BusinessDay 21 Apr 2020 by BusinessDay

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news you can trust I ** tuesDAY 21 april 2020 I vol. 19, no 546

₦2,860,879.14 +0.08

N300

Sell

$-N 408.00 417.00 £-N 483.00 500.00 €-N 423.00 440.00

Crude Oil $ 26.34

Buy

Market

Spot ($/N) 386.13 361.00

Currency Futures

NGUS mar 31 2021 392.66

or weeks now Nigeria has been engaged in an usual battle to find enough buyers for its oil, and now global storage for crude oil is

See explainer - page 2

filling up with the harsh reality coming back home soon to hit

Day of reckoning arrives, exposing Nigeria’s poor economic choices Bonny light trades at $12

homes, businesses and jobs as government finances collapse in Africa’s most populous nation.

Tens and probably hundreds of millions of barrels of Nigeria’s flagship crude grade Bonny

Light are held up inside oceanContinues on page 29

April 2020 Differentials ofBlends Nigerian Blends April 2020 OSPOSP Differentials & Prices&ofPrices Nigerian Date 01/04/2020 02/04/2020 03/04/2020 06/04/2020 07/04/2020 08/04/2020 09/04/2020 14/04/2020 15/04/2020 16/04/2020 17/04/2020 Average

Dated Brent US$/bbl 15.14 19.13 23.67 22.48 22.97 22.32 23.73 20.66 18.08 18.86 20.14 20.65

Bonny -3.29 11.85 15.84 20.38 19.19 19.68 19.03 20.44 17.37 14.79 15.57 16.85 17.36

Brass -3.16 11.98 15.97 20.51 19.32 19.81 19.16 20.57 17.50 14.92 15.70 16.98 17.49

Escravos -2.74 12.40 16.39 20.93 19.74 20.23 19.58 20.99 17.92 15.34 16.12 17.40 17.91

Forcados -3.00 12.14 16.13 20.67 19.48 19.97 19.32 20.73 17.66 15.08 15.86 17.14 17.65

Qua Ibo -3.10 12.04 16.03 20.57 19.38 19.87 19.22 20.63 17.56 14.98 15.76 17.04 17.55

5Y -1.29

0.00 2.94

9.67

NGUS mar 29 2023 401.74

www.

Pain coming for everyone as unwanted Nigerian oil piles up ISAAC ANYAOGU & DIPO OLADEHINDE

3M 0.00 2.17

I&E FX Window CBN Official Rate ($/N)

fgn bonds

Treasury bills

10 Y 0.00

30 Y 0.00

11.86

12.58

NGUS mar 26 2025 412.03

Anxiety in Lagos over rapid increase in new cases of COVID-19 … Infection will get worse before it gets better, says Sanwo-Olu … state to prosecute 4 patients who supplied wrong information JOSHUA BASSEY

larm bells are ringing across Lagos, Nigeria’s commercial capital, as new cases of coronavirus mount despite the over three weeks of lockdown imposed by the government. Seventy new confirmed cases of the deadly coronavirus were reported late Sunday in Lagos alone as community transmission that was feared has become real. With the state now ramping up testing, the number of new cases will inevitably rise faster in the days ahead, doctors say. The state has ramped up its testing capacity from 400 in the last two weeks to 1,400 presently and working to increase further in the coming weeks, Akin Abayomi, commissioner for health, said on Monday. There are now 309 confirmed cases in Lagos as at 6:00pm on Monday, 196 of which are still active and there has been 14 fatalities. Lagos Mainland Local Government Area has the highest number of cases with 114, followed closely by Eti-Osa with 86 confirmed cases and Ikeja with 41. They are followed by AliContinues on page 29

MTN, Airtel, others see surge in data use amid lockdown Jumoke Akiyode-Lawanson

… traffic rises on internet exchange points

from home, telecommunications companies in Nigeria have recorded some increase in online video content consumption, social media usage, email and chat applications. A BusinessDay source at MTN Nigeria said that although there seems to be an increase in the volume of data usage in some

parts of the country, data revenue increase cannot be determined until the end of the financial quarter. “We’ve seen a lot of traffic in both voice and data within the last three weeks, especially in specific parts of Lagos, Abuja and Port Harcourt where the elite population are expected to

work from home. So, as a result of video conferencing, Skype, file downloads and the rest, data volume will go up, but we cannot say that this will generally affect data revenues. If it does, it will reflect in our financial results after April,” the source said. MTN is Nigeria’s largest telecommunications network op-

erator with over 70.6 million of the country’s total 186 million subscribers on its network. The Average Revenue Per User (ARPU) rate for the month of January and February 2020, before the COVID-19 pandemic, was hovering around $3.85. This Continues on page 29

Tuesday 21 April 2020

BUSINESS DAY

the big oil market collapse commentary

#COVID19Thoughts: Tsunami Loading Patrick O. Okigbo III

f you are a state governor in Nigeria and you are not already working round the clock, night and day, you are playing with fire. Redhot, napalm FIRE! Here is your reality. Bonny Light (Nigeria’s crude oil) is trading at about $11. This is half the cost of producing the barrel. Even at that price, Nigeria is not able to sell her crude oil. She has tens of millions of barrels of crude oil in scores of vessels cruising the seas, like a gala seller in Lagos traffic, looking for customers. No is calling; no one is buying. Nigeria is offering a $5 discount per barrel but who will buy when U.S. shale oil is selling for $2 (and no one is buying that either). Nigeria has other bigger challenges because it does not have onshore crude oil storage so she has to put her oil on the vessels. In the last week, the cost of renting the vessels doubled to $350,000 per day. Do you see the picture? Clearly, this has to be the lowest the oil price can fall? Wrong! Over the weekend, Canadian oil hit -$3. Not $0; minus $3. They, too, are not selling. Why? China - the factor of the world - is running at a fraction of its capacity. The airlines are shutdown. Farms and factories are shut down. Many analysts are saying that the world will not get back on its feet for a few more months. In reality, we may be stuck in this new world until a vaccine is found for the novel Coronavirus and a major percentage of the global population vaccinated. Unknot your tie, we may be in this new world for a while. Mr. state governor, why should you care? The world as you know it has changed and nothing has prepared you for what you and the residents in your state are about to experience. All state governments except Lagos depend on allocations from the sale of Nigeria’s crude oil for most of their revenue. The Federal Government allocations to the states started dropping off a few months ago. It will get worse. About a month ago, I had a chat with one of

the State Commissioners for Budget and Economic Planning. As at that time, he was already petrified by what he was seeing. The cheque from the federal government was getting lighter. Sadly, he couldn’t get his principal and colleagues to understand that what the saw moving in the distance were not clouds but a Tsunami that is gathering speed. Many of the state governors still can’t see it. Mr. State Governor, the Tsunami is quite close now but you still have some time to lay the sandbags. This is the time to get into emergency mode and plan for the worst. What will you do when it becomes obvious to you, in a few weeks, that you can’t pay salaries, provide public services, provide security, etc.? What will you do when hordes of criminals take to the street, looting and killing people, in search of something to eat? What are your options? What are the things you have to cut off now to be able to tide over tomorrow? Who are the people who would help you maintain public order? I am sure you are not banking on the Nigerian Police Force. They won’t have enough bullets to kill the number of protesters. It can’t be the vigilante groups. They may be the ones doing the looting and killing. Basically, how are you going to balance this elephant on the top of a needle? The list of questions is endless. Set up your “war-room” now. Pull in your best thinkers. Bring in everyone who has a voice. This is no time to be partisan. Turn this problem into a shared one. Don’t let anyone brand it your problem. Plug the leakages in your system starting with the “security votes”. Call on the illustrious sons and daughters of the state and convince them to join you in planning for and in funding palliatives for the poor and vulnerable. This is the time to plan and act. Act as if you are convinced that the dam will break. It is more than likely that it would. If it doesn’t, you are still ahead. If it does, you will be ready. Don’t be caught napping. It won’t be pretty. www.businessday.ng

EXPLAINER

Why the US oil market is collapsed and how Brent will be next to succumb

f all the wild, unprecedented swings in financial markets since the coronavirus pandemic broke out, none has been more jaw-dropping than Monday’s collapse in a key segment of U.S. oil trading. “The US oil market is broken and corpses abound everywhere,” said one analysts last night. The oil market in Europe and Asia appears to have been spared the unprecedented blood-letting in the US with the internationally traded Brent holding slightly. And here is the difference. Brent is a seaborne crude allowing producers and traders to easily ship it to areas of higher demand around the world. The US oil market is wired together by huge pipeline networks leading to storage tanks at Cushing which will be full in weeks. The pipelines are already full and with the storage near being full, oil producers have only two options – stop producing or pay those who have storage space to take the oil. The crude oil tanks around Cushing, Oklahoma, have approximately 91 million barrels of storage capacity. The hub had working storage capacity of 76 million as of Sept. 30, according to the Energy Information Administration. The price on the futures contract for West Texas crude

that is due to expire today fell into negative territory -minus $37.63 a barrel. That’s right, sellers were actually paying buyers to take the stuff off their hands. The reason: with the pandemic bringing the economy to a standstill, there is so much unused oil sloshing around that American energy companies have run out of room to store it. And if there’s no place to put the oil, no one wants a crude contract that is about to come due. Underscoring just how acute the concern over the lack of storage is, the price on the futures contract due a month later settled at $20.43 per barrel. That gap between the two contracts is by far the biggest ever in history. “The May crude oil contract is going out not with a whimper, but a primal scream,” said Daniel Yergin, a Pulitzer Prize-winning oil historian and vice chairman of IHS Markit Ltd. “There is little to prevent the physical market from the further acute downside path over the near term,” said Michael Tran, managing director of global energy strategy at RBC Capital Markets. “Refiners are rejecting barrels at a historic pace and with U.S. storage levels sprinting to the brim, market forces will inflict further pain until either we hit rock bottom, or COVID clears, whichever comes first, but it looks like the former.”

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Since the start of the year, oil prices have plunged after the compounding impacts of the coronavirus and a breakdown in the original OPEC+ agreement. With no end in sight, and producers around the world continuing to pump, that’s causing a fire-sale among traders who don’t have access to storage. The extreme move showed just how oversupplied the U.S. oil market has become with industrial and economic activity grinding to a halt as governments around the globe extend shutdowns due to the swift spread of the coronavirus. An unprecedented output deal by OPEC and allied members a week ago to curb supply is proving too little too late in the face a one-third collapse in global demand. There are signs of weakness everywhere. Even before Monday’s plunge, buyers in Texas were offering as little as $2 a barrel last week for some oil streams. In Asia, bankers are increasingly reluctantto give commodity traders the credit to survive as lenders grow ever more fearful about the risk of a catastrophic default. In New York, West Texas Intermediate for May delivery dropped as low as negative $40.32 a barrel. It’s far below the lowest level previous seen in continuation monthly data charts since 1946, just after World War II, according to data from the @Businessdayng

Federal Reserve Bank of St. Louis. Brent declined 8.9% to $25.57 a barrel. Crude stockpiles at Cushing -- America’s key storage hub and delivery point of the West Texas Intermediate contract -- have jumped 48% to almost 55 million barrels since the end of February. Despite the weakness in headline prices, retail investors are continuing to plow money back into oil futures. The U.S. Oil Fund ETF saw a record $552 million come in on Friday, taking total inflows last week to $1.6 billion. The price collapse is reverberating across the oil industry. Crude explorers shut down 13% of the American drilling fleet last week. While production cuts in the country are gaining pace, it isn’t happening quickly enough to avoid storage filling to maximum levels, said Paul Horsnell, head of commodities at Standard Chartered. ”The background psychology right now is just massively bearish,” Michael Lynch, president of Strategic Energy & Economic Research Inc said in a phone interview. “People are concerned that we are going to see so much build up of inventory that it’s going to be very difficult to fix in the near term and there is going to be a lot distressed cargoes on the market. People are trying to get rid of the oil and there are no buyers.”

Tuesday 21 April 2020

BUSINESS DAY

news

Nigeria must gradually reopen economy; lockdown cannot be forever, NCDC boss … hails Wike on firm response to COVID-19 Ignatius Chukwu

igeria’s economy must gradually begin to reopen because lockdown cannot be forever, said directorgeneral, Nigerian Centre for DiseaseControl(NCDC),Chikwe Ihekweazu, who visited Port Harcourt Sunday afternoon. He said because the prolonged lockdown cannot continue indefinitely, stakeholders must begin to work towards gradually reopening the economy without endangering the populace. The NCDC boss also urged the private sector to focus more on helping states build their capacity to respond to the virus. Ihekweazu commended Governor Nyesom Wike for what he called the governor’s ‘firm and personal leadership to check the spread of coronavirus in Rivers State.’ Speaking during a meeting with Governor Wike in Government House, Ihekweazu said Rivers State was important in the fight to stop the spread of the virus. Wike had berated the federal authorities on Friday for allegedly

marginalising the second largest economy in Nigeria and one of the biggest oil states. He said: “This is a working visit. I want to thank you for your firm, strong, committed and personally led response to COVID-19 in Rivers State. “Rivers is one of the most important gate-ways into the country. One of the most important economies in the country. So, Rivers is important, not only to you but to the entire country. “We thank you very much for your leadership and we need your leadership to continue in order for us to continue doing our work nationally.” Ihekweazu said his team was in Rivers to engage with the state’s public health team to consolidate on the successes on the fight against coronavirus. He noted that because of the unique nature of the virus, all stakeholders must work in Unity. “We share information across the states to make sure that everyone is informed as they can possibly be. We share Information on new developments, strategies, what works and what doesn’t work.

Bill & Melinda Gates Foundation expands commitment to global COVID-19 response …additional funding brings Foundation’s commitment to more than $250m

TEMITAYO AYETOTO

he Bill & Melinda Gates Foundation has announced an expansion of its funding for the global response to COVID-19. The increase includes an additional $150 million of grant funding plus a commitment to leverage the resources of the foundation’s Strategic Investment Fund, which could be deployed to catalyse the rapid procurement of essential medical supplies and help life sciences companies secure financing to produce COVID-19 products. In announcing the funding, the foundation called on world leaders to unite in a global response to COVID-19 to ensure equitable access to diagnostics, treatments, and vaccines. “It is increasingly clear that the world’s response to this pandemic will not be effective unless it is also equitable,” said Gates Foundation co-chair Melinda Gates. “We have a responsibility to meet this global crisis with global solidarity. In addition to contributing to the development of diagnostics, therapeutics, and vaccines, these funds will support efforts against COVID-19 in low-and-middle-income countries, where local leaders and healthcare workers are doing heroic work to protect vulnerable communities and slow the spread of the disease.” The foundation’s new $150 million commitment will fund the development of diagnostics, therapeutics, and vaccines, as well as new efforts to provide partners in

Africa and South Asia with resources to scale their COVID-19 detection, treatment, and isolation efforts. The foundation will also leverage a portion of its $2.5 billion Strategic Investment Fund, which uses a suite of financial tools to address market failures and incentivise private enterprise to develop affordable and accessible health products. These funds, which can include equity investments, loans, and volume guarantees, will be used to help health systems in low- and middle-income countries (LMICs) facilitate the rapid procurement of personal protective equipment for health care workers, COVID-19 diagnostics, oxygen therapeutics, and other essential medical supplies. Any financial returns generated by the Strategic Investment Fund are re-invested in Gates Foundation philanthropic programmes. The funding announced on Friday builds on the $100 million the foundation has committed to date to support the global response, as well as $5 million in resources to support public health agencies and frontline response organisations in the greater Seattle region. Initial foundation funding has helped to kickstart the search for COVID-19 diagnostics, therapeutics, and vaccines; enhanced virus detection capacity in Africa; and contributed to the response in China. The foundation has also directed its programmatic technical expertise to support multilateral, national, and sub-national responses to the pandemic. www.businessday.ng

L-R: Emmanuel Adebayo, FMN area sales manager Business 2 Business; Tammy Danagogo, secretary to state government, Rivers State, and Tiwalade Ibraheem, FMN sales officer, Rivers/Bayelsa, at the official handover of food products in Rivers State donated by Flour Mills of Nigeria (FMN), as part of FMN’s commitment to support impact of the lockdown instituted to reduce the spread of Coronavirus across Nigeria.

78.4% of Nigerian businesses don’t plan to lay off staff – PwC survey ENDURANCE OKAFOR

here are fears that Nigeria’s jobless population could increase and worsen the already high unemployment figure amid the outbreak of coronavirus. However, a recent survey by PwC shows 78.4 percent of businesses in the country are not considering staff lay-off. With economic activities in Nigeria almost grinding to a halt as a result of the coronavirus pandemic, analysts project that Africa’s largest economy could see a host of its population becoming jobless. “Unemployment would see a significant climb particularly in vulnerable industries like airlines, leisure and industries with discretionary products because revenue will suffer significantly,” Ayorinde Akinloye, equity research analyst at CSL Stockbrokers, said. But of the 3,000 respondents ranging from managers to CEOs and business owners that were sampled in the recent survey by PwC, 2,353 of them said they are not considering the option of downsizing their staff as a result

… liquidity remains top concern amid virus crisis of the crisis. “Most businesses (78.4 percent) do not plan to lay off staff as a result of the crisis,” Taiwo Oyedele, fiscal policy partner and West Africa tax leader at PwC, said while providing the result of the survey findings during a recent webinar hosted by the firm to discuss the economic implications of COVID-19 on businesses and Nigeria’s policy responses. Of all the respondents, 21.6 percent said they would lay off various percentages of staff as a consequence of the pandemic. Of this group, however, 55.3 percent do not think government intervention would influence their decision on staff lay-off, with the rest indicating they would retain their employees if government’s intervention was able to take care of varying percentages of their staff wage bill. Asked what their top business concerns were, 22.5 percent pointed at liquidity, which is the availability of immediate cash to pay bills especially following disruption to business activities that has been experienced.

Overall, the businesses surveyed agree that the private sector has a role to play in supporting government’s fight against COVID-19, with 85.5 percent suggesting that they are best suited to provide support in the area of provision of items, equipment and facilities compared to only 10.7 percent who will consider donating cash to the government. Nigeria reported 35 new cases of coronavirus on Friday, bringing the total number of confirmed cases in Africa’s most populous country to 442, according to NCDC data. The odds of Nigeria’s crudedependent economy slipping into a recession are increasingly becoming likely as the crude price has hit a low point due to glut in supply. This is coupled with the fact that the slowdown in economic activities is also expected to affect the bottom line of most companies. In a situation where Nigeria can contain the outbreak of coronavirus, the country’s least worstcase scenario, it will be reporting a GDP growth of -3.4 percent in

2020, as projected by McKinsey. This would be a growth decline of almost six percentage points from the country’s last year’s expansion of 2.5 percent. “That would represent a reduction in GDP of approximately $20 billion, with more than twothird of the direct impact coming from oil-price effects, given Nigeria’s status as a major oil exporter,” McKinsey & Company said in a recent report seen by BusinessDay. Since 2017 when oil-dependent Nigeria emerged from its economic recession, not only has the country’s economic growth been sluggish but only a few sectors triggered the expansion, further undermining the country’s capacity to create enough jobs to meet the growing number of labour market entrants. Out of about 4.8 million Nigerians who entered the country’s labour market between 2015 and 2018, about 635,000 jobs were created within the period, indicating only a job was available for every eight people who joined Nigeria’s economically active workforce.

Terminal operators reject new guidelines on restriction of truck movement AMAKA ANAGOR-EWUZIE

… say it will worsen port congestion, Apapa gridlock

erminal operators under the aegis of the Seaport Terminal Operators Association of Nigeria (STOAN) have rejected in totality the new guidelines rolled out recently by the Presidential Task Team on Apapa gridlock, restricting movement of trucks evacuating cargo out of Apapa port city to only daytime. According to them, the guideline is a recipe for chaos, which will further compound traffic congestion on the port access roads and exacerbate port congestion. The task team drew up the guideline without inputs from critical stakeholders especially truck operators, terminal operators and shipping companies and without regards for prevailing cargo backlog at the nation’s seaports, said STOAN in a statement signed by Bolaji Akinola, its spokesperson.

“The Federal Government deliberately left the ports open to keep the flow of essential supplies to Nigerians at this difficult time, but the task team has come up with guidelines that suppress the timely evacuation of cargo at the port. Why creating guidelines that restrict the movement of trucks evacuating cargoes at the port? Is this not contrary to the position of the Federal Government that the logistics and supply chain should not be interrupted?” STOAN said in the statement issued on Sunday. Stating that the port operate round-the-clock and that cargo evacuation must be done roundthe-clock including at night in order to avoid port congestion, STOAN also said that part of the guidelines allowing port-bound trucks to access the Lagos Port Complex

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Apapa only via the Wharf Road, while those being used for other purposes have unrestricted use of all other access roads is ‘ill-advised’. “How do you ask the port trucks not to work at certain times and not to use certain roads? The roads in Apapa are for port operations. We kindly urge President Muhammadu Buhari to call the task team to order,” STOAN said. The association also asked the Federal Government to mandate the Nigerian Ports Authority (NPA) to take over traffic management on the port access roads, “so as to clear the chaos created by the task team”. “NPA has a robust security department that had done a good job in managing the traffic on the port access roads in the past and it is the consensus of stakeholders that they should return to that role. We also @Businessdayng

call on the Federal Government to investigate allegations of extortion of truck drivers by the task team as well as alleged preferential treatment granted petrol tankers and some truckers,” STOAN said. “It has become imperative to note that other truckers and stakeholders have complained severally about this injustice especially on extortion of truckers,” STOAN added. Recall that the Presidential task team recently stated in its new guideline that movement of trucks would only take place during the day time as night truck movement would be only reserved for branded trucks of manufacturing concerns such as Dangote Group, BUA Group, HoneyWell Group, Flour Mills Nigeria, FMN Standard Flour, excluding container carrying trucks.

Tuesday 21 April 2020

BUSINESS DAY

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Tuesday 21 April 2020

BUSINESS DAY

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Tuesday 21 April 2020

BUSINESS DAY

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New worrisome dimension to COVID-9 transmission as hospitals become danger zones CHUKA UROKO

new worrisome dimension to the transmission of thecoronaviruspandemic is fast evolving as more and more health workers, who are frontline care givers, are now testing positive for the virus, making hospitals in Nigeria danger zones. Many doctors, nurses and other indispensable health workers, even outside COVID-19 testing and isolation centres, have tested positive for the virus, meaning that many ‘innocent’ patients with undetected coronavirus infection are out there being attended to innocently by these health workers. Only last weekend, the president of Association of Resident Doctors (ARD) of University College Hospital, Ibadan, Adedayo Williams, was reported to have tested positive for coronavirus. “Having been on the field caring for others, I thought it wise to subject myself to a voluntary screening for COVID-19,” the ARD president said, revealing that the result of the test was positive. Williams’casecameontheheels of three out of five doctors that at-

12 and Shomolu 8. Mushin and Oshodi/Isolo local governments have seven confirmed cases each. Sokomba fears that there will be sharper rise in numbers in the days and weeks ahead with the sharp rise in community transmission. He noted that transmission had graduated from people with travel history to local transmission and, sadly, now to hospital transmission. Some doctors say Lagos is now ramping up testing, meaning that the number of new cases will inevitably rise faster in the days ahead. But Sokomba insists that the hospital transmission is a huge factor, explaining that many people from the community go to hospitals and infect the doctors and nurses who come in contact with them. “Doctors, in the course of their duty, come in contact with many people in a single day and the possibility of these doctors getting infected is high. Patients can also contract this disease from the doctors who are infected,” he said, calling on the government to go beyond only doctors who work at isolation centres to also provide personal protective equipment (PPE) for doctors in the hospitals.

tended to an ‘innocent’ patient at the UniversityofIlorinTeachingHospital that tested positive. The patient they attended to was later tested for coronavirus and she returned positive. “This kind of situation can also explain the huge increase in the number of confirmed cases we have seen in the past few day,” said Aliyu Sokomba, the president of the National Association of Resident Doctors (NARD), at a media programme in Lagos on Monday. Just on Sunday, April 19, 86 new cases of Coronavirus were confirmed by the Nigeria Centre for Disease Control (NCDC), taking the total number of confirmed cases in Nigeria to 627. Out of the 86 new cases, 70 were in Lagos, 7 in FCT, 3 in Katsina, 3 in Akwa Ibom, 1 in Jigawa, 1 in Bauchi and 1 in Borno. Lagos remains the epicentre of the disease and by the last confirmed cases, the number of confirmedcasesinthe state hasjumped to 376, up from 306 in just 24 hours. High impact areas in the state are Lagos Mainland Local Government, which has the highest number of cases with 114, followed closely by Eti-Osa with 86 confirmed cases and Ikeja with 41. Others are Alimosho with 15; Kosofe

Aid worker dies of Covid-19 in Nigeria’s war-torn Northeast

nternational medical charity Medecins Sans Frontieres said one of its aid workers died after contracting the new coronavirus in Nigeria’s war-torn northeast. The health worker died on April 18, the charity said in a statement on Twitter. Edward Kallon, the United Nations Humanitarian Coordinator for Nigeria, who also con-

firmed the fatality in a separate statement, said the deceased had no history of travel outside the northeastern state of Borno. The UN and the aid agency said they’re working with local authorities to trace people who had contact with the deceased. The northeastern region is the birthplace of Boko Haram Islamist militants that have carried out a 10-year-old campaign

of violence to impose Islamic rule in Africa’s most populous country of 200 million people. More than 30,000 people have died in the conflict, according to the government. The UN has said almost 8 million people in the region need urgent humanitarian aid. Africa’s most populous country has so far confirmed 627 cases of coronavirus infections and 21 deaths.

