Tuesday, Jul 21 2020 by BusinessDay

businessday market monitor

Biggest Gainer ARDOVA N12.55

Biggest Loser

Cutix 7.17pc N1.82 24,269.58

Everdon Bureau De Change

Bitcoin

NSE

-9.89 pc

Foreign Reserve - $36.1bn Cross Rates GBP-$:1.29 YUANY - 55.56 Commodities Cocoa US$2,219.00

Gold $1,816.51

news you can trust I ** tuesDAY 21 july 2020 I vol. 19, no 610

₦4,175,949.19

Crude Oil $ 43.19

N300

Market Buy

Sell

$-N 460.00 470.00 £-N 565.00 579.00 €-N 510.00 528.00

+0.78

FMDQ Close Foreign Exchange

www.

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

388.50 381.00

3M 0.00 1.71

12m NGUS jun 30 2021

Odinaka Anudu & Gbemi Faminu

10 Y 0.06

30 Y 0.00

5.32

8.89

10.54

36m NGUS jun 28 2023 494.13

Naira volatility pushes local sourcing to 56% since 2014

-0.35

0.08 1.61

420.83

Manufacturers invest billions in local raw materials as FX scarcity hurts anufacturers a re p u m p ing billions of naira into local raw materials sourcing as foreign exchange (FX) scarcity continues to hurt their capacity to import inputs. FX crunch due to oil price lows since 2014 has disrupted productions and projections, forcing 54 small factories to shut down in 2016 and threatening more closures and job losses this year in the wake of COVID-19 Continues on page 30

fgn bonds

Treasury bills

60m NGUS jun 25 2025 580.20

Fidelity Bank names Nneka Onyeali-Ikpe, first female MD/CEOdesignate … as Nnamdi Okonkwo retires December 31 Iheanyi Nwachukwu

idelity Bank plc has notified the Nigerian Stock Exchange (NSE) and the general public of the impending retirement of Nnamdi J. Okonkwo, its managing director/CEO, from the Board of Directors of the bank with effect from December 31, 2020, upon completion of his contract tenure. In compliance with the sucContinues on page 30

Inside Babatunde Fashola (2nd l), minister of works and housing, receiving a cheque of N162.557 billion from Zainab Ahmed (r), minister of finance, budget and national planning, during the presentation of Sukuk Symbolic cheque for the construction and rehabilitation of 44 roads in the 6 geopolitical zones, by the Ministry of Finance in Abuja, yesterday. With them are, Abubakar Aliyu (l), minister of state for works and housing and other dignitries. NAN

Inside the opportunity cost of Nigeria’s latest N1trn gas pipeline project P. 29

Tuesday 21 July 2020

BUSINESS DAY

West Africa Power Pool Job Opening

NOTICE OF INTERNATIONAL RECRUITMENT ELECTRICAL ENGINEERS Open to: Location:

All ECOWAS Citizens Cotonou, Benin

1. The West African Power Pool (WAPP) is a Specialized Institution of the Economic Community of West African States, (ECOWAS) established by the Authority of Heads of State and Government of ECOWAS Member States to ensure the integration of the national power systems into a unified regional electricity market with the ultimate goal of providing in the medium and long term, a regular, stable and reliable energy at competitive cost to the citizenry of the ECOWAS region. This aims to encourage industrialisation, improve Health and Education, Reduce Poverty, Create Employment Opportunities, etc… 2. The Headquarters of the WAPP Secretariat is in Cotonou, Republic of Benin. 3. The WAPP Secretariat, in view of achieving its global Vision, intends to reinforce its staffing by filling the job vacancy for two (2) Electrical Engineers. They will support the current team in the Information and Coordination Centre (ICC) which is a Department of WAPP Secretariat. They report to the Director of ICC. 4. The minimum qualifications and the functions of the Electrical Engineers are defined hereafter: A. Electrical Engineer – Profile “1” A.1. Minimum Qualifications Required: Education: • Master’s Degree in Electrical Engineering (with specialization in Electric Power) • Additional qualification (preferably a degree at least) in Economics, or Business Administration is an advantage Years’ Experience: • 10 years of experience in the related field; • 5 years of experience in Electricity Market Development or Operations; Experience in Power System Operations and Power System Planning is an added advantage; • 5 years of supervising or lead position experience; Experience & main skills: • Decision making, Leadership, assertive communication, complex thinking, analytical skills, • Strong interpersonal and teamwork skills along with excellent written and verbal communication skills, • Good knowledge of the electricity market principles is an added advantage, • Good understanding of power system operations and analysis, • Familiarity with Power Systems Modeling Applications such as PSS/E, etc. is an added advantage, • Experience with power system risk analysis and mitigation, • Experience with applicable labour laws, • Complete understanding and ability to anticipate system and market behaviours, analyse results and provide market enhancements based on market outcomes and system evolution, • Strong computer skills in MS Office applications including Word, www.businessday.ng

Excel and PowerPoint, e-mail and internet programs. Preferred: • Experience related to ECOWAS electricity market rules, protocols and procedures (Task Force, working group, committee, etc.); Language: Fluent (Oral and Editorial proficiency) communication skills in English or French with a good working knowledge of the other. A.2. Scope of Service The Electrical Engineer shall, among others, participate in • defining the vision of the Customer and Market Division within the Department of ICC; • setting strategy, giving direction, managing people/staff by objectives and deploying resources to achieve the division agreed objectives; • providing senior/high level technical leadership and management expertise in development, implementation and reliable operation of the WAPP uniform regional wholesale electricity market and whole functions and processes of the system; • overseeing all the aspects of market applications and services vendor management; • overseeing all aspects of WAPP transmission market operations and services of market design, business rules, regulatory policy, grid code to support market planning and implementation of transparent operation of uniform regional electricity market; • coordinating the tasks entrusted to his division and controls the quality of the expertise delivered. B. Electrical Engineer – Profile “2” B.1. Minimum Qualifications Required: Education: • Master’s Degree in Electrical Engineering (with specialization in Electric Power) Years’ Experience: • 10 years of experience in the related field; • 5 years of supervising or lead position experience; Experience & main skills: • Decision making, Leadership, assertive communication, complex thinking, analytical skills; • Strong interpersonal and teamwork skills along with excellent written and verbal communication skills; • Demonstrated Experience in power system operations (unit commitment, security constrained unit commitment etc.), power system planning studies (network modelling, power system contingency analysis, optimal power flow, dynamic stability analysis etc.), power system risk analysis and mitigation; • Electric utility industry experience including emphasis in any combination of the following: Power System Operations, Power System Planning, EMS Network Applications etc. Knowledgeable and experience with power flow applications such as PSS/E, DigSilent, PSS-MUST, EMS or equivalent; • Experience and knowledgeable in development of power system operational and planning procedures, guidelines, policies etc. • Knowledgeable in Wide Area Monitoring Systems (WAMS); • Experience with applicable labour laws; • High level knowledge in electricity system operation; • Complete understanding and ability to anticipate power system

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

news 90% of COVID- 19 patients admitted into 3rd Mainland Bridge: LASTMA, transport Fashola: 44 federal roads financed ICU have high hypertension - Cardiologist union partner on traffic management under SUKUK project ANTHONIA OBOKOH

nterventional cardiologist and Chief Executive Officer (CEO) of First Cardiology Consultants, Adeyemi Johnson, says 90 percent of Covid-19 patients admitted into the Intensive Care Unit (ICU) have a high potential of hypertension. According to him, people with hypertension are at greater risk of being infected with Covid-19, noting that they tend to also be the same people whose immunity is not able to fight the infection. Though earlier research has shown chronic conditions like obesity, high blood pressure, and diabetes are common risk factors for severe Covid-19. “Obviously, there are some serious implications to that, hypertension is a risk factor that tends to attack the older people more than it does younger people. So there’s something about potential one; it puts you at risk for infection of Covid-19 which can be sometimes fatal,” he said while discussing ‘’Covid-19 and Co-morbidity 2: Hypertension,” on the programme “Doctors on Air” hosted by Pamela JacksonAjayi, founder and managing director, Synlab Nigeria. The cardiologist said hypertension puts a patient at risk both ways; for contracting the disease in the first place, and the consequent severe cases that come to the ICU.

According to him, we have a covered ICU, and we look after the sick patients. “90 percent of them who come into the ICU have high potential of hypertension and with the severe symptoms of Covid-19, like headache, because I find a lot of people have headaches and sort of neurological type of symptoms and signs of hypertension as well. “This is one of the findings we have in Nigerians. And those ones who tend to need to be in hospital, there’s a severity where their oxygen level is low. They are so weak, dehydrated and might have a stroke. Those are the ones who come to the ICU,” said Johnson. He added that people seen with headaches are usually young people who don’t have hypertension. The other common symptom is loss of smell. And usually people with loss of smell, fall into the mild category, the lowest category smell tend to be younger and tend not to have serious disease. Another common presentation is diarrhea and abdominal discomfort. “To recap the ones that get into trouble is shortness of breath and coughing because what tends to make you very sick and potentially kill you is the shortness of breath, your lungs damage, and kidney failure. We can treat things we can treat, but once the lungs get damaged, then nothing seems to work,” Johnson explained. www.businessday.ng

JOSHUA BASSEY

agos State Traffic Mana g e m e n t Au t h o r i t y (LASTMA) says it will be collaborating with the National Union of Road Transport Workers (NURTW) to ease traffic movement during the closure of Third Mainland Bridge. Repair works on the bridge will start from July 24. It is expected to last for six months, according to the federal ministry of works and housing. It entails the fixing of worn-out expansion joints. The general manager of LASTMA, Olajide Oduyoye, said on Monday that the traffic management agency would work together with the union for a smooth flow of traffic on the bridge. According to Oduyoye, the collaboration would also extend to all alternative routes from the Mainland to the Island and vice versa for the period that the work will last. These alternative routes include Yaba-Oyingbo-IddoCarter Bridge-Idumota and the Funso Williams-Bode ThomasEric Moore-Iganmu BridgeCostain-Eko Bridge-Apongbon or Costain-Oyingbo-Iddo-Carter Bridge-Idumota Routes. “It is the resolve of LASTMA to enforce the law on any recalcitrant motorist who refuses to abide by the Lagos State traffic law,” said the LASTMA boss.

Oduyoye said that the THEMES agenda of the present administration in Lagos with the ‘T’ standing for ‘Traffic Management and Transportation’ showed the importance attached to making Lagos a 21st century economy in terms of traffic management. He noted that the successes of previous collaboration in controlling yellow buses menace on Ikorodu road and the easing of traffic congestion around the Ajegunle-Mile 12 -Ketu stretch, necessitated the partnership. According to him, there is the need for further cooperation on the alternative routes following the proposed partial closure of the bridge to forestall unnecessary gridlock in the state. Oduyoye, who acknowledged the support of the transport union in the easing of traffic on Ikorodu road, requested the extension of the same to the alternative routes while the repair works last on the bridge. The general manager appealed to private car owners and drivers to abide by traffic rules and regulations in order to make movement easier for all road users during the period. Vice chairman, NURTW Lagos Council, Shittu Ganiyu, who led the team, assured of the union’s readiness to partner with the traffic management agency in ensuring that bus drivers obey all traffic rules and regulations.

https://www.facebook.com/businessdayng

...as finance minister hands over N162bn raised by DMO for the project

HARRISON EDEH, Abuja

inister of works and housing, Babatunde Raji Fashola has said that fourty-four (44) federal roads spread across the six geo-political zones are being financed under this SUKUK roads project. Fashola stated this on Monday in Abuja during a presentation of N162, 557,000,000 Sovereign Sukuk symbolic cheque to the federal ministry of works and housing in Abuja, by the minister of finance,budget and national planning, Zainab Ahmed. He listed the roads project beingexecutedpergeo-politicalzone as follows: North Central having eight,NorthEast,eight,NorthWest (7), South West (6), South East (5) and South South, (10). He gave the breakdown of the financial implication as follows: North Central N26.5 billion, North East N30.5 billion, North West N26.5 billion, South east N26 billion, South-South N26 billion, and South West N27.05 billion. Speaking on the recent public debate on government borrowing and the concerns being raised by Nigerians, Fashola explained that, with this Sukuk projects distribution, Nigerians will now see where and how the monies were being spent. Fashola who hailed the partnership between the government @Businessdayng

and the private sector in the provision of SUKUK financing in roads project across the country also listed the many economic benefits of roads construction to the people, saying that a lot of jobs have been created for labourers, artisans, suppliers of building materials, sands suppliers, farmers and even food vendors who make their daily earnings from the construction sides. “President Muhammadu Buhari has been legitimately distributing wealth through investment in road infrastructure and the 100 million Nigerians he would take out of poverty in a decade would be achieved” he said. Earlier, the minister of finance, Zainab Ahmed said one of the key pillars of the Economic Recovery and Growth Plan (ERGP), is the development of critical infrastructure projects with a view to removing the impediments to growth and development in the economy. She explained that, the President through the annual budgets had prioritized capital expenditure on the development of roads, rail, power and agriculture infrastructure projects. She stated that the amount N162, 557,000,000 now released signified the 100 per cent full deployment of the total amount raised by the Debt Management Office (DMO), dedicated to roads project.

Tuesday 21 July 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

news

N-Power: FG’s exit plans see emergence of 109,823 entrepreneurs Tony Ailemen, Abuja

he exit strategy plans for the Federal Government N- Power programme beneficiaries have seen the emergence of 109,823 entrepreneurs. The development is seen as a departure from the previous lackluster approach that led to non- exit of the previous beneficiaries who, after several months after the end of their programme, were still collecting the N30,000 stipends. The minister of humanitarian affairs, disaster management and social development, Sadiya Farouk, in a statement by Rhoda Iliyam, the deputy director of information in the ministry, said that “a total of 109, 823 beneficiaries have established their own businesses” The new entrepreneurs were products of the recent exit plan for those previously enrolled for the N-Power program.

According to the minister, “statistics like this gives me joy and once again, I want to say congratulations; I look forward to hearing amazing testimonies and meeting beneficiaries of this programme who will be doing great things in the future”. The successful implementation of the exit plan, saw to the commencement of the Batch C enrolment, which Farouq said “is sequel to farreaching consultations and a review of the submissions on the reform and realignment of the programme for greater efficiency.” The ministry has a mandate to lift 100 million citizens out of poverty through capacity building, investment, and direct support, the N-Power programme is under the National Social Investment Programme (NSIP). She said “over time, worsening living conditions among Nigerians has been blamed, partly on lack of access to financial services, poor infrastructure, low income and social exclu-

sion.” Through the N- Power, the ministry is empowered to deal with the spiraling unemployment, especially with the growing number of youth population. The President Muhammadu Buhari-led administrations had realised that without meaningful means of livelihood, the youth remains loaded gunpowder waiting to explode any moment, the corollary being the general underdevelopment of the country and attendant poor living standards of the people. Over time, successive administrations had adopted policy measures targeted at curing the twin-disease of unemployment and general underdevelopment. Government reasoned then that despite the current high level of unemployment, harnessing Nigeria’s young demography through appropriate skills’ development efforts will provide an opportunity to achieve inclusion and productivity within the country.

Overall sentiment in sub Saharan Africa to improve as lockdown eases BALA AUGIE

nalysts expect overall sentiment in sub-Saharan Africa (SSA) equities to improve as more countries begin to ease lockdown policies and businesses begin to reopen. The coronavirus pandemic that has infected 13.98 million people and claimed 593520 lives so far has spurred a broad based risk-off sentiment across the globe while investors dumped equity and backed their money in safe assets. While central banks on rich economies responded to the crisis by embarking on aggressive bond buying programme and record cut in interest rate to invigorate their economies, Afr ica countries lack the financial ammunitions to salvage their already beleaguered economies. The Botswana Gaborone Index shed -5.08 percent as at July 20, Johannesburg Stock Exchange FTSE/ JSE Africa All Share Index dipped -1.85 perent ; Nairobi Stock Exchange -28.08 percent. Ghana Stock Exchange Composite Index -17.20, Mauritius Stock Exchange SEMDEX Index -26.06 perc e nt, a n d Th e Nig e r i a n Stock Exchange (NSE) All Share Index (ASI) -9.52 percent. The low interest rate environment in the developed market, the continued rollout of monetary and fiscal m o n e t a r y s t i mu l u s a n d our expectation for currencies within the region

to strengthen as external as well as domestic conditions improve, should spur a renewed foreign interest in the region, according to analysts at United Capital Research Limited. Bolahan Ologunro equity research analyst at CSL Stock Brokers Limited said economies that rely on tourism will be hardest hit from the Covid-19 induced and added that there could be a rebound to growth as soon as airlines resume fully. “ The recover y we see in some pick up in prices in commodities is a boost for such countries,” said Ologunro. Brent crude, the international Benchmark, fell o.34 percent at $42.80 a bar rel, which compares with $18.80 as at March. The International Monetary Fund (IMF) has said

www.businessday.ng

Africa will need more financial assistance to endure the consequences of the coronavirus pandemic and the Washington based institution expects a region wide contraction of 3.20percent. The IMF had announced that the Nigerian economy would witness a deeper contraction of 5.4 percent and not the 3.4 percent it projected in April 2020. Nigeria’s central bank responded to the crisis by weakening its currency in response to a depleting external reserve and a virus that has left a hole its budget. The naira now closes between N380 and N400 to a dollar, but it still trades at the black market at N450. Th e Fe d e ra l G ove r n ment has slashed the total budget size for 2020 from N10.51 trillion to N10.81 trillion.

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

news

Indigenous oil, gas firms contribute N50bn to Nigeria’s GDP HARRISON EDEH, Abuja

ndigenous oil and gas service companies under the auspices of Project 100 Beneficiary said they have contributed over N50 billion to Nigeria’s gross domestic product (GDP) and created over 1,500 direct and 15,000 indirect jobs. The companies disclosed this on Monday during a presentation at a virtual meeting with the executive secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote. According to the group, the increased involvement of the project 100 companies in the supply chain of international oil companies (IOCs) and other big companies would be a major boost in the quest to collectively support local companies to become large enterprises and deepen local content practice in Nigeria’s oil and gas industry. The project 100 is an initiative of the ministry of petroleum resources and the NCDMB to identify 100 Nigerian oil and gas service providers and support them through special interventions to facilitate their incubation and growth into world class service companies. Sixty oil service companies currently make up the scheme with capacity in 12 core service areas and more than 200 technical service offerings. The project 100 benefi-

ciary companies’ executive committee is led by Funmi Ogbue as chairman; Bode Ogundipe, general secretary; and Tony Obiebor, executive member. In her presentation on behalf of the companies, tagged “Project 100 post Covid development plan: Creating survival and growth opportunities,” Ogbue reaffirmed the project’s capacity to develop and utilise Nigerian materials as well as the potential of the scheme to acquire and utilise Nigerian equipment. Ogbue, who is also the managing director of Zigma Ltd, made a case for the creation of a platform for project 100 companies for the purpose of engagement, collaboration and continuous development within the industry and the NCDMB. Such platform, she said, would further help to drive the much needed access to the market for the companies. “Project 100 companies should be introduced to marginal field operators for project consideration. This will further drive the P100 imperatives and its sustainability,” Ogbue said. The executive secretary, NCDMB Simbi Wabote who acknowledged the request made by the project 100 companies, reaffirmed his support for the scheme and tasked members to align with the concepts of diligence, aspiration, responsibility and maximum possibilities the industry offers.

