses in line with our ease of doing business reforms; and raising revenue for the government.

There are key ingredients of the finance law that the Nigerian citizenry should take note of, part of which is the increment on the Value Added Tax (VAT). Businesses in Nigeria with a turnover of less than Twenty-Five Million Naira (N25,000,000) will not be taxed under the finance law. Also, some food items have been exempted from the new Value Added Tax

including Brown and White Bread, Cereals, including maize, rice, wheat, millet, barley, and sorghum, fish of all kinds, flour and starch meals, fruits, nuts, pulses and vegetables of various kinds. Others are: roots such as yam, cocoyam, sweet and Irish potatoes, meat and poultry products including eggs, milk, salt, herbs of various kinds, and natural and table water.

The implications of the increment in Value Added Tax (VAT) are that it may set off inflationary tendencies and create administrative complexities. On a brighter note, there are a lot of advantages the 2019 finance law can achieve in due time, one of which is; to help bring about a better-balanced tax system

and reduce obstacles to export, under certain conditions. In accordance with the provisions of the Finance Bill, small businesses with turnover of less than N25,000,000 (Twenty-Five Million Naira) will be exempted from Company Income Tax, while a lower Company Income Tax Rate of twenty percent (20%) will apply to medium-sized companies with turnover between N25,000,000 (Twenty Five Million Naira) and N100,000,000 (One Hundred Million Naira).

In summary, other implications of the amendments for Arbitrators, legal practitioners, and other members of the public, are as follows; compensation for loss of employment below N10,000,000

(Ten Million Naira) to be exempted from Company Gains Tax; Email correspondences to be recognized for communicating with tax authorities; Insurance Companies can now carry forward tax losses indefinitely, deduct reserve for unexpired risks on time apportionment bases while special minimum tax for insurance has been abolished.

Stamp duty on bank transfer to apply only on amount from N10,000 and above, and transfers between the same owner’s accounts in the same bank are also to be exempted.

It is noteworthy to state that the meaning of supply and the definition of goods has been expanded to cover intangible items other than land, amongst other amendments.

CONCLUSION Tax disputes may arise as a result of taxpayers being aggrieved by a number of issues. Such issues may be concerned with inaccuracy of filing of tax returns by tax authorities, interpretation of the finance law. For example, where there are inconsistencies regarding the interpretation of the finance law, disputes are practically unavoidable. In the same vein, if a taxpayer is aggrieved, the concerned parties may institute an action through arbitration amongst other alternative dispute mechanisms. Thus, it is important that taxpayers are abreast of the dispute resolution process in Nigeria and the options available to them as speedy resolution of tax and commercial disputes is key to business growth.

This publication is a product of The Research Unit of the Nigerian Institute of Chartered Arbitrators (NICArb).

Shola Oshodi-John, FCArb; Timi Olagunju Esq. (Editorial); FCArb; Oden Oonu Esq. are of the Nigerian Institute Of Chartered Arbitrators (NICArb)

INDUSTRYFILE

AELEX welcomes two new partners

T

wo female practitioners, Ngozi Efobi and Perenami Momodu have recently been admitted into the Partnership of one of Nigeria’s largest firms, AELEX, bringing the number of its partners to 11.

In a recent announcement, the firm expressed delight at the admission of Efobi and Momodu into its partnership, stating that the promotion of both women (drawn from the firm’s dispute resolution practice),was in keeping with its commitment to expanding opportunities for its people and providing first-rate representation for its clients.

Ngozi has over 11 years of experience in Dispute Resolution (Litigation, Commercial Arbitration and Mediation) and Project Finance, Company Secretarial and Regulatory Compliance.

She successfully represented a Nigerian oil concern with major

offshore shareholding in two rounds of multi-party arbitrations involving several other IOCs. A graduate of the Nnamdi Azikiwe University. She has been recognised by the International Financial Law Review (IFLR1000) as a Rising Star.

Perenami who has a post graduate certificate in International Business law, master’s in law (LLM), as well as a diploma www.businessday.ng

in International Environmental & Natural Resources Law, from the University of London, has over 10 years of broad-based expertise in Dispute Resolution (Litigation and Commercial Arbitration), Insolvency, Energy, Agriculture and Labour Law. She is currently leading the team handling a portfolio of matters arising out of the privatisation & bid process, owner-

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ship and title of one of Nigeria’s major enterprises. In 2019, she received a Special Recognition Award from the Vice-President of the Federal Republic of Nigeria, Professor Yemi Osinbajo, for her involvement with the proposed insolvency reforms in Nigeria.

Her other successes include team-lead on a team that successfully represented an exploration and production company in an arbitration pertaining to assignment of interest and cost recovery in a marginal field to the tune of about US$40 million, and being part of a team representing an investment and asset company in litigations relating to capital market disputes at the Securities and Exchange Commission and appeals at the Supreme Court. Clients have described her as an experienced negotiator and an “out of the box” thinker.

Commenting on their promo@Businessdayng

tion, AELEX’s Managing Partner, Theophilus Emuwa said, “I am proud to welcome Ngozi and Perenami into the firm’s partnership. Over the years, their expertise, diligence and commitment to delivering excellent client service have contributed immensely to the firm’s success.

I am positive that they will continue to embody the values that ǼLEX stands for and wish them the very best as they take on their new roles.”

AELEX is known for its global commercial and political awareness and extensive network of associations and contacts. The firm also has in-depth local knowledge that provides insight for international clients seeking to establish, operate, and grow commercial entities in Nigeria and Ghana. The firm is ranked as firm of the year 2019, 2017, 2016, 2015, 2011 & 2009 for Nigeria by (Who’s Who Legal).

Thursday 20 February 2020

BUSINESS DAY

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Investing in Rivers State Rivers builds massive ICT backbone, set to launch digital revolution and e-governance structure - 2020 to witness 22 digital projects - Rivers website and App to boost e-governance out soon - About 188,000 taxpayers, private and public sectors, captured on tax-net Ignatius Chukwu

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he Rivers State which has been building its information and computer technology (ICT) backbone in recent years is now set to launch its digital revolution that may usher in an e-governance system where most government transaction and interface with the public would be electronically done. By this, everything tax will start and end online, school registration would be done e-way, patients would register and pay online while court filing including affidavits would be sworn to and paid for online. Corruption may reduce and government revenue is already swelling by the day.

The evolution is being engineered at the ICT Department overseen by one of the computer wizards the state has produced, Ibifuro Asawo, now the Special Adviser (SA) to Gov Nyesom Wike on ICT. According to the SA who spoke to newsmen on Monday, February 17, 2020 at the ICT Centre opposite Pleasure Park on Aba Road, the department is saddled with the responsibility of developing and regulating ICT activities in the State. “Consequently, the department in the last two years and seven months has embarked on several ICT development activities funded by government which led to the setting up of the Rivers State Technology and Innovation Hub also known as the TechCreek” TechCreek is an attempt to change the perception that comes from that name, violence, kidnapping, oil bunkering, to something good, being a tech revolution that would sweep the Niger delta by the feet.

This goes with capacity development for the Rivers youths, creation of Job Portal for youths which has already grown to almost 200,000 persons with about 25,000 being trained and assisted to get jobs, automation of MDA processes, biometrics and physical verification of public servants, and information, security and emergency services.

Data speaks The work of the ICT backbone is believed to be speaking very loud especially in the area of IGR where Riv-

Governor Nyesom Wike

SA to Governor on ICT, Ibifuro Asawo

ers State is flying higher every month, next to Lagos State. The work of the ICT backbone has not only made tax administration run without violence but has made the state to cross the N12Bn per month IGR dream on its way to N15Bn. So far, over 6,778 organisations are believed to have been captured in the data base in payment of taxes in the state. There are also 139, 169 registered individuals on the tax platform.

There are 2,952 approved private schools in the State with 1,949 public schools in the State, making almost 500,000 schools captured. There were 337,480 candidates of BECE (Junior WAEC) that migrated to the RivEMiS Platform covering 2015 – 2019 exam years.

The biodata records show that 61, 708 patients were migrated to the RSUTH HMiS. Now, over 500 lawyers are registered and doing business on the Court Management Information System (RicCMiS); while 5,246 civil servants and 3,888 pensioners were captured in 2019 with 48,317 public servants been captured and physically verified since the inception of the 2018 exercise.

More wonders The ICT Department has been mandated to automate the processes of all government MDAs. He said; “To this effect, the following solutions have been developed and deployed: • Rivers State Tax Management

Information System; Rivers State Education Management Information System; Rivers State Public Service Management Information System; Rivers State Courts management Information Systems (RivCoMiS); Rivers State Health Management Information System; Rivers State Physical Planning and Urban development; Management Information system; Rivers State Business listing service; Rivers State Signage Authority Management Information.

No room for ghost workers and double employments anymore It was easy for ghosts to find space in the public space and persons to work in two or more places and collect salaries, but consistent deployment of ICT platforms has eliminated this. Over 11,000 workers tampered with their age records to remain on duty while almost 5000 pensioners can’t show up for verifications. This has saved huge sums for the government. The SA could not confirm figures but it used to be said few years ago that the state needed about N9Bn every month to pay workers but it is getting down to less than N7Bn. The SA however said biometrics and physical verification has been conducted for both serving and retired public servants in the state. :”Today, the government knows the number of public servants to be retired at any given time”.

TechCreek is the set-up of the

Rivers State Technology and Innovation Hub with the following facilities: six training halls with an average of 30 systems; 157 all-in-one desktop systems; one conference hall with a capacity of 150 – 200; seven smart boards; meeting room with a capacity of 10 – 15 persons; a broadband internet access with two STM1 capacity; a co-working space that can take 15 – 20 people; open café that can sit over 50 persons per time; a canteen; 10 co-working boots that can take 4 – 6 persons per boot; and youths being trained for free or at subsidized rates.

The exciting thing happening is that beginners in entrepreneurship can use co-offices to manage their businesses and host meetings till they grow big enough to stand alone. They share power supply, infrastructure, secretarial staff, etc, at little or no fees.

2020 digital revolution soon Between March and September, Rivers State may not be the same as most ICT platforms and Apps would be rolled out to change the way things are done in government in the state.

The most impacting may be the proposed automation of MDAs said to be part of the governor’s major ICT dream to improve service delivery, the ease of doing business and the IGR of the state.

Security may benefit too, as the State government has concluded arrangement to launch the 112 service

in Rivers. He said: “By dialing 112, a distressed citizen can easily get help from the relevant emergency.

Response centres or agencies such as:Security agents, Fire Service, Road Safety, Medical and Health Emergency Centres, etc, would fly into action.”

Many look forward to this.

Other major projects to be rolled out in 2020 to launch the digital revolution include Digital Literacy Course TechCreek already ongoing; 21st Century Education Skills for Teachers TechCreek in April; CODEGAMINATORS project to produce digital youths in April; TechMarketers scheme to produce marketers in hightech area; Techpreneurs scheme in April; automation of MDAs through the ICT Dept /Cinfores scheme for Urban and engagement of Ministry of Commerce in March; etc.

There will be the roll out of the Rivers State ICT Policy in June; an ICT Challenge for Secondary Schools to create excitement and interest in schools in March; Creek Hackaton for hubs and undergraduates in April; a national conference ICT in June; an ICT week in same April; and meeting LGA chairmen on need to have ICT tributaries in the 23 LGAs in March.

There will be SME Registration in March so that ll businesses would be captured to boost informal tax drive.

The state’s Website/Rivers App to go full e-governance system would be in April; the Emergency Call Centre (112) would be launched in March; the RivLands & Urban platform would be rolled out in March; TechPreneurs Meet-ups would be in March, June, September & December; CODEGAMINATOR for junior persons would be in August; eAgric Portal would be rolled out in September; the Unified LGA Identification System would be out in July; and the biometrics and physical verification of retirees and new employees would be monthly from February 2020.

Conclusion: The outcome may be that Rivers State could become the new India of the Niger Delta with digital operations and e-governance becoming a new way of life in the Garden city. No one can swear to a false date of birth anymore and the millions ripped off the state from affidavits would come to an end.

Farmers lose 40% of yield due to poor storage - PHACCIMA agric boss Ignatius Chukwu

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he Agricultural Supervisor, Port Harcourt Chambers of Commerce, Mines and Agriculture (PHACCIMA), Mike Elechi, has attributed the low enthusiasm in the Agriculture Sector to its capital intensive and risky nature.

Elechi said this when he spoke in a chat with newsmen at Vintage Farm at the week end in Elele, Ikwerre Local

Government of the State.

He said no farmer can boast of more than 60 per cent sales of his products after production due to lack of storage facilities. The PHACCIMA Agriculture Superior, who also is the Chief Executive Officer/ Managing Director of vintage Farm and Products, said such experience could be sort of discouragement for many intending farmers.

He reasoned that most people would not be moved to venture www.businessday.ng

into the sector after such horrible experience of 40 per cent business loss which was no fault of theirs.

“Agriculture is capital intensive and risky, that is why few people are in it. Not everyone would have the zeal or enthusiasm to venture into the same business after encountering loss due to lack of storage facilities”, he said.

But he had reiterated that the agricultural sector remains a huge revenue spinner, capable of turning

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the fortunes of any nation on proper usage and maintenance.

Using the palm tree as a case study, he said it has up to 33 different products which could not only go for export, but other local usage and benefits.

According to him, the waste product of the kernel shell could be used as asphalts, if properly researched.

On the move by the state governor, Nyesom Wike, to revive the agricultural sector of the state, he admitted @Businessdayng

it as an excellent idea capable of employment generation.

The Vintage Farm boss also hinted that at the execution of the Gov Wike’s idea, it would move most of the boys from the bush to the industry.

As a way forward, he was of the view that the comatose state-owned Rubber Plantation at Okomoko in Etche could be changed to other products that would meet up with the present economic demands of the state.

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Thursday 20 February 2020

BUSINESS DAY

Garden City Business Digest Belemaoil to build diagnostic centre for disabled students for Niger Delta at ABEC • As Belema scholars now to study at ABEC Ignatius Chukwu

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BE C g ro u p o f schools (Archdeacon Brown Education Centre) seems to have found favour with Belemaoil, the indigenous oil company that has been making waves in the Niger Delta and Nigeria for its passion in helping individuals and organizations out.

The founder/president, Jack-Rich Tein Jnr, announced the plan to set up Niger Delta’s diagnostic centre for the disabled students at the ABEC’s Christie Toby Inclusive Education Centre. The schools runs a system that allows challenged

Christie Toby (PhD) founder/CEO, ABEC Group, greets Abel Jumbo of Belema, admired by chairman on the occasion, Ijeoma Okoro,

Belemaoil Corporate affairs manager, Sam Abel Jumbo (l) with former deputy governor and chairman of ABEC group of schools

children to study side-by-side with normal ones.

Those who have come close to the students say the atmosphere has been won-

derful and that both sets of children learn from each other and find common use of sign language.They play, dance, quarrel, settle, and solve prob-

lems together and move on.

Touched by this, the Belemoil founder, who was represented by the Corporate Affairs Manager, Sam Abel Jumbo, accompanied by the community relations manager, Fubara Darego, announced that the Belemaoil scholars would also be trained in ABEC because of the quality the company has found there.

Jumbo said; “We are excited by the inclusive education school established here and we will support your diagnostics unit. It will become a Niger Delta Laboratory for Inclusive Education. We are an indigenous company and our support must start from home.”

He said Belemaoil is technology-driven but the journey is just beginning to become

a world class but indigenous company. “We too started small just like ABEC (started with only two pupils).”

H stated; “The founder and president of Belemaoil, JackRich Tein Jnr, is very passionate about this kind of thing happening here today. I watched the debate by the students panel and I discovered that they handled real life national issue. So, we wonder why our children can examine and understand the issues, why the adults cannot.

“Belemaoil is happy to be part of the day’s event. ABEC has come to stay and no gate of hell shall prevail against it. The proprietress (MD) has a Midas touch and ABEC is simply a reflection of the excellence that you possess. The students here are a good example of good

products from a good system.

The parents are good.