CACOVID orders supplies for 400,000 tests to complement government efforts

he private sector-led Coalition Against COVID-19 (CACOVID) has ordered for 250,000 supplies for tests and another 150,000 extraction kits to fast-track molecular testing for the deadly coronavirus, noting that the reality of the situation at hand was such that efforts must be put together with no stone left unturned in dealing with the scourge. In the same vein, the Coalition disclosed that no less than 1.7 million households would benefit from its food relief package as part of complementary efforts to help alleviate the effects of the lockdown and restrictions adopted by governments across the nation. Speaking newsmen in Lagos on the group’s activities in helping the Federal Government to stamp out the coronavirus pandemic, leaders of CACOVID

stated that the coalition has set up isolation centres in five states of Lagos, Kano, Rivers, Borno and Enugu as well as FCT, while renovations of hospitals and medical supplies are being carried out in other states. CEO of Aliko Dangote Foundation (ADF), Zouera Youssoufou, explained that all the partners in CACOVID are ready to roll out in all parts of the country having commenced building and equipping of isolation centres in some states. According to Youssoufou, there are currently three testing platforms for molecular testing in Nigeria, one of which is the “Open PCR machines”, which the Coalition has ordered for 10 units, with eight laboratories certified to conduct COVID-19 tests. Youssoufou said, “Open PCR machine is currently the standard platform. Eight labs in

Nigeria are certified to conduct COVID-19 testing; 10 new PCR machines and 150,000 extraction kits have been ordered. The other is Roche Cobus Platform with 6 Machines in Nigeria, each capable of testing 960 tests at a time. Nigeria was on track to receive 38,000 but we have ordered 250,000. 10,000 tests ordered by UNICEF have arrived on Thursday, April 16. “We also have Cepheid Gene Expert Machines – there are 400 machines installed in the country. 250 are expected to be functional with trained lab technicians. Cepheid has developed a COVID-19 testing cartridge that has received FDA approval, and will begin shipping to Africa in two weeks. We have ordered 250,000 cartridges and expect shipment receipt in two weeks.”

African Young Brains holds summit on ‘Building business & personal brand in difficult times’ Seyi John Salau

fricanYoungBrainsannounces a two-day event, ‘Great Leaders for Great Nations Summit’, holding from April 22-24, 2020 via Zoom. Time is 3pm-6pm daily. A release signed by Femi Awoyemi, the convener and executive chairman, African Young Brains, said the event would feature five important topics which were crafted in line with the present global realities andhowtofacelife,post-COVID-19. Accordingtotherelease,thetopicstobediscussedare:‘Greatleaders

for young and emerging leaders in time of crisis’; ‘Better understanding of COVID-19 personal health and safety strategies for leaders and professionals’; ‘Building business andpersonalbrandindifficulttimes through digital ecosystem’; ‘The world in need of leaders, volunteers and collaborators: Can we be on the same boat to defeat COVID-19?’ and ‘Work from home model and personal discipline to remain professionally relevant beyond 2020.’ Awoyemiexplainedthatexperts in various fields of endeavour had been selected to address the topics,

expressing the optimism that participants would not regret attending the summit. According to him, Sola Adeduntan, group managing director/ CEO, First Bank plc, will be the keynote speaker. He also said that Benjamin Dike, head, Business banking, Standard Chartered Bank Nigeria; Demola Adebanjo of the Federal Medical Centre, Abeokuta, Ogun State; Soji Adeniyi, a former chairman, United Nations Joint Staff Pensions Fund, and Phebean Amusan, CEO/lead consultant HR, Pitch, would be guest speakers.

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Tuesday 21 April 2020

BUSINESS DAY

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Nigeria’s lockdown spikes consumers’ data usage volume in parts of Nigeria … experts say data revenues may not increase, as lockdown is unlikely to change subscribers spending patterns Jumoke Akiyode-Lawanson

nternet data connection is proving to be a human necessity as some Nigerians are now spending more time online and using more mobile data since the enforcement of a lockdown in several states of Nigeria on March 30, 2020, due to the Coronavirus pandemic, BusinessDay finds out. With a lot of people working from home, telecoms companies in Nigeria have recorded some increase in online video content consumption, social media usage, and email and chat applications. A BusinessDay source at MTN Nigeria says although there seems to be an increase in the volume of data usage in some parts of the country, data revenue increase

cannot be determined until the end of the financial quarter. “We’ve seen a lot of traffic in both voice and data within the last three weeks, especially in specific parts of Lagos, Abuja and Port Harcourt where the elite population are expected to work from home. So, as a result of video conferencing, skype, file downloads and the rest, data volume will go up, but we cannot say that this will generally affect data revenues. If it does, it will reflect in our financial results after April,” he states. MTN is Nigeria’s largest telecoms network operator with over 70.6 million of Nigeria’s total 186 million subscribers on its network. About a week ago, it was reported that Kenya’s top telecom operator, Safaricom had seen a 70

percent surge in data usage since the country enforced its lockdown. As a result, some people were of the view that Nigerian telcos, with a lot more mobile network subscribers must have seen a lot more surge in data usage as a result of the work from home order by the Federal Government of Nigeria on March 30, 2019. However,expertssaythatitdoes not correlate, as Safaricom’s surge in data stems from its successful operation of mobile money and the Mpesa system has seen an increase in usage of transfer of monies and digital financial services. Globacom, Nigeria’s second largest telco with over 51.7 million subscribers said it wasn’t ready to divulge any details of data revenue or volume increase when Busi-

nessDay reached out to its public relations manager. Emeka Opara, the director of corporate communications and CSR, Airtel Nigeria, refused to answer telephone calls or respond to text messages from BusinessDay on this topic. However, Olusola Teniola, president of Association of Telecommunications Companies of Nigeria, (ATCON), the umbrella association for telecom companies in the country, told BusinessDay in a telephone interview that; “In Nigeria, there hasn’t been any evidence to suggest that there has been an increase in digital financial services, as we do not have an equivalent of Mpesa, so we are relying on other types of data service traffic.”

BDCs want CBN to establish voluntary offshore asset repatriation window to boost FX Hope Moses-Ashike

ssociation of Bureaux De Operators of Nigeria (ABCON) has appealed to the Central Bank of Nigeria (CBN) to establish a Voluntary Offshore Asset Repatriation Window to allow more foreign capital inflows into the Nigerian economy. Aminu Gwadabe, ABCON president, who disclosed this in a statement released Monday, said the proposed policy plan would be a monetary instrument of the CBN backed by an Act of the National Assembly for non-disclosure of the sources or basis of proceeds of the funds to be repatriated. The ABCON boss said there was need for tougher measures to keep the forex market and economy going by fiscal and monetary policy makers at this extraordinary time ignited by the COVID-19 pandemic. He said the COVID-19 pandemic had led to drop in crude oil prices and drastic cut in Nigeria’s foreign exchange earnings. According to Gwadabe, the proposed window will boost liquidity in the Bureaux De Change (BDCs) sub-sector, Investors’ and Exporters’ (I&E) forex window and help the CBN sustain stability of the exchange rate. The forex window, which dif-

fers from the previous Voluntary Offshore Asset Regularisation Scheme backed by executive order 008 and tied to taxation, will be an incentive for owners of stashed funds abroad to be given an amnesty to repatriate their foreign cash holding into the window and to be traded at the prevailing rates in those windows. Besides, owners of such funds should have one year amnesty to participate in the market and should be liable to pay a reduced corporate income tax of 20 per cent. Gwadabe also advised that naira proceeds from the transactions in that window should be invested in the economy for a maximum of 10 years before it can be allowed to be repatriated back if the need arises. According to him, the window will boost foreign exchange liquidity and stem the volatility in the market. It will also help in diversifying Nigeria’s foreign exchange earnings, support national planning, enhance backward integration and import substitution policies. Continuing, Gwadabe said it would lead to reduction in the size of black and informal economy, boost sovereign credit ratings, improve living standards for the people and promote good corporate governance in institutions.

COVID-19: Edo provides life insurance, special allowances for over 4,200 frontline health workers ... procures 3 PCR machines, 28 ventilators, readies 300-bed capacity isolation facilities, others

E L-R: Sadiq Ola, HOD, engineering; Ruth Oaku, president, Association of Resident Doctors; Adetokunbo Fabamwo, chief medical director, LASUTH; Richardson Ajayi, chairman, LASUTH Board; Lanes Familusi, member, LASUTH Board, and Ibrahim Mustafa, director, clinical services and training, during the presentation of Personal Protective Equipment (PPE) by the LASUTH Board to the hospital management in Lagos.

Noella Foundation/Foodclique’s COVID-19 emergency foodbox initiative hits 300,000 meals milestone TEMITAYO AYETOTO

oella Foundation, the brainchildofSeyiTinubu,Loatsad CEO, and his wife, Layal Tinubu, in partnership with Nigeria’s leading Foodbank, FoodClique Support, recently reached a key milestoneofdelivering300,000meals in their Stronger Together Covid19 Emergency Foodbox Initiative. Theinitiativehassofardelivered over 10,000 foodboxes containing about 30 meals per box (including staples from rice, pasta, salt, sugar, garri and semo to other important food items) to the most vulnerable in various areas across Lagos and its environs. Some area touched include Badagry, Epe, Ikorodu, Mushin, Onipanu, Surulere, Lekki,

Jakande, Agege, Oworonsoki, Ojo Alaba, Gbagada, Yaba, Ebute Metta, Lagos Island, among others. Speaking on this milestone, Seyi Tinubu, CEO, Loatsad PromoMedia and chairman, Noella Foundation, said the Emergency Foodbox Initiative was necessary to support ongoing government efforts during this pandemic. “This joint initiative with Foodclique is part of efforts in line with our adopted SDG Goal of eliminating hunger and we are proud of the work that has got us this far. As we hit a milestone of 300,000 meals distributed during this period, I want to acknowledge that not one person can do it alone,” he said. “We need to come together to support government efforts aimed at ameliorating

the negative impact of the measures put in place to stop the spread of COVID-19.” Tinubu commended Lagos StateGovernorBabajideSanwo-Olu for showing leadership during this crisis. He expressed the gratitude of Noella Foundation and Foodclique to all partners who have supported through the food drive, in cash or kind, including Aquafina, Elalan Construction, Mikano, BUA Group, Vava Furnitures, YBNL, Dbanj Cream Platform, Shoprite, Eric Kayser Nigeria, Nestle, Maggi, Swan Mosquito Coils, amongst others. “We appreciate you and will continue to seek your partnership as we reach out to more people,” he said. Bolajoko Fadipe, CEO of Foodclique, thanked all the volun-

teers and partners for their effort in ensuring that fewer people go to bed hungry as a result of this crisis. “We have been able to reach the most vulnerable across the nooks and crannies of Lagos and some surrounding states through our extensive network of volunteers and efficient distribution capacity. We also call on well-meaning organisations and individuals to reach out to us in supporting these efforts so that even more people can be reached,” Fadipe said. “We intend to continue this Stronger Together Initiative for as long as the impact of the COVID-19 pandemic remains. We also want to immensely thank our media and strategy partners, Ten & Square Brand Co., for helping shine a light on this initiative.”

Sahara Foundation, partners ThisDay to increase coronavirus isolation centre capacity to 300 beds, 8 ICU beds DIPO OLADEHINDE

ahara Foundation, the corporate social responsibility vehicle of energy conglomerate, Sahara Group, in collaboration with ThisDay, has announced plans to increase the capacity of Abuja’s coronavirus isolation and treatment centre to 300 beds with additional 8 Intensive Care Unit (ICU) transit beds amid rising cases in Nigeria.

The COVID-19 Isolation Centre, currently under construction by the CCECC inside Abuja’s ThisDay Dome, was originally planned to have 200 beds. Theexpansionwillalsoinclude the completion of facilities to support the Nigeria Centre for Disease Control (NCDC) tests for the virus along with the inclusion of 8 ICU transit beds for severe cases. “The expansion of the facility at this time is in response to the www.businessday.ng

recent increase of COVID-19 cases and the need to ensure that the centre is equipped to handle the most patients effectively and efficiently in line with global standards,” said Emeka Onwuamaegbu, a retired major general and chairman of the foundation, in an emailed statement Monday. NCDCconfirmed86newcoronaviruscasesinNigerialateSunday, April 19, taking the total of confirmed cases in the country to 627,

with 170 discharged and 21 deaths. The number of cases is expected to rise in the coming weeks Nigeria increases its testing capacity. Engineers overseeing the project say the new expansion directive has led to a short postponement of the estimated completion date of the project from April 20 to April 27th, 2020 (with a five-day dry run), thus receiving its first patients that same week if required.

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do State government has provided life insurance and other special allowances for healthcare workers handling coronavirus (COVID-19) response in the state, as motivation to work on the frontlines in the fight against the pandemic. Governor Godwin Obaseki, who disclosed this in a broadcast, said the state was making steady progress in containing the infectious disease, noting that Edo had started treating patients in three of the four isolation centres in the three senatorial districts of the state, which have a total capacity of 300 beds and 30 ventilators. According to Obaseki, the state has acquired additional 3 PCR machines and trained over 4,200 healthcare workers who are now manning the state’s screening, testing and treatment facilities. Obaseki said, “Our health workers are crucial if we are to win the fight against COVID-19,

therefore, we have emphasised training, equipping and motivation of frontline health workers. To date we have trained over 4200 healthcare workers who are now manning our screening, testing and treatment facilities. Apart from providing the safety and protection required, we have offered them life insurance and special allowances to continue to motivate them. “I am glad to inform you that the testing centre at the University of Benin Teaching Hospital (UBTH) is now ready. We have begun trial tests under the guidance of the Nigeria Centre for Disease Control (NCDC). We expect it will commence full operations this week. We have also taken delivery of another PCR testing machine currently being installed at the Edo Specialist Hospital which we hope will also be ready within the next 2 weeks. This will give us the capacity to perform up to 1000 tests daily in Edo State.”

Abia condemns shooting of Abians by security operatives GODFREY OFURUM

he Abia State government has condemned in very strong terms the unwarranted shooting of some Abians by security operatives and the consequent loss of their lives. In a statement, Chief of Staff to the Abia State Governor, A.C.B. Agbazuere, says while government appreciates the commitment of heads of security agencies and some other security personnel in the state, the breeding recklessness of some security men in the state must be nipped in the bud forthwith. @Businessdayng

“While government appreciates the commitment and industry of heads of Security Agencies and some other Security Personnel in the State, the breeding recklessness of some Security Men in the State must be nipped in the bud forthwith,” according to the statement. Continuing, the statement notes: “Government hereby reassures all Abians that anybody who takes the life of an Abian must definitely face justice. The soldier who killed an Abian at Umuokereke Ngwa has been dismissed from the army and is in prison awaiting final Justice for murder. All other arm bearers must learn their lessons. A wordshouldbeenoughforthewise”.

Tuesday 21 April 2020

BUSINESS DAY

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Tuesday 21 April 2020

BUSINESS DAY

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Oil price recovery in 2020 and the American paradox

Glenn Ubohmhe

he economic impact of the COVID-19 pandemic has been grave and unprecedented. Global economic output has nosedived, sending crude oil prices into a tailspin. The question a few weeks ago was not whether oil prices may keep on falling but how low will oil prices plunge. Not a few speculated prices within the lower band of $10 per barrel. Though, prices have rallied temporarily, it is nowhere near the pre-COVID levels. It is still early days yet to determine the movement of price, especially movement towards the northern direction and many analysts have opined that the production cut may not be enough to offset the drop in demand. In other words, we are in for a long haul. As such, an attempt to speculate on the likelihood of a pre-COVID 19 price recovery in 2020 may be considered preposterous against the backdrop of the subsisting battle with the pandemic. Even normal times, the art and science of forecasting crude oil prices is an arduous task. Nonetheless, this write-up takes a look at the geopolitics of oil, key policy issues and events in the United States that may shape the direction of crude oil prices in 2020, post-COVID 19. To this end, the analysis examines the likely movement of prices within the context of US energy security, unemployment,

the forthcoming presidential election, the interest of US allies in some of the oil producing countries and economic competitiveness with China. But before we go into all that, let us start with a bit of context. For most of the oil producing countries in dire financial straits triggered by the steep drop in oil prices, stemmed by the ravaging global pandemic, the only way to shore up public revenue was through increased volumes of crude oil into a market that was already too soft. The resulting scramble for market-share and oversupply went further to exacerbate the downward price spiral until Saudi Arabia and Russia (the second and third largest oil producing countries in the world with combined output of 23 million barrels per day or 23 percent of global oil production in 2019), agreed to an output cut in order to prop up oil prices. The jury is still out whether the output cut can sustain and shore up price. President Trump played a key role in the crude oil production curtailment pact. The interesting thing is why US involvement in an initiative that is somewhat not in consonance with its status as the foremost oil consuming country in the world with a share of 20.5 percent of global consumption (or 20.5 million barrels per day in 2019 including NGL), given the country’s vast industrial base and what low crude oil prices mean to the US economy in terms of lower production cost, low inflation and higher economic growth. Is such intervention not against the principle of free market economy but the reality is that market can and has always been tamed if it becomes too wild and exuberant – a subject for another day. Now here is the spin – President Trump’s role in brokering a truce was not such of a moral dilemma, it was a well-informed decision that is based on enlightened self-interest. The United States is not just the

foremost oil consumer in the world, the country is equally the leading oil producer with average daily production of 19.33 million barrels in 2019 (including Natural Gas Liquids). What this means from a self-sufficiency standpoint is that the country has a supply-demand net imbalance of just 1 million barrels per day which can easily be met through imports from neigbouring countries. Being a high cost producer, oil prices below production cost will be particularly devasting for shale players. Many shale producers are currently on the brink of bankruptcy. Anything that is likely to upset that supply-demand balance would force supply security to the top of the policy agenda in the United States. Bearing in mind that about 63 percent (7.7 million barrels per day) of oil produced (crude oil and NGL) in the US in 2019 was from tight shale formations (according to US Energy Information Administration), significant production cutback will widen the supply-demand gap and make US susceptible to supply vulnerabilities. Can the inventory build in US Strategic Petroleum Reserve (SPR) provide short term cushion? The answer is in the affirmative. However, the SPR capacity of 713 million barrels has a depletion timeframe of about 6 months depending on frequency and quantity of withdrawal. Moreover, the objective is not to completely drawdown on SPR but to release inventory during severe supply interruptions. Some analysts were of the view, even before Trump’s intervention, that in an election year, domestic producers in the US, especially in swing states would require some level of support in whatever shape or form. The devastating effect of the economic downturn is not only having a heavy toll on the fiscal position of oil producing regions in the United States, both Washington and the states would also have to contend with the political implication of massive job

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Economic outlook is highly uncertain, and recovery may be gradual but as the global production engine rev up and aircrafts take up the sky once more, post COVID-19, further production cut is not unlikely

loss, in an election year. Added to this is the likely implication of sustained low crude oil prices on efforts to diversify to alternative sources of energy. From a geopolitical standpoint, US allies in some of the oil producing countries require oil revenue for political stability and if it is therefore thought that a low oil price regime could endanger the government of such countries and by extension the interest of the United States, it then raises a major foreign policy concern for US government. Viewed from another perspective, low prices for imported oil by China against high cost of domestic oil in the US enhances the former’s economic competitiveness. How the US will react to this is up for debate. On a final note, oil prices are determined by drivers which impact demand and supply. Much more, oil prices are a product of consensus, not only of demand and supply but also by the behaviour of those who make the price. Oil is a strategic commodity which sits delicately within the global geopolitical and geo-economic vortex and geopolitics is not an easy fit into economic models. As I told a former boss a few days ago, just as war is too important to be left in the hands of generals, crude oil is too important to be left in the hands of oil men and bankers. Economic outlook is highly uncertain, and recovery may be gradual but as the global production engine rev up and aircrafts take up the sky once more, post COVID-19, further production cut is not unlikely. Therefore, global oil price recovery within the $50 per barrel corridor before the end of the year, perhaps much earlier, will hardly be a surprise. Don’t ask me if this outlook is from a crystal ball if you think Liverpool FC will not be handed the English Premiership this year. That will be cruel! Glenn Ubohmhe (FCA, FCTI) lives in Lagos

My own tribute to Abba Kyari

ver the weekend a man was buried. Abba Kyari was, to many, the de facto president of Nigeria. Since his demise became public knowledge, there has been a deluge of praise for him, as well as criticism of course, which will always accompany the death of an influential figure. But something happened yesterday. There was a concerted effort to blackmail those criticising the late Kyari, in some cases by implying that those criticising him would die soon. Like WTF? In a century’s time, not one person who is my agemate will be alive. Heck, in half a century, most of us will be dead, so those blackmail merchants miss the point. Let’s look briefly at Abba Kyari’s role. The Chief of Staff, to my knowledge, functions to organise the life of his principal. There is a reason why the role is not mentioned in the Constitution, so for Abba Kyari to have become, by many accounts, the most powerful man in Nigeria was an aberration. One of the things we tend to miss in this country, or to conflate, is holding opposing views. Saying that Abba Kyari was a good man, and that he was a bad leader/politician, are in no way contradictory, which brings me to something I noticed. I noticed is that pretty much everyone who spoke glowingly of the late Abba Kyari either knew him personally, or benefited from him, and therein lies one of the problems. No one appears to care for the country, just self. In a country of 150 million people, not everyone could have met him to ascertain

his goodness as a man. But, if he had been a good leader/politician, everyone could have benefitted from him. So what is Kyari’s legacy? He completely emasculated the Vice President and reduced him to a placeholder within the government. He stepped on toes and enabled a repressive state which is an anathema to the consensus required for democratic governance. He irreversibly shaped the policies of this government, and what have they delivered? Big government policies everywhere (one of which we’ll talk about soon), and consistent growth averaging less than population growth, which means that under his watch all Nigerians, including you reading this, got poorer. Heck, his border closure policy led to higher inflation, and under his watch, the trade sector, our second biggest employer of labour, has been in recession for two years. Based on statements made by the CBN governor each time he met with the man, the CBN’s interventionist stance, and refusal to pursue policies that would have let the economy breath, it’s clear who was calling the shots of a regime that created arbitrage opportunities which were ruthlessly exploited by people in and around the centres of power. As Chief of Staff, Kyari was not shy of dabbling in actual governance. For example, he was instrumental in shaping the contours of the Buhari administration policy thinking on agriculture, defining the government’s focus on achieving rice self-sufficiency. Going by official data, some progress has been made.

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Nigeria now produces more rice annually, about four million tonnes a year, than Egypt, Africa’s largest grower of the crop. However, this was not due to any burst of innovation or the encouragement of mechanised agriculture. First, Egypt cut its rice production by 40 percent in order to save water. The reality is that Nigeria’s rice crop yield has remained static for decades - at 2 tonnes per hectare, it is about half of Asia’s average. Nigerian farmers simply devoted more land to grow rice, taking advantage of subsidised inputs such as fertilizer; itself a process which operated as something close to a racket which benefited politically connected manufacturers and importers. Despite increased production, there is still a mismatch between domestic consumption and production, hence the continued smuggling of rice in spite of a 9-month border closure championed by Kyari. As if to confirm what was already evident, Nigeria nabbed a 49.17 score in the 2019 World Bank’s Enabling the Business of Agriculture Index - a measure which monitors such things as the supply of seeds, registering fertilizer, water security, registering machinery, livestock sustenance, protecting plant health, food trading and accessing finance - and way behind South Africa (68.73) and Kenya (64.80). Perhaps the one event that proved the near omnipotence of Mr Kyari was the controversy that trailed the recruitment of his daughter, by the Nigeria Sovereign Investment Authority, the federal agency that manages Nigeria’s hardly excess crude oil

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Cheta Nwanze

revenues. While the NSIA denied the allegations and insisted that her recruitment “went through a transparent process” and was not the result of political interference, it was hard to justify the organisation’s insistence that her role was a “junior one” when she was hired as its Assistant Vice President (the NSIA insists it is merely the 9th level out of its 22-level grading system). A year on from the crisis, Aisha remains in her position and Mr Kyari, until now a towering figure in Nigerian politics, reigned supreme. As an individual, his final destination is left only for God Almighty to decide. As to his personal bonhomie, that’s for those who knew him as an individual. But in the final analysis, that tinge of “some animals are more equal than others” was Abba Kyari’s legacy, and it showed in the shameful sight of his close associates completely disregarding social distancing guidelines at his funeral. Cheta Nwanze is the lead partner at SBM Intelligence and heads the company’s research desk.