SEC says automation of processes key to efficiency Iheanyi Nwachukwu

ecurities and Exchange Commission (SEC) has expressed the desire to automate its processes in a bid to conform to current global technological trends as well as ensure a more efficient capital market. Director-general of SEC, Lamido Yuguda stated this during a meeting with the minister of communication and digital economy, Isa Ali Pantami in Abuja on Monday, saying automating the commission’s processes would also make the capital market more investor-friendly. Yuguda said, “Presently, we have a lot of documents and papers being brought to the commission for one approval or the other. We think that if we can digitalise our

processes and these documents are transmitted to us electronically, it will make it easier for the market that we regulate and also stimulate growth. “If we can achieve that, it will also reduce cost and increase efficiency, that is why we are here today to discuss with you on areas we can work together to achieve this.” The SEC boss stated that the advent of Covid-19 has shown what can be achieved with technology, as during the period since March, the capital market has been working in spite of lockdowns and effects of the pandemic. “Remember that when the lockdown started, the commission activated its Business Continuity Process which saw staff of the commission working remotely while all our electronic channels remain

open to provide the necessary support to capital market stakeholders. “They should also continue to disclose the trend and outlook for the company, and updates on implementation of business continuity plans. Public companies are to publish these disclosures on their websites and on other relevant media. “We also told public companies who plan to conduct annual general meetings (AGMs) to ensure that the conduct of the meetings conforms to the provisions of the Companies and Allied Matters Act, the Investments and Securities Act, the SEC Rules and Regulations, relevant government and health circulars and guidelines issued in this regard. The DG stated that SEC would continue to engage and

Commuters to pay more as Sanwo-Olu approves 45% fare increase on LBSL bus services JOSHUA BASSEY

ommuters in Nigeria’s commercial city of Lagos, especially those patronising the Lagos Bus Services Limited (LBSL), operators of state-owned high capacity buses, will from August 1, spend more on transportation. This is because the state governor, Babajide Sanwo-Olu has approval about 46 percent fare increase on bus services on all the routes operated by the LBSL With the approval, a ride, for example, from Ikeja to Berger, will cost a passenger onboard a LBSL bus N150 as against N100. Similarly, from Oshodi to Obalende will now be N300 up from N200; Ikeja to Ogba, moves to N150 from N100. Also, Alapere to TBS goes up to N200 from N150, among others routes. However, Oshodi to Ajah remains N500. The new increase, according to the industry regulator- Lagos Metropolitan Area Transport Authority (LAMATA), takes effect from August 1, 2020. Governor Sanwo-Olu assented to the upward fare review following a plea by the bus operating company

on the need to sustain its operation following the negative effect of the Covid-19 pandemic on public bus transportation. Besides, Sanwo-Olu also approved LBSL’s request to increase the number of passengers per bus from 20 to 42 in strict observance of updated Covid-19 protocol as directed by the Nigerian Centre for Disease Control (NCDC) in the operation of public transport, while ensuring all other measures are in place. Equally, the governor granted LBSL buses permission to access all the dedicated bus lanes in Lagos State, thus making its journey time predictable on corridors with bus dedicated lanes. LBSL had argued that conveying no more than 20 passengers per bus, per trip had resulted in only 14 percent utilisation of the bus load factor, leading to 72 percent drop in revenue while running costs remained fairly the same. It stated that the fare increase would improve LBSL’s operational efficiency and place the bus operating company on the path to sustainability in the medium to long term. www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

collaborate with all stakeholders to ensure that the capital market remains resilient. The minister, Pantami expressed the readiness of his team to collaborate with the commission in automating its processes, adding that the present administration is committed to promoting a digital economy. He said: “With this lockdown, we have seen the advantages of digitalisation of processes that is what has kept us going when everyone was locked down in their homes. We are currently at the forefront of promoting digital economy. “We are very happy to look into areas that we can assist in digitalising your activities to ensure a better capital market. Digitalisation will certainly make processes easier and that is why we are championing it.”

Tuesday 21 July 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

comment

comment is free

Send 800word comments to comment@businessday.ng

Nigerian economy, corruption and infrastructural development

Festus Okotie

orruption is constant in every society and it occurs in all civilised societies. It has many different shapes as well as various effects, both on economies and societies at large. Among the most common causes of corruption are political, economic, environmental, professional, customs, tradition, demography, ethics, morality etc. Corruption hinders economic growth, reduces tax revenue, employment and investments opportunities. It also reduces the effectiveness of various financial assistance programs and affects access to infrastructures, health care and necessities that helps sustain life. In order to manage and reduce corruption in societies, the law of that society must be tailored to fit it because what works in one country or region might not necessarily work in another. Corruption is the major challenge affecting the growth of Nigeria’s economy and a great threat to the existence of the nation. According to the Corruption Perception Index CPI report released by Transparency International, Nigeria was ranked 146th out of the 198 countries with a score of 26/100 - considered very corrupt .This is two steps lower from 144th position it ranked in 2018 and from all indications with the alleged massive corruption currently going on in the country, Nigeria’s ranking will be on the decrease if urgent steps are not taken. The high corruption in Nigeria is a very pressing issue which affects public finances, foreign investments in the nation as well as quality of life of the citizens, for example the living conditions in the Niger Delta region and the

corruption rocking the Niger Delta Development Commission (NDDC) is a good example of how the purpose of an agency can been defeated .It has also shown how power can be abused and used to misappropriate public funds. According to National Bureau of Statistics, from September 2018 to October 2019, more than 82million Nigerians live on less than $1 daily. The high level of corruption in Nigeria calls for speedy intervention from our leaders as it is unbelievable to see the huge amount of cash in the hands of a few Nigerians. For example, a former Group Managing Director of Nigerian National Petroleum Corporation Andrew Yakubu in 2017 told the court that the $9,772,800- and 74,000-pounds sterling cash, the Economic and Financial Crimes Commission (EFCC) found in a safe in his Kaduna residence was given to him as gift. Another example of large sums of monies found by EFCC was the $43.45 million cash found in an upscale apartment in Ikoyi-Lagos, earlier that week the agency also discovered $817,000 cash in a Lagos market and a further $1.5million cash at a shopping plaza. While almost half of Nigeria’s population (200million) live daily on less than a dollar. These are just few examples of very large sums of monies found in few hands which could have been used to upgrade our national infrastructures and also improve the quality of life of the citizens. The actual number of looted funds are far more than this including the ones stashed in foreign banks around the world. This recent scandal at NDDC and other very large sums found in houses and bank accounts of some Nigerians are a tip of the iceberg of how corruption is destroying Nigeria. In March 2020,Nigerian Senate raised an alarm that Nigeria’s total debt profile had stood at N33trillion,with the approval of President Muhammadu Buhari loan request of $22.7billion.This is another source of concern for Nigerians and the international community because the most recent estimate puts the debt service-to-revenue ratio at 60 percent, which is likely to worsen amid the high rate of corruption and steep

decline in revenues associated with falling oil prices. This pose a great danger to the existence and future of Nigeria. In an ideal society, it would be expected that some of the main players of this scandal would have been in jail or honourably resign from their positions to give room for transparency, fairness and display of patriotic quality leadership, but the opposite is the case as it stands. While our nation is in serious deficit of basic infrastructural amenities in the areas of transportation, health, security, education, power, communication etc that can add value to the lives of the Nigerian people, some individuals are busy milking the resources of the nation dry. Despite Nigeria being the largest economy (with gross domestic product of $446.543 2019) in Africa with diverse natural resources and currently the sixth world’s largest oil producer globally, we have not been able to utilise this advantage to boost our economy and improve the living conditions of our people. Using the transport sector for example which increased its GDP from $642.927 to $720.241 million in 2019 added to the nations GDP. The sector urgently needs intervention as it has been lacking relevant attention from government in developing its infrastructures, adoption of modern policies to drive the sector and this is partly responsible for the poor state of the nation’s economy. All these have been hindered by the high corruption rate which hampers growth of the economy. We cannot continue to apply the same old formula and expect to achieve greater results. It is very sad that despite our great potentials and abundant natural resources, our economy has impacted very little in the lives of the people. Interestingly the 2019 global liveability index ranked Lagos- Nigeria as the second least city to live in, placed 139 out of 140 countries surveyed. While Vienna (Austria) was number one most liveable city, second was Melbourne (Australia), third was Sydney (Australia), fourth was Osaka (Japan) and Calgary (Canada) fifth. The United Nations Development Programme (UNDP) also described Nigeria’s road networks as one of the poorest and deadliest transportation in-

‘

We cannot continue to apply the same old formula and expect to achieve greater results. It is very sad that despite our great potentials and abundant natural resources, our economy has impacted very little in the lives of the people

Okotie, a maritime transport specialist, writes via fokotie.bernardhall@gmail.com, Fokotie@ bernardhallgroup.com

Investor - Know Your Management (KYM)

he COVID-19 pandemic continues to significantly impact negatively on businesses worldwide. The oil and gas industry received a double whammy when an earlier collapse in oil prices combined with the global restrictions on movement brought about by the incidence of the coronavirus pandemic. The oil industry continues to face numerous challenges in the present environment. The realities on ground foisted an enormous uncertainty on the oil & gas industry, making it inevitable for companies to drastically restructure their operations, from remote working to furloughing workers to discounted salaries and reduced headcounts, to mention but a few. These, including also the termination of contracts, have become routine business sustainability actions in this dire time. There are also reports of places where such actions were taken to the extreme. Oilfields were abandoned with the total evacuation of all staff, not an option the investors will favour, bearing in mind hundreds of millions of dollars invested in acquisition, exploration, and development of the fields, but it happened in several locations and this culminated in the loss of production of tens of thousands of barrels of crude oil per day. When eventually, the pandemic eases, more

a huge amount of money will have to be spent to bring the fields back to life, yet another cost to the investors. Insofar as we are humans, our initial reactions are understandable. Faced by a novel pandemic that has caused unprecedented mass death and a global stampede, people want to go home and be close to and among their families or loved ones. However, this could have been done in a manner that protects investors and communities, bearing in mind that investors are custodians of people’s savings and pensions, and that local communities derive a livelihood from oil and gas activities within their territory. In most of those fields that were abandoned, the management and operations staff constitute more than 96.5 percent expatriates. You cannot blame them for wanting to head home in uncertain times, but the management has questions to answer: Why were there no forward plans for emergencies like the COVID-19 Pandemic? Why run operations with greater than 20 percent expatriate workforce in any location in the world? It makes no economic sense. The global coronavirus crisis has demonstrated the intrinsic value of local content or local value proposition to the sustainability of businesses.

www.businessday.ng

Without doubt, it now makes sense that investors know the management of companies or organisations they invest in. Know your Management (KYM). When management is reluctant to accept diversity and bring on board locals, know it that the game plan is to ensure to look after or protect themselves, and your investment is at risk. It is natural for investors to insist on having some of their own on the board of the businesses they invest in; however, to protect their investment, they should also insist on diversity, not having more than 20 percent expatriates as staff in any location in the world. Not too long ago, the excuse used to be that you cannot find suitably qualified locals in some parts of the world. Oil & Gas technology, engineering and business, is old; if you search diligently, you can always find adequately qualified locals within the territories; and if there are not, those available could be trained up in a short time. Afterall, Oil & Gas jobs do not require rocket science or neuroscience skills. To have a consistent, reliable and sustainable business, investors must impress on management to, where possible, source locally and get involved in local talent development. We all can see the obvious fact now that with the global restriction on movement and the shutdown of international flights, expats would not return to their jobs in numerous locations globally. Only

https://www.facebook.com/businessdayng

frastructural systems in the world while data from the UNDP and the World Bank (WB) showed that Nigeria has suffered transportation infrastructure deficits for decades with one of the lowest indices in economic development in the last decade. Nigeria with a gross domestic product (GDP) of $446.543 billion in 2019. Many experts believed that corruption could cost Nigeria up to 37 percent of Gross Domestic Product (GDP) by 2030, if urgent steps are not taken to deal with it by adopting better strategies, restructure our economy and hire the best hands to block all the loopholes in the economy. It will also interest you to know that a World Bank indicator that promotes trading across borders measured the efficiency of different ports globally and ranked Nigerian Ports at 183 out of 185 countries in 2017. It also classified Nigerian ports among the worst ports in the world due to lack of modern facilities causing challenges such as delay of import/ export processes, difficulty in gaining access to the ports due to bad roads causing congestion, lack of modern security gadgets etc. All these are lacking because of the impacts of corruption to our economy and are partly responsible for why government’s projection to generate N2 trillion from the maritime industry cannot be achieved. In conclusion, while the negative effects of corruption are threatening the existence of Nigeria and its economic progress, we must urgently go back to the drawing board to revaluate and ensure total enforcement of our existing laws and policies to block all avenues of corruption in our nation. We must also start recovering all looted funds home and abroad to upgrade the nation’s decayed infrastructures, our government should also urgently put structures in place to block other revenue leakages, engage the services of reputable forensic auditors in all sectors, diversify our economy to create more job opportunities and create a better living conditions for all Nigerians.

Emmanuel Okoroafor

companies whose management planned will be able to sustain their business with the support of their well-trained local staff. Local content is not new. It is good for businesses and the communities where they operate. It has been around for many years and is practised in various forms in all countries on earth. In recent times, developing nations have been showing some seriousness about local content. Businesses should not shy away from it, but rather take it on board and invest locally as long as they see the local value proposition translate into sustainable returns for their companies and their shareholders. As part of their risk assessment, investors, among other things, should entrench Know Your Management (KYM) policy and must also insist on seeing and approving the local content plan of the companies they invest in. No one wants to see their investment completely abandoned for lack of adequate local content. Okoroafor is the MD/CEO of Holbark Consultant Management Services Ltd.

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

comment

comment is free

Send 800word comments to comment@businessday.ng

Reopening of schools must be data-driven

We cannot use our children as litmus test STRATEGY & POLICY

MA JOHNSON

he world is going through an uncertain time because of coronavirus. The chaotic response by nations to the coronavirus pandemic has tested the confidence of governments worldwide. Since March 2020, all schools in Nigeria have been shut due to COVID-19. No one can predict accurately when this season of the pandemic will end. The good news, however, is that epidemiologists understand the virus, and they have announced that rules for good hygiene must be strictly followed. Health experts have advised that wearing of masks, regular washing of hands, and maintaining social distancing amongst others, may help in many ways to either stop or decelerate the spread of the virus. But we have seen in many parts of world including Nigeria, that some individuals have refused to wear face masks. Many Nigerians don’t have access to clean water. It is incredibly sad. The sad news is that many people including those in the government at federal, state, and local levels are disenchanted, recalcitrant and resistant to behaviours that help reduce the spread of the virus. Had it been that we are all ready to obey simple instructions issued by medical experts, most likely those students in graduating classes in primary, secondary, and tertiary institutions would have resumed. We observed that most people being cooped up indoors during the lockdown for a few weeks developed a devil-maycare attitude. We can all see the consequences of their actions with rising numbers of individuals who are infected and those who have fallen dead. As at July 17, 2020, figures obtained from the worldometer coronavirus website show

that Nigeria has: 34, 854 infected cases; 769 deaths; and 14, 292 recovered. The total number of active cases and deaths because of coronavirus have been rising in Nigeria. But out of about 200 million people, only 202,097 have been tested as at July 17, 2020. That is, only 0.101 percent of the population have been tested. This is a ridiculously small percentage of the nation’s population when compared to the number of those that have been tested in Ghana so far. Ghana which has a population of roughly 31 million, has tested 339,491 people. This shows that 1.0 percent of Ghana’s population have been tested for coronavirus. When we compare these figures, Nigeria needs to improve its testing for coronavirus. As a nation, we have not addressed squarely what is responsible for our people not wearing masks and maintaining hygiene during the pandemic. Could it be poverty-induced disobedience in some instances? Or, ignorance? In the midst of these uncertainties, some Nigerians are advocating that schools should reopen. Before reopening schools, our concern should be how to generate practical ideas that can break bad habits in our society so that good ones can be created. The battle for better habits can only be won, if we insisted on building habits that are easy to maintain during and after the pandemic. If we tried to build good habits in our children preparatory to the reopening of schools and we fail, failure is not because of lack of willpower, but a failure of strategy. The Minister of education, Adamu Adamu, have said on a few occasions that reopening of schools now, and allowing academic activities including writing of examination is too risky considering the spread of the virus. He appealed to state governments that have announced schools’ resumption to reconsider it saying, “I think it is not safe. Let us protect our children.” The Ministry of Education has issued a 52-page document outlining actions, measures and requirements needed for safe reopening of schools after the coronavirus pandemic is contained. The document, according to reports, was developed in collaboration with the federal ministries of health, environment, and

health safety experts. As expected, the decision of the Minister of Education has been received with mixed reactions from a section of the society, the National Assembly (NASS) and private school owners. Some Nigerians expect all stakeholders in the education sector to do what is expected of them so that our children can go back to school. But members of the House of Representatives and some Nigerians have called on President Buhari to order a partial reopening of schools to allow pupils in JSS 3 and SSS 3 sit for the 2020 West African School Certificate Examination (WASCE). In fact, a former minister of youth and sports development say that if airlines can operate, students can write the WASCE. He urged the FG to find “creative ways to manoeuvre around” the coronavirus pandemic. Good suggestions, but our actions must be datadriven. We need to be careful! When over one million students finish their examinations and results are released, which university are those who passed their WASCE proceed to? All universities in Nigeria are shut and members of the Academic Staff Union of Universities (ASUU) are on strike. Today, ASUU’s strike is an endless phenomenon. Or are the students interested in traveling abroad? Sorry, Nigeria has not opened its airspace to international flights. I must acknowledge that some of those affected by closure of schools are proprietors, teachers, and auxiliary staff of private schools. Some private school teachers say they did not benefit from governments’ palliatives. It cannot be confirmed if those working in public schools were equally affected. Many parents have lost their jobs because of the pandemic. They have expressed concerns that their children will not return to school until their economic condition improves. But we all know that before the outbreak of COVID-19, over 10 million Nigerian children were out-of-school which experts say is the highest globally. Recently, a group of experts expressed their views that more children will not go back to school after the pandemic. This is worrisome. But I know that some children will go back to school in the nearest future provided they are alive. There is no vaccine against the coro-

‘

Before reopening schools, our concern should be how to generate practical ideas that can break bad habits in our society so that good ones can be created. The battle for better habits can only be won, if we insisted on building habits that are easy to maintain during and after the pandemic

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

On Minister Pantami, 40% data cut and Nigeria’s lost generation

he British government recently promised a “New Deal” to kick-start its economy in the aftermath of the COVID-19 pandemic, calling to mind the vast investment in jobs and infrastructure designed by President Roosevelt to save America from the Great Depression. When details of this “New Deal” arrived, it turned out that the people of Britain (649,000 of whom have lost their jobs due to COVID-19) were being offered £10 (N4000) off restaurant bills for 14 days in August. Not so much a New Deal as a meal deal – it would be like the Nigerian government trying to rebuild our economy with discounts in Mr Biggs! It was hard for me not to feel the way the people of Britain must have felt when they heard this when I heard Minister of Communications and Digital Economy Isa Ibrahim Pantami announce government ambitions for a 40 percent cut in data prices by 2025. Two weeks ago, I called on Pantami to require telecommunications firms to make educational resources exempt from data charges to save a generation of Nigerians from having their education permanently disrupted by COVID-19.

Data is a luxury many Nigerian families cannot afford. Education is a necessity. A 40 percent price cut in five years’ time will not help Nigeria’s lost generation one little bit. In the same speech Pantami announced government plans to “promote digital economy and improve the living standard of the citizenry” with an emphasis on “skill acquisition”. This is music to my ears, but during the speech the minister also boasted that broadband penetration in Nigeria has risen to 40.18 percent. Pantami spoke of targeting a rapid rollout of 5G capability across Nigeria – but we are yet to achieve significant 4G penetration! Indeed, with government projections stating that by 2025 only 70 percent of Nigerians will have any sort of internet. The youth of Nigeria will never develop digital skills if less than half of them are able to access the internet and those who are cannot afford to. Patami’s goals are the right ones and I genuinely applaud both his efforts and ambitions. And there is not getting around it - universal broadband takes time to deliver. But our children need action now. Especially those unable to access education. www.businessday.ng

One in every five of the world’s out-of-school children is Nigerian. 10.5 million of our 5 to 14-year-old are not in school. This is a national disgrace. And that was before COVID-19 robbed so many more children of months of education. The COVID-19 pandemic has revolutionised digital and online education as lessons move online across the world. But in Nigeria, many homes are not equipped to adapt to these new methods of learning. This means children who have fallen behind will never catch up, and Nigeria will continue to feel the effects of the coronavirus for long after the pandemic is over. About 170 million Nigerians have a mobile phone subscription, but many of those with smartphones cannot afford the data fees to make the most of the opportunities of the digital age. Many Nigerian parents will be burning through data trying to use online resources to help with their children’s schooling. When the data ends, so does the learning. As head of the Digital Democracy campaign – Rate Your Leader, I am calling on President Buhari to tell our telecommunication companies that this isn’t good enough. Our app allows registered voters to directly contact their local politicians – building trust,

https://www.facebook.com/businessdayng

navirus approved by the World Health Organisation. Some of our state governors still find it challenging to believe that there is COVID-19 in their states. Some public affairs analysts say some state governors do not want to take responsibility for the wellbeing of their people. Why? Analysts say some states do not want to spend money treating those infected by the virus and setting up isolation centres. Unconfirmed sources say the cost of testing for the virus is about N50,000 in some private testing centres in Nigeria. So, a worker on N30,000 salary per month, those underemployed and unemployed, cannot afford the test for coronavirus. How do we provide for indigent people in our society? Let us put politics and emotions aside. We must look at the data and analyse it. How many private and public schools- tertiary, secondary and primarythroughout the country are ready in line with the guidelines issued by the Ministry of Education in its 52-page document on the safe reopening of schools? If we feel that schools should reopen, have we analysed accurately the daily infection rate in all the 36 states, Federal Capital Territory and 774 local governments say over a 14-day period? Since the opening of the economy in phases, what is the daily infection rate using a 14-day average in Nigeria? In which phase of economic reopening is Nigeria now? I am just musing. At what percentage will our schools be free to reopen based on daily infection rate using for instance, a 14- day average? These are questions our medical experts should provide answers to before the FG decides when schools will reopen. Reopening of schools must be data-driven, not by intelligent guess. While the FG is discussing with WAEC and other member countries on a suitable date to conduct examinations, all schools (public and private) should proceed with the implementation of the FG’s guidelines as contained in the 52-page document. Common sense and intelligence should determine what we do in this uncertain time. “We must protect our children.” Thank you!