“We realize that the fourth industrial revolution is upon humanity; AI (artificial intelligence) and machine learning with supercomputers in our pockets (android phones) are the new reality. So, we are in an era of technically driven education founded on science, technology, engineering, arts, and mathematics (STEAM) is the bedrock of a new world.

Jumbo, who later led others to inspect various products including shoes made by the students, said; “Believe in your dreams, so, have faith in God. Study like your life depends on it. Today, being qualified is very important. ABEC gives you a chance to start in a great way. Teachers, please build future leaders right.”

Elated, the executive director of the group, Ibim Semenitari, said Belemaoil has come to be known as a company that wants to help indigent students in the Niger Delta and God will bless him.

Earlier, the principal of the secondary school (boardng0, Kola Olanikan, in his welcome address, said the school began in January 2000 with two pupils and has grown to about 1000 in Nursery/Primary, Secondary School (Boarding), Day Secondary School, Inclusive School, in different locations of different types.

Chairman of the occasion, Ijeoma Okoro, a notable Rotarian, said the founders deserve huge applause because

Wike is not leaving PDP, asks Oshiomhole to resign Port Harcourt

by Boat

IGNATIUS CHUKWU

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ov Nyesom Wike of Rivers State is not leaving his party, the PDP, to any party, not even the APC. For weeks, people have been calling knowledgeable persons in the Garden City to inquire if truly Wike was set to decamp. The notion grew louder in the altercation between him and then outgoing governor of Bayelsa State, Seriake Dickson.

The Bayelsa governor had alleged that Wike was knocking at APC’s door. When the PDP asked to settle them, Wike seemed to shun the effort.

Now, its between Wike and APC’s Adams Oshiomhole over the victory of the PDP in the Supreme Court in the Bayelsa governorship case. One significant development from the altercation is the declaration by Wike that he was not going to join Oshiomhole’s APC. He took harsh swipes at the APC boss and asked him to resign.

Oshiomhole had said after the Supreme Court order that nobody would be sworn in and that Bayelsa would end up not having a governor by Friday. Gov Wike had reacted angrily, asking President Muhammadu Buhari to caution Oshiomhole against interfering with Supreme Court orders. This too provoked vitriolic remarks by Oshiomhole who called Wike a man of violence.

Reacting in Port Harcourt Saturday, February 15, 2020, Gov Wike said asked the APC boss to resign. He said Oshiomhole no longer enjoyed the support of most APC governors.

Wike denied being a violent politician but claimed that Oshiomhole and his group had attempted to snatch victory in Rivers State with armed security agencies and did not succeed.

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Love week: God is looking for a lover

Saying Oshiomhole was not a man of his word, he noted that he stopped attending the National Economic Council because Oshiomhole turned it into a forum to bash former President Goodluck Jonathan, when he said the same Oshiomhole had gone to praise Jonathan at Aso Villa for ensuring credible elections.

He also said the way Oshiomhole won election as governor led to governorship cases being made to end at the Supreme Court.

He said that Oshiomhole’s talk questioning his membership of PDP was unintelligent, declaring that he is a strong and unrepentant member of the PDP. He said: “I will not be a member of their party. I have always been a member of PDP and they know that. Oshiomhole knows that his party does not even score up to 25 percent in my state. He cannot tell me that. And I want to tell him that his party is probing him about the so-called hospital he says he built.

I am not the one.”

Wike used the rest of the interview to pour invectives at Oshiomhole especially for calling himself an antelope and Wike a tortoise.

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the investment is a worthy one. “The teachers here need recognition. The inclusive education system here is the hallmark because it cares for challenged youths. Profit thus is not the motive in it. Touching every child is a big project. Our education system hardly cares for disabled persons. The compassion behind this is great.

“People will be what they were made at school and home. Those who kill today trace it to failures back then.

Parents, please do not force career down the throat of your wards. Allow the ABEC concept of helping a child discover his or her career, to develop independent minds.”

The chairman of the group, Gabriel Toby, former deputy governor of the state, said: “Teachers are the strength of our programmes because they interpret them in the lives of the children. The children leave as well-developed personalities. They develop selfconfidence. Here is the best place within the cost range. It is not about profit. We want to keep here affordable.”

The wife and managing director/founder of the group, Christie Toby, said her heart was glad because the journey of 20 years has been phenomenal and that each of the schools they set up has been a huge success.

The parents through the PTA chairman who unveiled music set to start music training at the nursery/primary level said, “No parent, no child and no child now school.”

F

ebruary every year is often regarded as love week around the world, not because anybody said so, but because of the Saint Valentine day celebrated on February 14, every year.

Several authorities have tried to define or redefine love while many have given history of Valentine Day. The most popular is that a king existed who banned marriages to free men to enlist in the king’s army and fight (win) wars fro him. A priest emerged who did not believe in it and went ahead to secretly wed couples, until he was allegedly found.

The king tried him and sentenced him to death. After some time, a lifeline was given to the priest; to recant his insistence that marriage was a right and love was higher than war and live.

He refused such conditions and died a martyr.

This story has been taken to new levels by young boys and girls who think the saint died for them to freely date each other and commit immorality. Preachers insist that this was rather what St Valentine died stopping. The king was not against immorality or dating but against marrying and building a love family.

This is why Mummy Lara Joseph of RCCG Model Parish in Elelenwo, PH, took time out last Sunday within the Val season to teach true love.

She relied on the Holy book, the bible, 1st Corrinthians 13: 1-7, where what love is was listed.

Love is not sex, not greed, not boasting, not even doing miracle. It is about a deep feeling for the next persons to be free from pain and want. She said God is looking for a true lover.

@Businessdayng

Thursday 20 February 2020

Retail &

BUSINESS DAY

consumer business Luxury

Malls

Companies

Deals

33

Spending Trends

consumer spending

Energy drinks shake-up competition in CSD market as Redbull sells 6.7bn cans in 2019 OLUFIKAYO OWOEYE

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nergy drinks seem to be catching the attention of young consumers in the country. At a time when the profit of beer makers is pressured, the narratives in the energy drink space seems to be different.

In recent times, there has been an increase in the number of energy drinks in the Nigerian market. The brands usually in varying sizes and they are regarded as energygiving drinks, capable of reinvigorating consumers.

Producers are now positioning their brands based on product innovation and

repackaging at the backdrop of rising concern over consumers’ health. Contributing to steady growth, energy drinks are beginning to evolve in terms of ingredients, flavor, and function, with several brands releasing lower-sugar, healthier options in slim cans.

The brands have also adopted the signing of celebrities and

football stars to help put their brands in consumers’ faces.

Popular brands in the country are Bullets, Redbull, Monster, Power Horse and recent entrant into the market Fearless energy drink.

According to Euromonitor International, in 2013 energy drinks captured $9.6 billion in sales. For the five-year time

period of 2013-2018, the category generated $12.3 billion in sales, a 28.3 percent yearover-year growth rate and a compound annual growth rate (CAGR) of 5.1 percent, the market research firm says.

“The energy drink market grew by nearly 9 percent in volume in 2018 and is on track to increase by nearly 8 percent by volume in 2019,” BMC’s Dilworth says. “The segment has enjoyed a new catalyst with the emergence of more sports-oriented brands recently.”

Energy drinks firm Red Bull group sales surge 9.5percent last year on the back of growth in emerging markets like Africa, Brazil, and India.

According to the com-

pany, it sold 7.5 billion cans of its iconic energy drink in 2019, which was a 10.4percent volume sales increase in 2018. The company said that it saw ‘exceptional’ sales growth in India, which was up 37percent, Brazil, which saw 30percent growth, and Africa, which rose by 25percent. Revenue increased 9.5percent to 6.1 billion euros ($6.6 billion) ‘Sales quantity, turnover, productivity and operating profit were further increased and represent record figures in the history of the company,’ Red Bull said in a statement.

In addition, established markets such as Germany (+15percent), Austria (+12percent), Eastern Europe (+12percent) and the USA

(+9percent) also saw strong growth.

Brand investment as well as ‘consistent cost management’ were also cited as reasons for the group’s positive performance.

‘Our growth and investment plans for the 2020 financial year are also very ambitious, providing for a continuation of the positive development to date and – as it is customary at Red Bull – being financed from operating cash flow,’ it added.

The drink owned by Mateschitz and Yoovidhya’s family, and both became billionaires thanks to the tonic they invented. Mateschitz is Austria’s richest person with $12.4 billion of wealth.

MALL

Local investors seize opportunities at secondary locations to develop retail spaces BUNMI BAILEY

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ocal investors are seizing opportunities at secondary market locations in the south-south, southeast, south-west and northwest as foreign investors re-evaluate existing business portfolios to determine profitability.

According to 2019 second half Nigerian retail report by Broll Nigeria, a commercial property services company, some of the measures taken by local landlords in secondary market locations are to quote retail rents in naira as opposed to core real estate markets where rents are quoted in dollars per square metre. Naira rent quotes cover over 90 percent of line shops in secondary markets.

Local operators of retail spaces have dominated secondary markets “as international retailers continue to remain reluctant about

rolling out operations in the country on their own balance sheet,” the report stated.

Nigeria’s gross domestic product (GDP) has remained weak since its exit from recession in the second quarter of 2017 and its recovery is failing to drive a strong rebound in the overall economic growth which is making foreign retailers to

consider either downsizing operations or pulling out of the country.

Most of the foreign retailers are not sure of the country because of its uncertain economy.

There has not really been a serious recovery since recession and purchasing power has still not improved which is a major driver for the retail market.

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So many things have not been really working well for them,” an anonymous researcher said.

Before the countr y’s entrance into recession in 2016, many foreign retailers were setting up businesses in Nigeria to gain a firm foothold in a marketplace where most consumers are brand loyal and value good services.

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According to 2013 article

by Mckinsey & Company, an American management consulting firm, the next chapter of emerging middle-class growth will be in the retail sector, fuelled by a new generation of Nigerian consumers, wholesale and retail sales are already the third-largest contributors to Nigeria’s GDP, contributing 16 percent to the total, albeit mostly through informal markets.

Apart from the low occupancy rate by foreign retailers, demand for its products is slowing as they are now perceived as more expensive to purchase by consumers, discouraging local merchants’ interest to stock them.

“This is obvious in the sale performance of many of these malls. And with the local retailers rebranding into a sort of mini-malls or supermarkets, competition is ramped up. I think it’s inevitable for many of the international retailers to downsize operations particularly in states where pa@Businessdayng

tronage is weak,” Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers said.

Data from the National Bureau of Statistics on Gross Domestic Product (GDP)

by Income and Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households have been declining at varying pace since it rose by 1.5 per cent in 2015. Also, per capita income in Nigeria has declined to $2,049 in 2018 from $3,268 in 2014, according to the International Monetary Fund (IMF).

Last year, Nigeria overtook India as the country with the largest number of people living in extreme poverty, thereby becoming the world capital of poverty, according to the Brookings Institute. This year, the number has risen to 91.6 million from 87 million in June 2018. Every minute, six Nigerians enter the group of extremely poor people, according to the World Poverty Clock.

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Thursday 20 February 2020

BUSINESS DAY

Corporate Social Impact

The import of the world CSR day ONUWA LUCKY JOSEPH

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he World CSR Day (Feb 18th ever y year) has not quite caught fire like other Days that are commemorated on a global scale.

But like the idea itself, it’s a work in progress and is sure to, in due course, attain critical mass.

Maybe a likely reason for its lack of spread is that it has 3rd world origins as the spirit behind the movement is the redoubtable Dr. R.L. Bhatia from India. A lot of its programmes are therefore still localized in India and Asia. But it does have a roster of 85 partner countries amongst which Nigeria is proudly listed.

Equally notable is that on its 2018 Advisory Council are listed two Nigerians: Babatomiwa Adesida, Corporate Social Responsibility (CSR) Manage for Sahara Foundation and Shina Atilola, Group Head, Strategy

& Communications at Sterling Bank Plc. So Nigeria seems pretty involved in the scheme of things.

A question like “What is the World CSR Day all about?” sounds like a no-brainer, doesn’t it? Who does not know what CSR means? Key in the public mind is that CSR is essentially about taking care of the less privileged. And since in these parts we have those in the millions, it’s easy to relate to. But there’s a lot more. And that’s what the CSR Day tries to help make aware to the mass of humanity and to work toward its adoption until it becomes a mainstream activity for any collective of people around the world.

SO, WHAT IS CSR?

Shina Atilola

Dr R L Bhatia

Without resorting to any standard definitions, CSR can be described as the ways and means by which a corporate entity helps enhance the social, economic and environmental wellbeing of its communities (and that’s not paid for by the community). It is usually voluntary, but has been made

mandatory in a few countries (notably in India). It is the diligent application of CSR principles and practices that ensures sustainability, meaning that a company manages its business practices in such a way that not only are they not deleterious to the environment, they help ensure that the business and the community can keep cohabitating under conditions that are commodious to both.

More than just ‘giving back’, today’s CSR is about ensuring that there remains a social, economic and environmental equilibrium that serves as a bulwark against depletion. This leaves investors and communities the sweet option of staying in their same preferred place www.businessday.ng

rather than continually being on the lookout for someplace else to settle and to do business. And what do you know, in today’s totally interconnected world, we soon will run out of options to escape to if we are in the habit of destroying our own corner of the planet or weakening the economic fibre

of our stakeholders.

World CSR Day is therefore a celebration of interventions by the business community and other bodies not government. And wouldn’t you know, sometimes, rather than being the arbiter between business and communities, it is government’s greedy appetite for revenue that puts people’s lives and their environments in jeopardy. So we have a situation where business must self-regulate as a form of enlightened self-interest.

CSR has quite a wide ambit that spans areas like Philanthropy: Commitment of funds towards alleviating social issues in areas important to the company; or that the company

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Babatomiwa Adesida

believes important to the community: education, health, sports, governance, etc.

Employee Welfare: It’s not all about outsiders. Staff of the organisation must be well looked after. Any CSR programme that does not factor in company staff is clearly fatuous and an exercise in mere propaganda Transparency: via CSR/ Sustainability Reports via which the public can have a record of a company’s societal impact in a given year. As well, independent evaluators and the press can be invited from time to time to test the veracity of claims.

Volunteering: Whatever a company is ready to deploy its troops for must be something it really believes needs to be done. It’s always when it has the buy in of the staff who would do the interface with the targets. is a key part of any Corporate Social Responsibility program, and can improve corporate culture in many ways.

As with other aspects of CSR, it is a good vehicle for enhancing corporate brand image.

Environmental Interventions: Working singly or in concert with other corporates to help bring down the carbon footprint generated by its business/industry/ through adoption of cleaner/renewable energies.

Diversity: The world, though diverse, tends to be lopsided in everything. Responsible organisations know better than to ignore any group.

Everyone has something to contribute, whether we like them or not.

SERIOUS CSR REQUIRES SUFFICIENT SCALE The reason big corporates are regarded as excellent assets @Businessdayng

for CSR is because they have amassed the critical resources that small organisations do not yet have. However, every organisation can have CSR goal-directed-actions that sees them helping to improve the wellbeing of their community through contribution of their time, talents and energies. It won’t be on the scale of the big corporates but every action done on a continuous basis leads to achieving the desired results.

How Corporates Go About their CSR Obligations Some have in house CSR/ Sustainability Departments through which they execute their projects. Others use these departments as liaison to work with established NGOs towards achieving on identified CSR objectives. Yet others have semi-autonomous foundations that have full budgets and board approved yearly activities.

Non-Governmental Organisations (NGOs) NGOs are a big part of many organizations’ CSR Programmes.

Staffed as they are with experts in different areas of intervention, there is a natural symbiotic relationship whereby corporates pool up the funds and find NGOs and Foundations that are uniquely suited to delivering on the desired objectives of the organisation.

Increasingly, though, many organisations are finding the need to create carve out foundations from their regular corporate practice. So that for instance, UBA has UBA Foundation, OANDO has Oando Foundation, out of In Nigeria, some of these organisations include LEAP Africa/ Fate Foundation/

Thursday 20 February 2020

BUSINESS DAY

Corporate Social Impact

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Onuwa Lucky Joseph (08023314782) Editor.

Some global model CSR Companies

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ctivists will always find holes to pick because there’s no one company that is perfect.