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Tuesday 21 April 2020

BUSINESS DAY

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Nigeria’s oil pain in ambiguous times

STRATEGY & POLICY

MA JOHNSON

efore the Arab-Israeli War of 1973, there was no hitches with the supplies of crude oil by members of the Organization of Petroleum Exporting Countries (OPEC). OPEC not noted for its pro-Israeli stance was outraged at what it observed as Western support for Israel and thus, flexed its muscle. OPEC unilaterally increased the price of oil by 70 percent to almost $35/barrel and stopped shipments to the USA and Britain. The effect was pronounced and shifted the balance overnight to oil producing countries. The price rise hurt; it was really painful. The crisis though relatively short-lived pushed many Western economies into recession. That is the way the price of oil fluctuates in the international market. So, Nigeria and other oil producing countries are hurt when there is fluctuation in oil prices. With global uncertainties arising from the spread of coronavirus, Nigeria’s fiscal worry is reported to worsen, as Bonny Light hits $12/ barrel on 17 April, 2020. While millions of barrels remain unsold. It is very painful. Anytime there is volatility in oil prices in the international arena, experts in the industry and economists have preached that Nigeria must diversify her economy and not rely solely on the proceeds from oil. Even the untiring former Minister of Finance, Ngozi Okojo-Iweala, and other notable Nigerians have been part of the debate that Nigeria must diversify her economy. In the book Reforming the

Unreformable: Lessons from Nigeria, Ngozi Okojo-Iweala says that since the oil-boom of the 1970s, the Nigerian economy has been highly undiversified. The forte of the former minister’s scholarship lies in her argument that “the overwhelming share of exports (96 percent) and government revenues (more than 75 percent) depend on oil. Today, the world is in ambiguous times bearing in mind the magnitude of uncertainties caused by the COVID-19. Regardless of ambiguities currently experienced, we need to tune our minds around a painful truth in what foreign affairs experts say may be the beginning of a series of cascading crises reverberating throughout the world. What will the world look like post-COVID-19? Some foreign affairs experts say that it is doubtful if the world would be back to anything resembling normal life. The novel virus is likely to have repercussions on world political trends as we witnessed after World War 2, during and after the Cold War, and post 9/11. The end of the Cold War in the early 1990 ushered in a new world. So, at the end of the COVID – 19 era, one will not be surprised to see a new world order emerge even as major powers find ways and means to manage the current economic and health problems together. What is important to Nigeria in this trying period is the fluctuating price of oil in the international market. The price of crude oil fell initially, in the international market due to a dispute between Russia and Saudi Arabia in the early part of the year. With coronavirus causing damages to humanity on one side and fallen oil price on the other side, we hope that the world will not be tipped into great depression of the 1930s. If there is great depression, almost all the oil states will be affected negatively. Even as the dispute between Saudi Arabia and Russia has been resolved, demand for oil has collapsed and may likely not recover immediately. Although some industry experts have predicted that oil may be heading south towards a ridiculously low amount of about US$ 10/barrel. On a more

serious note, I sincerely hope that this prediction will not come to pass. We need to consider the negative impact on Nigeria and a few other oil producing countries where the bulk of their revenue is from the sale of oil. If the prediction comes true, then one should be anticipating political unrest, refugees, and youth restiveness in a scale that has not been seen before. This problem has to do with the coronavirus-or, more specifically, the drop in Asia’s oil consumption that is being driven by the coronavirus outbreak. With depression in the price of oil, long-haul buyers in Asia do not want oil for now because of challenging freight payments and no real need for the barrels since demand has been significantly reduced. For our country, Nigeria, there is little storage space to store the commodity if demand for it is drastically low. Most scholars of history will recall one of the occasions when the price of oil fell to a ridiculously low level was when the former Soviet Union collapsed in the late 1980s. You may recall that it was Saudi Arabia’s oil policy that triggered the collapse of the former Soviet Socialist Republic. What did Saudi Arabia do in this case? Reports show that in 4 months, Saudi’s extraction rose from two million to 10 million barrels per day and prices plummeted from $32/barrel to $10/barrel. This was a death blow to the former Soviet Union’s economy. And ultimately, the command-style economy of the former Soviet Union crumbled. Saudi Arabia’s economy was also, affected negatively because of low oil prices. In 2015, there was oil crisis. Then, it was only 5 out of the 46 sectors of Nigeria’s economy that contributed significantly to the nation’s real GDP in the first quarter. In 2015, confirmed reports show agriculture contributing 19.79 percent, trade (20.08 percent), real estate (6.76 percent), and ICT (11.47 percent). Oil and gas which account for (10.61 percent) of GDP contributes about 70 percent of government’s revenue and almost 90 percent

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Regardless of ambiguities currently experienced, we need to tune our minds around a painful truth in what foreign affairs experts say may be the beginning of a series of cascading crises reverberating throughout the world. What will the world look like postCOVID-19?

of forex earnings. While the remaining sectors of the economy including manufacturing are reported to be weak with a contribution of about 10 percent to forex earnings in Nigeria. In 2020, the situation has changed. With a growth of 2.1 percent at the beginning of the year, the country’s economy is predicted by the International Monetary Fund (IMF) to contract by 3.4 percent during the remaining part of the year. An inflation rate of 13.3 percent as predicted will push more Nigerians into the unemployment market and this will broaden the poverty spectrum. In fact, the outbreak of coronavirus has worsened the economic situation of the country as many firms and individuals are in lockdown mode. Despite substantial oil earnings since 1970s, Nigeria in the year 2020 still remain mired in poverty, with high rates of adult illiteracy, maternal and infant mortality. The country was one of those in sub Saharan Africa that was unable to meet the millennium development goals (MDGs). With COVID-19 penetrating through the globe, Nigeria is likely not going to meet the 169 targets of the 17 components of the Sustainable Development Goals (SDGs) by 2030. Why? Nigeria is highly indebted, infrastructure is poor, power failure is a way of life, health care system is in shambles as we can see, and public educational facilities are an eyesore in most states, etcetera. The challenge Nigeria will face in the coming years after COVID-19 is how to manage its weak economy and provide for the needs of 200 million people out of which almost 100 million are poor. Economic diversification is inevitable. A successful diversification plan requires political will, commitment and consistent public policies. Above all, federal and state governments must respond to private sector needs if any inroads are to be made with respect to diversification. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

We need better exams

media outlet recently tweeted about a first-class graduate of Delta State University who developed a new type of face mask with beads when she realised that people might be having difficulties with breathing through the standard face masks worn for protection against Covid-19. Obviously, there were holes in her thinking and in the face masks, however, this media outlet lauded the beaded face masks as very innovative. As expected, this woke the comedians and professional “draggers” of Twitter from their quarantine-induced slumber. What does it say of the university if a first-class graduate could make a blunder like this? If a first-class graduate could think like this, then what should be expected from graduates with lower grades? Some people told the media outlet to take down the tweet as it was embarrassing, someone said “might as well snort the coronavirus like cocaine (than use the beaded face mask)”. This led to the age-long debate of “Can Grades Determine A Student’s Intelligence”. As expected, two uneven sides were created, the popular side swore that you can’t be mediocre and graduate with a first-class, the less popular side screamed with testimonies and anecdotes that a lot of first-class graduates have little common sense, they listed the names of popular brilliant people that dropped out of school. And as usual, this

debate ended in a stalemate as each team abandoned it to move to newer trends in the universe of Twitter. Personally, I think they were approaching the debate from the wrong angle, they were attacking the branches and not the root. The modern system of examination that is used to assess students is flawed. The modern concept of examination was invented around the late 19th century by the late Henry Fischel, an American businessman. Years before that, standardised testing was used in China. In the modern system of examinations, the teacher announces a particular date when he will test the knowledge of his students, usually at the end of the academic semester. Some teachers even give out areas of concentration from the syllabus. The students are given weeks to prepare for this exam, they read and memorise chapters from textbooks and also study collections of past exam questions. A lot of times, the students are lucky as many of these past exam questions recur. The problem with the modern system of examination is that it mostly tests the memory and cramming skills of the students, it tests how well they can regurgitate the paragraphs, definitions and formulas they crammed from textbooks, and the best crammer often comes out on top. Only a very few actually test the students’ knowledge and personal understanding www.businessday.ng

of the subject. During the weeks of preparation for the exam, every class would be filled with students memorizing words from textbooks that they hadn’t touched for months, students even develop innovative techniques to help them cram better, some use songs and some use acronyms. The teacher is well aware of this, many of these teachers also used these techniques when they were students. What I propose is to set up an impromptu exam instead of announcing a particular date for the exam. This will be effective in assessing what the students know and understand, and not what they memorised to forget after the exam. The modern concept of examination is inadequate if students’ study for the exam and forget everything after the exam. How many adults even remember what the Pythagoras Theorem is. The examinations for art students are even more flawed. Unlike mathematics where 2+2 = 4 universally, art is more subjective. A certain lecturer might be a fan of a certain style of expression and this preference often influences how he assesses his students. Although, several art schools have made attempts at developing more objective exams, much still needs to be done. People have argued for more equitable exams i.e. exams that test each student based on his strength. Develop specific questions

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OC George

for each student instead of testing a group of students with the same exam questions. The rationale is that the students have different interests and strength, so, the focus should be on that instead of irrelevant subjects. If a teacher notices that a student is better with technology than human biology, then, the exams should assess him based on that because if a tech-savvy student writes a biology exam and doesn’t do well, this would affect his overall grade which would be publicly used to judge his intelligence. This is a case of knotting a sock around the neck and choking the foot with a tie. I do not think we can or should eradicate examinations, they play a necessary role in our academic institutions, but the modern system of examination needs to be reviewed to make it more efficient. Email: ocgeorge.go@gmail.com

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BUSINESS DAY

Tuesday 21 April 2020

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Online disinformation and the African firm (2) Rafiq Raji

uggestions made about combating online disinformation include state intervention, making social media platforms liable for thirdparty content, and swamping fake news with the truth. State regulation of social media platforms and making them liable for content on their platforms have yet to produce desired results, however. Germany, Italy, Singapore and France are few examples of countries which have had little success in this regard. The third approach, which is that social media platforms should instead push alternative but accurate narratives to water down the potential influence of identified falsehoods, is seen as likely more effective. The “Related Articles” feature on Facebook is an example. Understandably however, there are concerns about how such related articles would be chosen. There are other ongoing initiatives as well. Facebook has entered into a fact-checking partnership with Reuters, for instance. However, “contagion is not slowed down by fact-checkers”. Still, the “designers of social media and search engines have the ability to alter the nature of contagion” (Shiller, 2019). And until the opportunity costs of not doing so outweighs the benefits, the purveyors of fake news would probably continue to have a field day. African governments increasingly keen on social media regulation African governments are increasingly irritated by fake news; whether they be from

local or foreign actors. Social media has become an effective tool for local propaganda by ruling and opposition politicians. Foreign governments are also finding online disinformation quite useful for their ends on the continent as well. There is evidence Russia conducted online disinformation campaigns in Cameroon, Libya, Madagascar, Mozambique, South Africa and Sudan, for instance. While estimates of the costs of online disinformation for Africa are not exactly known, the continent’s low resilience is not in doubt. Still, a need for control is understandable but fraught with dangers for what are still fragile democracies. Only recently, Amnesty International accused Somalia’s government of putting tabs on vocal local journalists by monitoring their activity online, and reporting them to enforcement units at the respective internet platforms, Facebook, in this case. And in February 2020, Ethiopia’s parliament passed a law that prescribes that the author of any internet post that incites unrest should do time in jail. Nigeria is also working on a law to curb internet misbehaviour. Understandably, there are concerns that these moves would stifle free speech. Foreign businesses operating in Africa who seek a legal recourse on the back of these laws risk being enmeshed in the unpleasant politics associated with them. In other words, the injured brand being repaired may suffer even greater injury. True, there are media laws that could apply in various countries, but African courts are generally not known for the quick delivery of justice. Simply put, firms operating in Africa would almost surely have to apply their own means to repair any damage from online disinformation. The issue is increasingly top-of-mind for African firms. According to a 2019/20 survey by Kroll, a global business intelligence and advisory firm, 67 percent of businesses in Sub-Saharan Africa (SSA) use brand in-

fluencers, 67 percent classify reputational damage due to a third-party relationship as a significant/high risk priority, and 60 percent classify adversarial social media activity as significant/high risk priority. And looking ahead five years, 58 percent of SSA firms worry about risks related to market manipulation through fake news. Edited version of article was first published by

Nanyang Business School’s NTU-SBF Centre for African Studies. References available via link viz. https//nbs.ntu.edu.sg/Research/ ResearchCentres/CAS/Publications/Documents/NTU-SBF%20CAS%20ACI%20Vol.%20 2020-17.pdf “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

Business continuity during and post-viral era

hat has just happened? “Corona virus just destroyed my business”, a CEO exclaimed! This is true for many CEOs and their businesses, whether partially or totally. There’s been a halt, a shock and an unseen enemy attack on your business, your customers, suppliers, employees and their families. In many cases where businesses have been forced to crash land, job, contract and business losses have occasioned. Business partners and alliances that had fuelled business travels have suddenly crashed. How apt is the celebrated poem by W. B. Yeats and Chinua Achebe’s book - “Things Fall Apart” ...the centre cannot hold; mere anarchy is loosed upon the world…” Nothing seems normal or makes sense again! Lockdowns have brought lockouts and many CEOs are also either locked in or locked up! This is a tragiconomy (an economic tragedy) presenting further volatility and uncertainties and hopefully not, suicides. The corona virus plague pandemic is not just a health crisis of monumental proportion— but also a business crisis or a nation’s economic crisis. It portends an imminent restructuring of the global economic order (Sneader and Singhal, 2020) In a recent business review, Lagos Business School (LBS) opined that the Covid impact could be dimensioned into four major issues or challenges. We have however made additional practical points. 1. Demand and supply side economic shocks - depressed consumers, users, clients, patients and suppliers of products and services, logistics trauma especially for imported raw materials, multiplier effects of lockdowns causing scarcity and vulnerabilities. 2. Global recession - resultant low demand for goods and worse for services, oil and gas shutdowns occasioning shortage in supply,

hyper-inflation. 3. Increased economic vulnerability - more volatile market situation, deepening uncertainty, poorer liquidity and investor apathy will raise interest rates and more challenges for SMEs to access funds. 4. Desperation of lead firms (firms that drive the value chain in terms of value addition and distribution) - they will resort to unorthodox means to survive e.g. price cuts, overproduction as evidenced by Saudi Arabia’s oil giant Aramco. 5. Crowding effect of SMEs and entrepreneurs - leading from above, survival actions of lead firms and multinational companies and large local enterprises (LLEs) will hit the cottage businesses and SMEs most. Additionally, as customers and clients reprioritise and rationalise their needs, certain frills and luxuries will be cut out. We hope this works for the over-bloated ‘weddings and event business market’ - event centre rates, “aso-ebis”, exquisite decorations etc. may likely be areas to rationalise (but don’t dare Nigerians!) 6. The health-economy propinquity - simply expressed as life-money connection (a Catch 22). Which one comes first? We’ll bet you know it is life! Now dawning on us is the gross neglect of the health infrastructure, personnel and services. No economy (or business or family or military) can thrive without a healthy workforce. Without mincing words, we need to reprioritise and fund vulnerable pillars like health, education and food sectors of the economy as basic givens to improve wellness of the populace and rack up with the developed nations. Therefore, in this new reality, we should witness a dramatic restructuring of the economic and social order in which business and society had hitherto operated. Whoever heard of *social distancing* in an era that is wholly anthropological, creating juggernaut platform businesses the

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likes of Facebook, Amazon, Alibaba, Twitter, WhatsApp etc. Following recent events, it thus seems that Quarter 1 (Q1) goals or results are already in the bag by many businesses but Q2 going into Q3 looks certainly hampered. We have to lower our expectations as the month of April is now totally locked out with Nigeria now locked down for total 30+ days, meaning no revenue or income earned by businesses and people. The economy should possibly crank by middle May before hopefully stabilising towards June. Chinese economy is bouncing back, Denmark wants to return gradually and US is debating when its economy will return. With several layoffs and innovations of working from home (WFH), a lot of changes in perceptions, work attitude and human resource management will present a new normal that was hitherto unprecedented. Finding a Path out of the Maze Sneader and Singhal in similarity with the recent works of Boudet, Gordon, Gregg et al (McKinsey & Company) claim the answer is a call to act across *five stages* or 5Rs, leading from the crisis of today to the “next normal” that will emerge after the battle against corona virus has been won i.e. post-viral era. In summary, they opined each business must 1. Resolve - Recognise and manage the crisis in the new realities of social distancing working from home and improving employee health and wellness. We must support our strategic resources - employees and customers. The times call for more understanding and market research should be timely to know what motivates your people and customers. Some folks who were technology averse are already embracing online shopping habits. The technology savvy ones will be more relevant and expected to lead in the new normal. A proper and holistic risk assessment will

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Tunde Onadele

be valued to dimension the current situation and the future. 2. Resilience - Need to build cash reserves. Cash is still king! Avoid loans and heavy exposure at this time. Drive revenue generation and limit spending. These are not times for frills, luxuries and business pleasures. You might want to reconsider your premium highflyer status - first class etc. Astute management of cash or its investment can be a big revenue line outside main operations. Your customer service must be superior to competition. This is the time to sustain current clients and not lose any. 3. Return - Plan ahead for the recovery. Anticipate that it will come quickly by planning all scenarios to push button stage. While top two stages are survival, this is a good attempt to expand your view or seek new customers or line of business. Returning businesses to operational health after a severe shutdown is extremely demanding and challenging. It needs a healthy CEO or Business Manager to manage the pain and surprises. Additionally, you might need veterans (experienced young retirees) to help re-enact success.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Onadele is the CEO, MPower

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Tuesday 21 April 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun

One more term for Akinwunmi Adesina at the African Development Bank Africa must leapfrog, and the AfDB should lead in providing the enablement

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

frican countries face many challenges in the economic front. Recent developments have worsened the situation and hastened the urgency of skilled management. With the effects of coronavirus and economic dislocation of most African economies, the African Development Bank needs at its apex a steady hand based on competence, experience, exposure, and vision. The African Development Bank is the foremost development finance institution on the continent. AfDB seeks above all to “spur sustainable economic development and social progress in its regional member countries (RMCs), thus contributing to poverty reduction”. It would do this by “mobilising and allocating resources for investment in member countries and providing policy advice and technical assistance to support development efforts”. Several compelling issues require concerted management with the technical and financial support of a strong development finance institution. They include the management of African econ-

omies post-covid19, implementation of the goals of the African Continental Free Trade Agreement (AfCFTA almost a year after it came into force and diversification as well as strengthening of the economies of Africa. The call is for tried and tested leadership. BusinessDay joins the Economic Community of West African States as well as the Executive Council of the African Union to call for and support the re-election of Akinwunmi Adesina as president of the AfDB. The eighth president of the AfDB, Akinwunmi Adesina, brings to bear wide-ranging experience in economic and financial management. His pedigree includes handson management of agriculture in Nigeria. Agriculture is one of the significant areas of concern going forward in Africa. He also has a sound theoretical and practical experience and exposure to the most pressing issues in development, including the geopolitics of finance and economics. The days ahead of African states demands focus on ensuring the economic fundamentals follow a positive path. The AfDB envisions the transformation of the African continent and its economies.

Its five-point operational priorities of infrastructure development, regional integration, private sector development, governance and accountability as well as skills and technology deserve support. We believe it has considered well the particular focus areas of fragile states, agriculture and food security. Since 2015, the African Development Bank has witnessed strong leadership and strategic focus on the core issues confronting member countries. As the 55 ministers of member states of the Executive Council of the African Union noted in February 2020, shareholders of the AfDB approved during Akinwunmi’s first term a landmark $115 billion capital increase in late October. The increase in the capital base, from $93 billion to $208 billion, signalled strong support from the Board of Governors in the continent’s foremost financial institution. AfDB has maintained a high level of accountability and transparency with Adesina as the head. As AfDB stated in response to misguided criticism by the president of the World Bank “our institution was ranked 4th most transparent institution in the world by the 2018

Publish What You Fund report”. ECOWAS hinged its endorsement of Adesina on at least two key considerations. First is the involvement of the AfDB “in the provision of technical and financial interventions to the West African region”. Another is for the implementation of numerous projects and programmes across the region. The African Development Bank has an investment portfolio of $20billion in West Africa. Adesina’s management of the African Development Bank has enhanced its credibility and brand equity. It is a lender in whom member countries repose confidence for technical and financial depth, what with its enhanced capitalisation necessary to face the challenges of now and the future. When they meet in May 2020, we encourage representatives of regional member countries to vote for Akinwunmi Adesina. Then charge him to ensure that the elegant prose of its Strategy for 2013–2022 translates into actual projects, programmes and activities that enhance Africa’s development and sustainability in a changing global economy. Africa must leapfrog, and the AfDB should lead in providing the enablement.

HEAD, HUMAN RESOURCES Adeola Obisesan

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

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Tuesday 21 April 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

UACN records N9.25bn loss in 2019 amid surging cost of sales …selling and distribution expenses ballooned 39percent …administrative expenses increased 25percent OLUFIKAYO OWOEYE

igeria’s oldest conglomerate, UACN’s 2019 revenue for the period ended 31st December 2019 increased 12.5 percent to N79.2billion from N70.47billion in 2018, cost of sales surged 9.3percent to N62.57billion from N57.23billion leaving gross profit at N16.6billion from N13.24billion in 2018. Loss for the period stood at N9.25billion from N9.53billion loss recorded in 2018 due to discontinued operations. Selling and distribution expenses increased 39percent to N6.45billion from N4.64billion, administrative expenses increased 25.14percent to N6.57billion from N5.25billion in 2018. Finance Income increased

marginally to N2.78billion from N2.76billion, finance cost jumped to N991.17million from N610.6million in 2018. Revenue from its reporting segments show that while revenue from its Animal feeds, made up of business units involved in the manufacturing and sale of livestock feeds and edible oil; Paints which comprises of business units involved in the manufacturing and sale of paints products and other decorative; packaged Food & Beverages made up of a business unit involved in the manufacturing and sale of bottled water, snacks and ice-cream, all had an increase in revenue and profit before tax while its Quick Service Restaurant (QSR) made up of a business unit managing Mr. Biggs outlet was again the usual laggards as it recorded a slight drop in profit and a loss

for the period. Revenue from Animal feeds and other edibles increased 16.2percent to N51.8billion from N44.57billion in 2018, paints segments printed 4percent revenue increase of N11.02billion from N10.59billion; revenue from packaged food and beverages stood increased 8.27percent at N17.54billion from N16.20billion; revenue from QSR stood at N1.50billion from N1.27billion it however recorded a loss of N75.20million from N59.23million recorded in 2018. Further breakdown of expenses shows that marketing, advertising & communication expenses ballooned 28percent to N820.58million from N635.58million in 2018. Sundry office expenses also skyrocketed 34.78percent from N166.7million in 2018 to

N224.69million in 2019. Directors’ emoluments also surged 27percent to N699million from N549.51million. UAC in September 2019, announced plans to restructure and recapitalize its real estate subsidiary UACN Property Development Corporation (UPDC) following decline in assets value and rental rates on the back of an economic contraction, UPDC continues to struggle as it continues to sink in losses since 2016. The debt-laden real estate subsidiary also has cash flow challenges to meet its obligations. The recapitalization involves an equity capital raise of N15.96billion by way of rights issue to repay the company’s short term debt obligations which stood at N22.84billion at the end of June 2019 and deleverage its balance sheet.

L-R: Dapo Olanrewaju, assistant manager, JNSD Category; Amit Aneja, head JNSD category; Deepanjan Roy, managing director, CHI Limited; Toyin Nnodi, marketing director, CHI Limited, and Ademola Mafikuyomi, brand manager, JNSD Category, during the launch of Chivita Ice Tea and Chi Exotic in new cool Cans.