Joel Popoola transparency and accountability, and allowing a two-way flow of information which educates and benefits both parties. We know Nigerians want this – so tell your local leaders! All of this is done with the touch of a smartphone button from the comfort of the home. It would take next to nothing for children otherwise unable to access education to learn the same way. But while Rate Your Leader requires minimal data, online educational resources do not. As for the telecommunications companies themselves, free data for education should not be seen as an act of charity but a sensible business decision. It is companies like them who stand to gain most from a more digitally-skilled workforce and wider internet access. For any of our telecommunication companies with consistent modest, profit after tax for decades this modest investment would pay for itself many times over. Nigeria’s lost generation needs free data for education now – not a price cut in 5 years. Popoola is a Nigerian tech entrepreneur, digital democracy campaigner and is the creator of the free Rate Your Leader app. He can be reached at @JOPopoola

@Businessdayng

BUSINESS DAY

Tuesday 21 July 2020

comment

comment is free

Send 800word comments to comment@businessday.ng

Are African numbers still poor? (3)

Rafiq Raji

se African numbers as baselines but filter with alternative measures There are now more frequent rebasing exercises for both GDP and inflation data across the continent. Consequently, the changes, often to the upside are not as dramatic as those of the past. Ivory Coast finally rebased its GDP this year, changing the base year to 2015 from 1996 hitherto. South Africa also plans a GDP rebasing exercise during the course of the year, with the base year to be changed to 2015 from 2010 hitherto and new sector weights adopted. In the same vein, Kenya and Ghana recently updated their inflation data, using new household surveys to change the consumer price index (CPI) basket of goods and services and adopted more recent base years. But even as these are improvements, they rely on what may still be deemed more than ideally lagged price and consumption data on the one hand and not long enough historical data for the new bases on the other. Take the Kenyan case; the new CPI, which now has a base period of February 2019, is based on a

2015/16 household budget survey. In the Ghanaian case, the rebased CPI, which now has a base year of 2018 (2012 hitherto), has only the revised historical data from August 2019 readily available on its website (based on author’s checks in early May 2020). As Kenya and Ghana are major African economies, these deficiencies could be said to be representative of a broader phenomenon in this regard across the continent. In general, a disaggregation of African data is often times not readily available; talk less newly rebased ones. As can be imagined, other planned African rebasing and survey exercises for the remainder of 2020 have been complicated by the ongoing Covid-19 pandemic. Delays in statistical data releases have been announced, with some exercises postponed altogether or methodologies changed to ensure publication within the year. Still, the key point is that the statistics of increasingly more African countries are being refreshed more regularly and businesses and investors could reasonably expect them to provide a good base case glimpse of the current state of the economy of interest. That said, there is clearly a need to always juxtapose official numbers with other more real-time and downto-earth data. As earlier shown, censuses, while now relatively more frequent on the continent, are still conducted with significant time lags. There is as yet no certainty about when the next Nigerian census would take place, for instance. And for South Africa, another census has been set for 2021. In the intervening period between

censuses, investors and businesses still need up-to-date and accurate data. In some cases, emerging techniques for using openly available spatial data show promise in bridging the gaps. Mobile phone subscription data are increasingly used to assess consumption patterns across income classes. Data on mobile phone use and spending sometimes provide far better insights into the spending patterns of an African country’s population than do official poverty statistics. In any case, most African statistical agencies now source and publish data from their telecommunication regulators. Social media data can also be reliable for filtering some official statistics. Considered “the largest enumeration of people in history,” with more than 2.4 billion active users, Facebook data can be used to get a sense of a country’s population, for instance. Whitby (2020) argues Facebook is tantamount to a census because the information it collects are modelled after the United Nations census core guidelines. These include name, birthday, gender, cities of residence and origin, high school and college attended, employer and relationship status. While in the African case, many of the poor in the informal economy might not have Facebook accounts, a firm looking to target the portion of the population with disposable income might find Facebook data to be quite useful. Firms can also now recreate some of Africa’s economic statistics. Realtime prices for African consumer goods and services are now increasingly available on the internet. While their use has long been in practice

‘

These are just illustrative examples to show how firms and investors now deploy various creative techniques to overcome the data challenge. Still, these additional efforts on their part to gauge opportunities and make investment decisions on the continent clearly add to the costs of doing business

by private sector economists in advanced economies, rising growth in African online retailing for both goods and services means it is increasingly similarly easy and cheap to use them for investment decisions on the continent as well. Just recently, The Economist asserted statistical organisations around the world had begun “scraping web pages” too, a practice they once shunned but are now forced to adopt since some of their conventional data collection methods have been rendered redundant by the COVID-19 pandemic. These are just illustrative examples to show how firms and investors now deploy various creative techniques to overcome the data challenge. Still, these additional efforts on their part to gauge opportunities and make investment decisions on the continent clearly add to the costs of doing business. Add to that the possibility that it could all be in vain if the reality on the ground turns out be way outside of any considered scenarios. Understandably, some firms might choose not to make the effort altogether. Thus, while one acknowledges ongoing improvements in the production and distribution of African statistics in recent years, one chooses to err on the side of caution and advise similarly to its users. Edited version of article was first published by the NTU-SBF Centre for African Studies of Nanyang Business School, Singapore. References are in the original article. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Roads and bridges

edia reports during the week indicated that amount of sleaze involved in handling the constrictions of the Second Niger Bridge, the Lagos-Ibadan and the AbujaKaduna-Zaria-Kano road projects suggests that they may not be completed and commissioned by the President Muhammadu Buhari administration. The House of Representatives Committee on Works led by Abubakar Kabir, an APC-Kano representative said this last Thursday. The engineering construction contractor handling the second Niger Bridge project among others, Julius Berger Nigeria, had said that the earliest date for the completion of the project is February 2022. However, legislators accused the company of submitting doctored documents claiming work done on the projects. They also described the construction company as incapable of handling the three projects and suggested that the road projects be split and shared to other companies to guarantee speedy completion. Yeah right. For a long time, I have been involved in a running battle with various supporters of the current government over that bridge, and thus when Alhaji Kabir made this declaration, I felt a momentary rush of pleasure. But that rush is self-defeating. Nigeria needs that bridge and many others, and it doesn’t matter who builds it. The 2nd Niger Bridge, the Kaduna-Abuja Road, and the first section of the Lagos-Ibadan road were awarded for N206 billion, N155 billion, and N134 billion respectively. At the

time of the contract awards, the dollar value of those contracts were $1.04 billion, $779 million, and $673 million respectively. These are amounts that Nigeria is finding it hard to pay. The question we should be asking is why, beyond the politics, is Nigeria finding it so difficult to finance basic infrastructure? About a month ago, the works minister, Tunde Fashola, said that the FG had concluded plans to concession 10 major highways in the country. While presenting details of the project to the National Assembly Joint Committee on Works, Fashola said the project titled, “Highway Development and Management Initiative”, is anchored on private sector engagement and that the investors would carry out the development and management of the road networks. The rationale behind the private sector engagement, according to Fashola, is to provide an avenue to mitigate the paucity of funds, which had hindered road development in the past. Fashola is right. Given Nigeria’s mounting debts, the plan to concession major highways is desperately needed to meet the country’s infrastructure needs. The humongous loans taken by the Buhari government are still a drop in the bucket compared to what’s needed to meet demand - an annual investment of $15 billion, or about half of Nigeria’s current budget, for infrastructure alone. Nigeria does not have this money, and given our rather wasteful record, cannot easily borrow the money. Investors are, quite rightly,

www.businessday.ng

concerned about Nigeria’s debt profile. But there are two other problems that require political will before we can unlock investor funding. First, our government’s attitude to agreements. Consider the controversy that dogged a similar concession with respect to the Lagos-Ibadan expressway which was first concessioned to a local firm, Bi-Courtney, in 2003, and then revoked nine years later, after numerous court orders stopped it. It will be very important that the government keeps to agreements it will sign with concessionaires after the Senate approves and the Infrastructure Concession and Regulatory Commission (ICRC), finds willing partners. If done properly, it will provide an excellent model for driving private capital into infrastructure, reducing pressure on the government to increase debt commitments for the same purposes while meeting the demand for excellent infrastructure. Second, the law of the land. Nigeria has two things, one called the Land Use Act, and the other called the Exclusive Legislative list. Between the two of them is a toxic brew for our ability to attract capital. The Land Use Act was the primary product of an effort by the regime of General Olusegun Obasanjo to solve the twin problem of a sharp rise in land disputes caused by a tumultuous decade and a half of instability - including the Civil War as well as the problematic transition of ownership rights in Nigeria from a custom-

https://www.facebook.com/businessdayng

Cheta Nwanze

ary, traditional to English concepts of possession and occupation. The model adopted for solving the problem was to create a coherent land acquisition and disposal mechanism by centralising property ownership in the state governor. As with many good intentioned measures, the participation of government in the management of a critical national issue has led to bloat, corruption, inefficiency and in some critical cases, outright mismanagement, ensuring that land transactions are notoriously difficult to complete, The Executive Legislative List is essentially a legally sanctioned power grab that perpetuates decades-long inefficiencies in our political system. Rolling back these legal stumbling blocks will require some tough political decisions. The pathway to getting basic things as infrastructure right lies in enacting those reforms. Cheta Nwanze is the lead partner at SBM Intelligence and heads the company’s research desk.

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

Conducting WASSC Exams not impossible, only takes commitment Discourse should be on ‘how to’, not ‘when to’

he decision of the Federal Government of Nigeria to rescind its earlier stand on an indefinite postponement of the 2020 West African Senior School Certificate Examination (WASSCE) for Nigerian students which received lots of backlashes from Nigerians is quite commendable. Last week, the FG and WAEC agreed to shift the date for the commencement of the WASSC Examinations from the earlier proposed August 4 to September 5, 2020. In the face of surging COVID-19 numbers, the need to protect students from contracting the deadly virus is understandable, more so as the government strives to flatten the pandemic curve. But losing an academic year as earlier proposed by Adamu Adamu, Nigeria’s Minister of Education, is tantamount to creating a problem in a bid to solve an existing one. That, we think, means basically setting back about 1,549,463 registered candidates as against their contemporaries in other West African countries who are also participating in the yearly exams. We share the view of most Nigerians, especially parents,

that holding the WASSCE is not impossible if there is a commitment to conduct the examination. It has been suggested that campuses of universities and polytechnics should be used for the exams to allow for social distancing. We can’t agree more. Additionally, we also agree with the view that, in a bid to achieve safe examination exercise, the usual examination duration could be extended to reduce the large concentration of students in the examination hall for better observance of physical distancing rules. It is important Nigeria finds a way to participate in the WASSCEs, while strictly adhering to health and safety protocols as advised by health professionals. After all, schools are closed and, so, spacing shouldn’t be an issue. Lessons can be conducted in safe environments until the exams are due. The outbreak of the COVID-19 virus forced several countries to shut the school gates this year. According to statistics, over 1.5 billion young people have been compelled to stay at home as part of broader shutdowns to protect people from the novel coronavirus. Although this measure was, to a large extent, effective in curbing the spread of the virus in some

countries, parents and educators at a time began to raise concerns that school closures did more harm than good. They contended that the measure was damaging the lives of a generation of young people. To address this, many countries have reopened their schools, while they ensure students remain safe by imposing strict policies and sanctions on failure to observe safety measures. The case of reopening schools or not is all about proper execution of safety policies and measures. This is why we feel strongly that Nigeria cannot afford to keep schools permanently shut, because no one knows how long the COVID-19 pandemic will last nor how soon a vaccine will be discovered and declared safe and potent for curing the virus. There is the fear too that when the vaccine is discovered eventually, not many Nigerians would be able to afford it, meaning that the virus may be here for a long haul. Instead of being reactive towards the opening of schools, we encourage the government to be more proactive in safe approach to restarting sectoral activities the COVID-19 pandemic has forced to shut-down. In the long run, the benefits will outweigh the risks,

especially in Nigeria’s education sector. All it will take is a combination of keeping student-groups small and requiring masks and some social distancing. In this regard, current discourse should be on “how to” and not “when to” reopen schools. It should also be on “how” to conduct the WASSCE and not “when” to do so. Basing policies on “when” would only see the FG go back and forth on COVID-19 related decisions when the numbers again become scary. Countries have now gotten to the point where they are asking, “how can we resume activities while safeguarding the people?” We advise that Nigeria should take a cue. Although very complex, we warn that the longer school activities are interrupted, the deeper and hasher the psychological impacts on students at home. Some students have taken to e-learning, but there are countless others out there without access to such a facility or opportunity. To this end, we advise further that ‘how’ do we make our schools safer for classes to resume and exams to take place, amid the COVID-19 pandemic, should be the big question on the government’s lips.

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

Enquiries NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

ADVERTISING 01-2799110 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 Legal Advisers The Law Union

Mission Statement To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

OUR Core Values

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

Tuesday 21 July 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

COMPANIES&MARKETS CONSUMER GOODS

Pandemic Borrowings Push Global Debt to 331% of GDP in Q1, Says IIF SEGUN ADAMS

lobal debt levels reached a new high of 331% the value of the world’s output in the first quarter of 2020 as countries borrowed to support their shrinking economies hit by the new coronavirus pandemic. The world’s debt levels rose more than 10% points from 320% in the last quarter of 2019. “While this marks the largest quarterly increase in global debt ratios on record, the actual rise in debt was only $1.2 trillion—well below the average quarterly rise of $2 trillion

over 2015-2019,” said IIF. However, available data on issuance suggests that the pace of debt buildup has accelerated since March, largely reflecting the massive global fiscal and monetary response to the pandemic, the Washington-based trade group of financial institutions said. In the second quarter, gross debt issuance reached hit a record $12.5 trillion in compared to a quarterly average of $5.5 trillion in 2019, following the approval of $11 trillion in global fiscal stimulus and another $5 trillion in the pipeline. 60% was government debt, and 92% of the debts are still rated highly even though

concerns are mounting over sustainability. Also, the face value of defaulted non-financial corporate bonds jumped to a record $94 billion in Q2 2020 as their ratings plunged, reflecting the impact of the virus on the earning ability of businesses and their ability to meet obligations. Notably, even though emerging markets saw their debt to GDP rise 10% points on a quarterly basis to 230% in the first three months of 2020, the dollar value of their debt fell by $700 billion to $72.5 trillion due to a depreciation in EM currencies against the USD. IIF noted that emerging market foreign-denominated

(FX) debt remained broadly stable at around $8.4 trillion in Q1 2020, suggesting that EMs have been able to roll over their FX liabilities despite market tensions amid COVID-19. “However, the sharp depreciation in EM currencies against the USD, along with the steep contraction in output, prompted a surge in FX debt-toGDP ratios in Q1 2020 — most markedly in Ukraine, Chile, Mexico and Colombia,” it said. Some $3.7 trillion of EM debt will mature this year, and almost 17% of the total is foreign-denominated while around $4 trillion of EM debt will mature in 2021 with almost 18% in foreign currency.

L-R: Lere Awokoya; Country Manager, Betway Nigeria, Don Jazzy; Superstar producer, Ebuka Obi-Uchendu; Media Personality and BBNaija Host and Chris Ubosi; Managing Director, Megalectrics Limited and Director, Digibay during the Betway BBNaija Ambassador’s signing ceremony yesterday.

Lakeg Nigeria CEO, Muftau Oyegunle emerges CIIN president

he Chartered Insurance Institute of Nigeria, CIIN is set to inaugurate Muftau Oyegunle, CEO OF Lakeg Nigeria Limited as its president and chairman of Council, taking over from Eddie Efekoha whose two years tenure elapsed earlier this month. The virtual inauguration slated to hold today 21st July 2020, will see Oyegunle emerge as the 50th president and chairman of the council of the premier professional body in the country. Oyegunle’s path to presidency of the CIIN is replete with acts of dedication and service to the Institute for over 26years actively functioning in various capacities. He rose to the position of chairman, Kaduna branch of Chartered Insurance Institute of Nigeria from 1994 to 1996 and was voted into Chartered Insurance Institute of Nigeria council in 2009 where he has remained a member to date. Prior to his investiture as President, He has served as the deputy president of the CIIN and chairman, College of Insurance and Financial Studies. In his 26 years as a member of the Institute and Governing Council, he has served as the Treasurer and Chairman of the Board of the College of Insurance and Financial Management. He has equally played very active roles in the Education, Examination and Finance and General Purpose Committees of the Institute. Muftau Olakunle Oyegunle was born in Makurdi, Benue State and began his educational sojourn at St. Peter’s Anglican Primary School, Ile –Ife for his primary school education and proceeded to Origbo Anglican Grammar School and Adeola Odutola College, Ijebu-Ode for his Secondary and Higher School Certificate education respectively. Oyegunle gained admission into the prestigious University of Ibadan to study Sociology and obtained a B.sc Hons in Sociology in 1982. He equally

completed the requirements for an M.B.A in Human Resource Management in 2002. Muftau began his foray into the insurance industry in 1985 after a brief teaching stint when he was employed as Insurance Superintendant by Leadway Assurance Company Limited. A dedicated and assiduous grafter, his application of intellect and skill to achieve results merited a progressive rise through the ranks to the position of General Manager, Commercial in 2009. During this period, in pursuit of professional excellence, Oyegunle acquired the required certifications needed to reach the pinnacle of the insurance profession. He qualified as an Associate of the Chartered Insurance Institute of London in 1990 and became a Chartered Insurer in 1995. He became a Fellow of Chartered Insurance Institute of Nigeria in 2003. He retired from Leadway Assurances Company Limited in 2013 to industry acknowledgement and acclaim after 28years of meritorious service, to manage his private Company - Lakeg Nigeria Limited which engages in Insurance Consultancy. A beacon of professionalism, academic excellence and standards, Oyegunle has delivered several Academic and Professional papers worldwide and has had the privilege of attending several conferences at the Swiss Insurance Training Centre Zurich, Switzerland, National Insurance Academy of India among others.

Here’s what you should know about artisanal gold mining development initiative (PAGMI) OLUFIKAYO OWOEYE

resident Muhammadu Buhari has officially presented locally mined gold bars made by the Presidential Artisanal Gold Mining Development Initiative (PAGMI) to the Central Bank of Nigeria for which the apex bank paid the sum of N268m for 12.5kg of gold. The artisanally-mined gold was processed and refined according to the London Bullion Market Association (LBMA) standards required for the use of gold as a reserve instrument by the Central Bank of Nigeria. The official presentation is the culmination of 24 months of intense efforts between the solid minerals development fund; Kebbi and Osun States; ministry of mines and steel development; and the ministry of finance, budget, and national planning under a

steering committee led by the chief of staff to the President, Ibrahim Gambari. What exactly is PAGMI? The acronym PAGMI stands for the Presidential Artisanal Gold Mining Development Initiative, it is a comprehensive artisanal & small-scale gold mining development programme, launched in 2019 to foster the formalization and integration of artisanal gold mining activities into Nigeria’s legal, economic, and institutional framework. PAGMI has been designed to integrate social, environmental, health and safety, economic, commercial, and technical considerations, into its implementation. The initiative is designed as a broader strategy to address the structural and institutional factors such as rural poverty, lack of alternative livelihoods, and difficulties in meeting legal

and regulatory requirements that tend to push artisanal gold mining operators deeper into the informal economy. How will PAGMI work? PAGMI will deploy safer and more efficient mining and processing technologies across artisanal mining locations across the country, starting with Kebbi and Osun States as the Pilot States with intervention in Kaduna, Zamfara and Niger States to commence immediately after the Pilot. Using a centralized offtake and supply system supported by a decentralized aggregation and production network, PAGMI will buy all the gold produced by artisanal and smallscale miners and aggregated by licensed buying centers and aggregators for supply to the Central Bank of Nigeria. Which States are benefiting from PAGMI? The main gold producing

www.businessday.ng

belt with a history of artisanal workings and exploration activities in Nigeria will benefit from PAGMI. Intervention at artisanal mining sites will take place in Kebbi, Kaduna, Zamfara, Niger and Osun States with Kebbi and Osun States serving as Pilot States. PAGMI will also be setting up gold aggregation centers in addition to supporting licensed buying centers and aggregators with access to financing options, responsible sourcing mechanisms, management and technical expertise including improved testing and processing equipment. How does this affect me? PAGMI is expected to create over 500,000 new mining and formalized jobs, thus, leading to poverty alleviation for more than 1 million households. Under PAGMI, artisanal gold miners will earn more from higher productivity, better recovery rates, mechanization of

https://www.facebook.com/businessdayng

operations, and better access to reliable geological information. Increased earnings for the miners will have significant spillover effects in the local economies as businesses will grow to cater to the increased consumption per household. The initiative would also boost national identity management through the biometric registration of thousands of artisanal miners nationwide. About 20,000 miners have already been registered in Kebbi and Osun States. PAGMI will also help bring them into the formal financial sector. PAGMI will boost productivity and output in the gold mining sector, by deploying safer and more efficient mining and processing equipment and technologies across artisanal mining locations across the country. Agreements have been reached with Thermo Fisher @Businessdayng

Scientific and Mettler Toledo, leading producers of gold testing and weight equipment to equip up to 50 buying centers across the country. PAGMI estimates that the Federal Government of Nigeria could realize an annual average of $150 Million in taxes, $25 Million in royalties, and $500 Million accretion to foreign reserves from the integration of artisanal gold mining activities implemented by PAGMI. PAGMI will allow the Central Bank of Nigeria to purchase locally produced gold in Naira to boost the nation’s foreign reserves. It will also ensure that responsible sourcing standards, as outlined in the OECD Due Diligence Guidance, are adhered to, and the gold bars delivered to the Central Bank of Nigeria are Responsibly-Sourced, and LBMA Certified.