Besides, there is the eternal tension between the profit motive and the overarching need to be a socially responsible corporate citizen. At the end of the day, we must always applaud the efforts of those who have transitioned from being mere profit driven entities to being an integral part of the overall progress of the communities where they operate in. Those are the people we are interested in.

Over time, some of them have become lightning rods to dead consciences everywhere. Some of the include Starbucks: The company’s CSR

is based on three pillars: Ethical Sourcing; Community; and The Environment. Notably, in 2013, it made a commitment to hire 10,000 veterans (old soldiers, in Nigerian parlance) and spouses by 2018. But by 2019, it had already hired 25,000 veterans and spouses and had made a fresh commitment to hire 5000 veterans and spouses annually, going forward.

Google: The pivot of its CSR is

renewable energy. And it is driving it with all it’s got. However, it also plays big in the areas of Education and Learning as well as Joblessness and Poverty Microsoft: With a co-founder like Bill Gates, you can be sure the Microsoft social conscience is tuned high. It is big on philanthropies, Environmental Sustainability, Skills and Employability, as well as Human Rights

Ben & Jerry’s: Even though the company is now owned by Unilever, they have managed to retain their identity as an activist corporate, strong on Use of Fair Trade Ingredients, Community based Projects, Corporate Philanthropy, Grassroots Organising for Social Change, and a couple of Vermontbased Programmes Nike: Commitment to reducing

its carbon footprint; Keeping the human voice at the heart of everything it does; Moving to complete renewable energy; Diverse workplace and inclusive culture McDonalds: Responsible Sourcing; Environment; Supporting Local Communities. This I know firsthand as my family enjoyed the support of Ronald McDonald House Charities in the early 2000s when my daughter had a heart operation in Germany. They were a great help in relieving the stress.

(Next week, we shall list a few more global companies and some trail blazing Nigerian companies that are doing their bit to ensure CSR/ Sustainability is alive and well in Nigeria)

WORLD CSR DAY: CSI Engages Nestlé Nigeria about ‘Creating Shared Value (CSV)’

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estle Nigeria does not shy away from touting its credentials as a trusted partner in nation building in the West Africa region. This it’s done and does through job creation, capacity building and community development, all of these in line with its stated purpose of enhancing quality of life and contributing to a healthier future.

It has been at this for over 58 years with high quality food products while helping to improve livelihoods in communities directly connected to its business activities, and striving for zero environmental impact in its operations.

It is in line with this line of thinking that Mr. Mauricio Alarcon, MD/CEO of Nestlé Nigeria re-stated the company position recently: “We believe that for our business to be successful in the long term we must create value, not only for our shareholders but also for society.

This concept called Creating Shared Value (CSV), is embedded in everything we do at Nestlé” “Doing business this way” he continued, “helps to optimize value for our shareholders and have a long-term positive impact on all stakeholders connected to our business”.

The three pillars of Nestlé CSV initiatives are: Individuals and Families; Communities; and the Planet. Its global ambitions include helping 50 million children across the world lead healthier lives and improving 30 million livelihoods in communities directly connected to its business and activities.

Expatiating on Nestlé CSV in Nigeria, Victoria Uwadoka, Corporate Communications and Public Affairs Manager at Nestle NIGERIA affirms that, “Nestlé Nigeria touches thousands of lives every day as we work towards the attainment of our ambitions to impact individuals and families, our communities and the planet”. The first level of course is by “delivering tasty and nutritious products to consumers”. But it goes beyond that, as according to her, “we are committed to building resilient communities by creating shared value.

Our focus areas include • Access to clean drinking water, • Sourcing our agricultural raw

of them employed by Nestlé directly.

Recently, the company has partnered with the ITF to extend the reach of the TTC. • Access to Water and Sanitation – Nestlé has consistently invested in providing access to clean pot Nestlé able water in the communities closest to its factories. The company continues to build upon the existing drinking water facilities, now serving over 14,000 people living in the communities closest to its business operations. In 2018, the company built seven new water facilities, and commissioned six more in 2019 to increase access to clean, safe water. materials and our packaging materials locally • Empowering farmers to improve their productivity and the quality of their crops.

• Promoting youth and women empowerment.

“Through our CSV initiatives, she continues, “we reach over 14,000 Nigerian families across our value chain, from the farmers who provide the agricultural input to the distributors and retailers who ensure availability and the individuals and families who enjoy the high-quality nutritious products every day”.

Nestlé creates value for individuals and families through 1: Its iconic brands, 80% of which are well fortified with micronutrients including iron, vitamin A, zinc and iodine to help address the challenge of micronutrient deficiency especially among the most vulnerable in our society.

Nutrition Education: In line with Nestlé’s ambition to help 50 million children live healthier lives, Nestlé Nigeria works alongside other stakeholders to bring this commitment to life through Nestlé for Healthier Kids(N4HK) school-based program.

Nestlé also promotes active lifestyles which, is a key element for healthy living, through Milo school sports development program which reaches over one million children annually.

Nestlé creates value for comwww.businessday.ng

munities through: • Locating Nestlé’s world-class factories and facilities in rural areas is a deliberate strategy to attract further investments and galvanize the industrialization of those rural communities, thereby creating employment and skills development opportunities for those who live closest to these factories. The company takes a step further by investing in activities and programs that promote economic and social empowerment to improve livelihoods.

• Local Sourcing - Nestlé has worked on local sourcing of raw materials since 2011 and today, about 80% of its agricultural input comes from local farmers and suppliers. 100% of the grains and legumes used in Golden Morn are locally sourced; the malt in MILO® is made from sorghum supplied by smallholder farmers. 100% of the cassava starch, palm olein, cocoa and soya beans are all sourced locally. Over 46,000 local farmers are part of the ecosystem that ensures a consistent supply of high quality agricultural input to Nestle factories. By sourcing raw materials for its productions locally, the company is helping to improve livelihoods in the communities where we operate by increasing household incomes.

• Nestlé in collaboration with International Fertilizer Development Centre (IFDC) / 2Scale is helping farmers improve their livelihoods by empowering smallholder farmers on sustainable farming practices under the initiative, Nestlé Nigeria & IFDC/2Scale

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Project Sorghum & Millet. The partnership aims to improve grain quality and productivity. Over 50,000 farmers have been empowered to improve grain quality and productivity in the last 3 years.

• Nestlé is also running a Youth Agripreneurship project in collaboration with AGRA and implementing partners with objective to encourage youth participation in full stream scale agriculture with trainings on best agricultural practices.

• Youth Development - In support of Nigeria’s drive towards building the capacity of her young people, a very significant part of Nestlé Nigeria communities, the company is engaged in a number of activities including improving employability skills, technical capacity building, sports development and entrepreneurship development.

Nestlé inaugurated a state-of-the-art Technical Training Centre (TTC) at the Agbara factory in 2011 and started a second centre in 2017 at the Nestlé Waters Factory in Abaji, FCT Abuja.

The Centres offer an 18-month multi skilled, vocational training in machining, mechanical fitting operations, electrical operations, instrumentation operations and automation leading to the certificate examination of the London City and Guilds Technician certificate. The five best students from each batch participate in an additional three-month technical training in Switzerland supported by the Swiss Embassy. This program has benefited over 80 students so far, with over 80% @Businessdayng

Nestlé Creates Value For the environment through – Its recognition of the growing challenge and the collective responsibility to manage the world’s resources for future generations. It is therefore continuously increasing its water recycling initiatives and promoting the safe reuse of wastewater. The company also strives to reduce its environmental footprints by decreasing water consumption and gas emission. In 2018, it reduced its water consumption by 11% and its gas emission by 7%. By October 2018, Nestle Nigeria attained zero waste to landfill across its factories.

In 2018, Nestlé’s global CEO announced the company’s objective to ensure that 100% of its packaging is recyclable or reusable by 2025.

In Nigeria, the company works with other stakeholder groups including Food and Beverage Recycling Alliance (FBRA) to achieve plastic neutrality.

In 2019 about 683 tonnes of plastics were removed from the environment through FBRA and other Nestlé initiatives.

In September 2019, Nestlé NIGERIA signed an agreement with Wecyclers to increase plastics sorting and collection in 5 additional communities in Lagos.

The project provides 40 new direct employment opportunities and reaches 15,000 households with a means of livelihood.

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Thursday 20 February 2020

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Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 19 February 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 344,788.69 9.70 -0.52 117 4,546,218 UNITED BANK FOR AFRICA PLC 259,915.60 7.60 0.66 227 15,736,651 ZENITH BANK PLC 612,231.63 19.50 -0.26 553 39,999,715 897 60,282,584 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 206,397.93 5.75 -0.86 275 34,620,421 275 34,620,421 1,172 94,903,005 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,361,123.51 116.00 - 135 1,943,579 135 1,943,579 135 1,943,579 BUILDING MATERIALS DANGOTE CEMENT PLC 2,896,886.26 170.00 - 212 1,222,145 LAFARGE AFRICA PLC. 252,892.39 15.70 3.97 79 2,710,353 291 3,932,498 291 3,932,498 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 356,008.96 605.00 - 2 800 2 800 2 800 1,600 100,779,882 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 9,205.53 3.45 - 7 96,650 7 96,650 7 96,650 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 7 96,650 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 13,750 OKOMU OIL PALM PLC. 64,865.88 68.00 - 8 7,712 PRESCO PLC 49,850.00 49.85 - 5 2,098 14 23,560 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 -8.70 27 1,032,400 27 1,032,400 41 1,055,960 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 3 8,505 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 38,615.59 0.95 -1.05 38 8,270,531 U A C N PLC. 25,931.67 9.00 - 28 129,189 69 8,408,225 69 8,408,225 BUILDING CONSTRUCTION ARBICO PLC. 469.26 3.16 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 29,700.00 22.50 - 22 251,560 ROADS NIG PLC. 165.00 6.60 - 0 0 22 251,560 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,572.41 0.99 - 9 116,000 9 116,000 31 367,560 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,594.61 0.97 - 6 100,000 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 34 612,705 INTERNATIONAL BREWERIES PLC. 189,377.58 7.05 - 8 27,695 NIGERIAN BREW. PLC. 411,840.46 51.50 - 55 305,281 103 1,045,681 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 145,200.00 12.10 -2.02 63 715,507 FLOUR MILLS NIG. PLC. 94,308.73 23.00 - 33 268,764 HONEYWELL FLOUR MILL PLC 8,168.10 1.03 - 4 131,000 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 34,442.70 13.00 - 7 50,000 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 107 1,165,271 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 17,091.64 9.10 - 26 56,238 NESTLE NIGERIA PLC. 984,479.06 1,242.00 - 82 634,622 108 690,860 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,691.34 4.55 - 12 92,457 12 92,457 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 19,852.39 5.00 - 15 248,505 UNILEVER NIGERIA PLC. 86,175.08 15.00 - 27 42,362 42 290,867 372 3,285,136 BANKING ECOBANK TRANSNATIONAL INCORPORATED 117,437.13 6.40 - 36 149,081 FIDELITY BANK PLC 61,426.57 2.12 -0.47 47 1,598,896 GUARANTY TRUST BANK PLC. 835,845.49 28.40 -1.56 233 79,346,101 JAIZ BANK PLC 20,035.69 0.68 -4.23 26 3,387,275 STERLING BANK PLC. 44,913.05 1.56 - 43 1,318,009 UNION BANK NIG.PLC. 203,845.27 7.00 - 61 1,129,372 UNITY BANK PLC 6,896.71 0.59 9.26 23 1,748,373 WEMA BANK PLC. 25,073.40 0.65 -4.41 22 3,088,750 491 91,765,857 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 10,197.18 0.90 9.76 43 5,354,789 AXAMANSARD INSURANCE PLC 18,900.00 1.80 -10.00 8 218,768 CONSOLIDATED HALLMARK INSURANCE PLC 2,601.60 0.32 -8.57 3 140,100 CORNERSTONE INSURANCE PLC 8,248.52 0.56 - 3 111,852 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,904.09 0.26 - 6 79,610 LAW UNION AND ROCK INS. PLC. 3,866.70 0.90 -9.09 11 550,020 LINKAGE ASSURANCE PLC 3,680.00 0.46 4.55 11 310,020 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 5 2,487,540 NEM INSURANCE PLC 10,772.23 2.04 - 4 58,484 NIGER INSURANCE PLC 1,547.90 0.20 - 1 3,500 PRESTIGE ASSURANCE PLC 3,283.36 0.61 3.39 5 550,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 1 250,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,148.65 0.31 -6.06 20 1,640,294 121 11,754,977 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,629.63 1.15 -4.17 5 694,000 5 694,000

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 10,240.00 5.12 9.87 101 10,207,857 CUSTODIAN INVESTMENT PLC 32,056.16 5.45 -9.92 27 1,845,618 540.00 0.36 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 37,031.07 1.87 3.89 54 1,650,719 ROYAL EXCHANGE PLC. 1,183.44 0.23 - 0 0 404,441.24 38.50 - 26 4,027,062 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 19,320.00 3.22 9.90 62 7,170,335 270 24,901,591 887 129,116,425 HEALTHCARE PROVIDERS EKOCORP PLC. 2,592.72 5.20 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 710.63 0.20 - 0 0 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,299.36 2.54 1.60 13 10,262,632 GLAXO SMITHKLINE CONSUMER NIG. PLC. 5,979.38 5.00 - 23 196,851 3,484.97 2.02 - 14 30,711 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 911.60 0.48 - 11 259,569 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 61 10,749,763 61 10,749,763 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 - 4 800,000 4 800,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,206.13 0.41 - 2 20 2 20 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 291.60 2.70 -9.40 3 480,000 287.07 0.58 - 0 0 TRIPPLE GEE AND COMPANY PLC. 3 480,000 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 -3.45 7 550,000 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 7 550,000 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 15 44,213 15 44,213 31 1,874,233 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 11 100,000 BUA CEMENT PLC 1,185,252.39 35.00 - 44 355,917 CAP PLC 17,220.00 24.60 - 18 43,425 MEYER PLC. 244.37 0.46 - 1 50,000 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 1 100 75 549,442 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,465.85 1.40 2.94 8 265,242 CUTIX PLC. 8 265,242 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 1 500 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 500 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 2 4 2 4 86 815,188 CHEMICALS B.O.C. GASES PLC. 1,873.10 4.50 - 9 75,922 9 75,922 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 1 370 1 370 10 76,292 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 5.00 30 16,313,472 30 16,313,472 INTEGRATED OIL AND GAS SERVICES OANDO PLC 43,385.63 3.49 -3.06 35 978,001 35 978,001 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 48,031.29 133.20 - 20 38,513 CONOIL PLC 12,491.14 18.00 - 15 15,553 ETERNA PLC. 2,803.91 2.15 - 18 93,390 FORTE OIL PLC. 21,751.43 16.70 -9.97 29 284,256 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 5 46,419 TOTAL NIGERIA PLC. 36,328.84 107.00 - 16 6,522 103 484,653 168 17,776,126 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 5 5,204 421.96 0.90 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 5 5,204 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 1 5 IKEJA HOTEL PLC 2,286.68 1.10 - 4 57,000 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,781.64 4.05 - 2 205 7 57,210 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 0 0 LEARN AFRICA PLC 956.60 1.24 - 5 26,500 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 539.26 1.25 - 0 0 5 26,500 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 530.46 0.32 - 3 43,350 3 43,350 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0

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Thursday 20 February 2020

BUSINESS DAY

news System breakdown disrupts visa on...

Continued from page 1

Jean Bakole (l), United Nations Industrial Development Organisation (UNIDO) representative to ECOWAS/regional director, Nigeria Regional Office Hub, and Fahad Obaid Al Taffaq, ambassador of the UAE to Nigeria, during a meeting on partnership strengthening for supporting inclusive and sustainable industrial development in Nigeria and ECOWAS.

NAICOM may force mergers to avert...

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recapitalisation exercise

billed to end on December 31, 2020.

Thomas said the role of the regulator in the recapitalisation is to ensure that there is transparency and certainty of the process, orderliness and level playing ground for all players.

According to him, another priority of the commission is the safety of funds, stating it will ensure that all realised funds in the course of the exercise are domiciled in the Central Bank of Nigeria’s escrow account.