AVIATION

NAHCO donates medical items to Lagos State in fight against COVID-19 IFEOMA OKEKE

igerian Aviation Handling Company (NAHCO) has donated various medical items to the Lagos State Government, as parts of its Corporate Social Responsibility (CSR) to aid in the fight against the ravaging Covid-19 virus pandemic. This is as the company lamented that the pandemic had impacted negatively on its finances, but assured that the country would overcome it with the cooperation of the citizenry. Speaking at the Lagos State Ministry, Alausa, Ikeja, Saheed Lasisi, group executive director, Commercial and Business Development, NAHCO, said that the ground handling company supported the government because of its attempt at curbing the spread of the deadly virus in the state and the country. Lasisi also lauded the Federal Government for being proactive in combating the pandemic in the country, noting that the steps so far taken by the government had help to reduce its havoc in Nigeria. He emphasised that the proactive stands of the government was responsible for the low number of cases recorded in the country and hoped that the number would continue to decrease in the country. He said: “As a corporate responsible company, we saw what is happening around the country, we are amazed. And we think we needed to support the Lagos State Government, which has really done well to tackle the pandemic. “In our own little token to support the fight against the pandemic, we decided to

give the state government the little that we can. “To those people who still think the pandemic is a gimmick, I think they are ignorant or intend to play politics with it. This is not a joke. If something has affected over two million people around the world with about 130,000 deaths, it shows this is not a joke, but real. “So, everyone should go back to the drawing board, listen to our government and play safe. People should stop playing games with ignorance, it won’t lead us anywhere.” Some of the items donated included 1,500 pieces of hand sanitisers, 43 packs of masks and 100 pieces of Overall Protective (Personal Protective Equipment). Lasisi explained further that the company would also expand its CSR to the Federal Capital Territory (FCT) in the coming days, stressing that it would further donate more items to the Lagos State Government to boost its performance in fighting the virus. He appealed to Nigerians to adhere strictly to the directive of the government, citing Italy and Spain as some of the nations the pandemic had caused grave havoc as a result of non-adherence to government guidelines and rules. Lasisi decried that the pandemic and eventual lockdown had affected the company’s projection for 2020, noting that aviation industry was the worst it by the crisis. “You should know that the number one industry that this thing would affect is aviation. If aircraft doesn’t fly, no one in the industry makes any amount of money, which means about 90-95 per cent of our revenues would be eroded.

COVID-19: APM Terminals’ Apapa, WACT increase contributions to over N300m AMAKA ANAGOR-EWUZIE

fter paying an additional N200 million, A P M Te r m i n a l s Apapa and the West Africa Container Terminal (WACT) Onne have jointly committed more than N300 million to the fight against the spread of the coronavirus disease also known as COVID-19 in Nigeria. Recently, APM Terminals Apapa, Nigeria’s leading terminal operator, donated additional N150 million into the Federal Government’s COVID-19 Relief Fund Ac-

count created by the Central Bank of Nigeria (CBN) while WACT paid N50 million into the same account. APM Terminals Apapa also donated 1,000 units of nose masks; 500 disposable protective coveralls; 400 litres of hand sanitizers; protective goggles and hand gloves to the Lagos Port Complex of the Nigerian Ports Authority (NPA) towards curtailing the pandemic. This new donation into the COVID-19 Relief Fund Account and the donation of safety items are coming barely two weeks after the com-

pany donated USD$200,000 (over N75 million) into the United Nations in Nigeria Basket Fund for the fight against COVID-19 in Nigeria, and committed another N25 million on community awareness through radio, social media as well as fliers to sensitise the Apapa community on how to curb the spread of the pandemic. Martin Jacob, managing director of APM Terminals Apapa, described the fight against COVID-19 as one battle everybody must join hands to fight. “And with the strong leadership being pro-

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vided by the Federal Government, Nigeria will overcome this difficult time.” Jacob said the items donated by the company were aimed at preventing the spread of the virus at the port, since ‘there is currently no vaccine for it’. “The only option available to us this time is prevention. The responsibility lies on all of us to protect ourselves and render all possible assistance within available resources. The basic precautionary measures to take such as not touching our eyes, nose, or mouth; regular washing of

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hands with soap and water or alcohol-based sanitizer; maintaining social distance and avoiding large gatherings must be respected by all including at the port where we provide essential services,” Jacob said. Daniel Odibe, general manager, External Relations of APM Terminals Apapa, who handed over the nose masks and other items to the Port Manager of Lagos Port Complex Apapa, Funmilayo Olotu, said all hands must be on deck to curtail the spread of the deadly virus. “As a responsible corpo@Businessdayng

rate citizen of Nigeria, APM Terminals Apapa has complied with the directive of the Federal Government and the NPA to maintain continuity in port operation. Our terminal is in full operation. We have also adopted stringent safety measures in line with the guidelines of the World Health Organisation (WHO), the Nigeria Centre for Disease Control (NCDC) and the Port Health Services to ensure that the supply chain remains uninterrupted and availability of essential supplies is maintained in the face of the pandemic,” he said.

Tuesday 21 April 2020

BUSINESS DAY

cityfile

‘One Million Boys’ and Covid-19 lockdown of Lagos, Ogun JOSHUA BASSEY

esidents have refused to be persuaded by repeated assurances from the Nigeria Police Force as they (residents) continue to defend their territories against threats of invasion and attack by ‘1 million boys’, a group of gangsters allegedly terrorising communities in Lagos and Ogun States. In the last three weeks the media have been awash with reports of activities of the gangstersmostly youths, moving from neighbourhood to neighbourhood, attacking, robbing and breaking into shops in what some people have linked to hunger occasioned by the Covid-19 lockdown. In areas like Agege, Egbede, Pen Cinema, Iyana Ipaja, there have been tale of woes as residents complain they no longer sleep with their two eyes closed due to rising cases of robbery. “We are in the darkness because there is no electricity. The 1 million boys and miscreants are attacking us. We have been calling the police for the past one hour they said they are coming but they are nowhere to be found. We are the one defending ourselves, what’s going on, they put us in isolation without protection,” said a voice in video that went viral last week. It was same lamentation from residents of Pen-Cinema, Oremeji, Ayanmeji, in Agege area of Lagos, as they complained their lives were in danger. “These boys are about breaking into homes, we are running helter skelter now. Please let somebody help us,” cried one of the victims residing in Agege area, who identified herself as Modinat Ajayi. According to reports, the invading robbers, mainly youths, armed with dangerous weapons operated from house to house on Sunday evening, April 12. They were said to have regrouped on Monday, April 13, but were repelled by youth associations in the area, complemented by police teams who moved in swiftly.

Security agencies comprising Lagos State Taskforce; Rapid Response Squad (RRS), Divisional Police and the chairman of Agege local government, Ganiyu Kola Egunjobi, were said to have responded to the distress calls by the residents. Chairman, Lagos State Taskforce, Yinka Egbeyemi, later told journalists that security operatives moved in and brought the situation under control. Spokesperson of the Lagos police command, Bala Elkana, in a statement on Saturday, April 11, said 36 miscreants who attempted to rob people in areas bordering Ogun and Lagos were rounded up by the police. According to reports, other areas where the robbers launched attacks include Agbado- Ijaiye, Dopemu, Orisunbare, Ejigbo, Ajegunle, Mile-2, Meiran, Iju-Ishaga. In a similar situation, residents of border communities in Ogun State on Monday, April 13, sent a save-our-soul to Governor Dapo Abiodun to beef up security around communities bordering Ogun with Lagos State. The group, under the aegis of “Coalition of Border Communities Development Associations (CBCDA) in Ogun State”, made the call following recent incessant robberies and unrest in their communities, especially in the Sango-Ifo axis. They www.businessday.ng

explained that increasing incidence of violence, robberies and cult clashes within the Sango-Ifo axis have deprived the citizens their sleep. In a statement signed by the coalition chairman, Samuel Ayo-Oloye, and the secretary general, Adekola Adeseyi, they noted that the recent incidents have shown that the governor and state police command have not done

Itele, Atan, Ilogbo, Singer, Mowe have been killed.” At a media briefing to give an update on the Covid-19 pandemic on Tuesday, April 14, Lagos State governor, said over 100 suspects had been arrested. Beyond the arrests, Sanwo-Olu said security has been further beefed up with the deployment of additional security personnel comprising the police and

‘‘

These boys are about breaking into homes, we are running helter skelter now. Please let somebody help us enough to protect lives and properties of residents in the border communities. They alleged that the spate of the robbery in the areas which during the lockdown has left no fewer than 15 residents dead while urging the government to live up to its primary responsibility of protecting the lives and properties of the citizens. “The increasing rate of robberies in the last few days have been worrisome, from our gathering more than 15 house owners in communities like: Ifo, Sango Ota, Lafenwa

soldiers to ensure the safety of the estimated 21 million population of the state. “We have just concluded an emergency security council meeting in which all the various heads of the state’s security agencies were present. At this meeting, we discussed the increasing reports of crime and criminality across the metropolis as cultists, miscreants and other criminals who sought to take advantage of the lockdown to unleash havoc on our people. “One of our key responsibilities as an adminis-

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tration is the safety and security of the lives and properties of all citizens, and we will not abandon this responsibility at any time. There is no room whatsoever in Lagos State for criminal gangs or miscreants of any kind,” said Sanw-Olu. In the light of this commitment, the governor said the over 100 suspects arrested on account of disturbances would have their date in court. “Let me assure you that those miscreants that you may have seen in the videos going viral are not hungry people; they are not acting on the basis of hunger. They are opportunistic criminals, and they will be treated as such by the law enforcement agencies.” He further explained that the state government has been in constant communication with the Federal Government on the issue of insecurity, and that the police authorities have deployed a Deputy Inspector General of Police (DIG), who is a seasoned crime fighter, to Lagos to coordinate and superintend over a superior strategy to curtail and stem the perceived and actual threat of violence. “With this revised strategy, you will see an increase in mobile police deployment in all trouble spots in the metropolis; as well as the police intensifying their patrols @Businessdayng

around residential areas, boundary communities, and other critical areas of activities during this lockdown period. This will also be carried out in conjunction with other security agencies – Army, Navy, Airforce and Directorate of State Security Service,” said Sanwo-Olu. But despite these assurances, residents say it is too risky to leave their safety to chances as the ‘1 million boys’ still lurk around. On Thursday, April 17, the neighbourhoods of Iba and Obadore, in Ojo area, as well as Egbeda, Ikotun and Igando, in Alimosho local government, were held down for hours, as residents in their hundreds, armed with knives and cutlasses thronged the streets to defend their territories as the ‘I million boys’ were said to have sent a letter of intent to attack the areas. Driving through the surging crowd at Iyana School bus stop on LASUIgando road, however, nobody could point to who the ‘I million boys’ were among the crowd, but everyone held their knives ready to attack imaginary enemies. Blaring siren from police patrol vans further charge the atmosphere as families, overwhelmed with fear, locked up their gates to be safe from attack that nobody could tell where it was coming from.

Tuesday 21 April, 2020

BUSINESS DAY

Media business Marketing agencies in for bigger trouble as Covid-19 hits hard on clients … Collaboration seen as survival strategy Daniel Obi

ome of the major sectors hard hit by the Covid-19 effects are aviation, vehicle transport business, hospitality, travel and tours, event centers and the downstream oil sector. Many airlines, both local and international have grounded their fleet while commercial vehicles, inter and intra city busses have stopped operation on account of rules on checking the spread of Covid-19. The Nigerian hospitality sector, which is still recovering from the traditional lull in business between January and early February of every year, is facing even more difficult challenge occasioned by the coronavirus (Covid-19) pandemic. From occupancy rate of between 50-60 percent in late January, hotels are now

recording below 25 percent, the worst in the history of the sector due to lockdown over coronavirus. The pandemic is also affecting the downstream sector. The operators are battling with fundamentals such as

low margins, source of forex, rate of forex and transportation logistics. Education sector is also affected. What all this means for marketing communication industry is that media agencies, both creative, PR and

outdoor, among others that have clients in these sectors as primary source of business sustenance are also in for hard time. This is in addition to heavy burden placed on them by the difficult operating environment occasioned by slow

Competition: Expert advises marketers to fuse technology into strategy

ny marketer that is yet to embrace technology which has become an integral part of business or delays in fusing technology into strategy will lose out in the competitive environment. This is as technology increasingly upends all aspects of business, including marketing. Over time, technology has impacted the ability of marketers to collect and reach consumers in different ways. With recent understanding of the role of technology in helping the growth of industry, business owners are progressively adopting it and Seni Adetu, former managing director of Guinness Nigeria told marketers recently to follow the trend as marketing is crucible part of business. Adetu who spoke on ‘The future of marketing in a technology driven world’ at National Institute of Marketing of Nigeria, NIMN fellows dinner and awards night recently noted that “the way we are doing things in the past will not suffice in the new world”. Challenging marketers about the things they need to be aware of in terms of

how technology is shaping the world, marketing inclusive, Adetu who is now the Group CEO of Algorithm Media Limited said technology and leadership will define the future of marketing anywhere in the world. He believed that future of marketing will leverage Artificial intelligence, virtual reality and Internet of Things, IoT for effectiveness. “We need to ramp up technology and it will take out all the wastages, inefficiencies in the way we operate manually. We can therefore convert our manual capacity and resources into other things and use

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technology to advance things that don’t need men to do”. Assessing Nigeria’s growth and technology, Adetu who introduced Orijin drink in Guinness said that for Nigeria to grow higher, the country needs to identify the areas where technology can operate in place of humans and use humans to drive the transformation we need for Nigeria. In terms of leadership, he said one of the things marketers should focus on is what they can change in their marketing strategy and leave what they cannot change. “A lot of times, people tend to play the blame game. Peo-

ple tend to focus on things outside of their control like weather and security. The risk of doing that is they leave the things that they can change and shape”. He also told marketers to understand that less is more. This means that marketers can execute few strategies to their advantage than planning more strategies. While advising them to measure themselves against the best, Adetu who also worked with Coca Cola said intuition at times is as good as insight. “You may not generate all the insight you need and in those circumstances, use your intuition”, he advised. Speaking earlier, the President of NIMN, Tony Agenmonmen who said that the institute is steadily on the rise, noted that over the past years the council has re-engineered the NIMN brand equity. At the night, the body inducted about 77 leading lights in the marketing community as fellows. Agenmonmen, said the new set of awardees comprises men and women who have distinguished themselves in the area of marketing in their various organizations.

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economic growth at 2.27%, marketing communication budget cut, multiple taxation, delayed payment by clients and competition. It is expected therefore that companies operating in hard hit sectors are likely to sit down with their media agencies for review of marketing contracts, renegotiation of payment due to the lockdown and slow business over Covid-19, says an analyst who prefers anonymity. The analyst who looked at this scenario said this is where collaboration and alliances among media agencies becomes significant. “A prealliance between agencies in different specialties such as creative, digital, PR and who separately have clients in different sectors is expected to pay off now” This collaboration, it is believed will enable agencies that are facing difficulty with their clients over Covid-19 to leverage opportunities with

agencies that have clients in other sectors such as banking, Telecom and FMCG that are not so much affected by the pandemic. Mergers and Acquisitions are yet to gain popularity within the marketing communication industry in Nigeria as many of the operators value it in the theoretical terms while others are satisfied with CEO title than growing their businesses. Across sectors, much integration is yet to take place. A report in BusinessDay said ‘The cases recorded so far are government policy-induced. For instance the Nigerian Enterprises Promotion Act 1973 compelled foreign investors to sell some selected companies to Nigerians. Much integration had not been recorded in the Nigerian economic scene, and if it has, it has not been pronounced until 2005 when major alliances were recorded, especially in the banking industry”.

COVID-19: Eat’n’go rolls out initiative to provide food for essential workers

midst the rise of the Covid-19 global pandemic, Eat’N’Go limited, master franchisee for Domino’s Pizza, Cold Stone Creamery and Pinkberry Gourmet Yoghurt has rolled out its charity initiative to support the Nigerian government in combating COVID-19. This initiative has allowed the firm provide food to essential workers who are at the frontline in combating the spread of the virus. This initiative which commenced since March, according to a statement, has since provided boxes of large Domino’s pizza, cups of Cold Stone ice cream and Pinkberry Yoghurt to different institutions including the Nigeria Centre for Disease Control (NCDC) Yaba Centre, Oyo state ministry of health, and various Police stations across the country. In addition, Eat’N’Go has committed to its support with food supplies, until the Covid-19 situation has been contained. Speaking about the initiative, Patrick McMichael, Chief @Businessdayng

Executive Officer, Eat’N’Go Limited in the statement, acknowledged the sacrifice and diligence of all medical practitioners, the government as well as other essential workers who have put their selves forward to manage this pandemic. “We are thankful to everyone at the forefront of this battle, doing all it takes to end the pandemic. As a firm that holds the wellbeing of others in high esteem, we are committed to contributing our quota to ensure you remain healthy throughout this period, which is why we have decided to drive this initiative“ Also commenting on the initiative, Oyo state Commissioner for Health, through T.O Ladipo, Incident manager, Oyo state COVID-19 Emergency response team, extended his appreciation to the firm. “We sincerely appreciate your relentless support and commitment in the fight to contain the spread of the virus in our communities, through the provision of refreshments for the Oyo state emergency team “he said.

Tuesday 21 April, 2020

BUSINESS DAY

ADVERTISING Covid-19: Nigerian media urged to focus on origin, vaccines, masks Daniel Obi

igerian media has been urged by analysts to focus on the origin of Covid-19 and provide more details about the masks and vaccines used for recovered patients. This is as much of Nigerian media report on Covid-19 has concentrated on rising cases and deaths resulting from the pandemic with less information about the origin, vaccines used for recovered patients, the efficacy of masks for protection and the behaviour of people living around recovered or death patients. Reports or interviews from the medics handling the cases in hospitals are scanty in the media as both traditional and social media have relied on official information on the pandemic in Nigeria. Some media experts who spoke to BusinessDay however commended the overall media coverage of COVID ’19 by Nigerian media but said more still needed to be reported. The analysts said that more is still needed from the media to dig deep and interrogate certain actions or inactions to slow the progress of the pandemic which has tested national systems including the health sector and Nigeria’s preparedness to such sudden developments. “The media has lived up to expectations of the public”, says Charles Igbinidu, Managing Director of CFO and Associates Public Relations. He agrees that though there is a level of tension over avalanche of information but said without the information more Nigerians would be ignorant about the disease. To the CEO of Neo Media, Ehi

Braimah, the coverage has been appropriate and professional excluding the fake news dwelling on inaccurate COVID’19 myths. In his comment, John Kokome, a public affairs analyst also agrees that the Nigerian media is doing its best within the circumstance it has found itself but said that the media can do more by digging deep. In the area of vaccines, it is noted that the media has under-reported it and provided less information about the drugs used to treat the recovered patients. Reports indicate that there have been about 500 confirmed coronavirus cases and 17 deaths in Nigeria, while 152 people in the country have recovered after contracting Covid-19. A report monitored in Worldometer site also put the total number of confirmed coronavirus cases worldwide as last Friday, by 1pm at 2,172,031. Out of that figure, 146,201 people have died from Covid-19

and 554,232 have recovered from the disease. Health reporters may have distanced themselves as the pandemic is a delicate one and easy to contract. A report issued by Meltwater and published by Bizcommunity also underscored the view that as Covid-19 continues to spread across the globe, much of the information reported has had to do with the rising number of confirmed cases, the number of deaths and possible preventions. “But did you know that since 1 January 2020 to date, there have been 26.1 million news articles, globally, reporting on the coronavirus, but just under 6,000 of those news articles are talking about a possible vaccine?”, the report said. Meltwater a company that exists to help companies make better, more informed decisions based on insights from the outside. “The sale of masks has seen a large increase in the wake of the

global pandemic. And while it has been talked about in the media as a preventative measure, few news articles talk about how face masks have become a symbol of health in these times. “As one of the trending themes to emerge from ‘coronavirus’ and ‘recoveries’, ‘face masks’, ‘mask and gloves’ and ‘health mask hands’ refers to how these items, mainly associated with essential workers, are now playing a big part in preventing the spread of the virus among nonessential workers”. Since the outbreak of the virus mid- December, 2019 in China, media consumption has increased according to a study by Kantar, a global firm that characterizes itself as “data, insights and consulting company”. The firm has more than 30,000 employees working in 100 countries in various research disciplines. But among all the media news channels which have gained in usage, traditional nationwide broadcast and newspapers are the most trusted sources of information, the Kantar report said. The report said 52% of the 25,000 consumers across over 30 countries polled identified traditional media (broadcast and newspapers) as ‘Trustworthy’ source than social media. “Government agency websites are regarded as trustworthy by only 48% of people, suggesting that government measures are not providing citizens around the world with assurances and security” while social media platforms are regarded by only 11% of people as a source of trustworthy information. Companies are also leveraging the increase in media consumption to promote their brands, tying their media activity to Covid -19 campaigns.

COVID-19: Jobberman offers free job listing for businesses in Nigeria

alent recruitment agency, Jobberman has announced that the Job Listing option on its platform will be available free of charge for the next three months to businesses of all sizes and industries during the period of the pandemic with the launch of its campaign titled, #UnityInAdversity. In a statement, Hilda Kragha, Jobberman CEO of the company recognised that “These are challenging times for everyone and there’s a lot of uncertainty right now,” But we want employers to know that they don’t have to do it alone. Our customers and the economy that we currently operate in, face an unprecedented challenge with COVID-19 and we have a duty to our country and our customers to help their businesses run. “Our absolute priority is to be a

reliable partner and maintain a strong relationship with our customers. Now more than ever, employers hiring need the right hire and Jobberman will be the beacon of hope and sup-

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port. We were here for our customers in the last 10 years and will be here in the next 10 years,” she said. Organizations across Nigeria are doing their best to support the

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country during this pandemic - from donating hand sanitizers, masks and fund relief to the government, Nigerians have shown unity in adversity and participated to stop the spread of the virus in Nigeria. This campaign is in line with Jobberman’s commitment to support business continuity and ease the burden of organizations encountering strain and deficit in this unprecedented time. The free job listing will be available to businesses for the next three months, between April 7, 2020, and June 7 2020, and it gives employers access to the largest pool of qualified candidates in Nigeria. In addition to this, Jobberman will be offering discounts on its premium products, for organizations in special need and targeted discounts for clients in the healthcare and critical sectors. @Businessdayng

Paga selected for Ping An Cloud Accelerator in China

aga, the payments company with operations in Nigeria, Ethiopia, and Mexico, announced that it has been selected for the 4th Cohort of the Ping An Cloud Accelerator, China. The five-month program was created by Ping An Group, one of the world’s largest insurance and financial institutions with headquarters in Shenzhen, China. Jerry Quan, General Manager of the Ping An Cloud Accelerator, in a statement commented; “We are excited to have Paga as part of our current cohort for the program. Its goal of building formidable emerging markets-focused payments business resonates with us, and we are impressed with its progress to date. There are many opportunities to build synergies with Ping An’s technology subsidiaries and external corporate partners, and our engagement with the Paga team thus far has been great. I expect that this is the start of larger collaborations to come between our organizations.” Paga was selected alongside 10 other companies from across the world including China, the United States, Spain, and Israel. This highly selective program, with an acceptance rate of only 2%, focuses on 5 verticals: FinTech, HealthTech, Auto Tech, Real Estate Tech, and Smart City. Participating companies in the Ping An Cloud Accelerator are growth-stage businesses that will explore collaborations with Ping An subsidiaries. Jay Alabraba, Co-founder and Director of Business Development, Paga, commented in the statement “We are proud to be chosen to be part of the Ping An Cloud Accelerator. Our relationship with the Ping An Group offers us the forum to experiment with cutting-edge tools within their global portfolio. The program, which focuses on companies with already strong traction also presents the opportunity for our team to work closely with other emerging leaders in technology, finance, health, and other sectors. We are proud to have been selected for the program. The timing is also great, given our expansion to new markets and the introduction of more services on Paga.” One of the goals of the Ping An Accelerator program is to strengthen interpersonal relations across borders, which is something that Paga greatly values as we build an open payments ecosystem. Ping An’s advanced FinTech arm, OneConnect, that offers solutions in the areas of eKYC, fraud prevention, artificial intelligence, and machine learning, identified the synergy in objectives of both companies and the opportunity to work together.