Tuesday 21 July 2020

BUSINESS DAY

property&lifestyle COVID-19: ‘The virus has reprogrammed many activities in the world including housing’

The impact of Coronavirus on the real estate sector in Nigeria does not stop at the demand and supply side of housing and other real estate products. The impact is also on conferences, seminars and advocacy talk-shows where stakeholders gather to discuss and proffer solutions to the sector’s problems. In this interview, FESTUS ADEBAYO, a Barrister at Law, a strong advocate for affordable housing, and chief host of the annual Abuja International Housing Show (AIHS), speaks on how the novel virus has impacted the sector and brought a new normal that all must embrace. He also speaks on other housing issues. CHUKA UROKO reports. Excerpts

he annual Abuja International Housing Show (AIHS) is underway and, for the first time in many years, it will be a virtual conference, no thanks to Covid-19 pandemic. Does this mean a new normal has come to stay in Nigeria? Oh yes, this is a new normal we all have to embrace because it has come to stay with us. Our greatest gift as human beings is the ability to always adapt and improvise. That the 14th edition of Africa’s biggest housing event that will be holding from 21st to 24th July 2020 will be a virtual conference is a confirmation of that new reality. As at today, over 32,500 people have been infected by the coronavirus pandemic in Nigeria with nearly a thousand deaths. We believe that adapting to the current situation is simply the responsible thing to do. The virus has reprogrammed so many activities in the world. Nigeria is not an exception. For us, the unfortunate spread of the novel virus has led to a strategic adjustment, while doing everything possible to still meet the needs of the show’s participants. As a show of commitment to human development and

as a responsible platform, we are abiding by the current global safety measures that limit the spread and dangers of covid-19 by adhering to the social and physical distancing rule. Arguably, AIHS has become an all-important conversation involving a large gathering of local and international stakeholders, speakers, and exhibitors in the housing and construction industry. This makes it a potential zone for the spread of the virus should we go ahead and gather everybody at a given place as we have done in the past 14 years, hence the virtual option. A virtual AIHS is perhaps an opportunity for us all to become familiar with a future that is inevitable. With the advancement in technology, it will become a norm, and not a rarity to witness more shows like this go fully digital, while maintaining its value, relevance and impact. One would think that this new normal might affect the show negatively. What are the possible benefits of going virtual for participants, developers and building materials suppliers who will be showcasing their products at the show? The benefits for participat-

•Adebayo

ing in this virtual edition of AIHS are the same as those in participating in the physical edition, if not more. The event is designed to be accessible to all participants globally using internet compliant devices such as computers, laptops, tablets or mobile phones. This event will also be available on demand 30 days after the first 4 live days. All our partners in over 15 countries will be able to participate, exhibit, network and make sales from wherever they are. With the kind of set up we have for this virtual edition, it is hoped to become the biggest online platform for industry stakeholders. This edition is also expected to present the biggest digital marketing platform ever seen in Nigeria as it will usher in a new era for companies and brands to

network and showcase their businesses to a global audience with minimum effort. We have designed it to be as interactive as possible. The key feature of the show is to provide easy access for both exhibitors and other participants to the virtual platform. Exhibitors will have the opportunity to create their profile pages with company names and logo. This will essentially serve as their virtual booths. We shall link their booth to their email addresses and make it a seamless process for them to log in and market themselves. What is this year’s show intended to achieve; in other words, what is the nexus between the theme and Nigeria’s housing sector? The theme of this year’s

We will continue to build the mortgage industry, NMRC boss assures …as company grows PBT 60% to N3.09bn amid headwinds CHUKA UROKO

he managing director and chief executive officer of Nigeria Mortgage Refinance Company (NMRC), Kehinde Ogundinmu, has assured that the company will continue to build the mortgage industry in accordance with its mandate. NMRC is a public private partnership between the federal government of Nigeria and private sector financial institutions to develop the primary and secondary mortgage market in the country with the mandate of increasing liquidity in the mortgage system and lowering interest rate on housing loans. Ogundimu pointed out that as part of building the industry, they are, among other things, pushing the mortgage foreclosure law with vigour such that, increasingly, it is gaining traction with many more states of the federation passing the law. He revealed that their Electronic Mortgage Assets Registry which, he said, has financial

•Ogundinmu

backing from the Work Bank, was also on course, explaining that the registry was aimed to facilitate seamless transfer of real estate assets from an old to a new owner. Recently, the mortgage refinance company, which was incorporated on June 24, 2013 and obtained its final license to operate as a non-deposit financial institution from the Central Bank of Nigeria (CBN) on February 18, 2015, held its 6th annual general meeting in Lagos. The company told its shareholders at the virtual meeting that it grew its profit before tax (PBT) to N3.09 billion as at the end of its financial year ending December 31, 2019, representing a 60-percent increase in the N1.94 billion it recorded in the www.businessday.ng

corresponding period in 2018. Ogundimu, who disclosed this in his address at the meeting, added that the company’s earnings per share increased to N1.43, up from N0.93 recorded in 2018, making it possible for the shareholders to approve a dividend payout of N0.43 per ordinary share. Chairman of the company, Charles Adeyemi CandideJohnson (SAN), had in his remarks, revealed that the company’s gross earnings increased by 36 percent from N7.09 billion in 2018 to N9.62 billion in 2019 while total Assets increased from N69.29 billion as at December 31, 2018 to N72.87 billion in the period under review. The chairman commended the company’s impressive performance given that the year started with the anticipation of some headwinds to the business. “Even though progress is being made, the company remains committed to its mandate of making housing finance more accessible and affordable for Nigerians, particularly in an era when

housing availability has come to play a critical role in mitigating the spread and impact of Covid-19,” he noted. Ogundimu described 2019 as a good year for the company with record earnings as well as commendable improvements in its financial metrics. He explained to BusinessDay in an interview that the key drivers of the company’s performance were mortgage refinancing and cost optimization with which they were able to cut off whatever was not necessary. “Our cost optimization measures continue to yield results as evidenced by the significant reduction in all our expense heads,” he said. Despite the ravaging impact of coronavirus pandemic, the CEO is looking at 2020 with optimism. “We will continue to do our best for the company and for the industry; this is the first time, since inception, that we are paying dividend. Our shareholders will be expecting the same feat this year. But we have to temper expectations with reality,” he said.

https://www.facebook.com/businessdayng

show is ‘Housing Finance Innovations for 2020 and Beyond: Sustainable Systems for Cities.’ We chosen this theme based on the current situation of things. It is becoming, increasingly, difficult to finance housing development, leading to fear of another housing sector crisis. This has been made worse by coronavirus. There have been enormous losses in the economy. So, we decided on this theme as a way of rallying stakeholders who can suggest innovative ways of financing housing development. More than ever, we need to address the problem of homelessness in our country. And this won’t be possible unless we are able to sufficiently finance housing projects. So we need local and international experts to speak to the problem. To get this done, you most assembled seasoned local and international speakers. Could you mention just a few of them who are being expected? The same experts and partners from our previous editions have all confirmed their participation in this edition. The show has played host to important dignitaries like Yemi Osinbajo, Debra Erb of OPIC, Babatunde Fashola, former presidents, governors,

ministers and national assembly members and numerous corporate executives. The virtual edition this year will not be any different. It will, in fact, host more international dignitaries, as it will be easier for those who wouldn’t have attended a physical edition to participate in the virtual edition. Given that AIHS hosts over 40, 000 participants from at least 20 countries every year, the show remains the prime destination for multinational and national corporations, businesses and executives, public officials, and home seekers to converge, dialogue, network, exhibit and learn from one another about opportunities they should tap into. Away from AIHS, let us take a look at the housing and mortgage sectors; what is your perception of these two important sectors? The Nigerian housing and mortgage sectors are in need of serious interventions. There is an urgent need for a new thinking in the sectors. We currently have over 20 million housing units deficit to deal with. Access to affordable housing for the poor remains a tall dream, except for what some institutions like Family Homes Funds are doing.

Osonuga named among Nigeria’s Top 10 Real Estate Disruptors 2020

he CEO of Adloyalty Business Network, Freeman Osonuga, has been named one of Nigeria’s Top 10 Real Estate Disruptors 2020.This is a reflection of his exemplary leadership and expertise that have led to the registration of over 20,000 realtors under his firm. Osonuga’s committed and deep understanding of the business of real estate has placed him ahead of his contemporaries. He is the author of Print Money With Zero Capital which is Nigeria’s first most comprehensive guide to success in real estate brokerage business. The book is accompanied by a Professional Real Estate Brokerage Online Course. Osonuga is a global leader who, effortlessly, dons many caps and has been quite successful as a medical doctor, real estate broker, humanitarian, international public speaker and a successful entrepreneur. “I am humbled by the surprise recognition but then I believe it is the smart work my team and I have vested into the industry that is paying off. However, this is a call for more work and, particularly, more @Businessdayng

innovations that will transform the real estate industry and put us on the global map,” he noted in reaction to the recognition. Osonuga was recognised by The Top 10 Magazine alongside Sijibomi Ogundele, MD/CEO, Sujimoto Construction Limited; Adebola Sheidu, Chairman/CEO, Brains & Hammers Limited; Kennedy Okonkwo, Group CEO, Nedcomoaks Limited, and Jane Onwumere, GMD, PWAN Homes Limited. Others are Adetola Emmanuel King, GMD/CEO, Adron Homes and Properties Limited; Teniola Adesanya, Group CEO, Oxford Group Nigeria; Noah Ibrahim, MD/ CEO, Novarick Homes and Properties Limited; Kennedy Nnadi, MD/CEO, Pennek Nigeria Limited, and Umar Abdullahi, CEO, Cosgrove

Tuesday 21 July 2020

BUSINESS DAY

Private Banking and

Quotes from the panelists

Wealth Management conference

Theme: Preserving Value through the Dip and Turmoil

Here’s how wealth, fund managers are solving client’s worries MICHAEL ANI

s the financial markets respond to the unprecedented public health cr isis that has brought the global economy to its knees, wealth and fund managers across the globe are leveraging digital technologies to make resilient investment decisions for clients seeking a good return for their money, and Nigeria is not left out. Africa’s biggest economy has been hard hit by the COVID-19-induced market volatility, and the economic impact of weakening oil prices spurred portfolio reallocation from risky assets to low-risk securities. For investors of Nigerian assets, the situation has become dicier as they must choose from a limited basket of products amid rising inflation, which has sent real yields on most asset classes to negative. This unfortunate situation has propelled investors to rethink whether to hold cash or invest. And even when they chose to invest, few have limited knowledge on the appropriate portfolio mix that would fetch them maximum returns. Against this backdrop, Business Day, West Africa’s most-read business paper, organized a webinar on private banking and wealth management solutions with the theme “Preserving Value Through the Deep and Turmoil”. The event featured renowned fund managers and wealth management experts who spoke to investors on the combination of asset classes to build their investment portfolio that would make them better-off this period. For better audience engagement, the conference was divided into three panel sessions with the experts giving insights that gave investors value for their time. Bimpe Nkontchou, managing principal at W8 Advisory LLP, who spoke from London, said as opposed to private banking which has gained much traction in Nigeria, the wealth management space is still in its infant stage in Nigeria. According to her, wealth management as it is being practised by global banks in London goes beyond walking up to clients and talking to them about their financial needs, products or investment but also, having a view of clients lifestyle holistically right from the financial assets that they own to tax planning down to their non-financial assets as well as how these assets are structured. She explained that most

clients she engages with tend to use wealth management interchangeably with private banking which is not supposed to be. “Wealth management implies looking at your global portfolio in line with global requirements. It means looking at your non-financial requirements, real estate and even looking at how your family is developing because that is part of your investments. And also looking at structures that you can set up to hold those assets efficiently from a tax and estate planning point of view,” Nkontchou said while noting that the concept is, however, evolving in Nigeria and hopefully, with the COVID-19 pandemic, wealth managers are going to start stepping up to have a clear discourse on what it means to take up the role. Despite the grim short and medium-term outlook of the Nigerian economy as anticipated by the International Monetary Fund and the World Bank, expecting a contraction of 5.4 per cent and 3.2 per cent by year-end, Akintoye Akindele, Chairman, Platform capital, stated that his firm is optimistic about the economy and further maintained that pandemic provided opportunities for his firm. Akindele while taking clues from his wealth of experience noted that wealth managers should be countryspecific when dealing with clients as opposed to dealing with them from a global standard. His argument stems from the fact that wealth, as described in developing countries like Nigeria, is different compared to what is obtained in other countries given Nigeria’s history and given its huge informal sector and economic breakdown. “Globally, the wealthy have most of their portfolio in real estate which is about 27 per cent, 23 per cent in equities, 17 per cent in fixed income, 11 per cent in cash and foreign currencies, eight per cent in private equities but in Nigeria, the biggest companies are private companies and are not listed. Similarly, the majority of assets in real estate here in Nigeria are undocumented and lack proper titles. We have land use-related issues, “Akindele said. “In Nigeria, we have lots of wealth trapped in private equity that is not being unlocked. We have a lot of wealth locked in real estates. We have lots of wealth trapped as cash under peoples pillow and tables hence, If one wealth management allows us to manage assets that are well defined in Europe and America with structures well in a place like taxes defined, in Nigeria it becomes a struggle to see how

Post-Event Report

Mr. Lanre Fabunmi, CEO, AIICO Capital

a wealth manager will fare when you do a cut and paste approach from what is done abroad to Nigeria,” he added. Akindele whose company services clients in 71 countries said his company’s view on wealth management is very different from what others think and that is why it has been able to grow significantly in the last one year because it customized wealth investment for African families or investors to consider what their wealth is by defining what define the asset classes of their net worths as they find ways to help them manage it. “Why people were moving their funds to the dollar to hedge against devaluation risk, we saw it and understood there are growth markets in Nigeria that needs naira so we have gone long on Naira in certain positions such that those who have naira but do not have dollar exposure are able to put their naira into opportunity in Africa and they have grown significantly. Basically, what we did was that those who have naira assets and naira needs, we have been able to match those naira needs with naira opportunities while for those who have naira assets with dollar needs, we have been able to help them match that as well. Our portfolio has grown over 200 per cent during the COVID-19 outbreak,” he said

Dr. Akintoye Akindele, Chairman, Platform Capital

Ms. Titi Odunfa Adeoye, Founder/Ceo, Sankore Investments

Ms. Yewande Senbore, Partner, Olaniwun Ajayi LP

“There is a huge gap in understanding wealth management in Africa and we are focused on that. I think it is growing, there is an opportunity here and there is a great task for finance and investment managers to take advantage of the growing markets,” Akindele said. Martins Emodi, Co-founder/Partner at Wealth Partners AG Switzerland, who spoke on some of the challenges client’s face in finding assets to invest in locally vis a vis other opportunities opened to them in other jurisdictions, explained that diversification is one of the issues faced by clients as 99 out of the 100 people complain there tends to be overconcentration in sectors, overconcentration of asset classes, and over-concentration in currency however these problems are not peculiar to Nigeria.

Mr. Idowu Thompson, Head, Private Banking, First Bank of Nigeria

Mr. Paul Onwuanibe, CEO, Landmark Group

Ms. Esiri Agbeyi, Partner & Head Private Wealth Services, PwC Nigeria

He noted that Nigeria is a unique country and investors should be super exposed to Nigeria by diversifying their products. “A lot of Nigerians are riding a very tight line on liquidity. Most of the people I meet are assets rich but are cash poor. This is a brave approach to investing however, it could be risky and the pandemic has taught us that so part of what we are doing is to help our clients to cash plan,” Emodi said. As a petrodollar economy, Nigeria’s asset classes are sensitive to the direction of oil prices, hence, tends to do well during periods of higher oil prices and vice versa. The decision on which asset classes to invest in has become a tough one for investors, with the coronavirus pandemic which has caused a 60 per cent decline in crude oil prices,

Mr. Martin Emodi, Co-Founder, Africa Wealth Partners

Mr. Taiwo Yusuf, Head, Asset Management, Meristem Wealth Management

Ms. Funmi Olaniyi, Manager, Private Clients & Family Wealth Practice, Andersen Tax Nigeria

Nigeria’s biggest foreign exchange earner. For instance, the all-share index of the Nigerian equities market has lost about 10 per cent of its value since the year’s start. Yields on treasury bills have also taken a bite, dipping by more than 860 basis points to some three per cent, after the apex bank banned non-bank domestic investors from participating in its short-term OMO securities, and this fuelled excess liquidity into the fixed income space. With inflation yet at a record high of 12.56 per cent last month coupled with uncertainties in the investment environment, the experts called on the need for portfolio diversification and rebalancing of assets to match current realities. For them, the age of the investor, financial goals, time horizon and risk tolerance are some of the major factors one must look out for when building a portfolio. Fund managers see tipped alter-

Mr. Samuel Enuechusue, Head, Investment Management, Investment One

Mr. Tunde Oyewole, Country Managing Partner, DLA Piper Africa in Nigeria

native investment and fixed income investment as viable options during this period. That would at least guarantee some positive real return while contributing to the growth of the economy which has been staggering behind population growth in the last four years, they said in a webinar session put forward by Business Day. They explained that such alternative investments that can spur growth while still giving investors a good reward for their money include investment in real estates, agribusiness, education, infrastructure bonds tied to specific projects amongst others. “In Nigeria, there’s no specific fixed investment instrument that can surpass the inflation rate, you need to look into alternative asset classes,” said Samuel Enuechusue, head of investment management, Investment One said. “At a time like this, construction of one’s portfolios in line with well-defined specific needs cut across various asset classes and sectors could be a better decision for any investor,” said Enuechusue. He explained that in knowing which asset class should be given more consideration, fund managers and investors must look beyond just seeing the negative trends or loss rather, they should ascertain the drive behind such negative trends, whether they are short term drivers or long term in nature. Titi Adeoye, founder/CEO Sankore Investments said the unlocking investment for Nigeria is in the alternative market. She explained that by investing in alternative asset classes such as in real estates and agriculture, investors

“Many persons tend to use wealth management and private banking interchangeably but it’s not supposed to be so. Wealth management as it is being practised by global banks in London goes beyond walking up to clients and talking to them about their financial needs, products or investment, to include holistically having a view of clients lifestyle right from the financial assets that they own to tax planning and to their non-financial assets as well as how these assets are structured,” Bimpe Nkontchou, managing principal, W8 Advisory “Wealth, as described in developing countries like Nigeria, is different compared to what is obtained in other countries given Nigeria’s history and given its informal sector and economic breakdown. wealth managers should be country-specific when dealing with clients as opposed to dealing with them from a global perspective,” Akintoye Akindele, chairman, platform capital

PRIVATE BANKING & WEALTH MANAGEMENT SOLUTIONS DIGITAL DIALOGUE

Ms. Bimpe Nkontchou, Managing Principal, W8 Advisory LLP

could make positive real returns while still making huge economic impacts with their investments. According to her, the reason why people do not make money in real estates is that they prefer investing in highbrow areas rather than targeting the country’s low and middleincome classes. Adeoye tasked investors to take advantage of the country’s huge housing deficit estimated around 20 million, to provide products for those in need of them. “In Ikoyi, the vacancy rate is around 22 per cent as opposed to the 2 per cent vacancy rate seen in places like Yaba. Why then should an investor go to Ikoyi when it can invest in areas where housing is of higher demand,” Adeoye asked. She however proffered building of share offices, students housing as some of the best forms of real estate investment. On how investors can maximize their returns considering current realities, Adeoye said one objective of having a diversified portfolio is that it allows investors to avoid drawdowns as much as possible She noted that the only thing that is certain about markets is that there would be ups and downs. “This is the best time for an investor to take a proper look at its portfolio, get educated as to how to diversify or rebalance them, and draft a long term investment strategy,” she said. Meanwhile, Lanre Fabunmi, MD Aiico Capital, said given current economic realities, the fixed income space is still a sure bet for investors as the market comes with numerous benefits including the fact that it is risk-free, there are tax advantages and more liquidity. Fabunmi while stating categorically that there is really no point for any investor to diversify assets away from fixed income space, said the Nigerian environment is a totally different one from those seen in other countries. According to him, data in the last five and 10 years has put Treasury bills to be the best-performing assets in Nigeria, rewarding as much as 111 per cent and 328 per cent respectively compared to the 12 per cent and 23 per cent loss seen inequities. Similarly, the commodities market has seen a 43 per cent and 23 per cent loss in a 5 and 10-year period respectively, while an average of 85 per cent

has been seen in 5 and 10-year bonds. In dealing with clients especially in this period, fund managers, as well as wealth managers, have to uphold three Ts which are transparency, truth and trust, as the three elements are necessary to underpin the relationship between advisers and clients and how they deliver, according to Esiri Agbeyi, partner at a global consulting firm, PWC. Agbeyi who moderated the last panel session where she engaged panellist on how their clients can navigate the ripple effect of the pandemic on their portfolios, and on the other hand, how are firms are stepping up their relationship management and tools to meet the interest of their clients in the economic slowdown explained that managers must embrace the pandemic that has befallen the globe, however, they must also strive to tell clients the truth. Responding, Tunde Oyewole, country MD, DLA Piper Nigeria, described the current pandemic as being the most destructive occurrence seen ever. Oyewole who spoke from the perspective of his clients said, many of them have been affected by the crisis as they are suffering cost amid revenue shortfall, which has made businesses particularly leverage businesses struggle to meet loan requirements and pay their bills. “Aside from the fact that we have seen companies finding ways to cut cost, we have also seen them sitting with bankers renegotiating contracts and probably getting a moratorium on interest payments and this is due to the impact of the pandemic,” he said. He added further that in the first three months of the lockdown, most clients went into scrambling for liquidity by either getting new facilities or restructure existing ones just to survive. For them, the key issue is just for their businesses to survive through the pandemic since not much of the fiscal stimulus has been extended to them unlike what has been in other countries like in the advanced world, he said. Oyewole noted that in normal time, companies could be advised to get a loan from the bank or go for equities instruments but now, mergers & acquisition is on standstill. Meanwhile, most investors

who have the capital to invest are holding on to their liquidity while those who are investing are doing so like a vulture or scavenger, looking for cheap assets to invest in. “So, what we have done is that we advised clients not to sell their assets but rather, let them use relationships from the bank to get liquidity. Many of these businesses have assets hence they can leverage on that to get liquidity,” Oyewole said. Idowu Thompson, head, private banking, First Bank of Nigeria, alluded that although the economy has seen some fiscal and monetary push including the renegotiating of loans by banks, the one-year moratorium of government loans and the N50 billion stimulus for businesses, however, these supports are still far from being enough. In his words, He, however, explained that this is the right time for people to be deliberate with their investments by sitting down with their private bankers and advisers to revalidate their portfolios. “I do not think it is the right time for anyone to panic,” he said. “When it comes to a period of uncertainty such as the type we are in now, you cannot rule out volatility, said Taiwo Yusuf, head, asset management, Meristem Wealth Management. According to Yusuf, there will likely be a U shape recovery of the markets hence, the lows that were seen in April might be the lowest to occur. Yusuf noted that there has been a gradual recovery of asset classes from the lows seen in April. “We should be seeing more stability in the market going forward,” he added. Paul Onwuanibe, CEO, Landmark Group, while narrating how the pandemic has impacted on businesses said over a 6 months period, his firm saw less than 6000 visitors as opposed to an average 320,000 in which it saw in previous years, signalling how negative the impact has been. He, however, noted that in salvaging the situation, his firm developed a 4Cs which includes communication by engaging with stakeholders, credit which has to do with ensuring a strong cash flow while also cutting down cost; colleagues which have to do with staff welfare and job security; then lastly, customers, buy promoting sustainable infrastructural changes to keep customers safe.