The commission has agreed with the CBN to ensure that the funds will not be in a dormant account, but one that will accrue interest income to the owner institutions, Thomas said.

Liquidation has not been a good experience for the regulator in the history of insurance industry, particularly when a life insurance

company is involved.

Amicable Insurance, for instance, was liquidated in the course of the 2005/2007 industry recapitalisation exercise. Being a life company, the situation required that its customers whose policies were yet to mature were transferred to existing companies, and assets were liquidated to settle outstanding liabilities.

This was a tough one for the industry as a whole.

Recently also, NAICOM appointed receivership managers for two companies – Investment and Allied Insurance and Spring Life Insurance – which are to go through liquidation, a problem the commission would have loved to avoid.

NAICOM had in a circular issued on May 20, 2019 announced increase in the paid-up share capital of life companies from N2 billion to N8 billion; general business from N3 billion to N10 billion; composite business from N5 billion to N18 billion; and

World Bank approves $2.2bn for 6 projects...

Continued from page 2

ral Access and Agricultural Marketing Project which will upgrade rural roads, improve connectivity and access to local markets and agrobusiness services in 13 states.

In particular, the project will upgrade about 1,600km of rural roads and improve 65 agro-logistics centres.

According to the World Bank, these interventions are expected to increase by up to 10 percent the proportion of population who live within 2km of an all-season road. The project is financed through an IDA credit of $280 million, cofinancing of $230m from the French Development Agency and $65m from the Government of Nigeria.

The Nigeria Digital Identification for Development Project will support the National Identity Management Commission to increase the number of persons who have

a national identification number (NIN) reaching about 150 million in the next couple of years.

“This will enable people in Nigeria, especially marginalised groups, to access welfare-enhancing services,” the World Bank noted.

The project will also enhance the ID system’s legal and technical safeguards to protect personal data and privacy. This is financed through an IDA credit of $115 million and co-financing of $100 million from the French Agency for Development and $215 million from the European Investment Bank.

Part of the funding is also for the Ogun State Economic Transformation Project expected to catalyse private investment in the state by improving the business-enabling environment, strengthening agri-food value-chains and upgrading skills. www.businessday.ng

reinsurance companies from N10 billion to N20 billion.

According to the commission, the minimum paid-up share capital requirement took effect from the commencement date of the circular (May 20, 2019) for new applications, while existing insurance and reinsurance companies were required to fully comply not later than June 30, 2020. However, the commission recently extended the deadline to December 31, 2020.

Yetunde Ilori, director general, Nigerian Insurers Association (NIA), said the extension of the deadline by NAICOM was a step in the right direction.

By that singular move, she said, the commission has portrayed itself as one with a listening ear, responsive to the yearnings and aspirations of the insurance operators, and shown that the interest of the market is uppermost in its considerations.

She noted that by the extension, insurance companies now have ample time

to comply with the directive instead of having to go into the exercise without adequate preparation and diligent execution.

“Now that the commission has provided the needed impetus for members to go about the exercise, it is my appeal that member companies should give the exercise all the seriousness it deserves,” Ilori said.

“We need to appreciate the commission’s gesture by working hard to achieve the recapitalisation threshold set for our various businesses.

That way, we will encourage the commission to churn out more market-friendly policies,” she said.

Ilori said the market expects more cheery news from NAICOM by way of palliatives and incentives, especially those that are within its control. She said the cost of the exercise would be too heavy on the companies and any incentive would assist the companies to reduce the cost of recapitalisation and increase shareholder value.

Amongst some of the key results, the project will support the issuance of 15,000 Certificates of Occupancy, facilitate off- taker arrangements with agribusinesses for up to 40,000 farmers and improve STEM teaching in up to 70 percent of public secondary schools. This is financed through an IDA credit of $250 million.

There is also an Innovation Development and Effectiveness in the Acquisition of Skills Project which is expected to strengthen the skills of 50,000 Nigerian students and enhance the capacity of technical teachers to better equip them for jobs in the formal and informal sectors.

The project will increase female enrolment rate from 13 percent to 23 percent in technical colleges and provide recognised skills and certification to 3,000 youths after completing an informal apprenticeship. This is financed through an IDA credit of $200

million, the bank stressed.

The Sustainable Procurement, Environmental and Social Standards Enhancement Project (SPESSE) will strengthen capacity in managing procurement, environmental and social standards in the public and private sectors.

The project will enhance the skills of 21,240 persons and facilitate certification of 4,000 practitioners in procurement, environment and social standards. It will also ensure that accredited degree programs meet International Best Practice and Good International Industry Practice (GIIP) in these areas. This is financed through an IDA credit of $80 million.

About 1.6 billion people live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.

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day at 11.55 am local time and left the airport around 3.45 pm. It was four hours of just trying to get the system to work. The printers that the airport authorities had in the main hall for visa on arrival broke down, so they had to go do the printout elsewhere. As a result of this, the process of applications and biometrics were also done elsewhere,” the Kenyan visitor said.

He also lamented the change in visa fee which was not pre-announced.

“Initially, visa on arrival was about $45 but when we were filling out applications at the airport, it was $135.

There is something about the price breakdown that shows biometrics inclusion, which is also a challenge because even with the biometric fees, there is still a $20 processing fee,” the visitor said.

Richard Quest, CNN International’s business correspondent, told BusinessDay in Lagos that it took his colleague three hours to process the visa on arrival at the Lagos airport on Monday.

Quest advised that Nigerian aviation authorities should concentrate on getting the main airports up and running and less chaotic.

“The chaos is just phenomenal when you come to the airport and I am thinking why it has to be this way,” Quest said. “It is simple.

Those with visas, those without visas and those with visa on arrival should be told where to stand, so they can be checked one by one. It took my colleague three hours just to do the visa on arrival at the Nigerian airport. So concentrate on getting those things right because they will unleash business potentials.”

The Kenyan visitor further explained that last year when he visited Nigeria, there was nothing like biometric fees; all that were required were application letter, letter of invite, certification from the company inviting or hosting you, your passport biodata page, passport photograph and $45 for visa fee.

He said back in his country, visitors are only required

to submit the requirements to the authorities at the airport, who help them process the visas and issue them, but in Nigeria, visitors run helterskelter just to get their visas.

He said the situation was compounded by the slow internet Wi-Fi at the airport, making it very difficult to complete the process online.

BusinessDay’s checks show despite the increase in price, Nigeria still issues one month single entry visa on arrival. Experts say $135 visa on arrival fee may be on the high side for a country like Nigeria looking to attract foreign direct investment.

Further checks show that Kenya charges $50 for visa on arrival, Rwanda charges $50, Egypt $25, and Ethiopia $50.

Abdullahi Musa Usman, comptroller, Lagos Airport, who admitted the breakdown in a section of the airport where visa on arrival is issued, said the situation has been addressed and visitors seeking visa on arrival have been moved to another wing of the airport.

“We have two wings, which are E-wing and Dwing. We had a breakdown in the D-wing, so we had to transfer people to E-wing in the same airport to make sure the problem is sorted out. As I speak to you, the printers are working at the wing where they have been moved to,” Usman said.

He said the service also discovered that the network at the airport was slow, so it has improved it to the Local Area Network (LAN).

Speaking on the visa on arrival fee, the comptroller said NIS has introduced biometric visas.

“The additional cost we introduced is as a result of inclusion of biometrics. The visa fee remains what it is but biometric fees were included.

The visa fee is the government policy and I am only implementing what the government says,” Usman said.

NIS issued 58,000 visas on arrival at the Lagos airport in 2019. Experts say to improve these numbers and generate more revenue for the government, the NIS needs to improve its processes and procedures.

World Bank approves $2.2bn for 6 projects...

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government.

He said if the DisCos are not ready to do the right thing, maybe they should give way to whoever is ready to come and invest.

“We are asking government to review and see if they are capable, but if they are not capable, they should give way,” he said.

The minister said the GenCos have capacity to generate 13,000MW, the Transmission Company of Nigeria can only take @Businessdayng

7,000MW, while DisCos distribute only 3,000MW to Nigerians and in return pay for only 1,000MW. The implication is technical and economic losses as the GenCos don’t get value for the electricity they generate and the end consumers also do not get adequate electricity despite the output of the GenCos, he said.

“We cannot continue to subsidise power distribution, so I have made recommendations to FEC on the next line of action,” he said.

Wednesday 19 February 2020

BUSINESS DAY

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FG rides on huge investor sentiment, secures lower yield for bonds Onyinye Nwachukwu, Abuja

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igerian Federal Government is obviously riding on the back of current excess liquidity in the market to secure better, lower yields for its bonds as investor appetite soars.

Report from the Debt Management Office (DMO) on February 2020 bonds auctioned Wednesday indicates a significant oversubscription as investors continue to explore profitable outlets to push in their cash.

Lower money market in-

terest rates continue to reflect liquidity overhang in the banking system, resulting from the restriction of individuals and non-bank corporates in the domestic economy from participating in OMO bill auctions.

At the Wednesday auction, DMO offered N140 billion across three instruments to investors, including 5-Year tenor bonds worth N45 billion; 10-Year tenor of N45 billion as well as 30-Year tenor, worth N50 billion.

“Subscriptions received through Competitive Bids for the three instruments were N398.20 billion, indicating a total

subscription level of 284.43%,” the DMO said in a mailed note.

Non-Competitive bid of N60 billion was also received, making the total subscriptions from Competitive and Non-competitive bid to N458.20 billion.

For Competitive bid, some N78.43 billion or 174.30 percent subscription was received for the 5-year Bond; N95.70 billion or 212.67% for the 10-year Bond; and N224.07 billion or 223.15% for the 30-year Bond.

Successful bids were allotted at the rate of 8.7500% for the 5-Year, 10.7000% for the 10-Year and 12.15% for the 30-Year Bond,

which indicate a decline from the allotment rates of 9.8500%, 11.1250% and 12.5600% for the 5-Year, 10-Year and 30-Year Bonds, respectively, at the January 2020 FGN Bond Auction.

The total amount allotted for Competitive Bids was N100.00 billion across the three tenors, while N60.00 billion was allotted through Non-Competitive Bid for the 5-year and 10-year tenors, at same rates with the Competitive Bids.

This brought total allotment from Competitive and NonCompetitive bids to N160 billion, the debt office noted.

L-R: Tunde Adelana, director, monitoring/evaluation, Nigerian Content Development and Monitoring Board (NCDMB); Ogbomo Endurance, graduate trainee of the Amazon-NCDMB Flaredown project; Olayinka Oluwatimehin, group chief executive officer, Amazon Energy; Blessing Amakeme, graduate trainee, and Ama Ikuru, general manager, capacity building, NCDMB, during the graduation ceremony of the trainees under the NOAC Kwale Gas Flaredown project by NCDMB and Amazon Energy in Lagos, yesterday.

What US can do to aid Nigeria’s quest to eliminate child labour - Ngige JOSHUA BASSEY

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inister of labour and employment, Chris Ngige, has asked the United States of America (USA) to extend technical assistance to Nigeria towards the elimination of child labour in Africa’s biggest economy.

Child labour refers to the exploitation of children through any form of work that deprives them of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially or morally harmful.

The United Nations Children’s Fund (UNICEF) believes that worst form of child labour reinforces intergenerational cycles of poverty, undermines national economies and slows progress towards achieving the Sustainable Development Goals (SDGs).

Ngige, who received in audience Mary Leonard, USA ambassador to Nigeria, Wednesday in Abuja, wants Washington to assist the Nigerian government in establishing schools and clinics in areas where child labour is endemic in Nigeria.

According to Ngige, such assistance would boost the efforts of the Nigerian government in tackling child labour and its socio-economic consequences.

Ngige equally solicited for logistics support, such as the provision of vehicles to assist in labour inspections across

Nigeria’s 36 states. He also urged the US government to initiate empowerment programmes in areas with high tendency for child labour as this would end poverty, which is the cause of such practices.

He noted, however, that Nigeria had been making efforts and “we need support for the measures we have in place to tackle child labour.”

He explained that the Nigerian government had been tackling the issues of child labour through the adoption of the International Labour Organisation (ILO) Convention on Child Labour and Forced Labour, and had put up a national steering committee on child labour.

The minister observed that child and illegal labour thrive on poverty and illiteracy, and as such the government had put in place social investment programmes such as school feeding and free education as measures to attract children to school and out of child labour.

“The Universal Basic Education (UBE) Act makes it compulsory for children to attend school, and it has a punitive side to it that compels parents to enrol their children in school.”

He disclosed that the Nigerian government was in the process of upgrading its skill acquisition certificate to international standard to enable the holders fit in professionally anywhere in the world.

The US ambassador was on a familiarisation visit to the Ministry of Labour and Employments.

Senate orders telcos to refund money on drop calls’ deductions Solomon Ayado, Abuja

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enate on Wednesday directed MTN, Glo and other telecommunications network operators in Nigeria to refund to subscribers money deducted on drop calls.

This is coming as the Senate urged the regulatory authority, Nigerian Communications Commission (NCC) to quickly check the sharp practices by the telecoms service providers.

The Senate is concerned that telecom service providers were cheating customers through drop calls and had, in July 2019, mandated two of its committees to investigate it.

The Senate described the deductions by the Global System for Mobile communications (GSM) operatives, which have amounted to billions of naira, as broad-day robbery.

To mitigate the ugly situation, the joint Senate Committees on Communications, Trade and Investment held public hearing on Wednesday in Abuja.

Chairman of the Senate Committee on Communications, Oluremi Tinubu, explained that the session was specifically to obtain explanations from the GSM service providers “on the increasing rate of drop calls and other unwholesome practices by telecommunications network operators in Nigeria that have robbed Nigerians of their hard earned billions of naira.”

In his remarks, president of

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the Senate, Ahmad Lawan, said the GSM service providers in the country had short-changed their customers through drop calls for a long time and the Senate would no longer tolerate it.

“The drop calls shortchange consumers. To me, it is a very serious issue and we have been with it since as far as I can remember. We have been short-changed for a long time.

We consider this development unacceptable.

“We mandated our committees to thoroughly investigate the issue of drop calls. This is in the interest of the people we represent. And even the people who only come to Nigeria either for tourism or business or whatever.

“What happens in Nigeria, especially as far as the attitude and behaviour of the service providers hardly happens anywhere in the world.

“What MTN does in Nigeria, MTN doesn’t do that in South Africa. All other service providers are also culpable. We have witnessed it for years. Maybe the time has come for us to reject it.

“Going forward, it’s not only making it better, but what happened to all the money that we paid for no service rendered.

I think the committee should insist on what happens to all the money people in this country paid for no service. Other countries give money back. But here you denied us and you don’t give one Kobo.

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Again, S/A universities shade Nigerian counterparts in latest emerging economies rankings KELECHI EWUZIE

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anagement of Nigerian universities as a matter of priority can learn lessons from South African style of university management that continues to top in Africa when it comes to global ranking of universities across every indicators, the Emerging Economies University Rankings 2020 shows.

South African universities have in the last decade provided increased competition to Nigerian universities in international outlook, knowledge transfer and research.

In the latest Emerging Economies University Rankings 2020 release Tuesday, South African universities were top performer based on countries’ average overall score among institutions in the top 200. The African country achieves an average score of 41.3 out of 100.

This latest Emerging Economies University Rankings 2020 shows South Africa universities outperforming Nigeria, a situation traced to the country’s recognition of education as a national priority.

While South African universities like University of Cape Town ranked among the top 10, Witwatersrand ranked 11th while Stellenbosch University ranked 24. Nigeria is feeling the squeeze as only Covenant University ranked number 91 among the world’s 100 best universities in the emerging economies 2020.

A breakdown of the ranking figure shows that Covenant University was the highest ranking university in Africa most populous black nation; the University of Ibadan (UI) secured the 105 position while the University of Lagos (UNILAG) was ranked 201–250 out of the 533 universities According to the ranking, universities are ranked based on the same 13 performance indicators used for The Times Higher Education (THE) World

University Rankings, but the weightings are different to reflect the development priorities of universities in emerging economies.