Tuesday 21 April 2020

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

How technology infrastructure is enabling the new normal, post Covid-19 Jumoke Akiyode Lawanson

hether we like it or not, there is certainly going to be a new normal - post Covid-19 pandemic, and a lot of things will change as regards to the way we work and carry out business activities across the world. Although we would gradually move back to what we used to be, there are certain other things that will change the way we work, think and operate. Things like working from home which has been popularised during the lockdown, as a result of the Covid-19 crisis, will now become even more acceptable. However, moving from the old to the new doesn’t necessarily mean leaving the old, but is a combination of the new and the old which optimises the way everything works to give us choice. Experts say this is going to be very critical as the world starts to determine how the world – post lockdown, will operate in the future. During an online presentation with technology journalists at the weekend, Ayotunde Coker, managing director of Rack Centre said that only seven percent of workers in the United States of America had the option to regularly work from home before the Coronavirus pandemic. “There is now increased dependence on technology. We now have business communications and people hosting webinars. It is really amazing how technology is changing some of these expectations. The

other key thing that this pandemic has also shown, is the importance of business continuity plans. This has shown that some organisations that have their own data centres and servers in house are finding it difficult t operate or just cannot operate at this time because all of their servers are down or now, they’re thinking of business continuity of the infrastructure they have rather than thinking of the business continuity of the market they serve, and having the agility to change and restructure their businesses to the new normal,” he said. Giving more details on the way technology infrastructure is enabling changes in business as a result of the

pandemic, Coker sited that Microsoft Teams had 32 million active users before the lockdown, but is now recording 900 million meetings daily, while Zoom which had 10 million daily users before Covid-19, is now seeing 200 million daily active users. “Internet usage has really gone through the roof. Another amazing thing is the elasticity of the global network that has actually been able to sustain the significant increase in the use of social media, moving pictures, and increased amount of business use – a new found place for the use of technology. All of this is actually underpinned by global infrastructure. In the middle of this global

infrastructure is the world of connectivity,” he said. With the new normal, people are now starting to know the importance of reliable data services that have low latency and high performance. Different aspects of technology and innovation have to be combined to foster the new normal, post Covid-19 era, and so broadband and the underpinning infrastructures that support broadband including data centres are key. In Nigeria, Coker suggests that we optimise to areas were we have commerce and key hubs, and innovate on technologies that will allow us satellite technologies, as we are now

starting to have low level orbit satellite technology coming in to reduce latency. “In certain instances, having a level of broadband is good enough as a starting point, but good enough is not always the best when we go forward that’s why I believe that giving what we see now, we really have an opportunity to innovate a lot more in how we get broadband out into the rural areas and not just Lagos and Abuja,” he said. Apart from the volume increase Nigeria has with telecoms, data movements and the use of mobile, the strength of our technology infrastructure will not only depend on communication, but now more on technology solutions in Agriculture as we need to feed ourselves, for integrated payment systems, power systems, transportation, financial systems and so on are now core. The technology infrastructure in any economy is dependent on data centres. Technology connects business to business, or to a data centre or tower somewhere and this is interconnected for the underpinning infrastructure. “In Rack Centre, we have been making Nigeria the centre of digital infrastructure in Africa, and one of the leading anchor points now over the six years we have been operating in Africa for digital infrastructure. So we are really putting Nigeria on the map of how we integrate and deliver digital infrastructure at world class into Nigeria and West Africa,” Coker said.

NCC plans to propel socio-economic transformation with ICT Parks project Jumoke Akiyode Lawanson

igerian Communications Commission (NCC), has embarked on the building of six (6) Information and Communication Technology (ICT) Parks to promote socio-economic transformation of Nigeria. The ICT Parks are to provide Innovation Labs and Digital Fabrication Laboratories (Fablabs) for use by ICT innovators and entrepreneurs to turn their ideas into products and prototypes; provide a Commercial Hub for ICT capacity building and digital skills; create employment and entrepreneurial activities; and facilitate smart city deployment across the

Digital Industrial complex. An initiative of the current leadership of NCC, the ICT Parks project involves the construction and equipping of fully-functional Tier-4 Digital Industrial Complex (DIC) in each of the six (6) geo-political zones across the country. The project concept is designed to support Federal Government’s ICT–related policies by facilitating the availability and accessibility of ICT services across the country and to promote their usage across all sectors. According to the regulator, the ICT Park consists of laboratories for ICT innovations and commercial hubs providing capacity building to ICT startups and entrepreneurial activi-

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ties. The parks are designed to have fast internet service (broadband) and constant power supply. Commenting on the initiative at the weekend, Umar Garba Danbatta, the executive vice chairman (EVC) of NCC, said the commission embarked on the project in all the six geo-political zones of the country with a view to building capacity for the Nigerian teaming youths in the area of skill acquisition and innovation to join existing initiatives towards accelerating socio-economic transformation of Nigeria. “The whole idea of putting these two things (i.e. skill acquisition and innovation) at the forefront of this very important initiative is to produce youths that can be self-reliant, gener-

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ate employment for themselves and for other Nigerians,” he said. The commission is starting the project with four ICT parks in Abeokuta for the South-West; Enugu for the South-East, Maiduguri for the NorthEast and Kano for the North-West, all of which are currently at different levels of implementation while the ones for North-Central and South-South are in the offing. Danbatta, who stated that the project commissioning would take place at different times, possibly starting from end of this year, assured that based on its national spread structure, no part of the country will be left out as beneficiaries of the initiative. “The NCC ICT Parks Project is an-

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other move by the current leadership of the Commission to boost youth digital skills acquisition, promote innovations, provide jobs for the teaming Nigerian youth and ultimately support the overall digital economy agenda of the Federal Government,” Danbatta said. Speaking on the expected tech products to be produced from the ICT Parks, Danbatta said: “Going forward, we hope to see software development, incubation, and hardware development coming out from the ICT parks. We also hope to see innovative applications that will leverage the broadband network, which the Commission is deepening in order to socially and economically transform our communities and societies.”

Tuesday 21 April 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

The Power of Artificial Intelligence in vivo S1 Pro Pro boasts allows users to explore and find their own style through various built-in photography modes. This means that selfies are bound to come out better than users can imagine!

Jumoke Akiyode-Lawanson

any smartphones released over the past two to three years have leveraged the power of artificial intelligence (AI) in both their hardware and software. AI’s potential is limitless, and we have already witnessed a myriad smart AI applications at work – in fields ranging from photography to stepping up efficiency. As a company that believes in the deep integration of AI in the 5G era, vivo’s S1 Pro packs some powerful features that have been enhanced through AI. Capture photos like a pro Photography has become one of the most widely used smartphone functions. Today’s click-happy generation wants to capture memorable life moments with their smartphones wherever they go. The S1 Pro offers an incredible 48MP Quad Camera with AI algorithms embedded, bringing a new

experience to photography lovers. The smartphone is also equipped with the Super Wide-Angle Camera that can further expand landscape shots, produc-

ing high quality precision images with precise details. Selfies beyond imagination While smartphones have

made hi-res photography more accessible, mobile and convenient, AI has made everything so much simpler. The 32 MP AI Selfie Camera that the S1

Work from home: Cyber tips for surviving the Covid -19 pandemic

oving from the prevailing physical model to the cyber space as lofty as it may seem, is a journey suffused with risks which organizations have to be aware of if they are to achieve continuity of their businesses unscathed. The cyber space has many predatory animals waiting to conveniently cherry-pick on organizations critical data and assets for various malicious purposes. Cyber predators are lurking for organizations and businesses to commence the journey into the unfamiliar cyber terrain through models such as work-from-home or remote work model. They know fully well that many organizations jostling to adopt these models have their focus on continuity of business operations with little or no consideration of the presence of dangers or risks lurking on their way. Before the Coronavirus pandemic, statistics on cyber incidences from research institutions paints a very gloomy picture of the Nigerian businesses with a cyberpresence. Threat Intelligence Reports from CheckPoints a renowned institution monitoring cyber threat globally shows that among others, on the average: • A typical organization in Nigeria with internet presence

is being attacked 1292 times per week in the last six months (October 2019 to date), compared to 411 attacks per organization globally. (With the COVID-19 and changing business model, this figure would have doubled) • 88 percent of the malicious files targeting institutions in Nigeria were delivered via the e-mail, compared to 66 percent of malicious files globally. (This is as a result of the low cyber risks awareness level in most businesses in Nigeria) • The most common vulnerability exploit type in Nigeria is Remote Code Execution (RCE), impacting 70 percent of the organization in the country. RCE gives that attacker the ability to take control of organizations systems in Nigeria) All these are happening with organizations operating 90percent physical model and less than 10 percent cyber presence or dependence. One could best imagine the volume of undetected attacks now that most organizations are adopting or considering the “work-from-home” model which obviously increases the attack surface thereby creating ideal conditions for attackers that seek to take advantage of the corona endemic. The RWM model mandates organizations personwww.businessday.ng

nel to connect remotely to their respective offices to do their work and access business emails and applications using home devices which most often are not protected by the corporate firewalls and anti-phishing security controls (if exist). Most times, connections are made using home routers which are ungoverned. Browsers on many computers provided by companies hold sensitive information like User IDs and passwords and attackers find these easy target to gain remote credentials and perform malicious logins to corporate network. With the low level security awareness, phishing campaigns through email makes employees at home a soft and easy target. One might be tempted to argue that connections to corporate networks (in the Work-from-Home model) are done via Virtual Private Network (VPN) and are secured, this posture provides a false sense of security as attackers according to PCYSYS (“Proactive Cyber Systems”) could easily transform VPN by an “owned” computer, into a magical back door to the organizations network. As inundating as this might be, taking necessary precautions as prescribed by ISACA Abuja and other cyber security professionals globally might

guarantee a successful navigation to safety hence business continuity as organization consider the RWM model. These measures apply to both businesses (Government and non-government) as well as individuals. The measures include: Companies carefully considering setting up a Cyber Risk Management team to evaluate all possible risk scenarios, ensuring that adequate IT resources are in place to support staff in case of technical issues while teleworking. And providing relevant information, e.g. on contact points, to staff and investing more on creating awareness on the do’s and don’ts while working from home. Other measures include; ensuring employees devices comply with organizations internal policy, have up-to-date security software and security patch levels and ensuring all the corporate business applications are accessible only via encrypted communication channels, as well as ensuring Data at Rest (DAR) on employee laptops are encrypted to protect against unauthorized disclosure in the event of theft or devise loss among others. ISACA Abuja says it is important for Nigerians to be particularly careful with any emails referencing the coronavirus, as these may be phishing attempts or scams.

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Clever features for better photos One of vivo’s goals is to make smartphones smart enough to detect, understand and process any challenges users might face while taking pictures, such as adjusting to poor lighting, exposure, saturation, colour depth and contrast. With the S1 Pro, they are able to focus on capturing the best shot anywhere, anytime, regardless of their knowledge of photography. Some of the main AI-based features the smartphone offers include: • I Face Beauty allows users to customise their looks or those of their subjects - from complexion to face shape, it’s all just one click away! • Gender Detection gives the subject’s facial features

greater definition. • AI Makeup enables access to strong beautification elements to enhance the stunning features of the subject. • Pose Master tracks the subject’s positions and through dotted guidelines, indicating the best poses to follow. Stay ahead of the game The S1 Pro leverages Multi-Turbo acceleration technology to optimize the operating system so that users can enjoy a more exhilarating gaming experience. This technology integrates the AI Turbo, Center Turbo, Game Turbo, ART++ Turbo and Cooling Turbo, greatly enhancing compiler efficiency. AI Turbo provides an AI prediction accuracy rate of over 85 percent, meaning that applications are able to launch at a much faster rate. For instance, PUBG Mobile can be launched 30 percent faster, while YouTube is 45 percent faster and other popular applications are at least 20 percent faster.

Jumia partners Procter & Gamble to provide easy access to hygiene products in Nigeria

opular e-commerce company, Jumia Nigeria, has partnered with one of the world’s largest producers of consumer goods, Procter & Gamble, to make essential hygiene products accessible and available on its platform to Nigerians during the COVID-19 lockdown. With the partnership, customers on Jumia platform will be able to make orders from a range of P&G products and get them delivered at their doorsteps via contactless delivery service. Announcing the partnership, Massimiliano Spalazzi, CEO of Jumia Nigeria, said both companies are committed to seeking ways to soften the unpleasant effects of the movement restriction imposed by the government to curtail the spread of the COVID-19 in the country. “We are proud to partner with Procter & Gamble as part of our commitment to provide customers access to essential hygiene and sanitary products during this challenging time. This partnership is in line with our “Stay Safe” campaign. We strive to continue operating so that customers @Businessdayng

continue to stay at home, use e-commerce to shop, and stay safe during the lockdown.” he said. Speaking on the brand’s commitment to help provide essential services in a safe way during the lockdown, Procter & Gamble’s managing director in Nigeria, Adil Farhat said: “We are proud to join Jumia in this initiative to supply essentials to consumers in Nigeria. Safeguard, Oral B, Ariel, Always, Pampers & Gillette will now be available for safe delivery across the entire country” Since the outbreak of COVID-19 pandemic, Jumia has been an online channel for Nigerians to access the essentials needed for daily upkeep. The company recently announced a partnership with Reckitt Benckiser to enable customers to have access to hygiene products at affordable prices during the lockdown. Jumia also implemented contactless delivery for prepaid packages on the platform that enable consumers to make prepaid payments for products online and get them delivered without a direct body contact or cash exchange with the delivery agent.

Tuesday 21 April 2020

BUSINESS DAY

Harnessing the power of teamwork to tackle coronavirus Strong local management helped Mark Bartlett remodel his Chinese plants to combat the crisis Andy Bounds

ust weeks after the coronavirus shut down in China, the three factories owned by kettle controls maker Strix reopened at full capacity. The way the company managed to keep staff healthy and production going offers a lesson to those industries in Europe and the US struggling to manufacture goods through the pandemic. Mark Bartlett, chief executive, credits the team on the ground in China for making this happen. He had to watch the situation unfold from the Isle of Man, the corporate headquarters of the business, which makes the thermostatic controls that switch off kettles when they boil. The company is the global market leader in kettle controls with 54 per cent share by value. The small island between Britain and Ireland has been Strix’s home since its founding during the second world war. It still has a factory there making its most advanced and sensitive components and which is applying the lessons learnt in China. Strix’s main plant is in Guangzhou, far from Wuhan where the virus first surfaced. It was already shut for two weeks to observe the Chinese new year holiday when the authorities started restricting travel on January 24. Local managers interrupted their holidays to set up an emergency response group. “They were amazing, particularly the local management,” says Mr Bartlett, 55, an engineer by background who joined Strix in 2006. “They used their initiative.” The first step was to make the factory safe. Led by Frank Gao, chief operating officer, they ordered masks and made all staff wear one. They installed hand sanitisers throughout and put high quality disinfectant in all restrooms. To go a step further, they erected a disinfection tent outside the factory entrance using one of Strix’s own products — halopure. This laces water with bromide, which draws out viruses and bacteria and renders them inert. Workers were covered in a fine spray on the way in and out. “The authorities said that was going above and beyond but it gave extra reassurance,” says Mr Bartlett. Managers also set up WeChat and other social media groups. Workers provided a health checklist before clocking

on and many gave their consent to be tracked, so managers could see whether they could have exposed themselves to the virus. The company also reduced movement within the factory with each production area sectioned off to eliminate any potential cross contamination. Safety screens were also installed in the canteen to ensure there was no contact. With daily temperature and health checks, anyone with symptoms was quarantined for 14 days on full pay. The factory reopened on February 10, having been shut for just one extra week. Mr Bartlett says he relied on front line managers to make the decision. Mr Gao, a Chinese national with years of experience in multinationals, is also a black belt — in Six Sigma, the lean manufacturing process. “I have complete trust in Frank. His team cleared things with him and he reported back to me. We have financial limits above which he needs head office approval but they were never breached,” says Mr Bartlett. He would not put a price on the measures but says it was insignificant for a company with £97m annual revenue. Office workers throughout the group worked from home and the company has long used video conferencing such as www.businessday.ng

Zoom as well as WhatsApp and WeChat groups to communicate. “Frank knows he can get hold of me day or night.” In the factory, no staff tested positive for the virus and production was back to normal levels within days. Only 4 per cent of workers were absent in March, which is normal following any Chinese new year period, The Chinese plants supply big manufacturers of kettles and heating equipment, who are concentrated in southern China. Mr Bartlett says their customers were now also at full capacity. “China is back to normal.” Its clients include Tefal, Siemens and Philips. Several factors helped. “There is a lot of discipline in China and they have experience of Sars and other pandemics. So they follow advice. “The team was motivated and took this as a challenge and were positive throughout using their own initiative to come up with creative solutions.” Some of those have now been applied to the company’s small factory at Ramsey on the Isle of Man now that Covid-19 has spread across the world. D espite the difficulties thrown up by the crisis, Mr Bartlett say Strix’s plans for the year remained on track. But there is life beyond kettles — which account for almost 90 per cent of revenue — and

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the company has a long history of innovation. Eric Taylor, its founder, invented a heating device to keep flying suits warm at high altitude for Royal Air Force bomber crew. Owner Eddie Davies oversaw rapid growth in the 1980s and by 1988 the company was the world leader for the supply of kettle controls. In 1997 it was among the first western manufacturers to move production to China. Mr Davies sold the company to private equity group AAC in 2005 and Strix listed in 2017 with a valuation of £190m. It is now worth more than £300m despite a price fall in the recent market downturn. Strix aims to launch 14 new products this year and invests about 5 per cent of revenue in research and development annually. It has developed its own range of water filters, Aqua Optima, and also makes a machine to heat baby formula with Tommee Tippee, the childcare products group. “Our expertise is the management of steam and water,” says Mr Bartlett. That means hot taps, coffee makers, sterilisers and filtered water dispensers. That knowhow underlies Mr Bartlett’s leadership philosophy: “Stick to what you are good at, your core competencies. Make sure you have the best people, and ours certainly are.” @Businessdayng

Three questions for Mark Bartlett If you weren’t a chief executive what would you be? Oh, tough one — I’ve always worked — I even did a sandwich degree working in industry throughout my studies, therefore business and of course my family is really my passion. Apart from that my other passion was (I’m getting old now!) badminton — I would have loved to have been a pro badminton player. Who is your leadership hero and why? Probably my father due to his commitment, drive and diligence — he was a successful manager in BP. His midlife crisis was probably brought on by a serious back operation when I was about 11. He was always a religious man and he changed his career in his mid-40s to become a Methodist minister — his passion. He spent the next three decades working in the communities, changing lives and deploying leadership in a very low key, empathic but very inspirational way What is the first leadership lesson you learnt? The most poignant ones were probably that leadership needs to adapt to the situation — one size doesn’t fit all. It doesn’t happen in a vacuum — leadership should be collaborative and finally the correct level of humility needs to underpin your decisions.

Tuesday 21 April 2020

BUSINESS DAY

Why picking a winning bold business is so risky Predicting success for companies in sensitive areas such as healthcare or food demands caution Brooke Masters

very time we at the Financial Times sit down to select the winners of Boldness in Business, I am reminded just how hard it must be to run a venture capital fund. That is because we find ourselves having to make judgments about companies that are still in the early stages of their development. Often they do not have much of a financial record and their products are still being perfected, so it is hard to predict whether their early promise will pan out. In fact, research by Shikhar Ghosh, a senior lecturer at Harvard Business School, suggests that three out of four venturebacked companies don’t return investors’ capital, including about one-third that lose all of it. At the Boldness awards, we like to reward chutzpah and hustling — in 2015, we named Uber co-founder Travis Kalanick Person of the Year, and stood by that decision even as the ride-hailing company ran into regulatory trouble and drew criticism for its

culture. Some of our other early winners have also struggled amid rising competition and changing habits — among them GoPro and Groupon. It is particularly challenging to pick winners among companies seeking to innovate in healthcare, agriculture or food. If a social media app or a new video tool doesn’t take off, it is disappointing. But if food or medicine does not work properly, the product can hurt people or even kill. Investors and judging panels like ours have a responsibility not to add to unmerited hype. Consider the cautionary tale of Theranos, the Californiabased blood-testing company. Founded by Elizabeth Holmes in 2003, the company claimed its new, tiny machines would revolutionise blood testing with a new automated technique that required only a pinprick of blood. It attracted a superstar board of directors and signed a partnership with US drugstore chain Walgreens. Theranos’s valuation peaked at more than $10bn before questions were raised about the validity of the test results the company www.businessday.ng

provided. The company ceased operations in 2018 and Holmes is awaiting trial on charges of criminal fraud and conspiracy. Prosecutors allege that hundreds of patients, or their medical insurance companies, paid for the blood tests, some of which were “inaccurate, unreliable, and improperly validated”. She has pleaded not guilty. But fraud is far from the only risk. Sectors such as pharmaceuticals and medical devices are — quite rightly — highly regulated, and agencies such as the US Food and Drug Administration insist on careful testing for both safety and efficacy before they are willing to approve a product for human use. Government healthcare providers, such as the UK’s National Health Service, also insist on proof that the product provides value for money before agreeing to pay for it. Many healthcare products fall at the first hurdle, or see their potential returns limited by the second. In February, Alzheimer’s drugs made by Eli Lilly and Roche each disappointed in late-stage testing. This year, the Boldness panel

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considered some very compelling entries in the healthcare and food sectors for the technology category. The shortlist included Brainomix, which is leading efforts to revamp the diagnosis and treatment of strokes by using artificial intelligence to analyse CAT scans, as well as Neuralink, the Elon Musk-backed start-up seeking to use brain implants to help people communicate with machines. If food or medicine do not work properly, the product can hurt — or even kill In the smaller company category, we shortlisted Solar Foods, a Finnish start-up that is trying to develop a resource-light alternative to animal and plant-based protein using greenhouse gasbased fermentation. In the end, the judges gave the technology prize to Healthy. io, an Israeli health start-up specialising in smartphone-enabled urine analysis. It started by addressing a common but serious problem: urinary tract infections are the most common bacterial infections in humans, causing an estimated 8m physician visits and 2m emergency hospital @Businessdayng

visits in the US each year. The company’s home testing enables patients to obtain treatment faster and reduces unnecessary doctor visits and overprescription of antibiotics. It won approval from the FDA in 2018, making it the only smartphone-based urinalysis cleared as equivalent to lab-based testing. Last September, Healthy.io raised another $60m and the FDA approved another of its tests; this one is aimed at diagnosing chronic kidney disease. The winning smaller company was Ÿnsect, a French start-up that is raising insects for pet and fish feed and fertiliser. Despite our caution when it comes to human health, the judges continue to reward ambitious dreams and efforts to improve society. Last year’s winners included Lilium, a German company trying to build electric flying taxis, and this year we picked Byju’s, an Indian online education company that is trying to use technology to tackle the problem of poor or uneven quality education with online or tech-based lessons and practice in multiple languages.

Tuesday 21 April, 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

ASUU knocks Buhari for slashing Health, education budgets ...mismanagement of palliatives REMI FEYISIPO, Ibadan.

he Academic Staff Union of Universities (ASUU) on Sunday knocked the Presidency of cutting down the budget of Education and Health sectors in the proposed 2020 revised budget. The union in a statement on Sunday stated that the proposed cut by the President Muhammadu Buhari led government shows totally lacking in understanding of the precarious state of things in Nigeria’s Education and Health sectors. In the release signed by Chairman of University of Ibadan of the Union, Ayo Akinwole, a Professor also said that Government should not defraud the nation by muddling up budgeted social intervention funds with donated

Biodun Ogunyemi, national president, ASUU

funds meant for palliatives for the vulnerables to cope with COVID-19 which has negatively affected their livelihoods.

The ASUU boss said it is now obvious that government has not learnt anything from the COVID-19

Bill underway to stem varsities’ rejection of candidates MARK MAYAH

he Federal Education Ministry is seeking a bill to forbid tertiary institution from rejecting candidates duely qualified and merited admission through Joint Admissions and Matriculation Board ( JAMB) It is to forestall a re-occurrence of past admission exercises in which thousands of qualified candidates were denied admission by federal and state higher institutions across the federation on the excuse of “no vacancy”.