“A lot of Nigerians are riding a very tight line on liquidity. Most of the people I meet are assets rich but are cash poor. This is a brave approach to investing however, it could be risky and the pandemic has taught us that so part of what we are doing is to help our clients to cash plan,” Martins Emodi, cofounder/partner Wealth Partners AG Switzerland. “One of the first things we recommend at this time is to buy fixed-income assets, which not only help preserve capital but guarantee a healthy return. For those who are heavily exposed to residential real estate, we are also advising them to sell down on some of them to have a diversified portfolio,” Titi Adeoye, founder of Sankore Investments, said. “At a time like this, construction of one’s portfolios in line with well defined specific needs cut across various asset classes and sectors could be a better decision for any investor,” said Samuel Enuechusue, head of investment management, Investment One said. “Given current economic realities, the fixed income space is still a sure bet for investors as the market comes with numerous benefits including the fact that it is risk-free, there is tax advantage and more liquidity hence, there is no point diversifying assets away from fixed income space, Lanre Fabunmi, MD Aiico Capital, “In dealing with clients especially in this period, fund managers, as well as wealth managers, have to uphold three Ts which are transparency, truth and trust, as the three are necessary to underpin the relationship between advisers and clients and how they deliver,” Esiri Agbeyi, partner at a global consulting firm, PWC. “Aside from the fact that we have seen companies finding ways to cut down cost, we have also seen them sitting with bankers renegotiating contracts and probably getting a moratorium on interest payments and this is due to the impact of the pandemic,” Tunde Oyewole, country MD, DLA Piper Nigeria. “This is the right time for people to be deliberate with their investments by sitting down with their private bankers and advisers to revalidate their portfolios. I Io not think it is the right time for anyone to panic,” Idowu Thompson, head, private banking, First Bank of Nigeria “There will likely be a U shape recovery of the markets hence, the lows that were seen in April might be the lowest to occur,” Taiwo Yusuf, head, asset management, Meristem Wealth Management. “In salvaging the pandemic, we developed a 4Cs, which includes communication by engaging with stakeholders; credit which has to do with ensuring a strong cash flow while also cutting down cost; colleagues which have to do with staff welfare and job security; then lastly, customers, by promoting sustainable infrastructural changes to keep customers safe,” Paul Onwuanibe, CEO, Landmark Group,

Tuesday 21 July 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Sanwo-Olu Education Policy: Lagos on the path to greatness, says Adefisayo Folashade Omobola Adefisayo, Lagos state commissioner for education, in this interview with MARK MAYAH, applauds Babajide Sanwo-Olu led- administration for the revolutionising the state’s education policy throuh the provision of infrastructural, instructional, ICT technology and welfare package adjudged to be the best in the entire federation. She also explained why government went into Public - Private partnership and other salient issues. Excerpt:Before your appointment as the Lagos state commissioner for education, what have you being doing? came from the private sector. I was the principal consultant/chief executive officer of Leading Learning Limited. It is an educational consultancy incorporated in the year 2014. I was consulting for public and private schools, state governments, NGO’s and development partners. My areas of professional focus include teacher training, leadership training, school set-up and school transformation. I am an education activist with passion for student learning, school transformation and teacher training. I had decades of working experience spanning, banking operations, organisational restructuring, human resources management, international trade and education. One year after, how has the journey so far? It’s a worthwhile judgement in the past one year. His Excellency, Governor Babajide Sanwo-Olu had invested so much in the sector that has transformed the state education policy, second to non in the country. The governor in his magnanimous way and wisdom, commenced the turn- around in the sector by increasing the 2020 budgetary allocation to 65 percent and supporting the ministry’s programmes, like Eko- Excel initiative- Excellence in Child Education and learning), tagged “Leave No Child Behind”.He demonstrated his commitment to this important sector, with the construction and upgrading of facilities in the entire education sector. We had in the last 12 months delivered over 60,000 tables and chairs to our public schools and more under going construction for ownward delivery. The exercise continue till the very last school get delivery of theirs. It is of note that our governor in the same period, approved for employment of 2,000 school personnel for primary school, while 1,000 were recruited for the secondary arm to join the workforce. They had since resumed after induction training. We also improved the efficacy of the Education Quality Assurance unit by instituting a Grading Instruments for evaluating standard of schools as well as increased

Folashade Omobola Adefisayo

www.businessday.ng

Your take on areas stakeholders in the private sector could assist in developing education policy in the state? It would be recalled that we or-

‘

I won’t be here without the support of my governor, Babajide SanwoOlu. He believes and support in what we are doing because he is passionate about the development of Lagos and the general wellbeing of the citizens and residents in the state

‘

Private school registration above 100 % year-on- year. At improving capacity and welfare of personnel, a sum of N7.8 Million disbursed to school teachers as car refurbishment loans; just as N3Million was also dished to teachers as Housing loans. To better encourage teachers in public schools, the governor promised that designs for teacher’s quarters within the school premises would soon commence. Of note, we engaged students and pupils by organising electronic learning and teaching platforms through radio, television, and the internet media, as a result of school closure caused by covid-19 pandemic. We received support from First Bank, Edfin Microfinance bank and MTN Nigeria towards the e-learning programme. Reviewing and optimising the curriculum, organising, instituting a better school governance and administration as well as improving the capacity and welfare of students and school personnel, investment in technology and state of arts training and induction of teachers through the EKO-Excel are some of the numerous ministry’s achievements.

https://www.facebook.com/businessdayng

ganized the 2020 Public - Private Partnership (PPP)-dialogue. It was aimed at acruing collaboration towards improved quality of education in Lagos state. Stakeholders in the private sector can collaborate with government; adopting schools as well ss teacher training centre to fund, equip and upgrade; providing accommodation; providing equipment and technology tools. Funding a Lagos state Teachers’ Welfare Fund; sponsoring work experience schemes for students and teachers, sponsoring local and international exchange programmes; investing in special needs eduacation providing consultancy services for monitoring and evaluation, capacity development, data gathering and analysis. All these are at ensuring that emerging generations of young people are exposed to the same high quality educational opportunities, with a comprehensive and well-rounded education that involves the impartation of skills such as empathy, leadership, selfconfidence as well as inculcating values and ethics in young adults. What are your plans towards reopening of schools as to enable the terminal students write their external examinations? Both federal, states and stakeholders in the sector met severally, and meetings still ongoing, at fixing required necessary protocols, that would determine govetnment decision. Let’s wait as we are approaching the bridge. As you’re here wanting to know, meetings are going on at various levels at seeing the best possible way to get out of the crisis. But by His grace and mercy, we shall overcome the pandemic. How prepare are the schools in regards to basic requirements for reopening? We are at the top of it. Our Education Quality Assurance (EQA), which is an agency under my ministry is following up to see that our schools does not lack those basic requirement for safety of our students, teachers and other support personnel as well as stakeholders in the sector and the society at large. You have a lot of complex activities in your hands, do you have time at all to rest? There is a balance I would say. I am a professional. Aside, I have experienced men and women @Businessdayng

manning various agencies and departments in the ministry and together we are moving the sector to a greater height. How much of support do you have from the governor to do all you want to achieve in the education sector? I won’t be here without the support of my governor, Babajide Sanwo- Olu. He believes and support in what we are doing because he is passionate about the development of Lagos and the general wellbeing of the citizens and residents in the state. As such, he is giving us all the backings -: financially and morally to bring results. You appear amiable, does it have to do with your growing up? I don’t know where I got it from. The way we were brought up was to be kind. That must be next to nature. It mustn’t have to be money. Just be kind and be accessible. You try the best you can and do it deligently at achieving positive results that are of beneficial to mankind. Who influences you more, your mother or father? Both of them. My mother is very calm, you hardly know she exists. She’s an epitome of simplicity. My father is an incurable optimist. Everything is doable. He has his energy that I think I took from. Would you one day go into politics, after serving your tenure as commissioner? No, no. I will not seek for elective position.I go back home after here. While am here, I do the necessary needful to better the lots for why we are here. What lessons have you learnt about life? Don’t come to the table with expectations, so you are not disappointed. Then, be yourself. That’s a positive energy that we must continually look for and I think that is one that I have worked on and I think it really worked for me. In every situation, I always look for the softer side. The first thing I do is, what is the worst case scenario. Once I can figure the worst case scenario, I sit down and say OK. I think, one day at a time, baby’s steps. If you keep at something you will eventually get there. It might not be the way that everybody would, but some how, you’re going to get there. It worked for me, and it’s still working. I’ am never agitated. I don’t have expectations.

Tuesday 21 July 2020

BUSINESS DAY

EDUCATION Lagos SUBEB chairman pledges inclusive education content for learners MARK MAYAH

he chairman, Lagos State Basic Education Board (SUBEB), Wahab Alawiye - King, has pledged his determination to provide inclusive education content while Schools remain closed. Alawiye-King, gave the assurance at the strategy meeting of the Board with Heads of its 36 special and inclusive schools, to document what should make up e-learning content for Special Needs pupils at home. “What we are doing today is to show our determination to fulfil our mandate to provide inclusive education. We are very pleased to know there are individuals and non-governmental organisations willing to help the government achieve quality. Every child has a right to education,” he said. Alawiye- King said that teachers’ input would form the crux of the review of the Lagos state policy on inclusive education. “I didn’t see any contribution from SUBEB to the Lagos state policy on inclujsive education. This document is due for review. Most of the things we are saying from here will form the basis for the

Wahab Alawiye-King, chairman Lagos SUBEB

review,”he stressed. Giving a breakdown of the number of special needs children in the five special schools and 31 inclusive units attached to mainstream schools, the Head of special education unit at SUBEB, Hilda Twins, said there were 2,947 primary level pupils in the schools with 1,326 having intellectual disability, 1,164 have hearing impairment, 86 with autism, 152 are physically challenged, 80 have Down syndrome, 113 learning disabilities, 22 cerebral palsy and four battling speech disorders. Many of the teachers who spoke, underscored the need to make content for special

needs learners feature more in instrumental materials, promote learning through play and at a slow Pace suitable for them. Explaining the challenges special needs children are facing based on feedback, Basirat Aderonke Femi of GRA inclusive schools, Ojota, stressed that some of her pupils complained the sign language interpreter that features on the television classes of the state government was too fast. Olufunke Oshodi, from Ibeju- Lekki said e-learning content for special needs learners should be interspersed with videos and in-

structional materials, while Afolabi Oyebade said the curriculum should be adapted to the learners pace. Olufunmilola Tunji, said the special needs children were best taught using play away method. “ The strategic plan should focus on how to educate those with intellectual disabilities using play- away method,” she said. “Reduce the workload. We have to break down the workload of children with intellectual disability. What others can learn in one term, it may take them one year. The goal is not to cover with speed but for them to learn,” she stressed. Anita Asukome said parents played a crucial role in the educational progress of special needs children and needed to be enlightened that their support was crucial, while Basirat Fam said distance learning content should be aired when parents would be home to assist their children. “ Some parents, because of the economy, cannot cannot follow the programme. Most fathers leave all care/ support of these children to their mothers who also have to hustle to make ends meet. Some will leave the children with grand parents who are not literate. These things need to be addressed,” said Asukome.

Kwara Gov vows to support private school owners, says online education has come to stay SIKIRAT SHEHU, Ilorin

wara State Governor, Abdulrahman Abdulrazaq last weekend, pledged to offer interest-free loan and grants to private school owners to be able to pay their workers and prevent massive loss of job in the sub-sector. Abdulrazaq said he would “not be blind to the plight” of any Kwaran, including proprietors and workers across private schools in the state who he acknowledged have been hard hit by the COVID-19 pandemic due to the closure of schools and some other businesses. “The government will therefore consider your request for grants or loan, which of course would be interest-free. We can do that as we did for ‘transport’ workers. But we will need to have the right database to know the number of private schools in the state, the number of their teachers, and their students,” he said at a virtual meeting held

Friday afternoon with the umbrella bodies of private schools in Kwara State. According to Abdulrazaq, such database would be key for efficiency, transparency, and success of the move, recalling how the administration had established a hitch-free and transparent bursary regime with digital registration and verification of all applicants last year. “The issue of database is critical for planning. We want to know how many private schools we have (and) where in the state. If we do so, we can even give land (to those who may need it) and issue certificate of occupancy and other relevant documents,” he added. The Governor, therefore, urged the proprietors to work out the modalities for the financial support with the education ministry, but said schools currently registered with the government and paying their taxes until the pandemic would be prioritised in the intervention. He, equally implored the private school owners to invest www.businessday.ng

in virtual schooling if they have not done so as the pandemic and the closure of schools may drag until it is absolutely safe to reopen. “On gradual reopening of schools, whatever we do would have to align with the position of the Federal Government,” Abdulrazaq said, adding that all schools should ramp up their preparations for school reopening by keeping in place

Abdulrahman Abdulrazaq, Kwara state governor

all safety measures like hand washing bay, among others. He also promised government would consider giving palliatives to those that did not get in April, especially members of the Association of Model Islamic Schools Nigeria (AMIS) who said they never got from the palliatives given to private schools in the state. Meanwhile, Kwara State President of the National Association of Proprietors of Private Schools (NAPPS) Rahman Adetunji Lateef commended the Governor for “the hands of fellowship extended to us during the lockdown”, saying the palliatives the government gave them went round all the member schools of NAPPS. Lateef urged the government to consider partial reopening of the schools in the state especially for terminal classes — a request which the Governor said would be subject to the position of the Federal Government and the schools meeting the requirements for such reopening when approved.

https://www.facebook.com/businessdayng

Nigeria, Ghana, others to access US$63.2m scholars programme Kelechi Ewuzie with agency report

espite is in sight for indigent, but high- performing university students in Nigeria and other Africa countries as they are expected to benefit from a US$63.2 million partnership between the United States International University-Africa (USIU-Africa) in Kenya and the Mastercard Foundation Scholars Programme. The partnership will enable up to 1000 students across the continent to receive goodquality higher education and leadership development over the next 10 years, with the first scholarships expected to begin in the 2020-21 academic year. According to the organisers, the programme will offer students facing financial, gender, displacement or disability constraints an end-toend support, including access to internships and industrydriven career services The scholarships will be targeted at high-potential students. 70% of the young people who benefit from the partnership will be young women, while 25% will be displaced or refugee youth, and at least 10% will be young people living with disabilities. The agreement, announced on 14 July, means USIU-Africa becomes the latest addition to the Mastercard Foundation’s

expanding global network of partners, which it says is committed to “developing a generation of African leaders who will use their knowledge and skills to lead change in their communities, and contribute to meaningful transformation across the continent”. Paul Zeleza, USIU-Africa’s vice-chancellor, said: “With the support of the Mastercard Foundation, we look forward to significantly expanding the impact and reach that USIUAfrica has had all across the world, by moulding students who will catalyse Africa’s continued advancement.” He said embracing the Scholars Programme would enable USIU-Africa to increase its international student population from 15% to 20%, in line with the university’s internationalisation strategy. “The Scholars Programme will enhance the socio-economic diversity of the student population as it will increase the number of students with disability, refugees, young women and displaced youth to address barriers to higher education for these marginalised populations,” he said. Mastercard Foundation’s Chief Programme Officer Peter Materu noted that USIU-Africa was considered as a partner in the Scholars Programme because of the university’s excellent academic standing and because it had demonstrated commitment to equity and inclusion.

UK Group Partners Oyo SUBEB To Promote Education Of Children with Disabilities REMI FEYISIPO, Ibadan.

group, Star Children Development Initiative, based in the United Kindgdom has shown its readiness to partner with Oyo State Universal Basic Education Board (Oyo SUBEB) on the promotion of education of children with disabilities. The group presented a working document with focus on the inclusive rights of the persons with disabilities (PWD) to quality education, especially children. While presenting the document to the Chairman, Oyo SUBEB, Nureni Adeniran, the leader of the team, Grace Alexander, who was represented by Fadesola Adelani, said there was urgent need for government and the society to come up with a working document to proffer necessary solutions to the problems confronting people with disabilities but in need of quality education. She called on the government to do more in providing equal opportunities to all, no matter their physical conditions, in attaining academic excellence, especially in the @Businessdayng

period of the ravaging Covid-19 pandemic and after. “The time has come for us to collaborate in bringing good and quality to the people with disabilities, like it is done to those without disabilities, they have equal right and privilege to achieve same and it is a thing of joy that Oyo State government, through SUBEB has been doing all it can to achieve this great task. “We salute the courage and sense of duty of the present administration in Oyo State to education of the children, especially those that are vulnerable, we believe this collaboration will further promote this agenda.” In his response, the Chairman, Oyo SUBEB, Nureni Adeniran appreciated the gesture of the group towards promoting the education of the less privileged, especially those with disabilities. Adeniran said Oyo State government has worked towards giving equal opportunities to children seeking qualitative education. He pointed to the present design of school buildings presently embarked upon by the agency, which he said favored the children with disabilities.