In the global ranking globally universities were assessed using performance indicators that are grouped into five areas namely teaching which has the do with learning environment; research which assesses the volume, income and reputation of each citadel of learning; Other performance indicators include citations (research influence); international outlook this accounts for the number of staff, students and research carried out in each institution ranked and industry income (knowledge transfer).

Among the indicators used in ranking the universities according to Emerging Economies University Rankings 2020 is that only institutions in countries classified by the London Stock Exchange’s FTSE Group as ‘advanced emerging’, ‘secondary emerging’ or ‘frontier” are captured in the ranking.

He noted such indicators, however, “are recalibrated to reflect the development priorities of universities in emerging economies.”

The best approach to tackle the mismatch is to ensure that all ingredients are in place to ensure that the curriculum is delivered 100 percent as intended, says Peter Okebukola, distinguished professor of Science education, Lagos State University (LASU) and chairman of Council, National Open University of Nigeria.

Okebukola says to improve the ranking of Nigerian universities globally; all existing Federal universities need to have their infrastructure elevated to world-class status.

“Beyond paper, a six-hour flight to South Africa to see the University of Witwatersrand in Johannesburg and another flight to The University of Cape Town will give us an idea of what world-class facilities are for a university”, he said.

COVID-19: Daily cured cases surpass new confirmed cases - China Innocent Odoh, Abuja

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atest statistics on the novel coronavirus disease (COVID-19) outbreak released by the National Health Commission (NHC) of China and the Hubei Provincial Health Commission on Wednesday pointed to some good news and reflect an increasingly clear trend in the coronavirus control.

A Newsletter of the Chinese Embassy in Abuja on Wednesday said the statistics released by the NHC, as of February 18, showed 1,824 cured and discharged cases were newly reported by the 31 provinces, autonomous regions and municipalities and the Xinjiang Production and Construction Corps, surpassing the number of confirmed cases, which stood at 1,749.

As of February 18, 57,805 @Businessdayng

confirmed cases still under treatment had been reported by the 31 provinces, autonomous regions and municipalities and the Xinjiang Production and Construction Corps compared with 58,016 on February 17, indicating a decline.

The Newsletter noted further that the number of cured and discharged cases nationwide of 1,824, exceeds 1,000 for the seventh day running.

The numbers of cured and discharged cases in the past six days were 1,701 (February 17), 1,425 (February 16), 1,323 (February 15), 1,373 (February 14), 1,081 (February 13), and 1,171 (February 12), respectively.

According to the Newsletter, as of February 18, the number of new confirmed cases outside Hubei stood at 56, marking the 15th day of consecutive decline.

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Thursday 20 February 2020

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Obaseki seeks increased investment in sports to tackle insecurity, unemployment, others

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L-R: Bolarin Okunowo, head, corporate finance, UPDC plc; Bola Adeeko, divisional head, shared services, The Nigerian Stock Exchange; Folasope Aiyesimoju, chief executive officer, UPDC plc; Deborah Nicol-Omeruah, deputy chief executive officer, UPDC plc, and Folakemi Fadahunsi, chief financial officer, UPDC plc, during the closing gong ceremony by UPDC at the Nigerian Stock Exchange in Lagos.

Why lack of jobs, housing, clean water work against efficacy of new treatments ... as clinical represents only 20% of personal health Temitayo Ayetoto

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he efficacy of new waves of treatments aiming at longer quality of human life could be counteracted in the health systems of people who lack employment, access to decent housing, good education, income equality or struggle to get clean water, a PwC Health Research Institute report has shown.

These social determinants, which often lack in the lives of the majority of Nigerians, are in themselves ingredients of good health, and essential to facilitate the effectiveness of enhanced medical interventions.

Despite the staggering pace of health innovations being imported from advanced countries, the report shows it may not easily translate to better

health outcomes when people stress to commute to work on poor road networks in highly polluted cities and low-income levels place them one illness away from poverty.

“Treatment alone won’t ensure that the level of human health improves; it may not even guard against its decline.

The reality is that our systems are not built or designed to truly achieve health for societies.

“If healthcare organisations and governments do not take greater account of the social determinants of health, nations will not fully realise the tremendous potential of those medical advancements,” according to the report.

One in five respondents indicated they could not afford a healthy lifestyle, and a similar share said they did not have the time to focus on healthy behaviours in PwC’s 2019 HRI global

consumer survey. Clinical care, while vital, is, in fact, responsible for only 20 percent of a person’s health. The other 80 percent is attributed to health behaviours, the physical environment and socioeconomic conditions.

But some health experts differ on the position that the efficacy of treatment will be jeopardised if people live under poor condition.

Adetokunbo Fabamwo, chief medical director of Lagos State University Teaching Hospital (LASUTH), argues that deplorable living conditions may predispose people certain health conditions, it does not neutralise the efficacy of treatments. He agrees it is important that the government needs to tackle the environmental mess, feeding, transport, water and poverty, which sum up as social factors and determinants of

health. However, the distribution of health challenges among the population could be blind to economic status.

“I do not agree that if you are offering treatment for a health condition and the patient is living in Mushin, for instance, he will not get better. It depends on what you are treating. The man does not have to live in Ikoyi to get better. Not everyone has to live in a posh area yet everybody will develop health conditions and has to be treated,” the professor of obstetrics and gynaecology explains.

“There are some health conditions that even the rich develop them. There is nothing you can do about cancer. But the government must take people away from living in deplorable conditions. If people have good transport and live in good conditions, they may not be predisposed to health threats.”

Over 20m jobs available in raw materials-based cluster, says Wachuku

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he raw materialsbased clusters if effectively implemented will generate over 20 million jobs for Nigerians on annual basis, Chuku Wachuku, president, Association of Agricultural and Industrial Entrepreneurs of Nigeria (AIEN), has said.

Wachuku said the cluster initiative highlighted shared industrial facilities as it will encourage value chain operators to manage limited resources, share expertise as well as operate and address common challenges including market, innovations, product improvement, among others at a least cost.

According to him, it is a strategy intended to foster the development of value-added products from the abundant local resources, as well as encourage the establishment of viable small and medium enterprises (SMEs) that are

adaptable to local contents’ development in Nigeria.

Wachuku who spoke in Lagos said the clusters initiative in the pilot stage is expected to create about two hundred and fifty entrepreneurs per cluster per local government and the primary target is to create sixty thousand primary entrepreneurs.

He said the primary targeted pilot local government will involve sixty thousand members of the clusters, he explained each cluster will have two hundred and fifty people in two hundred and fifty hectares adding they will be producing crops of advantage in their area.

Meanwhile, the organisation is working with some banks and has reached an agreement only to finalise some arrangements, he disclosed adding an ecosystem that will guarantee recovery is already in place. www.businessday.ng

Wachuku who also measures as the Former Director-General of Operations, National Directorate of Employment (NDE) and Former National President, Nigerian Association of Small Scale Industrialists (NASSI) urged the Central Bank of Nigeria (CBN) to support the deposit money banks who brought up products that will generate employment and give them interest buy back so that they could advance these money to the entrepreneurs who would create employment “We are going to look at interest rates, I’m sure the CBN will also see the need to support these deposit money banks with lowered interest rates, right now what the CBN is doing is transferring the risk to the deposit money banks and not assuming any”, he expressed.

He said as a business membership organisation (BMO), AIEN was designed to em-

power the Nigerian people to create wealth by alleviating the unemployment epidemic in the country. The organisation he stated was aimed at achieving this through expanding business opportunities in the agricultural and industrial sectors of the economy.

It is projected to empowering the Nigerian people, alleviate the widespread unemployment, and create wealth in the country by expanding business opportunities in the agricultural and industrial sectors of the economy.

Wachuku said clustering would create common services, effective monitoring, and effective consultancy. “We are actually creating a brand new initiative in this country, and the fact will be that every local government across the 774 local governments of the country will have a cluster of advantageous produce in those states.”

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do State governor, Godwin Obaseki, has called for an increased private sector investment in sports development, noting that the move will complement the state government’s efforts in tackling insecurity, unemployment, illegal migration and other social vices in the society.

The governor said this while declaring open the Nigeria Women Football League (NWFL) 2020 Annual General Meeting (AGM), in Benin City, Edo State capital.

Obaseki, who was represented by his deputy, Philip Shaibu, noted that investment in sports development is crucial for job creation and wealth generation that would make youths self-reliant, adding that governments alone cannot continue to support sports.

Obaseki advocated that ten percent of private sector’s Corporate Social Responsibility (CSR) be invested to support sports development, noting, “The private sector must come and drive sports in Nigeria.

They must begin to advertise products through sports. Our sports need urgent attention to compete with the leagues in Europe, as well as in athletics.

“For us in Edo, we are ready to collaborate with the private sector so as elevate sports to a greater height. Government alone cannot run sports; we need the private sector to help drive our sports economy.”

The governor added, “Sports is being used to preach against illegal migration, human trafficking and to curb social vices in our society.”

He called for more attention on female football, noting that sports have evolved overtime with more women doing excellently, noting, “Edo Queens have been doing greatly in the NWFL. The club did not get the kind of support Bendel Insurance got but they maintained stability in the women’s league. We therefore decided that Edo Queens and Bendel Insurance must be at par in terms of wages.”

Chairperson, Nigeria Women Football League, Aisha Falode, thanked the governor and his deputy for their open demonstration of love for women football in Nigeria.

According to Falode, the state-owned Edo Queens Football Club is the only club known in Nigeria and Africa where the players earn the same pay as their male counterparts in Bendel Insurance FC. She called on other clubs to emulate the step taken by the Edo State government.

Falode also urged the state government to assist the Nigeria Football Federation (NFF) in celebrating 30 years of women football in Nigeria and by extension Africa.

In a goodwill message, the representative of the NFF President at the event, Emmanuel Ibah, lauded the Governor Obaseki-led government for its contributions to sports in the country.

Ibah commended Governor Obaseki for the massive reconstruction work at the Samuel Ogbemudia Stadium in Benin City.

Sanctity of judiciary key to justice delivery in Nigeria - Sanwo-Olu JOSHUA BASSEY

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overnor of Lagos State, Babajide Sanwo-Olu, has affirmed the commitment of his administration to upholding the sanctity and independence of the judiciary, saying it is the key to justice delivery in Nigeria.

He spoke Wednesday when the outgoing president of the Court of Appeal, Zainab Bulkachuwa, visited him at the State House, Marina.

Bulkachuwa will be exiting office as president of the Court of Appeal on March 6, 2020, when she would have turned 70 years, which is the compulsory retiring age as required by the Constitution for judges in Nigeria.

Sanwo-Olu, who lauded Bulkachuwa for her services to the nation and the support she extended to @Businessdayng

the Lagos State division of the Court of Appeal, assured that his administration would operate within the ambits of law towards ensuring efficient justice delivery.

“We will continue to uphold the tenets of judiciary and uphold the Constitution that we swore to. We will continue to protect it, defend it in our ways and in our beats,” he said Bulkachuwa earlier informed the governor that she was in Lagos for a valedictory court session ahead of her retirement, saying by March 6, 2020 she would cease to hold office as a judicial officer.

“As part of the programme marking my exit from the Court of Appeal, I am going round most of the divisions of the court. Lagos is an important division of the Court of Appeal, and I thought I should come first to Lagos and that is why we are here,” she said.

Thursday 20 February 2020

BUSINESS DAY

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Thursday 20 February 2020

BUSINESS DAY

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Thursday 20 February 2020

BUSINESS DAY

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Japanese firms endorse Lagos Free Zone W/African countries lost close to $2.3bn to piracy, other maritime crimes in 2yrs GBEMI FAMINU

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n February 14, 2020, a group of Japanese companies was hosted to a tour of Lagos Free Zone (LFZ) – ‘The Gateway to a New Frontier’.

The LFZ is in ‘The New Lagos,’ a name earned by Ibjeu-Lekki region, one of the fastest growing local government areas of Lagos State.

This region is home to several brands such as Kellogg’s, Colgate, Dano Milk, Indomie and BASF, all of whom have manufacturing facilities in the zone. LFZ also houses Lekki Deep Sea Port, which is poised to contribute about 3 percent to the national GDP by 2025. This makes the Zone well connected to regional and international routes, while offering investors access to an enormous consumer market across Nigeria.

The deep seaport will be operational by the second quarter of 2022.

Once fully developed, the LFZ will house over 150 industries in different sectors - from FMCG to engineering and pharmaceuticals, bringing in billions of dollars in foreign direct investment to Nigeria.

The Zone will also serve as a logistics hub for West Africa and have a real estate cluster, creating a complete live-work-play environment.

The LFZ is promoted by Singapore-based, Tolaram Group.

With the presence of a one-stopshop clearance, LFZ is changing the narrative around the ease of doing business in Nigeria. The facilities on ground include an operational truck pack, emergency response medical facility, and a central processing centre that hosts agencies like the Nigeria Export Processing Zones Authority (NEPZA), Nigeria Customs Service (NCS) and Nigeria Immigration Service (NIS).

In line with its commitment to the Ease of Doing Business, LFZ provides and maintains internal infrastructure in the industrial complex including streetlights, warehouses, access roads, drainage, among others, for all investors.

Shigeyo Nishizawa, trade commissioner/managing director of JETRO Lagos (Japan External Trade Organization), said, “Since the last time I held a meeting with Japanese companies’ MDs in December, I found that the MDs were interested in the Lagos Free Zone, hence I decided to hold a site visit. Over 40 officials visited the site.

“The participants were not only food manufacturers, but also home appliances, vehicle manufacturers, medical equipment manufacturers, overseas traders and government agencies. We were pleased to have been received by Mr. Haresh Aswani, MD of Tolaram Group, and Mr. Dinesh Rathi, CEO of LFZ.

… as NIMASA strategies with judges to enforce new Anti-Piracy Act AMAKA ANAGOR-EWUZIE

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orried by the escalating incidents of piracy and other maritime offences on the entire maritime domain of the Gulf of Guinea region, the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Institute of Advanced Legal Studies (NIALS) have set in motion capacity for effective implementation of the new Anti-Piracy Act through interpretation and understanding.

This was prompted by the concern resulting from the fact that West African countries and their trading partners lost about $2.3 billion to various maritime crimes that took place between 2016 and 2018.

Speaking in Lagos on Wednesday during the 9th Admiralty Law Seminar for Judges with the theme, ‘Suppression of Piracy and Other Maritime Offences (SPOMO) Act 2019: Key to Accelerating and Achieving Safe and Secure Shipping,’ Dakuku Peterside, director-general of NIMASA, said the threat of piracy,

armed robbery at sea and other maritime crimes had been an issue of global concern.

According to Peterside, the Gulf of Guinea sadly, had been at the epicentre of maritime security discussions globally, given the incidents recorded in the region.

Peterside stated that the challenge of maritime insecurity in the region had been further compounded by a deficit of legislation to address the challenge.

“With the signing into law by Mr. President on June 24, 20l9, the Suppression of Piracy and Other Maritime Offences Act, facilitated

by NIMASA, there is now a robust and detailed framework in place for the criminalisation and punishment of piracy and other maritime crimes in Nigeria and the Gulf of Guinea,” he said.

He said the discussion at the seminar for judges would facilitate an understanding of the Suppression of Piracy and Other Maritime Offences Act and the collaborative mechanisms between the Judiciary and enforcement agencies in the implementation of the Act.

He however noted that it would also equip participants with the essential knowledge on the requirement of Nigeria’s obligations under the Act; and to foster interaction between the judiciary and enforcement officers to share ideas on the likely challenges if any in the enforcement of the Act. Muhammed Ladan, directorgeneral of NIALS, said the theme of the seminar was necessitated by the coming into force of the first standalone Anti-Piracy and Other Maritime Crimes Law in the Gulf of Guinea.

According to Ladan, the Law is aimed at stemming the tides of incidents of sea piracy and armed robbery as well as other challenges of maritime safety and security that hamper sustainable economic growth and development of all the littoral states in the Gulf of Guinea region.

Citing example, he said West Africa and its trading partners lost about $2.3 billion to maritime crimes between 2016 and 2018, and that on annual basis, the region lost about $777 million

between2015and2018inaddition tothreattolivesexperienceddueto theescalationofpiracy,kidnapping andarmedrobberyatseaincidents between 2018 and 2019.