In fact, going by the recommendations of the federal ministry of education to the proposed bill, an institution can only deny a candidate admission if he or she fails to meet with the minimum cut-off-marks , as well as the Post-UTME test. According to ministry sources, “the current practice whereby JAMB offers candidates admission to study a course of his or her choice and cannot be registrable by the institution, even after meeting the requisite qualification,does not augur well in the nation’s quest towards education ad-

Ishaq Oloyede, JAMB Registrar www.businessday.ng

vancement.” The bill, the source said, would empower the National Universities Commission (NUC), National Board for Technical Education (NBTE) and National Commission for Colleges of Education (NCCE)-the regulatory authorities of the nation’s tertiary institutions-Universities, Polytechnics and Colleges of education- to with- hold budgetary allocation to erring institutions. Besides, the governing council of affected institution to face disciplinary action. But, in the case of state owned institutions, the three regulatory bodies are to forward recommendation to state ministries of education to implement appropriate disciplinary action (s). BusinessDay further gathered that, the proposed bill is at the moment undergoing finishing touches for onward presentation to the National Assembly, when normalcy returns aftermath of the lockdown, due to the dreaded pandemic called COVID -19.

pandemic on the precarious state of facilities in Nigeria’s health and Education sectors. The Federal Government is proposing a slash of N50.76billion from the N111.78billion budgeted for UBEC to bring it down to N61.02billion and a cut of N26.51billion from the N44.49billion allocated to Basic Health care to bring it down to N17.98billion Akinwole stated that a serious and progressive government will not allocate funds for any rehabilitation of government buildings or purchase of buses but will face critical sectors like Health and Education which has evident in the COVID-19 pandemic brought all political, economic, religious, among other activities to a halt. On the palliative being distributed, Akinwole lashed out at the Buhari Government for stopping

salaries of lecturers for refusing the quest of the government to break the laws thereby making over 30,000 lecturers and there over 50,000 dependants vulnerable at this time. He stated that the distribution of the pallatives seem fraudulent as the reactions from Lagos and other states of the nation indicated that government officials are profiteering in palliative distribution. The ASUU boss advised that vulnerable people in slums, commercial drivers, Okada riders, food vendors, luggage porters among others must be targeted. According to Akinwole, while the stoppage of salaries to lecturers is a sign of lawlesness and tyranny of the Buhari Government, members of the Union will not be cowed in their resolve to fight for the revitalisation of public funded education and the sanctity

of the laws of the land. He then advised federal and State government to include Journalists in palliatives being distributed saying over fifty percent of journalists are not being paid salaries while many are being owed over a year salaries. “I have not seen this kind of government. A top government official claimed he never knew our Health institution is this precarious and the government that has not allocated sufficient funds to that sector is further reducing it! They are also muddling up palliative being distributed. we sense that lack of transparancy is ending in fraud and profiteering from the deprivation of the downtrodden. Most Nigerians are on the fringe and any mismanagement of palliative distribution will be counter productive to the fight against the pandemic” he added.

Coronavirus: Greensprings School advocate community support to less privileged KELECHI EWUZIE

etermined to help cushion the impact of the Coronavirus pandemic on its immediate community, Greensprings School, a leading British international school in Lagos, has encourage members of its community to show more love to less privileged especially as the Federal Government enforced lockdown continues. Lai Koiki, chief execu-

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tive officer of the school, urged members of staff to keep following the World Health Organisation (WHO) safety precautions, as well as reach out to the needy. According to Koiki, “For 35 years we have lived by our motto, ‘In love serve one another,’ which is more important now more than ever. We must continue to lean into the backbone of that collaborative partnership amid the understanding that a life of service is a life that counts. Koiki in a letter addressed to members of the school’s community

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motivated the members to be optimistic that this challenging period will be over soon. Adding that they should please reach out safely within your network to support the less privileged and the vulnerable in our society. “Remember, life will get back to normal soon and hopefully when this experience is over, our lives will include more appreciation of our daily blessings and our relationships,” Koiki said. The school has also launched a “Window of Hope” campaign, which is meant to inspire people to send messages of love to one another during this difficult time. The campaign asks people to decorate their home windows with hearts, messages of hope, flowers or teddies, take a snapshot of the decoration and post on social media, tagging the school’s official social media handle.

Tuesday 21 April, 2020

BUSINESS DAY

EDUCATION

LASU VC sees innovation as key to effective administration of justice post Covid-19 KELECHI EWUZIE

he adoption of innovation, strong will and discipline in the administration of Justice would help to guard against misplaced justice situation in Nigeria, post Covid-19 pandemic, Olanrewaju Adigun Fagbohun, vice-chancellor, Lagos State University, has said. Olanrewaju Fagbohun, decried the suspension of court sitting in the country pursuant to the directive of the Chief Justice of Nigeria as a result of the COVID-19 pandemic, without clear guidelines and directives that will ensure that the wheel of justice does not grind to a halt. According to him, it has become very fundamental to adopt strong will, discipline

Olanrewaju Fagbohun, LASU VC

and innovation in order to achieve an effective Administration of Justice System in

Nigeria, post Covid-19 pandemic. Fagbohun observed that

as things currently stand, post-COVID-19 in terms of civil/criminal cases already affected, leave no room for optimism.” Deliberate pro-active strategies must be put in place to change the paradigm. Fagbohun, speaking as a guest speaker on the Impact of COVID-19 on the Administration of Justice in Nigeria, What does the Future Hold?” at the 2020 Knowledge Sharing Series, a virtual Lecture organised by the LASU law Alumni graduate class of 2008, noted that COVID-19 is a wake-up call for Nigeria urging the Judiciary (lawyers and judicial officers) to fully go digital. “The Judiciary in Nigeria must fully go digital. It is not rocket science and enough of excuses. Let us have robust and open internet access in all courts. There are existing templates that will guide digi-

tisation of court processes”, Fagbohun said. Fagbohun, a Senior Advocate of Nigeria identified four commendable global justice system responses: 1) suspension of in-person proceedings to safeguard people’s health; 2) implementation of technology tools to continue proceedings in urgent or necessary situations; 3) keeping track of proceedings that are daily being postponed; and 4) pro-active thinking on such issues like effect of a statute of limitation and forfeiture as may arise post COVID -19. He reminded the over 100 participants that the Lagos State Judiciary started well on the path technology. Somewhere along the line, the challenge of continuity of policies clearly stagnated innovation. There is also the need for an audit of pro-

cesses and operations to know whether the different activities are on track. “In the Lagos State Judiciary, online listing of cases, Case Management System, E- filing system, use of verbatim recorder among others was already in use for quite some time. He concluded that “For as long as Nigeria continues on the same path as is currently, administration of justice will continue to fail on deliverables. The learned silk also took a swipe at legal practitioners and judicial officers who have turned our courts to theatre of repression and injustice. “For as long as we tolerate indiscipline, Nigeria’s Judiciary will continue to wallow in failure. We must advance the highest standard of conduct among lawyers and judges”, he said.

Lockdown of 3 states critical to stop spread Foundation seeks investment in of COVID-19 -UI medical geographer remote learning approach REMI FEYISIPO, Ibadan.

University don, Tolulope Osayomi noted on Sunday that the lockdown of Lagos, Ogun and Abuja is needed to prevent the spread of Coronavirus to other parts of the Country. Osayomi who is of the Department of Geography University of Ibadan,also urged the government to ensure that inter-state vehicular movement is stopped except for transportation of essential goods to check transmission. The Medical Geographer who has been mapping the transmission of the virus in Nigeria since the Italian index case stated that the lockdown in the affected areas will ultimately halt transmission. To achieve the desired effect in Ogun, Lagos and Abuja facing total lockdown, Osayomi advised that governments must pump enough palliatives to the vulnerables in Lagos, Ogun and Abuja to encourage observance of the stay at home directive. In a released entitled “Understanding the Geography of Transmission of CO-

VID-19 in Nigeria”, Osayomi,a doctorate degree holder stated that there should be equitable distribution to indigent and vulnerable population. “Lagos, the countr y’s economic capital has over 50 percent of country’s cases while the administrative capital, the Federal Capital territory (FCT) accounts for a little over 20 percent of the total. In the light of the fact that COVID-19 is a highly transmissible disease, it is very likely that significant proportion of the country ‘population will be susceptible to infection. Thus, a careful examination of the geographical distribution and the possible underlying factors of COVID-19 in Nigeria is fundamental to its prevention and control.

Tolulope Osayomi www.businessday.ng

“Given its immediate public attention and the very strong sense of urgency the matter deserves, the paper makes an attempt to comprehend the spatial epidemiology of this newly emergent disease in . Preliminary findings show that the disease incidence is increasing in states with large population size, with urban settlements, high vehicle ownership, relatively good transport networks. He said these findings might justify the lockdown extension in some states particularly Lagos, Osun and Ogun states, and enforce the implementation of physical distancing and other safety measures and provision of palliatives to enable people to stay at home. The don therefore said theb an on large gatherings and heavy vehicular movement should be strictly enforced in the entire country. Acccording to him, NCDC, in partnership with mobile service providers, should provide a three digit toll free number for the public to call or text in any event. Enforce a limit on the number of passengers public transport operators can convey .Free and mass distribution of face masks and hand sanitisers.

KELECHI EWUZIE

ith schools closed due to the Coronavirus pandemic, school systems around the world are forced to innovate or re-adopt old solutions to new problems. Educators, parents, and students are learning to think critically, problem-solve, be creative and collaborate. Remote learning is in! Education authorities in digitally advanced economies have been able to take schools online. Using tablets, laptops, other mobile devices and internet connectivity, students can take lessons, post virtual notes, share ideas, do individual work, group work and confer with teachers when needed. Bunmi Adedayo Foundation, an educational development organisation observes that reliance on technology for education is bringing other problems to the fore for children from disadvantaged homes and economies. As individuals growing up in the digital age, primary school-aged children are expected to be “digital natives” but there is an existing “digital divide” created by agelong economic and social inequities. The foundation opines

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that this “digital divide” manifests when children in public primary schools who lack digital devices, reliable internet connection and digital skills are completely cut off from learning or access to quality educational content. For children whose families can afford educational technology, there is still a need for parents to spend time helping their children learn online. According to BAF, has sets in motion works to reduce this sharp digital gap between children from privileged homes and their peers in public or low-income private primary schools by driving ICT infrastructure and training projects for teachers and pupils. BAF also seeks to improve teacher ICT skills and capacity through the BAF Learning Management System (LMS); an online platform featuring self-paced teacher training courses. The BAF LMS online courses were developed by world-class education experts taking the peculiarities of the Nigerian system and environment into due consideration. At the moment, various state governments including those of Lagos, Edo, Kaduna, Ogun, Oyo, and Ondo states have introduced educational TV and radio programmes for students during the school shutdown. @Businessdayng

Mass media for education is not a new application but is a low-cost alternative to online learning that bypasses some of the stated digital access issues to bring much needed educational engagement to children at home. The Lagos State Universal Basic Education Board (LSUBEB) makes basic literacy and numeracy lessons available for children through its Interactive Radio Instruction Programmes for Pupils in Public Primary Schools. The radio classes which targets pupils in primary 1-6 runs on Radio Lagos107.5 FM and Eko FM 89.7 from 9 am-1 pm on Mondays through Thursdays. While BAF commends Lagos State Universal Basic Education Board and other state boards for this initiative, we also encourage parents and pupils from low-income private primary schools who may not have access to online learning resources to take advantage of these radio school programmes during this lockdown period. No matter your remote learning medium of choice (radio, TV, online), your child’s educational endeavour is likely to be more productive if you can limit distractions, create a clear-cut space and routine for homeschooling.

Tuesday 21 April 2020

BUSINESS DAY

property&lifestyle Here’s how developers, valuers are sustaining business amid coronavirus lockdown CHUKA UROKO

or estate developers whose business of developing housing is activity-based, this is not the best of time as coronavirus lockdown and stay-at-home order have crippled them considerably. Same for estate valuers for whom social distancing is a spanner in the works. “It is a sad period for professionals because everybody is just sitting at home and because the development side of our business is activity-based, nothing is happening,” Adetokunmbo Ajayi, CEO, Propertygate Development and Investment Company, said in an interview. Like operators in other sectors of the economy, developers have their concerns. They are concerned about what comes after the pandemic; what will be the state of the economy and how it will affect their business. They are also worried about how they will recover from the pandemic, especially with all the noise everywhere about an impending recession. Hopefully, there will still be life after coronavirus and developers are, therefore,

thinking of what measures to put in place to ensure that their investments and that of their clients are secure. They are also thinking of how they will innovate their business to ensure that the economic impact is minimal. “We will carry on with our business when the storm (COVID-19) is over and so, this period offers us the opportunity to be thinking about our funding strategy. For those who have projects that are still on the drawing board, this is the time to perfect the design and align it with market realities,” Ajayi said. For estate surveyors and valuers, the situation is really dire. But technology is helping out. The lockdown and the social distancing directive make it difficult, if not impossible, for valuation jobs to happen. For the same reason, physical inspection of facilities and houses for sale or rent cannot be done. But Frank Okosun, CEO, Knight Frank Nigeria, has his way around all these. “We still do valuation job,” he told BusinessDay in an interview, adding, “but we put a clause to it stating that the valuation was done but we never visited the property.” “What we are doing now is arm-chair valuation, but

we do that without putting our stamp to the report. That has to be done after the lockdown and we have gone to see the property physically,“ he explained. Ajayi expressed worry over losses incurred by developers in terms of delay in projects funded with bank credit and deals that were about to be concluded now put on holds due to uncertainties, adding that even after the lockdown, developers will still have challenges with building materials which are imported mainly from China

where the rampaging virus originated from. Olawale Ayilara, Founder and Chief Executive Officer of Landwey Investment, a frontline property development company, shares Ajayi’s concerns, but revealed that it has not been an entirely dull moment for them at Landwey. “We’ve been able to leverage the use of technology over the years to prepare us for such a time as this. We have been using VR technology to create a unique experience for our clients and for this period,” Ayilara disclosed

in an interview in Lagos. According to him, the virtual tour function on their website has become very useful for their sales team to hold virtual inspections with clients, right from the comfort of their homes and without missing out on the opportunity to invest. Ayilara believes that Proptech has come to stay and they are always looking for novel ways to transact business, while still delivering value to their clients and so, it has been quite beneficial to them.

“It has helped us think of complementary services outside of the traditional real estate business. Through it, we have launched subsidiaries like Alausa.ng and Crowdownership, with more still in the pipeline,” he enthused. Real estate market in Nigeria has been the most traumatized sector, always at the receiving end of any economic downturn. Nigeria passed through a 15-month economic recession between 2015 and 2016. Real estate sector did not recover from that recession until the first quarter of 2019. “Between 2016 and 2019, real estate performed poorly as an asset class. Unfortunately, at a time when it seemed as if it was coming up, coronavirus came and it has gone down again,” Ajayi noted, sharing Okosun’s view that post-COVID-19, both the residential and commercial segments of the market will struggle. “We expect rent default in the residential market that may arise from pay-cuts and job losses; there will also be increased vacancy rate in commercial office space; most offices are empty today because everybody is working from home and that is likely to continue post-coronavirus,” Okosun posited.

Why Dubai is haven for Nigerian home buyers with unexplained wealth CHUKA UROKO

ubai, the United Arab Emirate (UAE) city, known for its ultra-modern architecture, luxury shopping and lively nightlife scene, is arguably the most preferred haven for Nigerian home buyers with unexplained and questionable wealth. As a city, Dubai is one of the most spectacular destinations in the world and this is reflected in its iconic architecture, magnificent skylines and

beautiful coastline. But the lure of the city to the corrupt home buyers goes beyond these fantastic attributes. Other reasons abound for the choice of Dubai by these home buyers populated by the political elite otherwise called politically exposed persons (PEPs) who cut across ethnic nationalities and religious persuasions in the country. By simple definition, PEPs are current or former political elites who are inherently at higher risk of carrying out

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illicit activity due to their position of power, meaning that people in this class would not like their activities to be easily seen or known. By design or default, Dubai is a welcoming destination for any unexplained wealth the PEPs amass. They find the emirate city a place where they can relax and enjoy such gains away from the prying eyes of anti-corruption agencies, journalists, and civil society watchdogs. Another strong reason the PEPs choose to ‘invest’ in

Dubai is that, generally, Nigerian elites face few obstacles transferring large quantities of cash to Dubai. Banks or other money transfer agents in both Nigeria and the UAE do not appear to be reporting large or otherwise suspicious transactions by PEPs to national authorities. Until 2016, when the Center for Advanced Defense Studies (now known as C4ADS) acquired the data of a private database of Dubai real estate information (dubbed the ‘Sandcastles’ data), there had been a dearth of specific information about Nigerian PEPs’ properties in Dubai. Apart from the snapshot offered by the Sandcastles data, Dubai property records remain opaque and inaccessible—both to international law enforcement and the general public and so the PEPs have been getting, and may continue to get away with their illicit trade. For these and other reasons, about 800 properties in Dubai property market valued at N145 billion are linked to the Nigerian political elite, according to the report compiled by Matthew T. Page of the Carnegie Endowment for International Peace (Publica-

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tion Department). The politically exposed Nigerians appearing in the Sandcastles data fall into eight broad categories, including state governors; state governors’ allies; heads of ministries, departments, and agencies; individuals already investigated or convicted by anti-corruption agencies; petroleum sector officials; security sector figures; legislators, and suspected proxies. An break-down of the 800 properties linked to these PEPs shows that suspected PEP proxy has 226; known Nigerian law enforcement agency suspects, 216; PEPlinked businessperson, 91; security sector leader, 71, and governors, 69 properties. Legislators have 45 properties linked to them; Department/ Agency head, 25; minister, 24; Nigerian National Petroleum Corporation official, 19; Presidency staff member has 13 while a judge has just 1. Analysts argue that if these 800 properties were built in Nigeria, besides the multiple jobs they would create, the houses would provide homes for close to 5000 persons, given an average of six persons per family. That would also have reduced the country’s yawning housing demand@Businessdayng

supply gap. To understand what the N146 billion used to acquire the 800 properties could do in Nigeria is to place it side-byside with allocations to critical sectors in Nigeria’s 2020 budget (now being reviewed downwards to reflect current economic realities). N146 billion is well over 50 percent of N262 billion allocated to the ministry of Works and Housing in the 2020 budget which got the highest sectoral allocation. This means that the money that have been illegally taken away and ‘invested’ in property in Dubai is more than the budget for housing or works. Aliko Dangote, President/ CEO, Dangote Industries, is committing N73 billion to the reconstruction of the 35-kilometre Apapa-Oshodi Expressway in Lagos. It follows that the N146 billion politicians have ‘invested’ in property in a foreign land can reconstruct 70 kilometres of roads in Nigeria. According to the report, this money equals two-thirds of Nigeria Army’s annual budget and over three times the annual budget of the country’s Independent National Electoral Commission (INEC).

Tuesday 21 April 2020

BUSINESS DAY

property&lifestyle Mortgage lenders at risk of default amid coronavirus crisis ENDURANCE OKAFOR

i t h Nig e r ia n mortgage banks already getting calls and text messages from mortgagors inquiring on how to defer their payments, there are concerns on the volume of mortgage defaults the lenders may record in a coronavirus infected economy. Like most mortgage industries around the world, Nigeria’s home loan lending market is being affected by the coronavirus crisis as activities in Africa’s largest economy is almost at a standstill due to the virus outbreak.

“We are already receiving calls from customers; they are asking what can be done to the month of March and April because their income has declined,” Eromosele Omozokpia, Group Head, Risk Management, First Generation Mortgage Bank said, adding, “capacity to repay mortgages which are usually done monthly, has diminished.” According to industry players, a large number of Nigerian mortgagors are in private practice or in the private sector and considering their income is guaranteed based on the number of days at work, their ability to repay

March and April mortgage is now in doubt. To curtail the spread of the deadly coronavirus, a lot of Nigerian businesses paused their operations with many others adopting the workfrom-home approach. The virtual work initiative is still not a guarantee for the economy that has an estimated 65 percent informal segment and even worse as economists have predicted it to post contraction. As part of efforts to flatten the coronavirus curve in Nigeria, President Muhammadu Buhari recently directed the cessation of all movements in Lagos and the

FCT for an initial period of 14 days with effect from 11 pm on Monday, March 30, 2020. Ogun State was also included in the restriction due to its proximity to Lagos and the high traffic between the two states. There are plans to also extend the lockdown. “The impact of coronavirus is going to affect repayment of mortgage,” Olabanjo Obaleye, managing director and chief executive officer of Infinity Trust Mortgage Bank said. Meanwhile, the mortgage industry in Africa’s most populous nation is not the only one taking the hit of the virus outbreak.

COVID-19: Group canvasses assistance from operators for homeless, vulnerable Nigerians CHUKA UROKO

ousing Development Advocacy Network (HDAN), a non-profit, non-governmental organization at the forefront of championing increased homeownership in Nigeria, has pointed the way forward for both public and private sector operators on how they can assist homeless and vulnerable Nigerians who are the hardest-hit by the ravaging impact of coronavirus pandemic. The network notes that the lockdown of Nigeria’s two major cities, Lagos and the federal capital city (FCT) Abuja as well as Ogun State, has exposed the sub-human and deplorable conditions in which some Nigerians live and eke out a living. The federal government, as part of measures to contain and curtail further spread of the dreaded virus, locked down the three cities, restricting movements and ordering the residents to stay at home. “This is a commendable move by the government to reduce the risk of more people contracting the disease. But there are many Nigerians who live under bridges, in slums and uncompleted buildings. To this class of Nigerians, the sit-at-home order means next to nothing,” noted Festus Adebayo, the Network’s president, in a statement obtained by BusinessDay. Adebayo urged the authorities of Lagos State and the Federal Capital Territory (FCT) to open a homeless people’s register, especially for those of them that live in shanties or are squatting in heavily congested rooms in very poor living conditions. He also called on religious bodies to collaborate with public sector authorities to

enable the provision of up to six months free accommodation for the most affected persons this period, even if they are temporary arrangements. ‘’We commend what the private sector is currently doing but we cannot afford to ignore the homeless in our cities. There are many vacant houses owned by private developers. These houses can become temporary dwellings for homeless people. They should be allowed to have access to them, even if it will require government or religious bodies paying for those houses,” he said. ‘’At this crucial time, we call on the government to roll out palliatives in the area of rent and mortgage payment obligations, downward review of interest rates, etc. Occupiers of mortgage houses might lose them at this time if nothing is done by the government to support them,” he said. He also recommended a break in mortgage payment while interests are also reviewed downwards. Even those who are living in mortgage-backed houses www.businessday.ng

might lose them at this time if nothing is done by the government to support them”, he said. The Network canvassed a policy from the government that will address subscribers’ struggle for NHF loan, especially civil servants. With the national lockdown, a few months break from the payment of the loans will help the subscribers use their lean resources to cater for their families. Adebayo is worried that housing situation is so grim in a country of 200 million people, pointing out that over 50 percent of Nigerians live in slums and make-shift shanties where living condition is below minimum standards. “Slums make it easy for the spread of diseases,” he said. He noted that the housing situation is even more worrisome in the northern part of Nigeria where millions of people are displaced by Boko Haram while others are living in poorly set-up IDP camps across the country. ” If the country must fight the spread of this virus, it must quickly make arrange-

ments for these people,” he advised, adding that besides providing shelter, there is also need for free meals for those at home, else they will be forced out of their homes in search of food. The president urged the government to incorporate housing sector bodies like Federal Housing Authority, Federal Mortgage Bank of Nigeria, Nigeria Mortgage Refinance Company, Family Homes Funds and others into the Pandemic Act to enable them to actively participate in fashioning out creative ways to salvage the homeless situation. The Act, he said, should of necessity include the suspension of utility fees collection like water and electricity and, where possible, free rents on government housing as part of immediate solutions. He commended federal government’s decision to continue with its unconditional cash transfers to the poorest of the poor, but advised that there should be due diligence so that those items will get to those who truly need them.

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Infrastructure Maintenance With Tunde Obileye Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Dealing with coronavirus by facility managers (part 2)

usiness leaders across all sectors are reass essing risk, shifting strategy, and searching for new ways to navigate these uncertain times as the Covid-19 crisis continues to disrupt the fundamental way people work and companies compete With the escalating coronavirus outbreak, it is expected that facility managers would have discussed with senior management the impact and what it means for the business and facilities. Government lockdown directives have created a huge number of employees to work remotely. However, facility managers still have a frontline role in the Covid-19 pandemic response preparedness. The most valuable tool available to facility managers in this situation will be the accurate data which should include information on employees and assets associated with day-today operations of their organizations. The following guidelines will be useful. 1.Who should lead the pandemic response It is important to identify who takes charge of every aspect of the pandemic response plan and who becomes the designated source for information. A senior management staff should oversee the entire preparedness and response strategies. However, issues relating to employees may be handled by the head of human resources and/or line managers whilst facility managers act towards implementing the right prevention and containment measures in the workplace. It’s critical that all parties understand their roles and responsibilities. 2. Set communication protocols Fa c i l i t y m a n a g e r s should set up communication protocols on how and when to disseminate vital information to both employees and customers including communicating with service providers about changing requirements. Checking the latest @Businessdayng

news from NCDC and other agencies is necessary. 3. Ensure a safe work environment The priority of facility managers should be the safety of employees who can’t work remotely and on-site contractors. Facility managers should create workplace policies that limit the spread of infectious disease and protect both staff and any visitors. For example, a separate entrance for employees or restrict visitor access to certain parts of the facility. The hygiene guidelines issued by the relevant health agencies must be placed in conspicuous points for all users of the workplace/buildings. In particular, the cleaners must deep clean and disinfect all areas of the work environment including tables, doorknobs, light switches, electronic gadgets, phones, keyboards, toilets etc. The sick leave policy may be reviewed to be consistent with public health messages urging people to stay at home if they are sick. 4. Be ready for the business impact The facility managers must work with the other members of the Pandemic Response Team to create a workable response plan in preparation for business impact. Changes in demand for products and services, as well as in customer behavior should be expected. Communication lines should be opened to inform customers about closure of any facility, product shortages, changes in service availability etc. Employees may require training in policies for remote working in order to remain productive and adapt ways to continue to meet needs of customers/clients. Time is of the essence for facility managers to act quickly to play a part in increasing the resilience o f t h e i r o r ga n i z at i o n s and workplace/buildings in the face of this global emergency. If the pandemic has not already impacted your business and facilities, the chance is that it is going to.