Tuesday 21 July 2020

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

IT industry needs fresh investments in cloud computing sub-sector - Experts Jumoke Akiyode Lawanson

echnology industry experts are advocating for fresh investments in the sector to increase the adoption of cloud computing in Nigeria. They say that cloud computing has the potential to accelerate growth of SMEs and business organisations, and also enable rapid governance on the part of government, thereby creating a better digital economy. Gathered virtually at a webinar hosted by CyberCloud, an indigenous service provider, with the theme: “The New Normal: Future of Cloud Computing in Nigeria post COVID19,” the experts submitted that with coronavirus pandemic still raging, companies must device means to continue to serve their customers adequately. To them, one clear cut platform this can be achieved is through cloud computing. As such, at the webinar, which had over 700 attendees from all over the world, the importance of fresh investment in the sub-sector was emphasised. Those in attendance include Kashifu Inuwa; the director general, NITDA, Ayotunde Coker; MD, RackCentre, John Anyanwu; partner technology advisory, KPMG, Collins Osugo; CIO, First City Monument Bank and Kasim Sodangi; national

coordinator, NITDA. They were hosted by Laurel Onumonu, head CyberCloud Business in partnership with Joe Onwubuya; MD, Cyberspace Limited, and Dave Funnell; senior manager, cloud business, VMware. According to Coker, cloud computing are services that you consume over the internet, regardless of its location. It’s a service you can subscribe to and consume as you require, you scale as you grow and you pay as you go. He further stated that CyberCloud and Rack center have the capacity to provide all cloud services needed by the government, corpo-

rate bodies and individuals. Speaking on the development, Anyanwu said Cloud services have always been a part of our lives without us knowing it. Anyanwu said several people have been using the likes of Google Mail, Yahoo, and so many services that are in the cloud and “we have been enjoying these services for our personal lives without even knowing what we are using.” He further said ‘’Cloud gives a huge opportunity for us to facilitate innovation with low capital investment.” Explaining how cloud services are utilised by the government,

Sodangi said as far back as 2013, NITDA issued a guideline for National Content Development in IT. According to him, one of the guidelines specifically speaks to the retention and domestication of data services of the government needs. The guideline states that operation of government and data owned by government must be hosted locally. He further stated that ‘’Cloud services will sufficiently improve how services are delivered in Nigeria and change the face of the public sector if it is understood and implemented as it ought to be’’. Talking about the cloud end user, Osugo stated that ‘’banks have been

at the forefront of cloud computing.” However, he said for banks to have the confidence to host and work with local providers, there are certain criterias that need to be met. He further said; “Once the government plays its significant role in making sure adequate infrastructures are in place and the enterprenuised, i.e KPMG, VMware accesses the risk and ensure that the skills required to manage these services are also in place, then the sky is the limit. Funnell on his part, said that people should “interrogate cloud providers because not all cloud providers are equal and can deliver the services required. However, the certification Vmware provides Cybercloud should help build the element of trust and trust is key because cloud computing is the way to accelerate a business.” Cloud is an enabler to fast forward to the future and working with a cloud provider that is reputable can really enable business agility and growth. From his perspective, the MD, Cyberspace Limited, concluded by urging the attendees to subscribe to the flexible services that CyberCloud has to offer. Onwubuya said: “Cybercloud can accommodate both the small businesses and big enterprises and can assure you that based on the policies from NITDA, we continue to run a very secure system.”

Indigenous firm launches virtual meeting platform, business collaboration tool Jumoke Akiyode Lawanson

1st Century Technologies Limited, a leading ICT powerhouse in Africa has launched Konet; a wholly indigenous business collaboration tool that will help small, medium and large scale enterprises adapt to the new world of work instigated by the ongoing COVID-19 pandemic. Konet is Nigeria’s first owned collaboration tool, it is a technology suite that empowers individuals, SMEs, startups and businesses to become more

productive online. Its features include but not limited to voice, video, live chat, file sharing with brand customisation. The newly launched platform with Zoom-like features will add to and benefit from the global web virtual conferencing market valued at USD12.58 billion in 2020 and it is estimated to reach USD 19.02 billion by 2025, at a CAGR of 8.6 percent. Speaking during a virtual press conference to launch the service on July 15, 2020, the Wale Ajisebutu, founder and CEO of 21st Century Technologies Limited, said the plat-

www.businessday.ng

form was carefully designed to cater for the needs of SME and businesses as they face the new normal occasioned by the impact of the Coronavirus pandemic. Sharing what the company intends to achieve with the service, Ajisebutu said: “Our plan is to build an ecosystem to enable collaboration, most secure collaboration environment in businesses, add efficiencies to workflows and allow organisations make decisions quickly with customers, vendors and partners.” He assured that the very secure

https://www.facebook.com/businessdayng

platform with enterprise grade security features and compliance standards to prevent data loss will revolutionise the ICT industry and Nigeria. “Our ISO certifications make us top of the line globally however we’ve ensured that our services remain easily deployed and used by businesses. Ibukun Femi-Ajala, Konet team lead, further stated that the service is targeted at corporates, transportation, retail, hospitality, educational institutions, government and individuals. “With Konet’s seamless connectivity, brainstorming sessions with your

@Businessdayng

teammates will be more productive. Konet is more than just a collaboration tool and will become a technology marketplace. We have decided to launch first and then introduce other key features and products in batches. Unquestionably, you will see some features of Konet in other existing products which have been successful.” While Konet’s biggest challenge could be the conversion ratio from other collaboration platforms, FemiAjala believes the effectiveness and features of the platform will distinguish it among peers.

Tuesday 21 July 2020

BUSINESS DAY

Transforming a small pathology lab into a $1bn business Ameera Shah was about to take a break from running her company when coronavirus struck Amy Kazmin

meera Shah, managing director of India’s Metropolis Healthcare, returned to her Mumbai home in mid-March, after giving birth to her first child. Her plan was to spend a month “without worrying about Metropolis,” the nationwide chain of diagnostics laboratories she had built over the previous two decades. But coronavirus cases had begun emerging in India, where authorities had done little to prepare for the pandemic. Ms Shah was soon ensnared in calls with government officials about testing policies. On March 23, New Delhi permitted six private pathology labs — including Metropolis — to start testing for the pathogen. A day later, Prime Minister Narendra Modi abruptly imposed a nationwide coronavirus lockdown. The 40-year-old entrepreneur — who by then had retreated with her husband, parents and baby to a house in the countryside — found herself at the centre of a maelstrom, trying to help her company ramp up its coronavirus testing capacity amid the severe disruption of the lockdown. For years, she fought the stereotype [in India] that young women lacked seriousness, as she transformed her father’s small pathology lab into a listed company valued at nearly $1bn on the Bombay Stock Exchange. Now, she knew it was critical to manage her own emotions and keep a cool head to face the onslaught. “Thankfully we know how to operate in chaos,” she recalls in a Zoom call from her rural bolt-hole. “We were in a crisis situation. But the minute you get anxious and overwhelmed, that is the beginning of the downhill slope.” Testing kits, reagents, protective equipment and other necessary items were in short supply, leading to fierce competition by rival labs for stocks. “It was a struggle,” she says.

“Ten of us were all fighting for the same chemicals and nobody was giving consistent supply.” The suspension of public transport — and aggressive police enforcement of lockdown — made it tough even for critical health workers such as lab technicians and phlebotomists to report for duty. Metropolis organised buses and hotels for key staff who feared their families would be exposed to the virus if they went home. Government testing policy was another frustration. While New Delhi urged private labs to scale up, state and city governments had their own testing criteria — often highly restrictive. “You can imagine the chaos — you are trying to do testing across India, and each municipal corporation makes its own rules,” she says. Metropolis — which has 125 clinical laboratories and more than 2,700 collection points across India — ended up squeezed between patients clamouring for tests and local authorities less than eager for the confirmed caseload in their jurisdictions to rise. “Testing was clearly the most fundamental right and the most fundamental need of citizens at the time,” Ms Shah says. “The idea that we were not being allowed to test to our full capacity was very shocking and very scary at the time.” While battling government authorities over access to testing, Ms Shah also had to devise ways for Metropolis to withstand the financial shock of lockdown, as nearly www.businessday.ng

all medical services — except emergency care and coronavirus treatment — were suspended, a huge blow to private healthcare businesses. Metropolis’ revenues were previously growing 15 per cent year on year. But in the second half of March, revenues contracted 45 per cent from 2019, as demand collapsed and labs struggled to reopen. April’s revenues were just 40 per cent of what was previously expected. “There was so much panic,” Ms Shah says. “We were all trying to figure out ‘can we pay salaries? Can we survive?’ I was working with my team to figure how do we maintain strength from a balance sheet perspective. We didn’t want to fire anybody nor have anybody take pay cuts.” Negotiating rent reductions with landlords and trimming other expenses helped reduce costs. But shocks kept coming as India’s Supreme Court in April ordered private labs to make coronavirus tests available to the public free of charge — leading to fresh anxiety. “It seemed that private labs like our small company must pay for millions of Indians [to be tested] because it is a noble profession,” she says. Ms Shah worked “day and night” with lawyers to prepare arguments against the order. It was finally rescinded, though many states have since imposed price caps on coronavirus tests. By late April, the strain had left Ms Shah “bone-tired”. Metropolis’ roots lie in the

https://www.facebook.com/businessdayng

in-house lab of a small 10-bed private nursing home run by Ms Shah’s grandfather, a prominent Mumbai doctor. In the late 1980s, her pathologist father, Dr Sushil Shah, moved the lab into bigger, independent premises. As a girl, Ms Shah spent several summer holidays helping at her father’s lab — writing receipts, answering phones, even cleaning patients’ arms before technicians drew blood samples. It was while studying business at the University of Texas at Austin that she saw the potential for modernising India’s loosely regulated diagnostics industry, then mostly made of independent local businesses. Returning to India in 2001, Ms Shah travelled across the country to acquire or form partnerships with the most reputable diagnostics laboratories run by highly trained, well-known pathologists. Her vision was to bring them together under the Metropolis brand — to which her father’s eponymous clinic had also been renamed. Latest coronavirus news Follow FT’s live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here. Potential partners were often initially sceptical, given her youth and lack of experience or medical training. “If you are young or female it was like a deadly combination that you probably had no clue what you were doing,” she recalls. But she leveraged her father’s reputation, and the frequent but mistaken assump@Businessdayng

tion that he was driving the project. As the network grew, Metropolis also built a hightech centralised laboratory in Mumbai to carry out the most sophisticated tests of samples collected from across India. “My personality was always quite bold,” she says. “I didn’t think twice about knocking on doors of people I didn’t know and getting something moving.” Through the pandemic, Ms Shah says she has had unstinting family support while juggling the responsibilities of a new baby and a company under severe pressure. “My parents, my husband all rallied around me to help in as many ways possible, as they knew how stressful it was,” she says. Three questions for Ameera Shah Who is your leadership hero? Muhammad Yunus [the Bangladeshi microfinance pioneer] If you were not a CEO/leader, what would you be doing? Building philanthropic institutions. What was the first leadership lesson you learnt? Courage is not the absence of fear. It is the ability to face your fears and keep moving ahead. Compared with April, Ms Shah says she now feels better, after deciding not to battle every government policy she finds illogical or overly restrictive. Meanwhile, some jurisdictions, including Mumbai are also relaxing controls on testing.

Tuesday 21 July 2020

BUSINESS DAY

Management courses bet on esports’ growth Programmes offer the chance to develop business skills as opportunities in competitive gaming increase Jonathan Moules

mid the disruption brought by the global pandemic, students at France’s EMLyon Business School have had a frustrating end to their studies. But for one class on the masters in management degree, it has been almost business as usual — even fun — as their classes revolve around playing online video games. EMLyon is the first business school in Europe to integrate esports — as competitive gaming is known — into its postgraduate management degree curriculum. When the esports elective started last year, 30 students took up the offer. From September 100 people are expected to attend. Esports undergraduate courses have started to appear on the curricula of about a dozen universities in the US, Asia and Europe, aimed at equipping students with specialist skills for a fast-growing subset of the media industry. A report in January by the consultancy PwC forecast that revenues from esports would almost double over the next three years to $1.8bn, a figure that Andy Fahey, PwC’s esports specialist, now describes as “understated” following the publicity the sector has had during the lockdown, with professional footballers and Formula One drivers competing in computer games versions of their sports. But the teaching of esports is also being developed to help students interested in other careers to hone their leadership, organisation and communication skills. Mickaël Romezy, director of the esports course — run in partnership with Gaming Campus, a training centre for the gaming industry based in Lyon — believes the benefits of gaming are similar to those of traditional varsity sports in that they provide a break from academic study, and teach teamwork and management skills. But esports also provide skills relevant to the new era

Shenandoah University in Virginia is among several US colleges offering scholarships to esports players as they would for traditional athletes © Shenandoah University

of working digitally. “Companies are more interested in students who have, in addition to first-rate academic training, developed an appetite for digital, skills oriented teamwork, efficient communication, risk calculation and decision making under stress,” Mr Romezy says. “That is what we are teaching.” Shenandoah University in Virginia is among several US colleges offering scholarships to esports players as they would for traditional athletes. Joey Gawrysiak, director of esports at Shenandoah, says the philosophy of the esports programme is to prepare students to be successful across industries, not just in esports. “We already have students working in marketing and social media jobs outside the esports industry,” he adds, “but they learnt the skills for these positions through our classes.” Chester King is an entrepreneur who founded eGames, an international esports tournament organiser, and the British Esports Association, the UK’s industry body. He believes esports should www.businessday.ng

be thought of as new media and to get a job “you have to be detailed, understanding the nuances of the terminology”. “People might be great gamers but they do not have the skills to work in management,” he says, and businesses would be “more interested in a CV with a business degree in esports on it”. However, there are sceptics. Richard Huggan, managing director of HitMarker — an online esports jobs board — pivoted his career into esports recruitment after working as a performance analyst for football clubs. He credits his degree in sports coaching and performance for helping him secure such roles. But despite seeing analyst jobs appearing in esports, he doubts whether a degree in it would help. “I got my degree because it was starting to be recognised in English football as a valid qualification but I am not sure the esports market is quite there yet,” he says. Still, institutions are clearly investing in courses that provide students with the expertise to work in the gaming industry — and beyond. And

https://www.facebook.com/businessdayng

despite the disruption of the global pandemic, it has given some students the chance to further develop their business skills. Danielle Morgan, 20, who is in the final year of the inaugural esports degree class at Staffordshire University in the UK’s West Midlands, is one such student. While the pandemic meant having to cancel an April event organised for Rocket League — a football game where cars are the players — the aspiring esports journalist says it was still a good experience. In the weeks running up to lockdown, when it was unclear whether the event should be cancelled or not, “we had to do contingency planning, so I have that skill now too”. Ms Morgan was one of the first 40 students to take esports at Staffordshire in 2017. This year the university has about 360 students, including 11 completing a masters degree in the subject. “Parents are very supportive once they find out that we don’t just play games on the course and that it’s more about creating business and @Businessdayng

organisational skills,” says Rachel Gowers, director of the Staffordshire University London campus, who oversaw the esports degree’s creation. Ms Gowers and Ms Morgan are rare female voices in esports. Just 6 per cent of the intake at Staffordshire are women, although Ms Gowers is hoping to increase that number by hosting a Power Women Summit on campus next year. And not everyone studying esports is looking for a career in gaming. Rachid Barhoune, who is in the final months of the masters in management degree at EMLyon, started competitive gaming aged four, so was eager to sign up to the esports elective. He will graduate in September and is considering two job offers, as a business analyst and a role in commercial finance in the travel sector. “The esports course has taught me useful skills in terms of leadership . . . and playing helps me with stress management,” he says. And while he does not want to go into the industry “it has proved a useful talking point in interviews”, he says.

Tuesday 21 July 2020

BUSINESS DAY

Media business Corporate Governance: MDAs tasked to integrate compliance officers for better performance Daniel Obi

n absence of corporate governance code for Nigeria’s public sector as it is in the private sector, Ministries, Agencies and Parastatals have been told to incorporate compliance officers in their management structure who will ensure rules and ethical standard procedures are followed for effective performance of the MDAs and growth of the economy. The appointment of compliance officers, who shall be senior management staff with duties and functions well spelt out and who shall be protected from immediate sack on the whims of the head of agencies or commissioners has become significant in the present day economy. The compliance officers are expected to give independent advice and assist in driving the agencies and the parastatals along the path of best practice, transparency and accountability. In the private sector, it is mandatory that companies shall appoint compliance officers who are usually company secretaries whose duties include ensuring the integrity of the governance framework, ensuring compliance with

statutory and regulatory requirements and implementing board decisions. Speaking to BusinessDay recently, the President and Chairman of the governing council of Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), Bayo Ayeku suggested that pending the time there will be a code of corporate governance for the public sector , every institution, agency and parastatal should have a compliance officer. “The value they offer is important in driving the agencies according to global standards. They challenge the system for

efficiency”, he said. Ayeku recounted that a compliance officer in the private sector is able to advise the chairman of the board and the managing director professionally without any fear or favour and he/she cannot be removed easily or without due process. “We are advocating such role in the public sector. The compliance officer will not be studying the mood of the DG, Commissioner or the head of the agency before advising him or her”, he said. He warned that the appointment of secretaries without clear qualification, man-

date, functions or appropriate placement in the management structure as obtainable in the public sector does not equate to compliance officers whose functions involve governance, direction by ensuring institution’s activities comply with legal and ethical requirements. On lack of governance code for the public sector, Ayeku said what the reporting council attempted to do in 2016 was to have a three- inone code of corporate governance. To have part One dealing with the private sector, Part Two dealing with the Public sector and Part Three dealing with Non Profit sector. But the position of MDAs is that such code will infringe on statutory provisions setting them up and a code cannot override the law. “Their position was that there was the need to amend the existing laws setting them up before the code can be applied. With this controversy, government decided to focus on the private sector”, he said. Assessing adherence to Corporate Governance in Nigeria, ICSAN president scored the private sector high but said there is still room for improvement. He said corporate governance is important not only for the companies but the stakeholders, government and the economy.

Lee Group partners Osun State to fight Covid-19, donates material

n international conglomerate, Lee Group of Companies has continued to support Nigerian states in their efforts to stamp out Covid-19. The Chinese company’s latest intervention was the donation of 100,000 pieces of Biobase disposable face masks to the Osun State government. Osun is in South West with a population of 3.4 million as at 2006. With 3% annual population growth, today the population is estimated at about 4.8 million. The state has strategies to

fight Covid-19, among them is information and enlightenment strategy where it educates and guides the populace against contracting the virus. Handing over the 40 cartons of the product to the secretary of the Osun State Covid-19 Food and Relief Committee, Adebayo Jimoh in Lagos recently, Lee Group Executive, Philip Seng commended the decisive and laudable steps taken so far by the Osun State government in curtailing the spread of the pandemic in the state since the index case was reported

on March 25, 2020. “The state government under the leadership of Governor Gboyega Oyetola has shown great determination, professionalism, care and candour in tackling this pandemic”, he said. The company which has core investments in steel, footwear, plastics and heavy duty trucks has established substantial industrial footprints across Nigeria and it is currently developing strategic investments in Osun State. The company had previously assisted Kano, Jigawa,

Lagos, Ondo, FCT, Ogun with different equipment to fight the pandemic. It has donated a total of 1.5 million face masks. Receiving the product, Adebayo Jimoh appreciated the company for the gift. He said the state’s efforts to fight the virus include health and sanitisation campaign, building of isolation centres, enlightenment and providing food and palliative to people. He said the state will welcome partnerships in agriculture where the state has comparative advantage.

Mastercard partners celebrities to offer consumers unique experience at home

astercard has partnered with Nigeria’s popular media personality, Toke Makinwa; African football and Super Eagles’ legend, Austin ‘JayJay’ Okocha, and celebrity chef, Chef Fregz, to offer cardholders in Nigeria unique experiences for their at-home enjoyment. At a time when connecting people to their passions – such as sports and culinary – it’s more important than ever, Mastercard will be leveraging

its expertise to create exciting physical events online in a series of local Digital Priceless Experiences.

www.businessday.ng

As part of the new line up, Jay-Jay Okocha will be discussing his illustrious career with Toke Makinwa. Through-

https://www.facebook.com/

out the session, fans will have an opportunity to ask their priceless questions by registering on priceless.com, there will also be limited signed merchandise on registration. And in a separate session, culinary enthusiasts can watch Chef Fregz cook up a storm in the kitchen alongside Toke. Registered participants will receive the ingredients list ahead of the session so they can have their own private cooking lesson with the talented Nigerian chef.

Covid-19: NIMN resolves to use technology for its programmes

ational Institute of Marketing of Nigeria, NIMN has resolved to use technology to drive its activities in the face of global pandemic. This is part of New Normal as Covid-19 which has continued to lay prostrate many businesses and economies has disrupted activities, prompted lockdowns and social distancing in order to slow the spread of the virus. To start with, the institute chartered by Act 25 of 2003 held its 10th annual general meeting virtually with about 110 members and non-members participating online. “As a forward-looking institute, we will continue to adapt to the new realities of our existence”, the President of the institute, Tony Agenmonmen who was last year elected for another two years term told the members at the meeting last week. He said in spite of the challenges ahead, he has been energised by the collective determination of members to move the institute forward. Since then, he said substantial house cleaning has been achieved but much work is in progress. He also reported that things are looking up including the growing equity of the institute. He told the members that

the institute will continue its membership drive. Under his leadership, the institute grew revenue from N114. 3 million in 2018 to N129.9 million in 2019. At the meeting, the institute announced the election of Idorenyen Enang, the managing director of Corporate Shepherds, a firm that helps businesses, individuals and organizations achieve their goals by providing contemporary teaching, guidance, and motivation, as its 1st Vice President Enang who polled 165 votes to win, contested for the position against other three members. They are Onyekachi Onubogu, Chief Executive Officer of Frutta Juice and Services; Umar Musa Mustapha, the present first vice president of the Institute and Ify Emesiama Dike, a visionary leader . During the debate before the election, Enang said his desire to contest was predicated on thought leadership by using insightful judgement, thinking strategically and applying his global perspective in bringing his experience to bear to the institute. Agenmonmen congratulated the elected and others who vied for various positions. He charged the elected to live up to their promises to the members and the institute.