“In 2018, maritime crime report released as at May 2019, shows that Nigeria, with a coastline of about 853km, was tagged as a piracy hotspot, by the International Maritime Bureau (IMB) becauseinthefirstquarterof2018, Nigeriaaloneaccountedfor22out of 66 piracy and armed robbery incidents at sea while eight out of 11vesselsfireduponglobally,took place in the region,” he said.

He further disclosed that in 2019, IMB quarter three report, revealed that Lagos seaport recorded 11 out of such incidents, making it the highest globally.

“The Gulf of Guinea is home to Nigeria, the largest economy and the most populous nation in Africa, whose economy generates more than 70 percent of the seaborne trade in West Africa and Gulf of Guinea because about 90 percent of global trade is carried out by ship in form of import/ export of goods,” he said.

Lagos confirms first Lassa fever case ANTHONIA OBOKOH

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agos State has confirmed its first case of Lassa fever this year, and appeals to residence to be calm, as patient is currently in isolation at the Lagos University Teaching Hospital.

Akin Abayomi, commissioner of health, has said efforts are ready in place to ensure the disease is not spread but contained with shortest possible time.

“The Lagos State Ministry of Health is collaborating with the Nigeria Centre for Disease Control (NCDC) and the Federal Ministry of Health (FMoH) through Epidemiology, Biosecurity and Global Health Directorate “to carry out ‘contact tracing’ to determine those who may have been infected in line with international standards while we beef up our other surveillance strategies,” Abayomi said.

So far, this year the death toll from the viral haemorrhagic illness has risen to 70 while confirmed number of cases ‘significantly’ increased across 26 states in Nigeria.

According to the Lassa Fever weekly situation report, a total of 109 cases were confirmed out of 482 suspected cases from February (week 06) 3 to 9. This brings the total number of confirmed cases to 472 in 2020.

Abayomi advised that the prevention and control of the disease remained a shared responsibility of all citizens through the observance of the highest possible standards of

personal and community hygiene as well as environmental sanitation.

The commissioner stressed the need for residents to store household refuse in sanitary refuse bags or dust bins with tight-fitting covers to avoid infestation by rats and rodents; dispose refuse properly at designated dump sites and not into the drainage system and store food items in rodentproof containers.

“Members of the public are further advised to avoid contact with rats, to always cover their food and water properly, cook all their food thoroughly, as well as block all holes in the septic tanks and holes through which rats can enter the house and clear rat hideouts within the premises.

“Isolation wards have been prepared to manage suspected and confirmed cases, drugs and other materials have also been prepositioned at designated facilities while health workers have been placed on red alert and community sensitisation activities intensified,” he said.

The commissioner also pleaded with medical and health workers to always maintain high standards of universal safety precautions as well as comply with infection prevention and control measures when dealing with all patients.

Government, he assured, has provided sufficient protective wears like hand gloves, face masks, goggles, which must be worn at all times when treating suspected cases of infectious diseases like Lassa fever. www.businessday.ng

L-R: Adedeji Ajadi, registrar/chief executive, Chartered Institute of Stockbrokers (CIS); Oluwole Adeosun, 2nd vice president; Emeka Anyaoku, former secretary general, Commonwealth; Adedapo Adekoje, president/chairman of Council, CIS, and Olatunde Amolegbe, 1st vice president, CIS, during courtesy visit of CIS‘ principal officers to Anyaoku in Lagos, yesterday.

Pic by Olawale Amoo

CBN’s penalty on cash lodgement will frustrate Finance Act 2020, CITN warns … tax compliance, financial inclusion thrive without penalty on deposits - expert RAZAQ AYINLA

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s part of measures to ensure the effective operations of some sections of Finance Act 2020, the Chartered Institute of Taxation of Nigeria (CITN) has advised the Federal Government and Central Bank of Nigeria (CBN) to cancel penalty placed on certain cash deposits and withdrawals in order to allow more deposits of cash at banks, and to be able to tax individuals and businesses appropriately.

BusinessDay reports that the CBN has placed 3% and 2%, respectively, on N500,000 and above withdrawal and deposit on individual accounts and 5% and 3%, respectively, on N500,000 and above withdrawal and deposit on the corporate accounts in all commercial banks across the country, which tax practitioners and administrators argue will affect tax compliance in the long run.

The Tax Institute noted that

the penalty placed on cash withdrawals and deposits by the CBN might prevent further deposit and withdrawal from both individuals and corporate organisations, which could also prevent the Federal Inland Revenue Service (FIRS) from having access to true position of bank statements of many account holders.

Consequently, lots of funds will be lost to tax evasion and tax avoidance as lots of account holders - individuals and corporate entities, will hide under exemption granted by Finance Act 2020, wherein any business that earns below threshold of N25 million annual turnover will be exempted from both Company Income Tax (CIT) and Value Added Tax (VAT) on goods and services offered for sales.

Speaking at the Year 2020 Tax Week of the Chartered Institute of Taxation of Nigeria, Abeokuta and District, tagged, “Taxation: Key Factor to Economic Recovery and Social Development”, held

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in Abeokuta on Wednesday, Gbenga Adeoye, said the contradictory policies of both the CBN for penalty on huge cash deposit and FIRS’s search and quest to drag more people into the tax net would cause people to evade and avoid tax, which he explained, would frustrate 2020 Finance Act if not checked.

Adeoye, who delivered a keynote paper in company of Olalekan Kolawole, FIRS tax controller, and Oluseun Olajube, chairman, Abeokuta and District of CITN, noted that Godwin Emefiele, governor and Monetary Policy Committee of the CBN as well as the FIRS should go back to a round- table and work on these discrepancies if there will be effective operations of 2020 Finance Act, appreciable level of financial inclusion and effective tax compliance.

He said, “Anti-tax monitoring policy of government which is penalty for cash lodgement, and people don’t pay their proceeds @Businessdayng

into bank accounts; there is no way you will know if they (individuals and corporate organisations) had made more than N25 million, there are the issues.

“Part of the advice is that, we need to synchronise our policies; somebody is dragging to the left, another is dragging to the right.

If you want to catch people who are under-declaring income then you must insist that everybody pays the proceeds of their sales into bank accounts, and you can’t be penalizing people for paying cash and at the same time, you want to catch people that are under-declaring.

“So, these are contradictory, Emefiele is being called at their meeting to think about this lodgement penalty, once that is removed, it gives FIRS the room to say, look, bring your bank statements, we will be able to determine if you are within the threshold of N25 million or not, but if that penalty is there, people will not be encouraged to pay money into their accounts.”

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Thursday 20 February 2020

BUSINESS DAY

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45

Thursday 20 February 2020

BUSINESS DAY

FT

FINANCIAL TIMES

World Business Newspaper

EU’s richest countries dig in heels over budget as summit nears Bloc grapples with €60bn funding gap as proposed cuts threaten poorer countries SAM FLEMING AND JAMES SHOTTER

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he EU’s richest states have dug in their heels over the region’s forthcoming seven-year budget ahead of a crucial summit on Thursday as the European Council president seeks to ease the blow of spending cuts on poorer countries.

Charles Michel last week put forward a budget framework including a series of compromises over regional development funding — one of the top two items in the EU budget alongside agriculture — as he worked to soften opposition from central and eastern European countries in time for the leaders’ meetings in Brussels.

Member states are grappling with a near €60bn funding gap in the forthcoming seven-year multiannual financial framework (MFF) because of the UK’s decision to quit the EU. As a result, net payers into the budget are being asked to shoulder an extra burden, while net recipients led by the cohesion fund countries are facing tighter spending programmes.

Mr Michel’s proposals have received a mixed response from central and eastern nations that are net recipients of support from the EU budget, with one diplomat arguing that their criticisms have been “reassuringly mild”. But the European Council president still faces trenchant opposition from many parts of the EU, teeing up prodigiously difficult talks.

The richest states in particular remain adamant that they are being forced to assume too much of the budgetary burden under the multiannual financial framework, which begins in 2021. The biggest net contributors to the budget, including Germany, Denmark, Sweden, Austria and the Netherlands, want the budget to be kept at no higher than 1 per cent of EU gross

German chancellor Angela Merkel, Poland’s prime minister Mateusz Morawiecki, European Commission president Ursula Von der Leyen with Charles Michel in Brussels: the European Council president’s proposals have received a mixed response from central and eastern nations © Olivier Hoslet/EPA/Shutterstock

national income, compared with Mr Michel’s proposal for 1.074 per cent of GNI. Despite the efforts to seek for a well-balanced outcome, we are far away from agreement Jovita Neliupsiene, Lithuania’s permanent representative to the EU They are also clinging to contentious rebates aimed at easing their budgetary burdens. These will play a central role in the budget talks that could last into the weekend.

“If President Michel wants the European Council to be successful, he needs to come up with a substantially revamped proposal,” said one EU diplomat.

Mr Michel’s strategy going into the summit has been to wear down opposition from poorer member states, which have been infuriated by proposed cohesion cuts nearing 15 per cent compared with the current multiannual financial framework period.

Pawel Jablonski, Poland’s deputy foreign minister, told the Financial Times that even after these overtures the budget proposals still required “a lot of work”.

“We don’t see a high chance that this proposition will be accepted soon,” he said. Cutting the EU budget risked fuelling Euroscepticism, he argued, because it would make the EU’s activities less visible to the bloc’s citizens. “It’s potentially a big problem, because people support the project because they see it,” he said.

Behind the scenes countries in the so-called friends of cohesion group have been poring over the detail of Mr Michel’s ideas to weigh the implications for their less developed regions. The proposals include topping up the cohesion spending pot by €6bn compared with proposals from the EU’s Finnish presidency late last year; diverting some money from the most prosperous regions; lifting the EU

share in co-financed projects in the poorest areas; and making it easier to transfer funds between different spending pots.

In a sop to Poland and Hungary, Mr Michel also suggested a relatively high bar for the EU to suspend payments when a state breaches the bloc’s rule of law principles.

The proposals are important to central and eastern Europe, given the role cohesion has played in development since the region’s members began joining the EU in 2004.

The funds have helped revive infrastructure that crumbled behind the iron curtain. EU cash helped build roads linking economic centres, as well as developing schools, public buildings and other facilities such as libraries and swimming pools.

Despite Mr Michel’s efforts, some newer member states remain dismayed by the scale of the reductions they could see. Jovita

Neliupsiene, Lithuania’s permanent representative to the EU, said her country faced “drastic cuts” to cohesion that were steeper than the EU average. The country would also face deep cuts in agriculture funding, she added. “Despite the efforts to seek for a well-balanced outcome, we are far away from agreement.”

Top figures from Germany’s coalition government discussed the Michel offer over the weekend and emerged with a tough position going into the summit. Heiko Maas, the foreign minister, told his European counterparts that Berlin wanted to see more money being funnelled into modern priorities such as research, that the budget volume being requested by Mr Michel was too high, and that the EU needed to agree a permanent system of rebates to help net payers including Germany.

The latter point will be critical in forthcoming talks: among the questions are the size of the rebates, the question of whether they should remain permanent or not, whether they should decline in size over time as proposed by Mr Michel, and the split between the various countries that receive them.

Germany is also among the countries concerned by Mr Michel’s rule of law proposal, under which any decision to freeze money would need to be approved by a qualified majority of member states.

Tytti Tuppurainen, Finland’s minister for European affairs, echoed those concerns. “We cannot allow the rule of law mechanism to be a dead letter in the budget book,” she said.

It was now high time to settle the multiannual financial framework, she said, arguing that “good progress” was being made even if Mr Michel was asking for too much funding, in Finland’s view.

“My appeal would be to the leaders that we should all be ready to compromise.”

Rising UK inflation reduces chance of interest rate cut Consumer goods prices increase in January for the first time in six months

BETHAN STATON

U

K inflation rose for the first time in six months in January, matching Bank of England expectations in what central bankers could see as validation of a cautious approach to changing interest rates.

Prices of consumer goods in January were 1.8 per cent higher than a year ago, a significant increase from December’s 1.3 per cent annual rise, which had been the lowest level for more than three years. The consensus forecast was for a rise of 1.6 per cent.

The accelerating pace backs up the assessment of the Bank

of England, which had predicted a pick-up in the economy and decided not to cut interest rates despite fears of recession.

“The fact that inflation is evolving in line with its projections provides another reason not to cut interest rates in the near term,” said Ruth Gregory, chief economist at Capital Economics, adding it was unlikely to “move the dial” in deliberations.

Gas, fuel and electricity were the biggest drivers behind the rise in inflation for January, while the prices of clothing and airfares also created upward pressure by falling less than expected.

Inflation has hovered around the BoE’s 2 per cent target for a www.businessday.ng

year and has remained below it since August last year, resulting in market speculation that it could cut interest rates this year.

But at the BoE’s Monetary Policy Committee meeting on January 30, members opted to hold interest rates steady at 0.75 per cent. Improved business sentiment post-Brexit, they said, would bring inflation gradually to the 2 per cent target within three years, making an interest-rate cut unnecessary.

While the rise in inflation validates the BoE decision for now, economists said the increase was not likely to hold and does not rule out a future move on interest rates.

“We suspect inflation could

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move back down in February,” said Howard Archer, economist at EY ITEM Club, adding that lower water and energy prices could curb further increases.

“Inflation is seen as starting to trend gradually up during the latter months of 2020, but it looks unlikely to reach the Bank of England’s 2 per cent target.”

Markets were muted in response to the data. The pound edged up slightly following the release of the figures, before giving up its gains to trade down 0.1 per cent at $1.2982.

In separate figures released on Wednesday, UK house prices increased 2.2 per cent over the year to December compared with @Businessdayng

a 1.7 per cent rise in the previous year, reflecting signs of renewed momentum following three years of slowdown. Month-on-month it increased 0.6 per cent.

The increases reflect signs of increased confidence in other housing surveys, but analysts are divided over whether the rise will persist or prove to be a shortterm “bounce” following Brexit but ahead of difficult trade talks.

The UK economy contracted in the second quarter of 2019 and grew just 0.3 per cent in the following three months. The BoE has forecast that the economy will pick up this year, but outgoing governor Mark Carney has acknowledged this is “not assured”.

Thursday 20 February 2020

BUSINESS DAY

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Investors hunt for alternative data to track coronavirus shock Analytics companies mine figures on everything from traffic jams to food orders in China PHILIP GEORGIADIS, ROBIN WIGGLESWORTH AND HUDSON LOCKETT

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nvestors scrambling to quantify the impact of the coronavirus outbreak on China are turning to a string of unusual data points to measure disruption to the world’s second-largest economy, from food-delivery apps to the polluted air wafting over Hong Kong.

The humanitarian crisis has caused factories to be shut and cities to be closed off, and has prompted analysts to slash their first-quarter economic growth forecasts for both China and the rest of the world.

The crisis has also sparked a race among investors to gain an edge by finding esoteric sources of information that can be used to measure just how bad the economic pain in China is — and when the recovery is beginning.

Chen Mu, founder of Beijingbased research firm BigOne Lab, said the data provider was expanding the trackers it provided “because our clients, mainly institutional investors and corporates, are enquiring more about impact and recovery speed of different sectors”.

Mr Chen said there was a broad consensus about a slowdown in China, “but the bigger question is how the recovery goes”.

BigOne’s insights point to slow progress in bringing businesses back online. In early February, for example, 83 per cent of about 1m restaurants tracked on MeituanDianping, China’s biggest delivery platform, remained closed. As of February 14, services were still suspended at 87 per cent of roughly 5,500 outlets operated by Luckin Coffee, China’s rival to Starbucks.

Airline bookings, meanwhile,

Analysts are looking at everything from passenger numbers and delivery app data to changes in emissions to see how the Chinese economy is being affected by Covid-19 © FT montage; Getty Images; Wu Hong/EPA-EFE/Shutterstock

suggest that the viral outbreak has caused the biggest-ever reduction in activity by a single event, including Sars and September 11 2001, according to Eagle Alpha, a Dublinbased provider of alternative data.

The airline industry has lost 10m seats to, from and within China.

Analysts say that normal economic activity should have resumed last week after an extended lunar new year holiday. But indicators including traffic congestion rates, coal consumption and property sales are all still running well below regular levels.