Tuesday 21 April 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Can the NNPC GMD suspend fuel subsidy? Stories by ISAAC ANYAOGU

ne week after the group managing director of the Nigerian National Petroleum Corporation (NNPC), announced plans to suspend a wasteful subsidy on petrol prices, the oil sector regulator has yet to provide clarification. As the boss of the state-oil firm, the NNPC GMD is hired by the government to manage its commercial oil business not to frame public policy. The Petroleum Ministry headed by Muhammadu Buhari and the Petroleum Products Price Regulatory Agency (PPPRA), are qualified to speak on policy according to extant laws. Speaking on a Channels Television breakfast talk show, Sunrise Daily, one week ago, the NNPC’s helmsman said the decision to finally end the fuel subsidy regime is in the interest of ordinary Nigerians as it would free up funds for the various tiers of government to develop basic infrastructure in the education, health, transport, and other sectors for their benefit. “Subsidy is elitist because it is the elites that benefit from it. They are the ones that have SUVs, four, five cars in their garages. The masses should be the ones to benefit. There are many things wrong with the under-recovery because it makes us to supply more than is needed. This makes

the under-recovery to be bloated because we unwittingly subsidize fuel for the whole of West Africa. That has to stop,” the NNPC boss said. Kyari explained that the removal of subsidy would automatically correct the distortions it created in the market such as products arbitrage and smuggling, stressing that it would also provide the needed impetus for the NNPC to establish retail outlets in neighbouring countries. In his media interview announcing the policy, Kyari did not clarify who made this decision and he did not provide coherent framework on how the plan

would be operationalised. Analysts say he lacks the power to make such pronouncements. “I think it is the primary role of the Federal Government of Nigeria through the PPPRA,” says Ayodele Oni, energy lawyer and partner at Lagos-based Bloomfield law firm. Oni further said that it could also be that he may be speaking for the ministry based on an understanding he may have reached with them from prior communication. Chuks Nwani another energy lawyer at Lagos-based consultancy PowerHouse International, said he envisaged the actions of the labour unions throwing a

wrench in the plan. “The problem is that labour may come in and insist that the government must pay subsidies.” However, there are yawning gaps in Kyari’s announcement. NNPC boss said it would no longer get foreign currency at preferential rates but how could it keep costs at government’s regulated price if the landing cost and foreign exchange become unfeasible at current price? According to the NNPC, the corporation has not been paying subsidies since 2016, It sees subsidies in terms of payments by the government to marketers for importing and selling petrol

Oil is biggest victim of the Great Lockdown I n its latest World Economic Outlook, the International Monetary Fund (IMF) said the world is heading into a much worse decline than in the financial crisis of 2008-09, with global GDP shrinking by 3 percent this year on account of the current COVID-19 pandemic. Perhaps the biggest toll of the pandemic can be felt in the oil sector where demand has fallen to historical lows and prices have slumped so badly that short-term cuts and heavy discounts haven’t provided enough fillip. A storm of epic proportions is gathering in the oil market where storages are brimming and top producers have only agreed to ceasefire after weeks of pumping oil like it was going out of fashion, while consumers hunker down at home waiting out a dangerous pandemic. The COVID-19 pandemic is inflicting high and rising human costs worldwide, and the necessary protection measures are severely impacting economic activity.

Oil which is one the biggest enabler of the modern economy has taken a hit. Factories are shut, airplanes have disappeared from the skies and even the roads are quiet. According to a study by Rystad Energy, a Norwegian, independent energy research and business intelligence company, the largest oil supply surplus the world has ever seen in a single quarter has www.businessday.ng

hit the global market this April, creating an imbalance of around 10 million barrels per day (bpd). The firm’s research analysis shows that global storage infrastructure is in trouble and will be unable to take more crude and products in just a few months. However, oil producers have cobbled together an agreement. Their slumping economies created a strong incentive for Russia

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and Saudi Arabia to do what they failed to do a month ago, and agree concerted cuts in oil production to cushion the blow. After four days of wrangling, the OPEC+ group finally reached an agreement on Sunday April 12: its members have pledged to cut their production by 9.7 million barrels per day in May and June, 7.7 million b/d for another six months, and then 5.8 million b/d for a further 16 months. It is the largest output cut since OPEC was founded 60 years ago. The US president played a key role in the negotiation, sometimes organizing web conferences among oil producers. “In a baseline scenario--which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound—the global economy is projected to grow by 5.8 percent in 2021 as economic activity normalizes, helped by policy support.,” said the IMF, in its report. The IMF said that risks for even more severe outcomes are substantial. “Effective policies are @Businessdayng

at a controlled price that falls below the landing cost. It prefers the term ‘underrecovery’ which means the cost the NNPC pays for retailing petrol below landing cost. It removes this cost before remitting the balance to the Federation Account. The nagging question is what would the NNPC do when the price of crude oil recovers and the landing cost exceeds the current pump price of petrol? Would the organization resist the pressure from the Federal Government to keep prices low amidst growing public outrage? Would the corporation not be pressured to review prices downward and begin new underrecoveries following labour protests? The labour unions have argued that it is immoral to remove petrol subsidies while the nation’s refineries lay comatose. Now Kyari has said that the refineries would be handed over to private operators but has yet to clarify how this model would work. This is not the first time it is proposing an arrangement to have private organisations manage the refineries but it has been unsuccessful. Analysts say the government has to clarify what policy it is pursuing for the downstream sector. The current move would suggest the government is heading towards liberalisation which eventually could lead to full deregulation. Now, is when it must manage public expectations if it hopes to avoid problems in future, experts say.

essential to forestall the possibility of worse outcomes, and the necessary measures to reduce contagion and protect lives are an important investment in long-term human and economic health. “Because the economic fallout is acute in specific sectors, policymakers will need to implement substantial targeted fiscal, monetary, and financial market measures to support affected households and businesses domestically. “And internationally, strong multilateral cooperation is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak health care systems. The IMF described the drop-off in oil demand as “unprecedented”, and highlighted the impact on oil-exporting countries, warning that it would be a particularly severe blow for those with high production costs and undiversified revenues.

Tuesday 21 April 2020

BUSINESS DAY

ENERGY INTELLIGENCE Oil price rebounds won’t happen anytime soon, here is why DIPO OLADEHINDE

ome of the world’s largest oil producers including Nigeria might have reached a truce the global oil market long sought, but hopes for a significant and sustained rebound in prices might not be visible anytime soon. Organisation of Petroleum Exporting Countries (OPEC) and allies member reached a tentative agreement to trim oil production by 9.7 million barrels per day (bpd) to help ease the economic impact of the coronavirus crisis on global demand. Goldman Sachs and other major global investment banking firms believe the new historic deal agreed by some of the world’s biggest oil producer will fail to support oil prices in the coming weeks as the agreement, albeit historic, is falling short of the expectations. The global oil deal would translate into just 4.3 million bpd of actual production reduction from Q1 2020 levels which still fall short of market expectations, according to Goldman Sachs, assuming that all major OPEC members comply 100 percent and all other producers comply at 50 percent with the

agreement. “In short, and as we have been repeating all along, the 9.7mmbpd production cut is nowhere near enough to offset the plunge in demand which based on various estimates is anywhere between 20 and 36mmb/d,” Goldman Sach said in its note. “Ultimately, this simply reflects that no voluntary cuts could be large enough to offset the 19 million bpd average April-May demand loss due to the corona-

virus,” Goldman Sachs said. Other market analysts believe even if 10 million bpd worth of production is removed via an agreed output cut, storage levels will still fill up, just at a slower pace. International Energy Agency (IEA) said this summer the world may still run out of space to store unwanted crude -- a worst-case scenario for the oil industry that could push prices even lower. “In a few years, when we look

back at 2020, we may well see that it was the worst year in the history of global oil markets,” IEA Executive Director Fatih Birol said in its monthly report. Also, Warren Patterson, ING’s Head of Commodities Strategy said compliance with this new historic cuts will also be an issue, and “Saudi Arabia—which has rescued the compliance rate in previous pacts—is unlikely to go the extra mile this time, considering the size of its cuts.”

Kirill Tachennikov, director and senior oil analyst at Bcs Global Markets told Reuters it’s not technically possible to achieve these numbers in less than a month, and it is not enough to offset current oversupply that is exceeding 20 million bpd as it stands. Roger Read, a senior energy analyst at Wells Fargo told CNBC until the extreme social distancing economic shutdown measures are significantly relaxed across North America, Europe and parts of Asia, OPEC+ supply cuts are simply playing catch-up at best. Bjornar Tonhaugen, head of oil markets at Rystad Energy said a 10 million-bpd deal is far lower than what the market needs at the moment and “even that seems to be of a fragile nature, as OPEC+ producers appear to struggle to agree, dragging negotiations longer than expected.” Lower oil price means dozens of small independent oil producers are on the brink of bankruptcy while oil-producing countries across the Middle East, Africa and Latin America are bound to face not only economic difficulties, but possibly political turbulence as governments are forced to cut social programs and energy subsidies.

offgrid

Nigeria’s renewable energy ambition gains momentum amidst lockdown DIPO OLADEHINDE

ith Nigeria’s struggling national grid lacking in capacity to power the entire country in a period of pandemic and economic lockdown, Nigeria’s renewable energy sector is offering solutions to Nigeria’ s chronic energy shortages and big investment opportunities for SMEs. Nigeria’s power grid has come under pressure in recent weeks most especially after an extension of an initial 2-week mandatory lockdown of Lagos, Ogun and Abuja announced by the federal government to curtail the spread of the coronavirus. “The repercussions of any premature end to the lockdown action are unimaginable,” President Muhammadu Buhari said in his address on Monday, April 13. For many Nigerians, the “unimaginable” of being cooped up at home in this mandatory lockdown include a poor power supply. Faced with fears of rising economic hardship and a spike in coronavirus cases in Africa’s most populous country, Ni-

geria is turning to renewable energy in a big way. In the past few weeks, various government and private sector efforts have begun to find alternative energy solutions to keep the lights on in homes and hospitals around the country. A government agency in the ministry of Power charged with improving energy access for rural communities, Rural Electrification Agency (REA) in partnership with the Africa Development Bank (AfDB) made available a $200 million development fund to ramp up solar home systems and solar mini-grid projects to connect www.businessday.ng

over 500,000 people across 105,000 households to energy supply. REA said it will be supplying solar home systems and minigrids to primary healthcare and isolation centers across the country. The agency handed over two completed solar hybrid mini-grid plants in Abuja and another two in Lagos, while two other completed solar hybrid mini-grids are slated to be handed over on today in Ogun state. Also, Nigeria-based provider of merchant infrastructure, Rensource launched a digital platform that helps retailers get discovered quickly while ena-

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bling servicing of customer orders online during the ongoing lockdown that has disrupted global supply chains. “Energy has always been our core business but in light of the pandemic, we see the opportunity to help small businesses who are the backbone of our economy survive by gaining access to consumers online,” Anu Adasolum, Chief Operating Officer at Rensource said. All On, an off-grid energy impact investing company seeded by Shell, announced a postponement of all Q2 2020 interest payments on current interest-bearing investments. All On earlier announced the COVID-19 Solar Relief (CSR) Fund in March, which made available N180 million to four off-grid energy companies to provide solar power to emergency health facilities in cities around Nigeria, through various private sector initiatives. The companies: Auxano, Arnergy, GVE and Lumos, were selected based on their immediate preparedness to respond with products, inventory, technical capabilities and @Businessdayng

their efficient delivery track record, according to a statement by the company. Recent activities have shown Nigeria’s solar mini-grid and off-grid solutions as well as other alternative energy sources can serve not only present energy needs due to the ability to scale the solution quickly but can also generate by-products like employment at a time where the consequences of the pandemic are already present or looming. The federal government so far has attempted to improve power supply during this period announcing a N200 billion($518 million) gas supply injection to help GenCos improve power generation. Conversations are also said to have been ongoing, through a Stimulus Bill, to provide electricity at no cost to the public for a two-month period. Africa’s most populous country needs more than 10 times its current electricity output to guarantee supply for its 200 million people - nearly half of whom have no access at all, according to its former minister of power Babatunde Fashola.

Tuesday 21 April 2020

BUSINESS DAY

feature

COVID-19 and Nigerian businesses: From survival to thriving in a changing world Businesses must focus on reestablishing order while providing very clear and direct communication. The danger with this command-and-control regime is that if it takes longer than necessary, businesses may miss the opportunity to innovate amid the adversity. Leaders can mitigate this by setting up parallel teams that can pursue the spotted opportunities even in such chaotic environments.

IFEOMA OKEKE

he coronavirus disease 2019 (COVID-19), caused by the SARS-CoV-2, has affected 210 countries and territories around the world as at 1pm on Sunday, April 19, with 2,348,953 confirmed cases and 161,221 deaths, according to https://www.worldometers.info/ coronavirus/. Many nations have moved from their initial prevention strategy to aggressive multi-pronged strategies to contain the spread of the virus, save lives and sustain economic activities to ensure a health crisis does not morph into a combination of financial crisis, economic recession, and social upheaval. Beyond its devastating effect on human lives, the coronavirus disease has begun to leave its negative impact on economies and businesses worldwide. The sub-Saharan African region, and indeed Nigeria, is not immune from the economic shock caused by the coronavirus outbreak. Renaissance Capital, in a recent analysis, revised down the growth forecast for sub-Saharan Africa from 3.5 percent to 1.3 percent. A reduction in global economic activity has lowered the demand for oil, taking oil prices to a multi-year low. In March of 2020, the price of Brent crude averaged $34.27 per barrel (spot price FOB was $23.55 on March 26), compared to $56.21 per barrel in February of 2020. This is a 65.25 percent reduction in price since the beginning of 2020 and 48.19 percent reduction over the last 12 months, with an obvious negative impact on the Nigeria’s 2020 budget as about 60 percent of the Federal Government’s revenue and 95 percent of export revenue come from oil and gas. Hence, Nigeria is also not exempted from a downward revision of the GDP growth rate to less than 2 percent by major analysts, down from the initial 2.4 percent projection. All-Share Index and market capitalisation both dropped 19.5 percent and 18 percent to close the month at 22,198.43 and N11.568 trillion, respectively, as at March 20, but all of these are signs of a troubling journey for the economy and the citizenry. Collapse in national development indices Four of Nigeria’s top trading partners and import sources – China, USA, Spain, and the Netherlands – accounting for an estimated 45 percent of our imports have implemented lockdown strategies to contain the spread of COVID-19. In a recent report issued by Verraki Business Solutions for Africa, it explained that if the current situation continues for another two months, the attendant effect on trade is a potential N2.23 trillion loss from Nigeria’s top five import nations which would lead to domestic scarcity. From the top five export figures, another estimated N2.27 trillion worth of exports which should drive economic activities will also be lost to closed borders, social

distancing, lockdown in destination nations, and lockdown in Nigeria. The report stated that while the exchange rate will be significantly challenged from the loss of export proceeds, the pandemic will be responsible for the attendant decline in revenues, reduction in profits, and erosion in asset value for nonessential services, consumer-facing, and export-dependent firms who may then have to downsize. Market scenarios are likely to get worse if the naira is devalued. The Central Bank of Nigeria has set a $30 billion foreign reserves threshold for devaluation. Beyond the foreign reserves and exchange rate, employment and poverty indices will need to be thoroughly reviewed to provide useful economic indicators and business planning guides for small, medium scale and corporate businesses over the next few weeks. Human capital challenge According to Verraki report, “All these monetary policy actions are, no doubt, attempts by the apex bank to control the looming slowdown in economic growth.” As the health sector rightly takes up more national resources needed to combat this pandemic, people reduce social activities, and government revenue declines, we see a conscious decision by many businesses to conserve cash while governments at the state and national levels are likely to slow down investments in physical infrastructure. Yet, there is a high risk of infection and mortality amongst health workers who are on the front lines fighting this global pandemic – in a country already battling with a shortfall in the supply of healthcare professionals – this could worsen health conditions further, eroding the slow gains being made in the sector. Furthermore, as schools close, students will lose learning opportunities and resources leaving more vulnerable students from low-income households with rewww.businessday.ng

duced chances of learning even with the online alternatives being hurriedly provided by some state governments and reduced opportunities of returning to school at later resumption date. This translates to lower long-term earning trajectories for them and their families and reduced overall human capital for the economy. Cash crunch In peculiar contexts where a company or its industry is not the only one affected by a social, economic, or even political tsunami that sweeps through the business landscape, negotiation becomes critical, according to the Verraki report. Every business seeks to operate from a point of advantage, and this may create conflicts. As corporates seek cash flow to stay afloat, they must negotiate to increase cash payable period and reduce the cash receivable period as a means to shorten their cash cycle. But the reverse case is of interest to suppliers and customers, hence the conflict. Traditionally, businesses give credit facility as a tactic to increase sales, but this advantage may be upended by bad debts and cash discounts. All these seeming conflicts must be implemented by a craftsmanship given to skilful precision. Also, businesses may negotiate tax credit or tax holiday to reduce pressure on cash and profit, although this is better done when businesses ally to engage the government. Drop in purchasing power The report reveals that although only 21 percent of the 99.6 million adult population in Nigeria have savings, “this period will particularly be a trying time for about 78 million Nigerians who are without savings”. Most of these people wait on the monthly salary, daily income, or erstwhile generous relatives who remit money home. There has been and will be some panic buying and stocking but overall, there is likely to be a decline in discretionary spend-

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ing and producers of luxury and nonessential goods and services will need to brace up for the times ahead. Surviving the storm – short term Verraki report stated that at this point, it will not be out of place to borrow from Snowden and Boone (2007) masterpiece, a Harvard Business Review article on managing in difficult times. The authors discussed how to respond in simple, complex, complicated, and chaotic business scenarios and market environments. Most unique to this present discourse is the complex business context as it references business situations characterised by flux and unpredictability, emergent instructive patterns, unknown unknowns, a myriad of competing ideas, the need for creative and innovative approaches and pattern-based leadership. It is crucial, according to the report, for business leaders to distinguish between hard facts, soft facts, and speculation, and to make fact-based decisions by probing situations and responding by creating environments and experiments that allow for patterns to evolve. This, it stated, will require increased teamwork, communication, and interaction between multidisciplinary teams across divides. Business leaders must track progress daily, look ahead to anticipate shifts and constantly update insight to frame overall perspective to avoid being slow to changing dynamics. However, there are chances that the situation may snowball into a chaotic one considering the lessthan-optimal state of many Nigerian institutions. In such high turbulence, high tension and unclear scenarios characterised by many unknowns, it serves little benefit looking for the right answers and business leaders need to step up and act in what they consider to be the best interests of the firm while balancing responses to staff, clients, suppliers, community and others. @Businessdayng

Looking beyond today – long term “At every point in the history of global inflection such as this, few companies emerge stronger than others,” Verraki stated. The report explained that while most businesses are rightly active about short-term survival, these few companies are deliberately positioned to take advantage of future opportunities and beat the curve ahead. This is coupled with the knowledge that some industries will feel the impact differently, faster, and more intensely than some others. The report projects that similarly, some industries will jump the curve faster than some others too. It, therefore, suggested that companies must be very prudent to know in what direction to spend their scarce resources. “While many businesses will be driving for cash at the expense of profits, smart firms must skilfully drive for both. It is high time for business leaders to leverage experiential insights defined by clarity of maneuvering familiar grounds. “Just as the Great Depression defined consumer habits for decades, oil supply crisis of the 70s led to the first efforts at energy efficiency, diversity, and conservation, and the 2008 financial crisis triggered a new regulatory framework across the financial service industry, the COVID-19 health emergency is likely to change the way we work and live including online teaching, remote work, distributed supply chain, delivery service, eCommerce and digital financial services,” Verraki report explained. It noted that employees and the community are looking forward to business leaders to demonstrate responsible leadership during the crisis period. Therefore, leadership that demonstrates inclusion, diversity, empathy, compassion, humility, transparency and openness in taking decisions while actively listening to divergent views and balancing the needs of critical stakeholders such as employees, clients, suppliers, community, governments, and investors is highly sought after during this period. The report suggested that infrastructure and machinery must be modular and be such that they can evolve over time and can be fashioned for different usage. Lastly, business leaders must act with both courage and prudence to ensure the business is embedded in an ecosystem to benefit from affinity and economies of scale.

Tuesday 21 April 2020

BUSINESS DAY

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Tuesday 21 April 2020

BUSINESS DAY

news

Anxiety in Lagos over rapid increase...

L-R: Jordi Borrut Bel, managing director, Nigerian Breweries plc; Kola Jamodu, chairman, board of directors, Nigerian Breweries; Babajide Sanwo-Olu, governor, Lagos State, and Obafemi Hamzat, deputy governor, during the presentation of N100 million donation and other relief materials as part of the company’s N600m support to the FG and 7 state governments to fight COVID-19 in Nigeria, at the State House, Marina.

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mosho with 15, Kosofe 12, and Shomolu eight. Mushin and Oshodi/Isolo Local Government Areas have seven confirmed cases

Pain coming for everyone as unwanted... Continued from page 1

going vessels in international waters around the world and buyers, when they come, are offering as low as $12 a barrel in the

physical market, cheaper than a basket of tomatoes. You must now sell a dozen barrels of Nigerian crude oil to buy one entry-level Samsung phone, a pointer to the dystopian reality that declining crude oil prices present for all economic actors in Nigeria, including the federal, state and local governments and the private sector as well as the jobs they hold. State governors would by now be dreading what will happen when next their finance commissioners gather in Abuja for the usual federal accounts allocation commonly called FAAC. The fiscal outlook for Nigeria is so bad that economists were warning last night that governments in the country will fail, jobs will be wiped out even in the private sector and the misery will increase in homes across Nigeria. For the very first time in history, the benchmark US oil prices crashed into negative territory as evaporation of demand caused by the coronavirus pandemic leaves the world awash with oil and not enough storage to hold the oil no one wants to buy. Yesterday, US oil producers in the Texas belt were offering buyers cash for them to take the oil off their hands. The internationally traded Brent crude had its own losses muted by comparison, with the commodity sliding 7.4 percent to $26 a barrel at intrasession lows. Despite a national pretence at diversification, crude oil sale still drives the Nigerian economy and Nigerians are going to pay a steep price from this month for years of ruinous economic policies including wasteful subsidies on electricity and petrol, defunding health-

care, artificially propping up the naira on the back of foreign currency earnings and a gutless fight against corruption. The next Federal Accounts Allocation Committee (FAAC), a gathering of state commissioners of finance with the federal minister of finance to share national income promises fireworks as the long-foretold rainy day when oil income will run dry is upon Nigeria. Already the clouds are darkening. The Federal Government is raiding the Stabilisation Fund, a part of Nigeria’s Sovereign Wealth Fund (SWF), saved when oil incomes exceed budgeted revenue, kept as rainy-day fund to meet FAAC allocations to states which would be used to pay civil servants, build roads and schools. To keep the states and indeed Nigeria functioning, the sub-national governments need to share no less than N600bn every month during the monthly FAAC allocations. This month, there are indications that the country may not generate as much in revenue and it will be worse in the months following. Due to the coronavirus pandemic, Nigeria has implemented a lockdown across its commercial capital, Lagos, its fastest-developing industrial cluster in Ogun, and the nation’s capital Abuja, grinding to a halt commercial activity. This will crimp tax earnings for this period from companies including the value added tax. International Oil Companies who pay the bulk of Nigeria’s oil earnings are collectively slashing an estimated $35bn in their capital expenditure for 2020. This implies that national economies would be starved of long-term investments that allow businesses generate revenue for many years by adding or improving production facilities, boosting operational efficiency and increasing labour productivity. “If these oil majors could suffer substantial income rewww.businessday.ng

duction, despite their strong structures and efficiencies, then governments, world over, who are less efficient are likely to suffer more,” said Ayodele Oni, energy lawyer and partner at Lagos-based Bloomfield law firm. Crude oil now selling for less than its cost of production does not offer Nigeria respite. Oil production cost averages between $15-$17 a barrel in onshore, according to the NNPC. However, 40 percent of Nigeria’s crude oil production now happens at offshore fields where a larger capital outlay is required. Several cargoes of Nigerian April loading are yet to find buyers and even after slashing the prices, Nigeria can still not find buyers for its oil. One unfolding real-time effect of lower oil price is a US dollar shortage that’s already manifesting on the parallel forex markets with the informal dollar dealers who often operate just in front or across the road from airports and top hotels in the business districts of Lagos and Abuja. One currency trader told BusinessDay dollars are literally no longer available even on the black market due to “excessive demand”. Much of that demand is down to Bureau De Change operators no longer selling dollars while speculators attempt to hedge against potential naira losses in the event of further devaluation. Last week, Nigeria’s currency weakened marginally to N386.13k per dollar at the Investors and Exporters (I&E) forex window. A larger foreign exchange (FX) reserves position usually boosts investors’ confidence in Nigerian equities and the external reserves provide security for foreign investors who may be worried about the difficulty of exiting the market at will. Nigeria’s foreign exchange reserve, which serves as a buffer against external shocks, depleted to $33.8 billion, according to CBN data, as foreign portfolio investors dump Nigerian assets over uncer-

tainties seen in the shortmedium term. Nigeria’s real estate sector was largely affected by the commodity price crisis of 2015/2016 which sent oil prices below $30 in early 2016. The sector is yet to recover from the 12-quarter recession it entered due to the meltdown. While the coronavirus outbreak may be bringing back the trend of 2016, industry analysts expect the hospitality, retail and commercial real estate segments that are highly exposed to international tourism to be most affected. Most of the country’s mortgage banks are already getting calls and text messages from customers inquiring on how to defer their payments, while there are fresh concerns on the volume of mortgage defaults the lenders may record in a lower oil price ùeconomy. “We are already receiving calls from customers; they are asking what can be done to the month of March and April because their income has declined,” Eromosele Omozokpia, Group Head, Risk Management, First Generation Mortgage Bank said, adding, “capacity to repay mortgages which are usually done monthly, has diminished.” According to industry players, a large number of Nigerian mortgagors are in private practice or in the private sector and considering their income is guaranteed based on the number of days at work, their ability to repay March and April mortgage is now in doubt. “The effect of lower oil price on Nigeria’s economy is going to affect repayment of mortgage,” Olabanjo Obaleye, managing director and chief executive officer of Infinity Trust Mortgage Bank said. “Nigeria’s real estate trajectory has risen and fallen with international oil markets,” Oxford Business Group said. Nigeria’s stock market is not left out of this web as investors are expected not to totally overrule the possibility of sell pressure, given that the macroeconomic space remains fragile.