UAC Restaurant fights Covid-19, donates products to health workers, traders

AC Nigeria, owners of Mr Bigg’s lived up its corporate social responsibility initiative as it connected with frontline health workers and traders within Lekki-Ajah axis in Lagos where it donated products in an effort to slow the spread of Covid 19. The Ikota Primary Health Care Centre, Lekki and OrisunmiBaareOlumegbon Market, Ajah were two public places visited by Mr Bigg’s and Debonairs Pizza team to donate products and facemasks Recognizing the health workers response towards fight against the COVID-19 pandemic, UAC Restaurants’ Mr Bigg’s and Debonairs Pizza donated Mr Bigg’s meals,

Debonairs Pizza’s Snackie and facemasks to staff and patients of the Ikota Primary Health Care Centre, Lekki. In the same vein, branded facemasks alongside pastry products were distributed to traders and shoppers at the Orisunmi Baare Olumegbon Market, Ajah to celebrate the first anniversary of the combo store located within Northwest filling station by VGC in Lekki. While thanking the health care centre management and the market leaders for welcoming the brands, the UAC Restaurants’ marketing services manager, Eustesia Ogunsusi said that the brand was excited to come to the market to identify with them.

Chivita launches new Happy Hour Flavoured Drink Orange Safari

hivita is once again at the forefront of providing Nigerians with innovative beverage solutions as it announces the launch of the new Happy Hour Flavoured Drink in Orange Safari flavour. As Nigeria’s foremost fruit juice and value added dairy manufacturer, this launch is another testament to the continuous drive by Chi Limited for product innovation, high qual@Businessdayng

ity, and sustained consumer satisfaction. With its consistently high quality product offerings over the years, Chivita, leading fruit juice brand of CHI Limited, has remained the major player in the Fruit Juices and Still Drinks category. At a retail price of N50, the new Happy Hour Orange Safari offers value for consumers seeking to enjoy the same great taste of the orange fruit at a pocket-friendly price.

Tuesday 21 July 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Global oil & gas spending to fall by more than 75% in 2020 - study DIPO OLADEHINDE

he Norwegian independent energy research firm, Rystad Energy, has said that global project sanctioning is set for a staggering decline this year by over 75percent from 2019 levels with total sanctioning value expected to end up around $47 billion. Of total global sanctioning value in 2020, Rystad Energy said some $27 billion is expected to be for offshore projects, while the remaining $20 billion for onshore. In 2019, the total sanctioning value reached $197 billion, with $109 billion going to offshore projects and $88 billion to onshore projects. “At the beginning of this year, the project commitments forecast for 2020 were expected to be comparable to 2019, but the industry downturn thanks to Covid-19 has caused com-

mitments to fall sharply,” says Karan Satwani, energy service analyst at Rystad Energy. The spending estimates for the sector would have been even lower if not for the recent contract awards in Norway and Russia, the Rystad Energy report found. So far this year, the pro-

jects that have been committed are worth a combined $29 billion, with $16 billion going to offshore and the remaining going to onshore. Rystad Energy’s forecast is based on a scenario in which Brent averages around $40 per barrel this year, not far from its current market price.

Brent crude prices dropped from highs of almost $69 per barrel in January to $19.33 by mid-March as demand buckled. However, prices recovered to more than $40 per barrel on the back of an Opec+ agreement to cut production by 9.7 million barrels per day, with tapering of supply in

place until 2022. Going forward, Rystad Energy estimates that sanctioning will not pick up again and recover to 2019 levels anytime soon. According to the forecast, drilled wells are to partly recover, to just above 61,000 wells in 2021, as governments ease travel restrictions, boosting oil demand and prices. Then numbers are expected to grow further, to just above 65,000 wells in 2022, although they will remain below 69,000 wells until the end of 2025. Rystad energy services analyst Reza Hassan Kazmi said: “Both new wells and drilling lengths will be pared down as E&P’s scale down investments, affecting the entire supply chain associated with these services.” Before the coronavirus outbreak, Rystad Energy had expected that the total number of wells would rise to 74,575 year-on-year, of

Plan to end fossil fuel subsidies as COVID-19 recovery effort launched across Africa

Explainer: How Ajaokuta-Kaduna-Kano gas C pipeline may resemble Kaduna refinery

ISAAC ANYAOGU

STEPHEN ONYEKWELU

igeria has a long list of projects that have been designed more to score political points than for their reasoned economic value. The Kaduna refinery makes this list and the Ajaokuta-Kaduna-Kano gas pipeline may find a place on the list too, according to people with a deep understanding of Nigeria’s oil and gas sector infrastructure development. Alexander Ogedegbe, former managing director of the Port Harcourt Refining Company, who was part of the team that constructed the Kaduna refinery said in a webinar in May on Nigeria’s refining that a business or economic case could hardly be made for the refinery. The Kaduna refinery was 700 – 800 kilometres far from Lagos, Nigeria’s commercial capital and as far from any source of crude oil. A pipeline was built from Warri to Kaduna, which cost as much as the refinery. The argu-

ment then was that the refinery was strategic and was completed in 1979. Similar strategic reasons are being evoked for the AKK gas pipeline. A consensus position among people familiar with Nigeria’s oil and gas industry and markets is that natural gas needs to be available everywhere in Nigeria. Liquefied natural gas penetration into every part of Nigeria is desirable, especially in the northern regions. The provision of gas to drive gas-based industries and boost electricity generation in the northern parts of Nigeria are also desirable to enhance inclusive economic development in Nigeria. However, there are disagreements regarding the most cost-efficient way to take gas up north from the south. The AKK gas pipeline project has been criticised as lacking economic viability, particularly at a time when other sectors, such as education and health are suffering and Nigeria’s public debt stockpile increasing. www.businessday.ng

Estimated to cost $2.80 billion the 40-inch diametre Ajaokuta-KadunaKano gas pipeline recently entered a critical phase with the award of engineering, procurement and construction contract in April 2020 for the first phase. The 614 kilometres long gas pipeline designed to connect eastern, western and northern geopolitical regions of Nigeria aims at creating a steady and guaranteed gas supply network across the country. To be executed in three phases, phase one covers the construction of a 200km-long segment between Ajaokuta and Abuja. According to the federal government, the project will be financed through 85 percent debt and 15 percent equity with a loan facility from the China Export & Credit Insurance Corporation (Sinosure) at London Interbank Offered Rate (LIBOR) interest rate plus 3.7 percent with a 12year repayment period, while NNPC will cover the remaining 15 percent of

the project’s cost. On July 13, BusinessDay published an editorial showing how the AKK gas pipeline fails to tick fundamental boxes for economic viability. For instance, northern Nigeria with over 80 percent of Nigeria’s poor lacks the industrial capacity to offtake the gas. Siting a multibillion-dollar gas project in the least developed and poorest region and betting that industries would follow is like betting the house on the lottery. In an economy where over 90 percent of government revenue goes to servicing debt, it seems rather pragmatic to make use of existing rail infrastructure to ship gas to the north. BusinessDay’s editorial board argued that if the federal government made huge investments in reviving rail lines across the country, it would have been more economical to move gas along rails rather than spending over $2.8 billion on this venture – except the objective is just a contract bazaar.

https://www.facebook.com/businessdayng

which 2,896 were offshore wells. Drilling length, a driver for drilling tools, especially for drill pipes, drill collars, heavy-weight drill pipes, and drill bits, is also estimated to proportionally decrease by 25percent this year, before improving in 2021. Rystad Energy expects that onshore and offshore purchases for drilling tools will drop from $16bn in 2019 to $10bn in 2020, with North America, Africa, and Russia being the biggest contributors to this loss, since purchases in these countries will drop between 27percent and 36percent this year. Global investment in energy is expected to slump 20 per cent or nearly $400bn in 2020 due to the “staggering” impact of the Covid-19 pandemic on the industry, the International Energy Agency said in May.

40 Cities, an advocacy forum has released C40 Mayors and Governors Agenda for a Green and Just Recovery outlining bold steps to deliver an equitable and sustainable recovery from the COVID-19 pandemic and an end to fossil fuel subsidies. The agenda includes specific measures that are already being delivered and endorsed in many cities around the continent including Freetown, Johannesburg, Cape Town, Durban, Addis Ababa, Nairobi, Lagos and Accra. The outcome of the plan seeks to create a ‘new normal’, which will identify, contain and proactively prepare cities for future pandemics, while addressing systemic injustices and playing a key role in keeping global heating below the 1.5°C goal of the Paris Agreement. Amongst the measures championed by mayors and governors include providing immediate access to water to vulnerable communities and institutions, issuing permits for citizens to work and generate income, green job creation programmes; increased rights and support for all workers whose efforts proved essential during the COVID-19 pandemic; investments in green industries such as guaranteed access to resilient public services, particularly for the most vulnerable; building retrofit programmes; investing in safe and reliable mass transit, and new protected spaces for pe@Businessdayng

destrians and cyclists. Yvonne Aki-Sawyerr, Mayor of Freetown, Sierra Leone said: “Freetown’s recovery from the COVID-19 pandemic will be an uphill climb. But as a city, we will ensure that like our response and recovery is focused on bringing some of the city’s most vulnerable along. Freetown’s commitment to improving public services postCOVID, particularly sanitation, will make our city more livable for all whilst creating much needed jobs in the circular economy.” In Freetown, Mayor Yvonne Aki-Sawyerr rapidly provided sustainable access to water to vulnerable and important public spaces in the city such as informal settlements, markets and peripheral health units as a major component of the city’s COVID-19 response plan. Further, in South Africa’s major cities Cape Town and Johannesburg, mayors have also developed an informal trader policy through regional consultative workshops with leaders and trader associations. In response to the COVID-19 lockdown, the cities recognised informal traders as providers of essential goods and services under the Disaster Management Act and issued permits allowing informal traders to work and generate income. Recognising that delivering an equitable, low carbon recovery from the COVID-19 pandemic will require a global effort, C40 Cities and its allies have also called on national governments to support their efforts.

Tuesday 21 July 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

EU pressured to give results of leak probe into China disinformation MEPs are concerned that focus has been on the leak rather than on pushing back against Beijing Michael Peel

he EU faces pressure to reveal the results of a leak inquiry it launched over internal emails that suggested it toned down a report on alleged Chinese disinformation after pressure from Beijing. European parliamentarians are concerned that the bloc’s diplomatic service has focused more on how the documents became public than on the substantive question of how it dealt with China’s complaints. The affair has crystallised fears among some legislators, member state diplomats and analysts that the EU is reluctant to fund its antidisinformation efforts properly or to push back strongly against Beijing. The perceived hesitancy contrasts increasingly sharply with the economic countermeasures being drafted over China’s alleged failure to reciprocate the market access the EU allows Chinese companies. “I am perplexed and unhappy they have not said anything about the leak inquiry,” Markéta Gregorová, a Czech MEP who sits on the European parliament’s foreign affairs committee, told the Financial Times. The focus on the leak rather than the Chinese pressure is also strange Markéta Gregorová, a Czech MEP She added: “The focus on the leak rather than the Chinese pressure is also strange.” Ms Gregorová called for the diplomatic service to divulge the outcome of the leak inquiry launched in May and also what measures it had taken to improve its “resilience

European Council President Charles Michel and European Commission President Ursula von der Leyen after a virtual summit with the Chinese president. © Yves Herman/Reuters

against self-censorship and undue interference”. The EU’s diplomatic wing — known as the European External Action Service — has recently completed the final report on the leak, according to people familiar with the matter. An EU official said the inquiry had “identified clear evidence of unauthorised disclosure of information”, but had “not established evidence of a leak directly by EEAS staff to a journalist”. The EEAS insisted the inquiry was not yet closed. The affair burst into public after internal diplomatic service emails, first disclosed by the New York Times, revealed a dispute over the editing of an April EU report that accused China of a “global disin-

formation campaign” during the coronavirus pandemic. After a draft of the document leaked to the news organisation Politico, China made at least three formal diplomatic complaints to the EU and warned that bilateral relations would be hit should the bloc publicly accuse it of spreading coronavirus crisis propaganda. A version of the report eventually published made criticisms of China but was shorn of any reference to the alleged “global disinformation campaign”. In the internal diplomatic service emails, Monika Richter, a disinformation analyst, raised concerns that changes being made to the report showed the EU’s “apparent willingness to self-censor in

response to Beijing’s threats”. The diplomatic service responded by launching an inquiry into how the emails came to be disclosed. Josep Borrell, the bloc’s foreign policy chief, told the European parliament foreign affairs committee in April that the “personal belief” of a staff member “maybe . . . written to be leaked” had damaged the credibility of the institution. Ms Richter left the EU diplomatic service last week of her own accord to take a job in the private sector. She told the FT that she was not the source of the leak and was disillusioned by the EU’s institutional response to Chinese pressure. “It was the fact that, in the face of what was an incredibly crude and

also well-known intimidation tactic by the Chinese ministry of foreign affairs, the knee-jerk reaction was: ‘There’s pushback and so we should self-censor — or we need to second guess what we did’,” she said. Hilde Vautmans, another MEP on the parliament’s foreign affairs committee, said legislators had “made it very clear that the EU should never give in to pressure by the Chinese to censor reports”. “I personally think it is very good if civil servants are critical and dare to share concerns with their colleagues about foreign pressure,” she said. “This is a culture that the European institutions should cherish and even encourage.” Reinhard Bütikofer, a third parliamentary foreign affairs committee member, said that the diplomatic service must share the results of the leak inquiry once formally completed and deal with the “open questions” remaining about the matter. The diplomatic service has always maintained it did not bow to Chinese pressure to soften the report. It has said the published document was the product of a normal editing process, with “particular attention” paid to ensure phraseology in public reports was “unassailable”. It also defended the decision to launch the leak inquiry, arguing that breach of confidentiality was “a serious matter we cannot accept”. “It undermines the work done by the institution including the safety of the members working on disinformation,” it said. China has denied it has spread disinformation during the pandemic.

US regulator fines Citadel Securities over trading breach Market-maker traded ahead of customer over-the-counter orders over 2-year period Richard Henderson

he US financial industry regulator has fined Citadel Securities $700,000 for trading ahead of customer orders, dealing a blow to the market-making firm that has benefited from a big rise in retail trading this year. Chicago-based Citadel Securities delayed certain equity orders from clients to buy or sell shares while continuing to trade the same stocks in its own account, as part of its marketmaking activities, Finra said. The claims relate to “over the counter” equity trades, which are carried out away from public stock exchanges and then reported to regulators. Over a two-year period until September 2014, the marketmaker removed hundreds of thousands of large OTC orders from its automated trading processes, according to Finra. That

Citadel Securities was fined $700,000 after it removed hundreds of thousands of large OTC orders from its automated trading processes, according to Finra. © Bloomberg

rendered the orders “inactive” and so they had to be handled manually by human traders. Citadel Securities then “traded for its own account on the same side of the market at prices that would have satisfied the orders,” without immediately filling the inactive orders at the same or better prices as required www.businessday.ng

by Finra rules, the regulator said. In February 2014, a sample month reviewed by Finra, the market-maker traded ahead in nearly three-quarters of the inactive orders. “Based on this review, in 559 instances, Citadel Securities traded ahead of 415 inactive OTC customer orders,” the regulator said.

https://www.facebook.com/businessdayng

Citadel Securities will pay a fine of $700,000 under the terms of a settlement with the regulator without admitting or denying the claims. The company is also required to make whole any customers affected. In a statement to the FT, Citadel Securities said: “We have addressed all of Finra’s concerns and take very seriously our obligations to comply fully with its rules. The issue relates to a limited number of manually handled orders, most of which occurred in 2012-2014.” Citadel Securities is majorityowned by Ken Griffin, the billionaire investor, and is the sister firm to Citadel, the hedge fund he runs. The company is the biggest US retail market-maker with a 40 per cent share and has emerged as one of the big winners from the boom in retail investing through the pandemic. The company makes money from the difference between @Businessdayng

orders to buy and sell a stock, known as the spread, and buys up orders from the big retail trading platforms including Charles Schwab and Robinhood that have attracted record numbers of new customers this year. Finra also said Citadel Securities fell short of supervisory requirements and failed to display certain OTC customers’ limit orders: instructions to buy or sell at a specific price, or better. Nearly half of the 467 limit orders reviewed by the regulator in the six years until September 2018 were found to violate Finra’s requirements to display orders. The bulk of the violations were for failing to execute trades against existing quotations in a timely manner, Finra said. The regulator also highlighted the ability for traders on Citadel Securities’ OTC desk to “disable” the system component that automatically sent certain messages to trade OTC stocks.

Tuesday 21 July 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

European stocks close higher on recovery fund hopes

Italian borrowing costs fall as investors bet on breakthrough in EU talks Naomi Rovnick, Matthew Rocco and Hudson Lockett

talian borrowing costs dropped and European stocks rose on Monday on hopes EU leaders will forge a deal to launch a fund to help the bloc recover from the economic pain caused by coronavirus. Italy’s 10-year government bond yield, benchmark for the cost of borrowing in Europe’s third-largest economy, fell 0.09 percentage points to 1.15 per cent. The decline, which is the biggest since early June, reflects rising prices for the debt. The gap between 10-year Italian and German government bond yields also narrowed to the lowest level since late March. The spread is seen as an indicator of market sentiment towards the bloc’s more financially vulnerable nations. Yields on the debt of other big eurozone borrowers, including Spain and Portugal, also declined on Monday. After days of haggling over the recovery fund, which has pitted the leaders of a group of richer countries against those nations hardest hit by the pandemic, Dutch prime minister Mark Rutte

The gap between 10-year Italian and German bond yields narrowed to the lowest level since late March © AFP via Getty Images

and Austrian chancellor Sebastian Kurz expressed optimism about breaking the logjam. In currencies, the euro early on Monday hit a four-month high against the US dollar. However, those gains cooled during the afternoon session. The composite Europe Stoxx

600 ended the day 0.8 per cent higher after a muted reaction early in equity markets. Germany’s Dax was up 1 per cent while the CAC 40 in Paris rose 0.5 per cent. Milan’s FTSE MIB rose 1 per cent. In London, the FTSE 100 slipped 0.5 per cent, with British Airways owner IAG and online

retailer Ocado among the biggest fallers. One of the FTSE’s best performers was drugmaker AstraZeneca, up 1.5 per cent amid a burst of enthusiasm about coronavirus vaccines that caused shares in biotech group Synairgen to rise more than five times, or 420 per cent. Its shares closed at 190p, up

from Friday’s 36.5p. US stocks were higher, with the benchmark S&P 500 up 0.4 per cent at lunchtime in New York. A rally in technology shares powered the Nasdaq Composite to a 1.6 per cent gain, putting the index on track for a record high at the closing bell. Investors are looking for fresh clues this week on how the pandemic has hit corporate earnings, with Microsoft, IBM and Unilever among those that will report second-quarter results. In Asia, China’s CSI 300 index of Shanghai and Shenzhen-listed stocks jumped 2.6 per cent on indications that Beijing was taking steps to support a recent rally in equities. Regulators said on Friday that they would allow insurers to invest more of their assets in the stock market. “There’s a lot of speculation of more policy [support] coming for . . . the buildings materials sector,” said a director at one mainland brokerage. But Hong Kong’s Hang Seng index closed flat as the city indicated a fresh wave of coronavirus infections. Japanese stocks were weighed down by data showing exports in June fell by a faster rate than forecast by economists.