“All of [the indicators] paint a very similar picture of an economy that just grinds to a halt every time around the new year, but has barely picked up at all since then,” said

Gareth Leather, Asia economist at Capital Economics.

Investors have long tried to mine alternative data points for clues on the health of the Chinese economy, as some set little store in the official numbers that emerge — often after a long lag — from Beijing. Such reservations have been compounded by a near-total shutdown as the government tries to contain the spread of the disease.

Min Dai, an Asia-Pacific strategist at Morgan Stanley, told clients this month that “probably the most asked question among investors these days” was how to track the resumption of production in China.

Sitting in the bank’s offices in the 118-storey International Commerce Centre in Hong Kong,

Mr Dai’s colleagues noticed that their views have been improving over the past month as mainland factories powered down. Using air pollution levels as a proxy to track the restart of industrial production, they suggested that activity could be running at 50 per cent to 80 per cent below capacity.

Goldman’s economists noted a modest rebound in some data points last week, but concluded that “in absolute levels, all indicators on the industrial and services sectors that we track remained relatively weak in the first half of February”.

Official data will confirm the clues coming from the real-time numbers, said Matt Harris, head of investment strategy at the wealth manager Hightower in New York.

“We expect to start seeing weaker data in the coming weeks,” he said.

For now, said Tracy Chen, a portfolio manager at Brandywine Global Investment Management, “it is like flying in the dark”.

Sitting 7,000 miles away in Philadelphia, Ms Chen is looking for signals from the vast amount of digital data that the country produces.

She has built her own dashboard using 20 reference points including traffic from the search engine Baidu, and daily figures for how many drivers are on the roads, via the satellite navigation company TomTom. The numbers are not encouraging, she said. “It will be very ugly in the first quarter, all the data is telling me.”

Korea and Japan, but that it had not seen “any major business impact” there.

Puma’s chief executive Bjorn Gulden said business this month “has of course been negatively affected by the outbreak”.

The impact has rippled into the wider region, with revenues in Puma’s other Asian markets also suffering due to the lower number of Chinese tourists.

The region delivered Puma’s strongest sales growth last year of 22 per cent, driven by China and India.

But the company said it expected to be able to hit its 2020

targets despite the disruption, and was working under the assumption that the situation “will normalise in the short term”.

The group forecast earnings before interest and tax in a range between €500m and €520m for the full year. Shares rose 8 per cent, largely recovering losses since the outbreak rose to international prominence in mid-January.

Puma said sales climbed 18 per cent to €1.48bn on a currency-adjusted basis in the fourth quarter, while earnings before interest and tax surged 47 per cent to €55m.

Adidas and Puma warn of coronavirus drag on sales German sportswear makers generate about a third of revenues in PHILIP GEORGIADIS

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erman sportswear makers Puma and Adidas have warned that the coronavirus outbreak has severely disrupted business in China, prompting store closures and a sharp drop in sales in one of their most important markets.

Puma on Wednesday said that more than half its stores in China were closed, and that it expected a negative impact on revenues and profits in the first quarter of this year. Rival Adidas said sales in the country had slumped 85 per cent year on year

since January 25, and that it had closed a “significant number” of stores and seen a “pronounced” reduction in customers at those that remain open.

The Chinese economy has ground to a near-standstill following the rapid spread of the highly contagious coronavirus, with some workers quarantined and consumers staying away.

The updates from the German companies offer some of the clearest details yet on the impact of the virus on the $250bn-a-year sportswear industry, which is increasingly reliant on Asian consumers for

growth. The Asia-Pacific and China are also key manufacturing hubs for apparel and shoes.

Puma and Adidas generate about a third of their revenues from the Asia-Pacific region, and both said it was too early to accurately quantify the longterm impact on their businesses.

“We have experienced a material negative impact from the coronavirus outbreak on our operations in China,” Adidas said in a statement.

The group said it had also seen declines outside mainland China, predominantly in South

Thursday 20 February 2020

FT

BUSINESS DAY

47

ANALYSIS

Venezuela: refugee crisis tests Colombia’s stability With the exodus set to continue, the strains on Bogotá and other governments are set to intensify MICHAEL STOTT AND GIDEON LONG

T

he chaos spreading into Colombia from Venezuela is unmistakable on the crowded highway that spans the countries’ 2,200km border. On the Venezuelan side pick-up trucks crammed with entire families jostle for position as cars try to weave through the traffic. Motorcycle riders line up in the heat waiting for passengers. Roadside vendors hawk plastic bottles filled with contraband gasoline. Litter is strewn everywhere.

“If there were a hell on earth, it would look like Paraguachón,” says an aid worker, gesturing towards the heaving mass of people and vehicles streaming across the border.

Long popular with smugglers, Paraguachón is now one of the main exits for Venezuelans fleeing hunger, disease and repression. The scale of the exodus has far exceeded initial expectations, propelled by President Nicolás Maduro’s mismanaged socialist revolution which has seen the oil-based economy collapse into hyperinflation.

Now Colombia is struggling to cope with the influx.

“Two years ago the worry was that the Maduro regime would stay in place, the economy would tank even more, healthcare would collapse and more and more Venezuelans would leave,” says Shannon K O’Neil, vice-president at the Council for Foreign Relations in New York.

“The worst-case scenario has happened.”

Nearly 5m Venezuelans have left since 2015 — about 15 per cent of the population — and another million are expected to depart this year. That could make the crisis the world’s biggest refugee emergency, surpassing Syria. Unlike other humanitarian crises, it is a disaster caused not by war or natural disaster but by misrule on a grand scale.

It is “the world’s largest forced migration crisis you have never heard of ”, says Andrew Selee, president of the Migration Policy Institute in Washington, highlighting the relative lack of attention Venezuela has received.

In the first four years of the crisis, Venezuelan refugees received less than a twelfth of the funding given to Syrians escaping their conflict over the same time period, according to the Brookings Institution.

The shape of the crisis is changing. Wealthier and bettereducated Venezuelans were the first to leave, many heading for the US or Spain. Then middleclass professionals departed for nearby Latin American nations

with good employment prospects. Now, aid workers say, the refugees are poorer, older, sicker and more vulnerable.

“We didn’t want to leave Venezuela,” says Nellyisa Lopez Fuenmayor, 50, who was sheltering with her family at a UNHCR camp in the Maicao area. “But what we earned there was not enough to feed our children.

Here we can eat three times a day. There we could only afford breakfast.”

More than 1.6m Venezuelans are now living in Colombia — more than 3 per cent of its population — and the number is rising by around 3,000 a day, according to the UN High Commissioner for Refugees.

The UNHCR figures and those of the Colombian authorities are thought to underestimate the problem because of the scale of illegal migration.

This influx adds a fresh source of tension in Colombia, a country grappling with a long-running drug trafficking problem, paramilitary groups and the recent demobilisation of thousands of Marxist guerrillas who laid down their arms after decades of insurgency.

Further south, Peru has over 860,000 Venezuelan refugees, while Ecuador and Chile have more than 370,000 each. Another 220,000 are in Brazil and more than 100,000 in the Caribbean islands.

Official data show that more than 11,000 Venezuelans a month crossed the border on average last year, but the official Colombian immigration checkpoint was moved from the centre of the road a few months ago after being caught in crossfire

during a gun battle between rival gangs, aid workers say.

“It’s one of the most chaotic and uncontrolled borders I have ever seen,” says Federico Sersale, head of the UNHCR’s office for the region. “Most people crossing here don’t have passports and most don’t enter through the official crossing points.”

The Colombian frontier with Venezuela is highly porous, passing through jungle, desert and mountains. There are ample opportunities for illegal crossing, starting close to the main highway. To one side of it is a primitive wooden stake fence, behind which lurk a few dilapidated 1980s American cars with Venezuelan number plates. A couple of blocks in the other direction, a rope crossing guarded by an attendant marks the start of another dirt track.

Both are trochas, unofficial trails through bushland that cross the border.

Lacking passports, and unwilling to pay the hefty bribes needed to secure them, many Venezuelans use smugglers to cross — an often perilous journey.

“The National Guard [part of Venezuela’s armed forces] and the criminals take money off you,” says Emmanuel Pirela, 28, who used the trails three months ago with his wife and five-yearold son. “The border is crazy. If you don’t pay, they shoot you.”

Once across, arrivals deemed to be in greatest need are housed and fed in a purpose-built UNHCR “integrated assistance centre” near Maicao for 30 days while they receive medical and psychological treatment and legal advice.

Between 60,000 and 80,000 Venezuelans are estimated to be living in or around Maicao, a city with a pre-crisis population of 160,000 located in La Guajira, Colombia’s secondpoorest province. The UNHCR transit camp has space for just 600 people a month, though that will double when an extension is completed in a few months’ time.

Refugees with friends or relatives already in Colombia may have somewhere to go.

Many others end up in primitive squatter camps on the fringes of Maicao, like Bendición de Dios (Blessing of God), a stretch of occupied wasteland where 575 refugees eke out a living.

Margarita del Carmen Palmán, 40, lives with her husband and three children in a shack made of plastic sheeting, which flaps loudly in the howling winds that blow fine sand everywhere. The family’s only visible possessions are clothes, a few towels and a hammock.

“There is no work in Venezuela,” she explains. “We had to go scavenging each day for food to feed the children. Sometimes we found it, sometimes we didn’t.”

Her husband now scrapes a living selling eggs in Maicao. Ms Palmán says his daily takings can be as low as 10,000 Colombian pesos ($3), half of which is spent on buying fresh stock.

Colombia and other Latin American host nations have won widespread praise from refugee agencies for their generous response to the crisis. But as the numbers of Venezuelans keep rising and the costs mount, the open-door policy is becoming harder to sustain.

Colombia’s finance minister Alberto Carrasquilla says estimates of the additional annual cost of educating, housing and ministering to the health needs of Venezuelan migrants range between 0.4 per cent and 0.8 per cent of gross domestic product, while adding that research suggests there would be a longer-term benefit to economic growth.

“National budgets are exhau st e d a n d i n st i tu t i o na l capacity is completely overwhelmed by the crisis,” says Eduardo Stein, the UNHCR’s joint special representative for Venezuelan migrants and refugees. “This situation continues to worsen as more people arrive.”

A UN-led appeal last year for $738m in aid for Venezuelan refugees was only 52 per cent funded. There is no indication that this year’s far more demanding target of $1.35bn will fare any better.

Brookings estimated that there could be as many as 6.5m Venezuelans living outside the country by the end of this year. “The numbers could be significantly higher if the humanitarian crisis in Venezuela continues to worsen, reaching over 8m,” it said in a recent paper.

Most of the aid to Venezuelan refugees has come from the US ($473m), with the EU contributing €170m since 2018 plus another €150m from member states. The UK has provided £44.5m of aid to help Venezuelan refugees, against £206.5m committed this year alone in bilateral Continues on page 48

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NATIONAL NEWS

Michael Bloomberg unleashes media blitz ahead of Super Tuesday Billionaire has spent more than $400m on massive advertising spree targeting big states

there because early wins can help build momentum.

The Bloomberg campaign has already forked out $147m on the 14 states that hold primaries on March 3, often called Super Tuesday, when 1,357 delegates are up for grabs. The other candidates have spent a combined $46m on Super Tuesday states so far.

His broadcast advertising budget has focused on California — a major prize with its 415 delegates — Texas, Florida and New York, according to data compiled by Advertising Analytics.

In California, Mr Bloomberg has spent almost $50m so far, far more than any candidate — although he has only captured 4 per cent support in the state, accord-

ing to an average of polls from Real Clear Politics.

New Jersey is a notable exception. It ranks in the top 10 states for number of delegates, yet Mr Bloomberg has only devoted $73,000 to ads there. It is possible he hopes to have already secured the 1,990 delegates needed to win the nomination prior to the state’s primary — which falls on the last day of the Democratic race.

The Bloomberg campaign’s extravagance does not stop at advertising. Millions also went to fund private jet travel, pricey rent at the campaign’s headquarters in Manhattan’s Times Square, highpowered consultants and Apple laptops for staff.

In December, Bloomberg’s campaign paid nearly $14,000 to Cowgirl Catering, a New York deli, and $16,000 to JL Sushi restaurant.

In November and December, it spent more than $660,000 on Apple computers, according to FEC filings.

In addition to television, the 78-year-old is splashing cash on less traditional forms of advertising such as Instagram influencers. Dozens of sponsored adverts for Mr Bloomberg have recently appeared on popular meme accounts like @kalesalad, @grapejuiceboys and @mytherapistsays.

“Hello Juice Boys,” an Instagram message from Mr Bloomberg begins. “Can you post an original meme to make me look cool for the upcoming Democratic primary?” A screenshot of the exchange was posted on the Instagram account @grapejuiceboys, with a disclosure: Paid for by Mike Bloomberg.

his two young daughters.

“There are bad people in Colombia but that’s the same everywhere,” he says of the attitudes he has encountered. “Sometimes people insult you . . . but nothing too bad has happened to me personally. Sometimes people give us food even if we don’t ask for it.”

No one knows how long the country’s social fabric can hold as the Venezuelans continue to arrive in their thousands. “Colombia has survived civil wars, paramilitaries, drug trafficking, massive migration flows and it keeps going,” says Mr Selee from the Migration Policy Institute. “I don’t think this is what will blow up Colombia but it is another element in what is already an unstable mix.”

However, the Venezuelan exodus may have a more permanent effect on a continent which has long been a source of northward migration to the

US and Europe but has experienced relatively little movement between countries.

“Latin America is changing profoundly as a result of this migration crisis,” says the UNHCR’s Mr Stein.

The first migrants who left Venezuela in the early 2000s when Hugo Chávez, Mr Maduro’s predecessor, was preaching revolution have built new lives in their adopted countries.

That trend is personified by people like Liliana López, 50, who left Venezuela in 2007 and settled six years later in Chile, where she bought a flat and started a business selling snack foods to offices.

“It’s going to take years for Venezuela to recover and at my age, I don’t think I’m going to see the changes that would convince me to return,” she says. “We need a total clean-up of the country and I don’t see that happening any time soon.”

BROOKE FOX AND ANNA NICOLAOU

M

ichael Bloomberg has made up for his late entry into the Democratic presidential race with an advertising spending spree of nearly half a billion dollars that has caught more conventional campaigns off-guard.

The self-made billionaire and former mayor of New York City has surged to 19 per cent support in a national poll, up from only 4 per cent in December. His strong showing, supported by a flush self-funded campaign, has earned him a spot in Wednesday night’s debate in Las Vegas, which will put him head to head with the other candidates for the first time.

“Advertising works,” said Brian Wieser, president of business intelligence for GroupM, the media buying agency owned by WPP. “That’s the obvious, single biggest takeaway.”

Mr Bloomberg’s spending dwarfs any of his rivals with a serious shot at the ticket, prompting other candidates to accuse him of trying to buy the election.

“This is a stark difference from someone who can just come in and plop down a cheque and buy a bunch of ads,” said Amy Klobuchar, the Minnesota senator running for the Democratic nomination. “I think people are going to see through it.”

Voters seem less bothered.

Mr Bloomberg, who is worth an estimated $62bn, came in second place to Bernie Sanders in a NPR/

Michael Bloomberg has spent millions on both traditional TV spots and online and social media advertising, including paying influencers to post memes © FT montage; AP

PBS NewsHour/Marist poll of Democratic voters nationwide, released on Tuesday. That puts him ahead of rivals Joe Biden, Elizabeth Warren, Ms Klobuchar and Pete Buttigieg.

During this year’s Super Bowl — the most expensive airtime in the US — a 60-second Bloomberg campaign advert that ran moments before the second-half kick-off cost an estimated $10m.

The only other candidate to spend that much money on a Super Bowl ad was Donald Trump.

The US president spent $65m less for his entire 2016 presidential campaign than the $408m Mr Bloomberg has shelled out in his first four months.

Mr Bloomberg has flipped

traditional campaign spending on its head. Unfettered by fundraising constraints, he has bypassed the earliest-voting states to cast his eye on big, populous states where he can splash out in proportion to the number of delegates on offer.