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each. Surulere has six cases, Amuwo-Odofin follows with five confirmed cases, and Ikorodu has four. Badagry, Apapa, Lagos Island and Ifako/Ijaye have two confirmed cases each. Agege and Ibeju-Lekki have one case each. Three local government areas – Ajeromi/Ifelodun, Epe and Ojo – have not recorded any confirmed case. According to data released by the state government, the age distribution of the confirmed cases are 0-9 yrs = 5; 1019 yrs = 14; 20-29 yrs = 34; 30-39 yrs = 63; 40-49 yrs = 60; 50-59 yrs = 38; 60-69 yrs = 15; 70-79 yrs = 2, and above 80 yrs = 2 cases. Seventy percent of the cases in Lagos are classified as males while the female population accounts for 30 percent. Babajide Sanwo-Olu, the state governor, said on Monday thattheCOVID-19infectionrate in the state will likely get worse before getting better, adding, however, that government is hopeful the infection curve will flatten in two to three weeks. Government is therefore going to be more frontal in the enforcement of the stay-athome order while face masks are now to be worn in public places to reduce community transmission of the deadly virus, Sanwo-Olu said at a media update on the spread of the disease in Lagos and the measures being taken to curtail it. Urging the citizens to strictly observe the rules and regulations to contain the virus in the remaining days of the lockdown, the governor said, “What is in front of us is not up to what is behind us. But we have to do our best to overcome it.”

The governor said four coronavirus patients may be prosecuted in Lagos for supplying medical officials with wrong information on their travel history and other details on their activities in the state. He said the resolve to prosecute the cases was because their act endangered their lives and the lives of medical officials and other patients at their hospitals of admission who stood the risk of contracting the disease. Sanwo-Olu said the prosecution would serve as a deterrent to others planning to hide details on their activities before and after the lockdown was imposed on the state by President Muhammadu Buhari. “We have taken a decision that we will be prosecuting patients that hide their details at inception and were later found to have the virus after several tests. And when they do this, they are not endangering their lives alone but the lives of our health workers. If they failed to give details, there is no way the health officials can know where they are coming from and who they have had contact with before coming to the hospital,” he said. “We believe that when the arm of the law catches a few, everyone will know that we truly mean business. While we are doing this, it is also time for our health officials to heighten their level of suspicion on any patient that they come across. And they should raise alarm on anyone COVID-19 cases they discovered at their point of duty,” he further said. To compensate for the workload and pressure being exerted on health workers as a result of the pandemic, Sanwo-Olu said his administration was increasing duty allowance for all categories of health workers in the state this month (April).

MTN, Airtel, others see surge in data... Continued from page 1

includes voice and data

services across the whole 183 million subscribers. When the lockdown in Nigeria started at the end of March, there would have been minimal impact because consumer behaviour had not changed and majority of people were still travelling from their homes to work. However, in April, after the lockdown, the type of activities done in enterprises will not correlate with the type of work that can be done at home because most people do not have the tools or facilities other than to connect to Zoom or Skype. Ayotunde Coker, managing director and CEO, Rack Centre, told BusinessDay that there is an increase in traffic seen on the internet exchange point. “With Rack Centre hosting over 35 carriers and internet service providers (ISPs), one of the things we’ve seen is an @Businessdayng

increase in traffic on what is running through the Internet Exchange Point (IXP). I can surmise from my experience that there was a spike in capacity demand in form of voice and also for data,” Coker said during a Zoom conference call with journalists at the weekend. Rack Centre is the most connected Tier III constructed facility certified data centre that connects over 35 of the major carriers and Internet Service Providers (ISPs) in Nigeria, Tier 1 networks, pan-African international carriers, and direct connection to all five undersea cables serving the South Atlantic Coast of Africa. The Nigerian Communication Commission (NCC) said on April 8 that telcos had been allowedtolayfibreopticcablesand deploy other telecoms equipment to expand their networks infrastructure to provide more efficientservicestoconsumersas a result of increased traffic.

Tuesday 21 April 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

US oil price crashes to record low as coronavirus hits demand

Benchmark collapses on concerns fuel storage facilities might be overwhelmed David Sheppard, Myles McCormick, Derek Brower and Hudson Lockett

S oil prices crashed below $5 a barrel on Monday, hitting the lowest level since the contract launched in 1983, as the collapse in demand triggered by the coronavirus pandemic leaves the world awash with crude that it is struggling to store. West Texas Intermediate, the US marker, lost 74 per cent on Monday, sinking to a low of $4.04 a barrel, on warnings that storage could fill up within weeks — including at the benchmark’s delivery hub of Cushing, Oklahoma. Lockdowns imposed in many of the world’s major economies have sent crude demand tumbling by as much as a third, leaving the industry facing what Jefferies analyst Jason Gammel called perhaps “the bleakest oil macro outlook” he had ever seen. Physical grades in many North American regions have fallen into the low single digits — with some contracts changing hands for as little as $2 a barrel — reflecting a dearth of buyers able to take delivery, even as prices for later contracts have held up marginally better due to some investors betting on an eventual rebound. In Canada, spot prices for Alberta’s heavy oil, which sells at a deep discount to WTI, traded at below minus $6 a barrel in the spot

market, according to traders and brokers. The possibility of negative prices for the main US grades is growing, with the prospect that producers could pay traders to take oil off their hands to try and forestall the shutdown of fields ahead of their rivals. Stephen Schork, editor of oilmarket newsletter The Schork Report, said he expected access to storage capacity in the US to be exhausted within the next two weeks — and cautioned that the collapse of the country’s oil consumption was accelerating. “It just gets uglier from here,” Mr Schork said, adding that sharply rising unemployment numbers meant fewer and fewer Americans would be driving, hurting petrol

demand even during its peak summer months. “This summer is dead on arrival. The biggest demand months are not going to happen,” he said. Part of the rapid decline in WTI prices reflects technicalities around the contract for oil to be delivered in May, which expires on Tuesday while short-term storage issues are severe. Still, WTI for June delivery was also down 10 per cent at $22.62, while Brent crude, the international marker, dropped 5 per cent to $26.72. Traders said contracts for later delivery were being propped up by hopes the worst of the demand destruction could be passed by the summer, if lockdowns and travel bans are eased. But others are

questioning whether the recordbreaking gaps between spot sales and future prices are sustainable. “The May contract expires tomorrow so volume on it is going to be very light. The June contract is more reflective of the changes,” said Olivier Jakob at Petromatrix. “That being said, oil is very weak . . . The big thing right now is destruction of demand due to the virus.” Wall Street opened lower, dragged down by weakness in energy stocks. The S&P 500 was down 0.5 per cent in New York. The sub index for energy was off 4.5 per cent. European indices steadied, with the continent-wide Stoxx 600 closing 0.7 per cent higher, while London’s FTSE 100 and Frankfurt’s Dax gained 0.45 per cent.

Crude prices have plummeted this year on the possibility that the coronavirus outbreak will cause a deep global recession. The number of Covid-19 infections worldwide topped 2.4m as of Monday, according to Johns Hopkins data, with more than 165,000 dead. The latest developments “painted a grim picture of a world still firmly in the grip of the coronavirus crisis, amplifying worries about sinking oil demand”, said Vandana Hari, founder of Vanda Insights, a Singapore-based energy research firm. The deepening fall in oil prices has come despite an Opec-backed deal to cut roughly 10 per cent of global crude supply. Reductions of varying magnitude are planned to run until April 2022 as part of efforts to stabilise prices. Baker Hughes data on Friday showed that the number of active oil rigs in the US has dropped by more than a third over the past month. But signs of curtailed US supply have done little to boost prices. “Too much oil, with nowhere to put it,” said Kit Juckes, a senior strategist at Société Générale in London, noting that “oil-sensitive currencies are under pressure again”. Equity markets in Asia came under pressure earlier in the session. Japan’s benchmark Topix fell 0.7 per cent and Australia’s S&P/ASX 200 shed 2.5 per cent, while Hong Kong’s Hang Seng was flat. In fixed income, the yield on the 10-year US Treasury was little changed at 0.623 per cent.

Bondholders reject Argentina’s debt offer Creditors denounce government restructuring plan as unacceptable

Colby Smith and Benedict Mander

rgentina’s biggest bondholders have rejected the government’s offer to restructure $83bn of foreign debt, raising the prospect that the country is headed for its ninth sovereign debt default. In statements released on Monday, three creditor groups rebuffed the terms laid out by the government late last week, which called for interest payments to be delayed until 2023 and principal payments until 2026. The deal encompassed not only debt issued by the country since 2016, but also previously restructured bonds issued in 2005 and 2010. These so-called “exchange bonds” require a higher percentage of bondholders to accept any changes to the payment terms of the debt, potentially making it more difficult for the government to reach an accord. “Rather than follow a course of constructive engagement, Argentina has instead chosen to make a

Argentine President Alberto Fernandez (R), Argentine vice-president Cristina Fernandez de Kirchner (C) and Economy Minister Martin Guzman during a working meeting with governors last week © Argentina’s Presidency Press Off

unilateral offer,” wrote one creditor group representing holders of these exchange bonds. “Argentina’s proposal does not represent the product of good faith negotiations and the Exchange Bondholder Group considers it to be unacceptable and does not intend to support it.” The group, which is advised by Dennis Hranitzky at law firm Quinn Emanuel Urquhart & Sullivan and www.businessday.ng

counts hedge funds Monarch Alternative Capital and HBK Capital Management among its members, said it collectively held more than 16 per cent of the exchange bonds issued by Argentina, an amount equivalent to more than $4bn. Another bondholder group, which is advised by White & Case and includes BlackRock, Fidelity, Ashmore, T Rowe Price and other

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large institutional investors, also said it could not support the government’s proposal. Incremental movement on this proposal is not going to get a deal done “The group believes that all stakeholders in Argentina will need to contribute to a solution that puts Argentina on a path toward sustainable growth and financial stability,” the creditors said in a statement. “However, the proposals included in the press release fall short of that mark, and seek to place a disproportionate share of Argentina’s longer-term adjustment efforts on the shoulders of international bondholders.” The group said it collectively held more than 25 per cent of Argentina’s bonds issued since 2016 and more than 15 per cent of the country’s exchange bonds. A third group, advised by UBS and Mens Sana Advisors, also rejected the terms of the deal, noting in a statement that the offer came “without meaningful discussions”. @Businessdayng

Investors were asked to accept a 62 per cent “haircut” on interest payments worth almost $38bn, with the government proposing to pay interest rates of 0.5 per cent initially, before rising to levels of less than 5 per cent. The government also requested a 5.4 per cent reduction in the face value of the debt, worth around $3.6bn. According to Gordon Bowers, an emerging markets research analyst at Columbia Threadneedle, the average recovery value for the exchange bonds under the government’s proposal hovers around 35 cents on the dollar. With Argentina’s exchange bond set to mature in 2033 trading at 39 cents on the dollar, Mr Bowers said there was “little incentive” for these bondholders to accept the government’s deal. Siobhan Morden, head of Latin America fixed income at Amherst Pierpont, said the bonds issued since 2016 had a historically low average recovery value of 32 cents on the dollar — an offer more in line with current market prices.

Tuesday 21 April 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Coronavirus has shaken our laid-back attitude to financial risk The present flap would not have surprised economist Hyman Minsky Jonathan Ford

he coronavirus epidemic has been accompanied by sharp declines in equity values. Share prices have slumped by about 20 per cent around the world since its severity became known. That is clearly grim news for investors in quoted companies. But it is even more frightening for those pursuing highly leveraged strategies. That decline alone might have eaten through the slender equity cushion shielding their bets from insolvency. It is why a claque of heavily indebted companies in hard-hit sectors — such as airlines and airports — have been loudly imploring governments to bail them out. Of course, not all companies are to blame for their predicament. Many smaller businesses simply have not built the balance-sheet reserves to endure a prolonged period of zero or limited income. Governments are right to have pursued policies to assist these businesses through cost subsidies and access to capital through guaranteed loan schemes. But for others high leverage has been a conscious strategy aimed at magnifying returns. They are a major factor behind the extraordinary expansion in corporate borrowing over the past decade, when the global outstanding stock of non-financial corporate bonds reached an all-time high of $13.5tn last year, double its level in real terms in 2008, according to OECD data. It is this population of heavily leveraged companies — espe-

cially lower-grade borrowers in the US and Europe — that threatens to magnify the severity of the crisis. Their fragility may lead to more insolvencies, idle assets and dispersals of skilled workforces than would otherwise have been the case. High leverage makes returns more volatile — both on the upside and the downside. Normally the fear of loss should act as a self-regulating check on excessive borrowing. But monetary policy has in recent decades short-circuited this mechanism, with the authorities supporting markets when they plunged but failing to damp them down when they inflated bubbles. Excessive risk-taking consequently cascaded through the financial system, creating a web of incentives that encourage the bosses of enterprises to take on more

debt. None of this would come as much surprise to the American economist Hyman Minsky, who died in 1996. He noted how prudent financial arrangements can give way to what he called “Ponzi finance”, which is where borrowers are unable to service their debts or repay principal out of current income. Ponzi borrowers depend on refinancing against the collateral of rising asset prices to stay afloat. Long before economists were hailing the era of the “great moderation” of low inflation and stable growth that preceded the financial crisis, Minsky argued that stability itself was destabilising because people responded to the good times by changing their risk-taking behaviour. Just how Ponzi-like the markets have now become is re-

vealed in some analysis from Matthew Mish, global credit strategist at UBS. This looks at how the riskiest borrowers — many backed by private equity — have massaged a measure known as ebitda — earnings before interest, tax, depreciation and amortisation — to appear more creditworthy and hence able to take out bigger loans. Perhaps the most ludicrous example was when the US officesharing company, WeWork, turned a $933m loss into $233m of what it termed “community-adjusted ebitda” (by basically excluding most of its core operating expenses). Such corruption has filtered through the ranks of lower-grade borrowers — especially those in the $1.3tn market for leveraged loans, much of it in the US. Mr Mish estimates that in the context of a virus-induced reces-

sion lopping, say, 20-25 per cent off the ebitda of such borrowers, the actual fall could be of the order of 40 per cent, simply “due to the unmasking of aggressive accounting practices”. A balance sheet meltdown on this scale could lead to a surge of defaults and bankruptcies. Yield-chasing investors may have accepted ebitda fictions in the good times, but are now less trusting. Spreads in the markets for leveraged and other highyield loans have ballooned and issuance has sharply declined. With economies in lockdown, much depends on the profile of the recession. The early discovery of a vaccine might permit a rebound. A longer lockdown would not just cause more financial damage, it might change consumer behaviour in ways that were detrimental to some established business models. Minsky believed that crises were important in making people more cautious. So the Great Depression made the next generation of Americans more risk-averse, while New Deal reforms made the financial system much safer. Since the 2008 crisis, change has been superficial. The toobig-to-fail banks have become even more humongous. Private equity, with its cavalier approach to limited liability, has expanded to absorb an ever greater slice of an increasingly leveraged corporate sector. Whether this is yet a “Minsky moment” is not certain. But the bigger lesson is an old one: Trends that cannot go on forever, do not. When the virus has passed, we need to restore more respect for financial risk.

Coronavirus creates biggest economic uncertainty in decades The divergence of global growth forecasts has increased dramatically, says BofA Robin Wigglesworth

he global economic outlook is the murkiest in modern history, with uncertainty over the coronavirus outbreak’s ultimate impact causing wild divergences between analysts’ forecasts. The dispersion in macroeconomic estimates is the greatest since at least the 1960s, according to Bank of America. Quoting Russian revolutionary leader Vladimir Lenin, BofA’s analysts said: “There are decades where nothing happens, and there are weeks where decades happen.”

The IMF last week forecast that the global economy would swing from a 2.9 per cent growth www.businessday.ng

rate in 2019 to a contraction of 3 per cent this year. That is down from a forecast in late January

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for a 3.3 per cent expansion, and would constitute the most severe recession since the Great Depression of the 1930s. The IMF warned that this year’s crisis, which it dubbed the “Great Lockdown”, would also leave more lingering economic scars than many analysts expect. “There remains considerable uncertainty around the forecast, the pandemic itself, its macroeconomic fallout and the associated stresses in financial and commodity markets,” the fund said. However, governments and central banks have gone to extraordinary lengths to reduce the @Businessdayng

economic damage. US lawmakers have passed a $2tn stimulus package, which has led to the fastest and biggest increase in US public spending relative to gross domestic product in peacetime, according to BofA. “The key lesson from 1929 and 2008 is that big, fast policy action is essential to avoid [a] depression,” the bank said in a report. “‘Targeted’ measures stink of miserly austerity; only indiscriminate, abundant largesse can ‘flatten the curve’ of personal and corporate bankruptcies.” The US, the analysts said, had “learned that lesson”.

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BUSINESS DAY Tuesday 21 April 2020 www.businessday.ng

FirstBank stays ahead of COVID-19, keeps faith with customers

mid shuttering of social activities especially commercial ser vices, through various lockdown measures to contain the coronavirus pandemic, FirstBank has proven that as long as its customers require services, the bank will be waiting right in front of them. As key enablers of the economy, banks are providers of essential services to customers and communities. Sequel to the pandemic outbreak, the Minister of Finance, Budget and Planning and the Governor of the Central Bank of Nigeria obtained Presidential approval to permit critical financial services to function during this period. CBN further urged the general public to limit their use of cash and avail themselves of alternative payment channels such as mobile banking, internet banking, mobile money, Point of Sale (PoS), and USSD banking; assuring that financial institutions will remain operational during this period and therefore people should guard against panic withdrawals from their banks. The assumption that banks will be able to deliver services during this period, was no doubt predicated on the fact that institutions like FirstBank already had a fully functional digital infrastructure, to serve its customers through electronic channels. In a statement to customers, FirsBank’s CEO Dr Adesola Adeduntan, categorically made this promise to them: “COVID-19 will not slow us down”. “These are unprecedented times,” acknowledges Adedutan “We therefore promise that now more than ever we will remain steadfast, showing up for all Nigerians; we would always be there for you. “As I reflect on the last two weeks, I am comforted by the resilience of our people. I look back at our commitment and contribution to keeping commerce going and enabling businesses.” These reassuring words of Dr Adedutan, do not go without tangible proofs of the bank’s unrelenting efforts to stay ahead of the situation many customers feared would cripple banking transactions and further exacerbate the pains brought on by the pandemic. Indeed since the enforcement of the lockdown measure, regular and unique ancillary services continue to be seamlessly delivered by FirstBank. The impressive achievements of FirstBank in service delivery, during this unexpected disrup-

Adesola Kazeem Adeduntan, MD/CEO, First Bank.

tion to lives and businesses on a global scale, has been nothing short of the extraordinary. Or how would you explain over 53,000 agents bringing banking services right to your doorsteps, processing over 5 million transactions with different and large monetary values in the week preceding 10 April. How about an approximate 2.5 million withdrawals amounting to N35billion across FirstBank’s ATMs in a single week. On record, FirstBank’s larger corporate customers have done over 1,700 transactions successfully on the bank’s e-bills platform worth N6.8billion during this challenging period. Nigerians with FirstBank cards have used them 21 million times for payments or withdrawals, worth N268 million. Customers have made transfers over 10 million times with a total value of about N615billion naira across FirstBank’s digital

channels all in one week. How does a bank get all these done under the prevalent lockdown and disruption of regular routine? “Expertise and resilience are in our DNA,” explains the Bank’s CEO, “we are working tirelessly to ensure that your banking transactions continue seamlessly and will remain so; COVID-19 will neither slow us down nor defeat us. We are holding up our side; and now more than ever we will uphold our promise to you to be here for you and put You First.” Indeed the capability of banks to render uninterrupted digital services and investment advisory across many channels, especially during a crisis, projects economic stability. More than ever before, the importance of the services banks provide to individuals and communities extends beyond commercial interests, especially

‘‘

Expertise and resilience are in our DNA,” explains the Bank’s CEO, “we are working tirelessly to ensure that your banking transactions continue seamlessly and will remain so; COVID-19 will neither slow us down nor defeat us

‘‘

On record, FirstBank’s larger corporate customers have done over 1,700 transactions successfully on the bank’s e-bills platform worth N6.8billion during this challenging period now that cash withdrawals far outstrip deposits. As an unprecedented challenge to financial institutions like banks, the current coronavirus pandemic serves as a litmus test for them to prove their role as systemic stabilizers, delivering services at least in part for social good. As the crisis lingers with no end in sight, FirstBank staff remarkably are in place to attend to customers’ needs, in spite of the social distancing measure. The bank continues to maintain all pre-existing channels of communication including receiving emails through its

firstcontact@firstbanknigeria. com address and urging customers to contact their Relationship Managers or Private Bankers for banking services guidance and advisory. Despite the extra efforts banks may put into rendering uninterrupted services in times like this, they are doing nothing more, than to meet the expectations of customers and maintain economic stability. From a tactical level, financial institutions like banks can do a lot to reduce consumer and business stress, because as deposit gatherers, credit grantors, and payment facilitators, banks play a vital role in the functioning of the economy. However, delivering solutions tailored to each individual customer at this critical time, also engenders trust and brand loyalty. “We recognize our role in keeping the engine going, keeping society going and recognize further, it is our responsibility to remain at the forefront of this; true to our name and in keeping with the incontrovertible fact that we are fully woven into the fabric of society. Our unparalleled network and total coverage of this nation serve us all well at this time ensuring service across the country via our safe, user friendly and convenient alternative channels are available for you 24/7,” says Adedutan. While Nigeria is Africa’s largest economy, large portions of the economy are in the informal sector and depend constantly on cash movement. As the financial consequences mainly for MSMEs become more serious due to paucity of inflows, (some major players in the economy – oil, aviation and tourism too are not spared) people will expect their banks to look out for them and protect them from imminent financial catastrophe. Indeed bank clients would like to see the pandemic brought under containment as soon as possible, in order to resume work and commercial activities. For them, a stable and reliable financial partner like FirstBank that has shown resilience and reliability, would be an institution that can be leveraged on, to get business back on track and rolling as fast as possible, once this is over. Adedutan in concluding his statement says to the bank’s customers: “Rest assured that we are in this together, and together we will emerge stronger at the end of this period, because this too shall pass. We have all it takes; your support, patronage and trust. We will always put You First”.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.