While Mr Sanders and Mr Buttigieg each devoted more than $10m to advertising in Iowa, the first state to hold a primary — where they finished neck and neck among Democratic candidates — Mr Bloomberg spent a measly $160.

Iowa and New Hampshire’s early contests only offer a small number delegates to support a candidate’s nomination at the party convention in July, but campaigns usually focus on spending

Venezuela: refugee crisis tests Colombia’s stability Continued from page 48 aid to Syria.

In a sign of hardening attitudes, Peru, Ecuador and Chile imposed visa restrictions on Venezuelans last year, leading many to enter these countries illegally and a larger proportion to remain in Colombia.

As the financial and social costs mount, there are signs that public opinion is starting to turn. A Gallup poll in December found that most Colombians have shifted from welcoming migrants to regarding them as a problem. Asked for their impression of the Venezuelan arrivals, 69 per cent said it was unfavourable.

Maicao’s newly elected mayor Mohammed Dasuki claims a minority of Venezuelan criminals spread vice and violent crime. “Colombians and people from Maicao respect women and children,” he says. “Venezuelans don’t respect them.”

Mr Dasuki accused refugees of undercutting locals in the job market by working for less money and of bringing prostitution to his city “not just of women but also of homosexuals”.

Luis Eduardo Castro, the mayor of Yopal in the sparsely populated, oil-rich eastern Colombian province of Casanare, which is sheltering nearly 20,000 Venezuelans, has started to deport back to Venezuela migrants he accuses of breaking the law and has threatened to fine drivers who give lifts to refugees.

A poster campaign in Yopal urges locals not to hand out money to Venezuelans with the slogan: “Your help is not helping”.

Such instances of xenophobia, however, are so far seen as isolated. Aid workers and refugee experts point out that Venezuela’s hosting of thousands of Colombians during the oil boom years has created a deep www.businessday.ng

reservoir of goodwill towards the country.

The Colombian government is trying to legalise as many of the new arrivals as possible, giving them permission to work, plus full access to medical and educational services.

The strategy worked well in the first years of the exodus but is becoming more difficult to sustain.

“The profile of the Venezuelans entering is more and more vulnerable every day,” says the UNHCR’s Mr Sersale. “They are more elderly, they have more disabilities and suffer from more chronic diseases. Their possible integration is limited.”

Gabriel Lugo, 32, is one of the estimated 328,000 Venezuelans living in the Colombian capital Bogotá. He sells chocolate bars on the buses for a small profit. In a 15-hour day, he tries to make 30,000 pesos ($9) to cover the cost of a hostel for himself, his younger sister and

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@Businessdayng

Thursday 20 February 2020

BUSINESS DAY

43

POLITICS & POLICY Death of security chief in bathtub in Kaduna shocks Amaechi’s followers back home Ignatius Chukwu

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n the midst of news of whether or not Minister of Transportation, Chibuike Ro t i m i A ma e ch i , was attacked or not, and the assassination of a deputy director in Aso Rock, what has spread shock most in Rivers State seems to be the electrocution of Amaechi’s long-standing chief security officer (CSO), Tony Iwelu.

Those close to Amaechi over the years have reacted bitterly in full lamentation of the death and the circumstances. The incident has also caused some to begin campaigns on awareness of bathtubs and electrocution.

The likes of Dakuku Peterside of NIMASA, Achor Omodu (lawyer and commentator) and Ibim Semenitari, former information commissioner, have poured out their hearts.

The most strident eulogy, perhaps, has emerged from a chieftain of the All Progressives Congress (APC) and a pro-Amaechi activist, Eze Chukwuemeka Eze, who has called for immortalisation of Iwelu.

The for mer national publicity secretary of the

d e f u n c t Ne w Pe o p l e’s Democratic Party (nPDP) commiserated with the minister and his immediate family and members of the Rivers APC, over the sudden demise of Iwelu.

Eze highlighted that Iwelu’s feats especially his heroic actions that stopped the five lawmakers that wanted to impeach Amaechi during the 2014 crisis. He described the Delta State-born senior intelligence officer as the fulcrum of the security architecture of Amaechi from his days as the governor of Rivers State who accompanied the Minister to Kaduna to felicitate with Governor Nasiru El-Rufai on his 60th birthday.

Iwelu died on Monday, February 17, 2020 at about 10.30am of electric shock from a shower rose in Stone Edge Hotel, Kaduna, where he lodged with other colleagues.

In a statement circulated to media houses, Eze said the sad news of the death of Iwelu came to him, members of his household and media team as a rude shock from which they are yet to recover.

Describing Iwelu as a gem, an unassuming, a friend, brother, gentleman personified, and a true

Tony Iwelu

professional and committed loyal security officer, the party chief said his death has caused deep sorrow to Amaechi, his immediate family, the entire security circle in Nigeria, and particularly, members of the APC. “Oh Death, you have

Buhari is firmly on top of security situation - BMO

B

uhari Media Organisation (BMO) has said that Presi d e n t Mu h a m madu Buhari was fully in charge of “critical affairs of governance”, especially security affairs.

The group said that there was no split, crisis or disharmony in the security architecture of the country as being speculated by “haters of Nigeria.”

The group said in a statement signed by its Chairman, Niyi Akinsiju and Secretary, Cassidy Madueke, that the President has never abdicated his responsibilities as Commander-inChief of the armed forces.

It accused the PDP of latching on an in-house issue in the Presidency, which has since been resolved, to

push a self-serving interest.

“The opposition party just opted to twist an inhouse situation to mean that strange persons had been presiding over critical affairs of governance,” it said.

According to the statement, BMO said: “That PDP could make it seem like the President has abdicated his responsibilities and should resign is nothing but mischief taken too far.

“The President has never abdicated his duty on security matters to anyone and like Presidential spokesman Mallam Garba Shehu once said, he is working hard to keep Nigeria and Nigerians out of the harm terrorists have unleashed in the entire Sahel and Sub-Saharan.

“There is an estimated 10 million small arms and www.businessday.ng

through this, proved once again how cruel you can be. Coming to a young and vibrant gentleman, whose sacrifices and inputs in the political journey of Amaechi cannot be quantified,” Eze lamented.

“For the past few days, I have been feeling that a

terrible event will occur to me. Although, I have fasted and prayed, but little did I know that a true brother will journey home so early,” the party chief further wailed.

Eze encouraged himself not minding this great loss in the words of a philosopher and friend, Aristophanes, “Your lost friends are not dead, but gone before, advanced a stage or two upon that road which you must travel in the steps they trod.”

He went on: “Tony my brother, don’t feel lost wherever you are at the moment because we all your dear ones will sooner or later join you not to depart from you anymore so keep resting in the bosom of our father Abraham.”

Eze said Iwelu proved what a loyal friend and brother can be and that his principles and sacrifices in the Amaechism were enormous.

Eze recalled how CSO Iwelu risked his life for the safety of the then governor, now minister, when the five lawmakers of Rivers State House of Assembly after conniving with the certain powers then met and plotted to impeach Amaechi in a State House of Assembly of over 32

members. CSO Tony stood with other great minds to scuttle these agents of darkness from carrying out their devilish plots that would have scuttled the administration.

“CSO Iwelu went further to display similar professionalism and commitment both at Ekiti and during the confrontation between the convoy of the Minister and that of Governor Wike few years ago.

“A l a s ! It i s s a d t h a t when death came knocking through electric shock from a shower on 17th January, 2020, by 10.30am, you gave in without your usual fight”, he lamented.

Eze thus, recommended that the associates of the minister shouldn’t allow the death of the vibrant, honest, kind-hearted, loyal and easygoing young man who was conscientious in the discharge of his duties and who executed his duties with utmost professionalism to go in vain. “I therefore, plead with the associates of the minister apart from ensuring that his three children and wife are well catered for should further immortalise him by keeping alive his Tony Foundation which he established for the less-privileged in his community.

Ita Enang writes Buhari over Calabar-Ikot Ekpene federal highway light weapons in circulation in Africa as a result of the Libyan crisis, according to a report by the office of the National Security Adviser (ONSA), out of which one million are believed to be in Nigeria.”

It further said: “To curb new security challenges in the country, President Buhari has in the last three months alone held a minimum of two meetings every month with Service Chiefs and heads of security agencies, as well as a series of local and international engagements on security matters with a view to making the country more secure.

“We make bold to say that President Buhari has had a hands-on approach on matters of security and will continue to do so.”

ANIEFIOK UDONQUAK, Uyo

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orried by the deplorable condition of the Ikot Ekpene-Calabar federal highway which links Akwa Ibom, Abia and Cross River States, Ita Solomon Enang has written to President Muhammadu Buhari, appealing for budgetary allocation for the prompt construction of the road project.

Ita Enang, who was the senior special assistant to the President on Niger Delta Affairs, stated this in a press release made available to the media.

He thanked the Presi dent for approving the award of contract for the road project at a cost of

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N50.2billion, saying with the development, the President has “breathed life into the economy of the South-South & South East, this road being the economic artery of the two zones and indeed lightened the sufferings of the commuting public.”

The road was first constructed in 1976 as single lane but would now be a dual carriage way from Calabar-Odukpani in Cross River State to ItuIkot Ekpene in Akwa Ibom State.

The section from IkotEkpene (Akwa Ibom) to Aba in Abia State has yet to be awarded.

Ita Enang, who als o lauded the Federal Executive Council, the minister of works and housing as @Businessdayng

well as the former minister of budget and national planning, Udoma Udo Udoma, for working with him “to capture the funds in the appropriation process,” appealed for assistance “for the take off and sustenance of the project for completion within the contractual timeframe by making adequate budgetary provisions annually.”

He also thanked the Secretary to the Government of the Federation (S GF ), Boss Mustapha and expressed the hope his efforts and that of his colleagues in the federal executive council as seen in the road project would continue to make more impact in the South South/ South East geopolitical zones of the country.

industry Insight

BUSINESS DAY Thursday 20 February 2020 www.businessday.ng

Why Nigerian manufacturers should worry about Coronavirus MICHAEL ANI

A

deadly flu-like infection is causing the global economy to shiver, and Nigerian manufacturers are not left out, as development of the virus holds major implications for them.

Known as the coronavirus, the epidemic has ravaged the Central province of the world’s most populous nation, China, from where the virus is believed to have originated from and spread to other parts, making countries of the world take a cautious stand.

Over 70, 000 people have been confirmed to have been diagnosed of the virus while the number of deaths from the outbreak have exceeded 2000 as of Wednesday, according to China’s National Health Commission.

From a collapse in crude oil price, declining stock markets, down to slower global demand, the economic and human cost of the coronavirus outbreak are climbing across China and beyond, which could impact Africa’s biggest economy.

The virus has a major implication on foreign exchange earnings.

Since the discovery of oil in large quantities around the 1950s at Oloibiri in Niger Delta, after half a century of exploration, Nigeria has remained a mono-product economy.

By being a mono-product economy, the Nigerian economic system is essentially based on the existence of only one major economic product upon which the economy is sustained.

Data from the governmentfunded National Bureau of Statistics (NBS) show that the oil sector accounts for about 85 per cent of Nigeria’s foreign exchange earnings and over 70 per cent of the government’s revenue.

This has made the country susceptible to oil shocks, hence when oil prices go up the Nigerian economy booms and vice versa.

Since the coronavirus started in early January, there has been a slowdown in the demand of oil from China which happens to be the world’s largest importer of the commodity, bringing in about 10.04 million barrel per day.

Brent crude, which is the international benchmark of oil prices, has fallen 14.03 per cent to 57.24, from the high of $65.44 per barrel before the outbreak of the epidemic struck, according to Bloomberg data.

Falling oil prices does not sit well with Africa’s largest economy that depends so much on the commodity to attract dollars.

Nigerian manufacturers need dollars to buy inputs and equip-

ment for their day-to-day operations.

A decline in oil prices would mean lower dollars coming into the country and this can exact pressure on the Central bank reserves. The CBN needs the reserves to settle monthly import bills.

It could also make the apex bank resort to naira devaluation as it weakens the CBN’s firepower from using its reserve to continually keep the naira at a fixed rate to the dollar.

Devaluing the naira would cause a devastating effect on manufacturing countries that would have to pay more to get dollars.

A clear case example was in 2016 when Africa’s largest economy suffered a huge dollar shortage owing to a collapse in crude oil prices and oil production.

‘‘

By being a monoproduct economy, the Nigerian economic system is essentially based on the existence of only one major economic product upon which the economy is sustained

‘‘

The International Monetary Fund (IMF) downgraded Nigeria’s outlook for 2020 to 2 per cent from a previous forecast of 2.5 per cent, citing declining oil prices that were caused by the coronavirus In that period, oil prices fell to as low as $28.94 barrel per day while the disruption of oil pipelines sent production to $1.2 million barrel.

These factors culminated into sending the economy into five quarters of negative growth, and triggered massive capital outflows, as foreign investors left in droves.

The situation was much more precarious for manufacturers as they were left to battle with inadequate dollar liquidity to import, falling demand and the big naira devaluation that eroded their investments.

Data from the Manufacturers Association of Nigeria (MAN) say a total of 54 manufacturing firm went down the drain due to the harsh economic condition at the time.

The country may have exited the recession, but its pace of growth is still weak at an average of 2 per cent and largely centred around activities in the oil sector.

The virus, which has taken a toll on oil prices due to slower demand from China, could have negative consequences on the health of the Nigerian economy—though probably not as bad as the 2016 scenario— which would, in turn, affect the

manufacturing sector.

To show the extent to which the virus has an impact, oil price rallied four per cent after rumours that vaccines for the Coronavirus have been found.

However, the price tumbled after the World Health Organisation refuted claims that the cure had been found.

The Coronavirus is casting an ever-widening shadow on global demand and stocks, with analysts revising downward, forecast of growth.

The epidemic has forced the world’s most populous country, which accounts for roughly 20 percent of global gross domestic production, into lockdown and idled its manufacturing industry, a vital supplier to companies everywhere.

New studies show that the new coronavirus outbreak and subsequent shutdown of many parts of China could impact more than five million businesses worldwide, and Nigeria might not be left out.

Although Sun Saixiong, political and information officer of the Chinese Embassy, has debunked rumours that the spread of the Coronavirus may hurt the trade relations between Nigeria and China, analysts say

they see a slower growth following the continuous outbreak of the epidemic.

The International Monetary Fund (IMF) downgraded Nigeria’s outlook for 2020 to 2 per cent from a previous forecast of 2.5 per cent, citing declining oil prices that were caused by the coronavirus.

Trade between Nigeria and China reached $8.6 billion in the first half of 2019, according to data released by Chinese Consul-General in Nigeria, Chu Maoming.

BusinessDay reported earlier that prices of phones, accessories and electrical appliances have skyrocketed on the back of the extension of holidays in China since many of these products are imported from there.

As earlier noted, a falling oil price would, to a large extent, not sit well for Nigeria as this would make the government handicapped in carrying out its fiscal obligations, particularly capital expenditure.

Manufacturers need good roads, constant power and other basic infrastructure to remain competitive and produce at a low cost.

Already, Nigeria has a huge infrastructural deficit that could gulp about $100 billion or N3 trillion of its finances annually through the next 30 years, according to a statement by Zainab Ahmed, Nigeria’s minister of finance. A further decline in the government finances would worsen the deficit.

As a percentage of GDP, Nigeria’s infrastructure stock hovers around 25 per cent, a far lower value when compared to the 70 per cent benchmark set by the International Monetary Fund (IMF).

For the 2020 fiscal year, Nigeria pegged its oil benchmark at $57 per barrel, while it aims to achieve an oil production target of 2.18 million barrel per day.

Using this assumption, Nigeria hopes to rake in as much as N8. 155 trillion, comprising oil revenue of N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenues of N3.7 trillion.

The country would, however, spend as much as N10.33 trillion of which N4.88 trillion would go to non-debt recurrent expenditure while N2.14 trillion of the amounts would be for capital expenditure.

An oil price below the targeted oil benchmark would mean less revenue for the government that depends on it for its finances.

This would widen the variance between the actual and the budgeted revenue, and further increase the budget deficit which was put at N2.2 trillion.

•Continues online at www. businessday.ng

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