Chevron to buy US energy group Noble in $13bn deal Tie-up expected to trigger a string of deals prompted by oil price crash Derek Brower, Myles McCormick, David Sheppard and James Fontanella-Khan

h e v ro n ha s agre e d to buy Noble Energ y for $13bn including debt in the oil and gas industry’s first big deal since geopolitical tensions and the global pandemic sparked this year’s crude prices collapse. Under the terms of the allshare tie-up, which values the independent oil and gas producer’s equity at $5bn, investors will receive 0.1191 shares in the supermajor for each one they hold in its smaller US rival. The acquisition is expected to trigger a string of deals in the oil sector as deep-pocketed groups such as Chevron and ExxonMobil lead a wave of consolidation across the heavily indebted US shale patch. Vitol, the w orld’s largest i n d e p e n d e nt o i l t ra d e r a n nounced on Monday it was establishing a US oil production business called Vencer Energy looking to acquire “mature, producing oil and gas assets”. “Our strong balance sheet and financial discipline gives us the

Chevron will now become the operator of the giant Leviathan field and take over Noble’s other Mediterranean assets © REUTERS

flexibility to be a buyer of quality assets during these challenging times,” said Chevron chairman and chief executive Michael Wirth. “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources.” The purchase of the independent oil and gas producer fits with Chevron’s strategic plan to focus on the international natural gas business and US shale production. The company is already one of the world’s largest natural gas producers. The new deal significantly expands its position in the eastern Mediterranean, where several countries are racing to develop the region’s huge gas reserves for www.businessday.ng

export. It also gives Israel’s energy sector the supermajor investor — with political clout — that its government has craved since Noble began finding huge offshore gas reserves there more than 20 years ago. Chevron will now become the operator of the giant Leviathan field and take over Noble’s other Mediterranean assets, including in Cyprus. The deal comes despite the company’s wider investments in the Middle East, where it has a leading role in the Neutral Zone shared between Saudi Arabia and Kuwait, and a position in Iraq. Total chief executive Patrick

https://www.facebook.com/businessdayng

Pouyanné said last year that Israel was too “complex” a market to invest in because of his company’s assets elsewhere in the region. The deal also significantly expands US Chevron’s shale position, including in Texas’s Permian, the world’s most prolific oilfield, where it said Noble’s acreage would be contiguous with its own assets. “We really like unconventionals,” said Mr Wirth, referring to the addition of Noble’s US shale oil assets. “This gives us another piston in the unconventional engine.” Chevron said it was buying “low-capital, cash-generating offshore assets” as well as “de-risked acreage” in the US, adding that the deal would generate “run-rate cost synergies of approximately $300m” and be “accretive to free cash flow, earnings, and book returns one year after close”. The acquisition will increase Chevron’s total reserves base by almost a fifth at a cost of less than $5 a barrel of oil equivalent, while offering further growth potential in west Africa, where Noble has a position in Equatorial Guinea. Noble’s debt, included in the acquisition, amounts to almost $9bn against assets currently valued at just over $17bn, according to S&P Capital IQ. @Businessdayng

Mr Wirth told the Financial Times in May that Chevron had an appetite for acquisitions, saying the group was “alert to opportunities” that had emerged because of the oil price crash. Last year the company pulled out of a bidding war with Occidental Petroleum to buy Anadarko, another company that had international natural gas assets and a presence in the US shale sector. “Going back to Anadarko we know that the company had an interest in M&A before the Covid commodity crash. Clearly that interest persists,” said Pavel Molchanov, an analyst at Raymond James. But at roughly 7 per cent of Chevron’s own enterprise value, the deal is on a much smaller scale than the $50bn it would have spent on the Anadarko purchase. “For a company of Chevron’s size, this is a modest-sized deal and is much, much less — about one quarter of the size of what Anadarko would have been,” Mr Molchanov said. Despite analysts saying Chevron was offering just a “modest premium” for Noble, Mr Wirth said he was confident Noble’s shareholders would accept the deal. “We do deals that are fair to both sides,” he told an analyst conference call on Monday.

Tuesday 21 July 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

CBN considers more forbearance of up to 65% for banks’ customers

… Retains benchmark interest rate at 12.5% … N18.9trn credit to N150trn economy not impactful – Rewane HOPE MOSES-ASHIKE, BUNMI BAILEY & MICHAEL ANI

he Central Bank of Nigeria (CBN) on Monday said it would encourage commercial banks to grant more forbearance to their customers of between 60 percent and 65 percent. The move is to assist businesses that have been adversely affected by the impact of Covid-19 pandemic to return to life. Godwin Emefiele, governor, CBN,said22outof27bankshad come to the CBN to restructure about 35,640 loans of their customersputatN7.8trillion,which constitutes about 41 percent of the total industry loan at N18.9 trillion. “We still see this as a bit low,” Emefiele noted. Emefiele said this at the end of the Monetary Policy Committee (MPC) meeting, which kept the benchmark interest rate unchanged at 12.5 percent in consideration of rising inflation rate and weak growth. The committee, by vote of 10 members in attendance, voted to retain the Monetary Policy

Rate (MPR) at 12.5 percent; the asymmetric corridor of +200/500 basis points around the MPR; the Cash Reserve Ratio (CRR) at 27.5 percent, and the Liquidity Ratio at 30 percent. The apex bank on March 16, 2020, granted all commercial lenders leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the outbreak of Covid-19, particularly oil and gas, agriculture, and manufacturing. “We are going to encourage the banks to continue to extend forbearance to businesses until we see forbearance level rising to about 60 percent to 65 percent, then we will get a bit comfortable that we have been able to assist business to a large extent coming back to life,” the CBN governor said. Reacting to the development, Bismarck Rewane, CEO, Financial Derivatives Company, said, “When you take it on the context of a N150 trillion economy, the impact of N18.9 trillion is not going to be impactful. So, there is work to be done.”

News Why CBN’s new guideline may suffer setback in microfinance bank sub-sector Hope Ashike & Ignatius Chukwu

… Fintech firms hail loan recovery standard

he implementation new loan recovery guideline called Global Standing Instruction (GSI) issued on Monday last week by the Central Bank of Nigeria (CBN)maysuffersetbackacross microfinance banks (MFBs) sub-sector of the economy. This is because not all MFBs are on the Nigeria Inter-Bank Settlement System (NIBSS) platform. The guideline specified the roles of NIBSS, which is to execute the master GSI agreement between Participating Financial Institutions (PFIs). Also, NIBSS is to administer the back-end of the GSI services (utilising NIP protocols) where upon trigger undertakes balance enquiry, debit instructions on identified

accounts, and completes the GSI operations by instantly transferring the collated funds to the borrower’s pre-designated repayment account in the creditor bank. It is stated in the guideline that the creditor bank shall indemnify NIBSS and other Participating Financial Institutions from all liabilities that may arise from inappropriate use of the GSI infrastructure. However, the National Association of Microfinance Banks (NAMB) is collaborating with NIBSS and other services providers to bring all MFBs on board, says Rogers Nwoke, national president of NAMB. The latest CBN’s Financial Stability Report (FSR) published in 2019 showed that MFBs net loans and advances

increased by 26.11 percent to N220.95 billion at the end of December 2018, from N175.20 billion at the end of June 2018. The apex bank examination of the sub-sector revealed high incidence of non-performing credits (above PAR of 5%). Nwoke is optimistic that if the guideline is implemented, it will help the sub-sector recover past loans from defaulters. “It will when fully implemented. The only challenge now is that not all MFBs are on the NIBSS platform. Our Association is collaborating with NIBSS and other services providers to bring all MFBs on board. Our Microfinance Development Company is handling this,” according to Nwoke. However, the initiative has been hailed as a much-await-

ed policy capable of sanitising Nigeria’s credit space and promoting economic growth and stability flowing from borrower-lender credibility. This is as financial technology (fintech) groups and other lenders not yet captured in the GSI have commended the policy, seeing much hope in the sanity of the lending market. Push for a system that would spread the net to harvest debtors across the financial industry was made in February 2020, when the Bankers’ Committee approved what they called the ‘Go-Live’ on the GSI aimed at facilitating an improved credit repayment culture; reducing non-performing loans in the Nigerian banking system, and do watch-listing of consistent loan defaulters.

Inside the opportunity cost of Nigeria’s latest N1trn gas pipeline project DIPO OLADEHINDE

igeria may be able to find better use for the $2.8 billion (N1trn) to be spent building a gas line that connects its moribund steel facility in Ajaokuta to Kaduna and Kano. Nigeria’s dwindling revenues make it imperative that the Federal Government is more strategic in its allocation of scarce resources and focus on projects with compelling multiplier effects at the lowest cost.

That message has not caught on in Abuja; however, following the government’s plan to invest as much as $2.8 billion in a gas line project that analysts say does little to stimulate economic growth. “There are lots of big-ticket projects scattered around the country that can unlock private capital, create an opportunity to diversify revenue of the Nigerian government, strengthen the country’s revenue base,” Niyi Awodeyi, CEO at Subterra EnergyResourcesLimited,says. For instance, many projects are still at the planning stage or under some legal hurdles years after initiation, which the government can fast track and allow private investments unlock.

These projects include Shell’s Bonga South-West and Aparo, expected to add about 225,000 barrel per day (bpd) oil production; Bonga North (100,000bpd); Eni’s ZabazabaEtan (120,000bpd); Chevron’s Nsiko (100,000bpd); ExxonMobil’s Bosi (140,000bpd); Satellite Field Development Phase two (80,000bpd), and Ude (110,000bpd). These projects are estimated to have the capacity to boost the nation’s production by as high as 875,000bpd and the nation’s revenue by about $1.5 billion annually. The government however claims there are numerous opportunities attached to the $2.8 billion AjaokutaKaduna-Kano (AKK) gas line project, which will result in the establishment of a connecting pipeline network between the eastern, western and northern regions of Nigeria. While some industry players, who spoke with BusinessDay, lauded the AKK project initiative, some are equally sceptical about the country getting the best from the project, knowing fully well that similar facilities across the country have remained dormant, either due to failing refineries, as well as repeated attacks on pipelines, or the political colouration of developmental projects. www.businessday.ng

L-R: Theodora Kio-Lawson, chair, media and publicity; Ozofu Ogiemudia, 2020 conference chair; Adeola Ajayi, conference secretary; Seni Adio, NBA-SBL chairman; Christine Sijuwade, chair, venue and accommodation; Nnenna Udoye, programmes officer, and Ayoyinka Olajide-Awosedo, at the 14th Annual Business Law E-conference in Lagos.

Nigerians, top business executives face formidable enemies in these four lifestyle diseases … shortage of lifestyle clinics slows effective disease management STEPHEN ONYEKWELU

ardiovascular disorders, hypertension, diabetes and cholesterol-related health conditions springing from lifestyle habits have been on the rise in Nigeria, in the last 16 years. Often, between 35 and 40 years of age, lifestyle diseases begin to manifest. This is about the time some people experience the onset of diabetes. Cardiovascular disorders such as hypertension start around this period too, experts say. According to the World Health Organisation (WHO), Nigeria is one of the many developing countries where the health services have focused on treating infectious diseases, such as malaria and

tuberculosis, but in recent years, non-communicable conditions have become an increasing problem. One of the most prevalent non-communicable conditions worldwide, hypertension, is responsible for an estimated 45 percent of deaths due to heart disease and 51 percent of deaths due to stroke globally. Hypertension and its complications constitute approximately 25 percent of emergency medical admissions in urban hospitals in Nigeria. While Nigeria’s plans to tackle the problem have yet to be announced, the factors making it worse are clear, WHO says. “The high prevalence of hypertension is explained in part by lifestyle changes, many related to changing environmental

https://www.facebook.com/businessdayng

and social factors,” notes Obinna Ekwunife, a lecturer at the University of Nigeria, Nsukka. In terms of social and economic demographics, lifestyle diseases cut across social classes in Nigeria. “In the last 16 years of my experience in Nigeria’s healthcare industry, diabetes and cancer affect both the rich and poor. However, cardiovascular disorders are prevalent among top executives,” says Anil Grover, founder of Grover Medical Lifestyle Clinic, Nigeria’s first. Grover states that these are often people who work in highly stressful jobs or environments - management executives, bankers, telecoms people, business people and top government officials. There are limited num@Businessdayng

bers of dedicated healthcare facilities for these lifestyle diseases in Africa’s most populous country. Such clinics are common in Singapore, Dubai and India, but there was none in Nigeria until Grover started one three years ago. “We decided to start a small clinic that focuses on lifestyle diseases; this is how we got Grover’s Medical Lifestyle Clinic registered,” Grover says. The small clinic has blossomed into a full-blown medical lifestyle hospital. Ignorance and poverty make it difficult for some people to see how their lifestyles have consequences on their long-term health. It is also uncommon for people to go for routine medical check-ups, so many people present late with long-term complications.

Tuesday 21 July 2020

BUSINESS DAY

news Manufacturers invest billions in local raw ... Continued from page 1

and crunching FX scarcity.

But multinationals, conglomerates and factories have been responding, pumping billions of naira in backward integration projects and supporting farmers to raise their local input sourcing. Already, local input sourcing has risen to 60.5 percent in 2019 from a low of 47 percent in 2014, data from the Manufacturers Association of Nigeria (MAN) say. On the average, local input sourcing has hit 56 percent since 2014. Backward integration occurs when firms acquire their suppliers or produce what their suppliers used to. FrieslandCampina WAMCO, a Dutch dairy maker, has set up 16 milk collection centres in Oyo State and is constructing 10 new ones for the collection of raw milk from local herdsmen as input. “We are collecting about 40,000 litres a day. Our actual storage capacity is 85,000 litres, which means there is still a lot of room for this to increase,” according to Ben Langat, managing director, FrieslandCampina WAMCO Nigeria, in a recent online interview with BusinessDay. “Presently, we are in five states – Oyo, Ogun, Osun, Kwara, and we have just launched into northern Nigeria with a large project that is going on in Niger State in Bobi grazing reserve. In 2019, we built a new factory and the bulk of fresh milk that is collected is what we use in producing our Peak yoghurt range,” he says. Dangote Sugar is pumping billions in sugarcane

plantations across northern states to enable it cut raw sugar imports. Raw sugar, an essential input for sugar makers, is still being imported as $337.3 million was spent on the importation of the raw material in 2018, according to the National Sugar Development Council (NSDC), an agency in charge of sugar development in the country. But manufacturers are establishing nurseries and plantations to bridge this gap. Dangote Sugar’s $700 million project in Nassarawa State is expected to see its plant in Tunga, Nassarawa State, produce 450,000 metric tons and generate 90 megawatts of power annually when completed. Aliko Dangote, Africa’s richest man and president of Dangote Group, said in early 2019 that his investments in sugar plantations and refineries would cut prices and place Nigeria on the global map. PZ Wilmar, a subsidiary of PZ Cussons, has 26,500 hectares of palm oil plantations in Cross River State. About 5,549 hectares (ha) of oil palm plantation are located in Calaro Estate, while 2,369ha are in an area known as Calaro Extension. Its investment in oil palm plantations in Cross River State alone is worth approximately $150 million, Santosh Pillai, managing director of PZ Wilmar, says. The firm also acquired Ibiae plantations with 5,595ha; Ibad plantations in Akampa with 7,805ha; Kwa Falls in Akampa Akpabuyo with 2,014ha, and Oban plantations, also in Akampa, with 2,986ha. “We are determined to continue with these invest-

Babatunde Oduyoye (2nd r), representative of Oyo State governor and special adviser on strategy and political matters; Taiwo Adisa (r), chief press secretary to the governor, during the presentation of cash donation to the widow of PDP committee member in Ogbomoso North Local Government Area of Oyo State, late Isaiah Adegoke and Folasade Adegoke (l), while the children lookon at Governor’s Office, Ibadan.

ments and looking for opportunities to expand our plantations in the state. We have also invested around N20 billion in an oil palm refinery in Lagos,” he states. Brent crude price was $43.13 per barrel, with WTI crude at $40.55 per barrel as of 4.09pm on Friday. Nairadollar exchange rate is naira at N462-N470/$ in the parallel market on Friday, as against N360/$ in early to mid-March. Though the official rate is lower, importation of inputs is now more expensive for manufacturers. The CBN is

working on FX unification of multiple FX rates— a condition given by the International Monetary Fund (IMF) before pushing $3.4 billion to Africa’s largest economy. Jesmin Rahman, IMF mission chief for Nigeria, said in a virtual fireside chat Thursday last week that exchange rate unification and greater flexibility was the way to go for Nigeria. But manufacturers are looking at beating naira volatility by setting up enduring local input sourcing projects. Flour Mills of Nigeria

Fidelity Bank names Nneka Onyeali-Ikpe... Continued from page 1

cession policy of the bank,

the Board has approved the appointment of Nneka Onyeali-Ikpe, the current executive director, Lagos and South West Directorate, as the MD/ CEO-designate of the bank to assume office with effect from January 1, 2021. As part of the process of ensuring a smooth and successful transition, Nnamdi Okonkwo will continue in his role as the MD/CEO until December 31, 2020, while Nneka Onyeali-Ikpe will assume office as the substantive MD/CEO on January 1, 2021. The approval of the CBN has been obtained for the appointment. TheBoardhasalsoapproved the appointment of Kevin Ugwuoke, the current chief risk officer of the bank, as executive director/chiefriskofficer,subject to the approval of the CBN. Okonkwo was appointed to the Board of Fidelity Bank in April 2012 as an executive director and was subsequently

appointed the MD/CEO on January 1, 2014. He implemented a Digital-led Strategy that led to significant growth across key performance metrics and increased market share, with the bank currently ranked sixth among Nigerian banks on most performance indices. Some of his key achievements include: profit before tax (PBT) growth of 236 percent from N9 billion to N30.4 billion; return-onequity (RoE) increase from 5.5 percent to 13.3 percent; Customer Deposits growth of 68 percent from N806.3 billion to N1.352 trillion; Savings Deposit growth of 275 percent from N83.3 billion to N312.1 billion; Net Loans and Advances growth of 174 percent from N426.1 billion to N1.165 trillion; Customer Base increase by 121 percent from 2.4 million to 5.3 million; Digital Banking penetration improved from 1percent to 50.1 percent and now accounts for 28.4 percent of total fee income. In addition, the bank successfully accessed the local www.businessday.ng

Nneka

Kevin

and international markets through the issuance of N30 billion Corporate Bonds in 2015 and $400 million Eurobonds in 2017. The Board expresses appreciation to Nnamdi Okonkwo for his significant contributions to the growth and development of the bank during his tenure on the Board. Nneka Onyeali-Ikpe was appointed to the Board in 2015 as an Executive Director and currently oversees the Lagos and Southwest Directorate. She led the transformation of the Directorate to profitability and sustained its impressive year-on-year growth across key performance metrics. Nneka has been an integral part of the current management team responsible for the remarkable increase in the

bank’s performance in the last 5 years with the area under her direct responsibility contributing over 28 percent of the bank’s PBT, Deposits and Loans. Nneka has over 30 years of experienceacrossvariousbanks including Standard Chartered Bank plc, Zenith Bank plc and Citizens International Bank Limited, where she held several managementpositionsinLegal, Treasury, Investment Banking, Retail/Commercial Banking and Corporate Banking, in addition to serving as an Executive Director on the Board of Enterprise Bank plc. Nneka has been involved in the structuring of complex transactions in various sectors including Oil & Gas; Manufacturing, Aviation, Real Estate and Export. As an Executive Director at Enterprise Bank

https://www.facebook.com/businessdayng

(FMN) is pumping N50 billion in Sunti Golden Sugar Estates, Niger State, featuring 17,000ha of irrigable farmland and a sugar mill processing 4,500 metric tons (MT) of sugarcane per day. Atfullcapacity,theestatecan produce 1 million tons of sugarcane, which roughly translates into 100,000MT of sugar yearly, according to John G. Coumantaros, chairman of FMN. According to Coumantaros, the Sunti Golden Sugar Estates achieved its first development target of reaching 2,836ha of land under cane in July 2018. Many manufacturers are also working with suppliers, providing them with funding, technical support and market. Guinness Nigeria is supporting over 30,000 smallholder farmers, who supply them with sorghum, to enable them move from basic to more efficient and productive yields. “In our view, it is a contribution that is beyond buying seedlings. We assure them of the market for their produce.

As you are aware, African farmers have issues with a reliable market. Therefore, being able to assure them of the market gives them confidence,” Baker Magunda, managing director of Guinness Nigeria, says in an interview with BusinessDay. Nigeria Breweries is also buying sorghum and cassava from Psaltery Nigeria Limited and others, providing support for them. Biggest food maker, Nestlé Nigeria plc, sources 80 percent of its maize, sorghum, millet, soya, cassava starch, cocoa powder, and palm olein from more than 41,600 local farmers and processors scattered across the country. Nestlé Cereals Plan project has over 30,000 farmers who supply 100 percent of the grain requirement for Golden Morn Maize. Through its Sorghum and Millet in the Sahel (SMS) project, now called Nestlé Nigeria & IFDC/2Scale Project Sorghum & Millet, it engages a lot of farmers, thereby raising their incomes while reducing unemployment.

plc, she received formal commendation from the Asset Management Corporation of Nigeria (AMCON) as a member of the management team that successfully turned around Enterprise Bank Plc. Nneka holds Bachelor of Laws (LLB) and Master of Laws (LLM) degrees from the University of Nigeria, Nsukka, and Kings College, London, respectively. She has attended executive training programmes at Harvard Business School, The Wharton School University of Pennsylvania, INSEAD School of Business, Chicago Booth School of Business, London Business School and IMD, among others. She is currently undergoing a diploma programme in Organisational Leadership at Said Business School, Oxford University, UK. She is an Honorary Senior Member (HCIB) of The Chartered Institute of Bankers of Nigeria. She is married with children. Kevin Ugwuoke joined Fidelity Bank in 2015 as General Manager, Chief Risk Officer. Under his supervision, the Bank’s Total Loan Book

has grown by a Compound Annual Growth Rate of 17 percent from N559.1 billion to N1.218 trillion with Cost of Risk averaging 0.7percent within the period and NonPerforming Loans Ratio below the regulatory threshold at 4.8 percent in Q1 2020. He has over 29 years of banking experience across various banks namely Citi Bank, Access Bank, United Bank for Africa and Mainstreet Bank Limited, where he worked in various capacities in Banking Operations, Commercial Banking, Corporate Banking and Risk Management. Over the period, he was also Chief Risk Officer of United Bank for Africa and Mainstreet Bank Limited. Kevin holds a bachelor’s degree (First Class) in Civil Engineering from the University of Nigeria, Nsukka. He also holds a Post Graduate Diploma in Management from Edinburgh Business School of Herriot-Watt University. He has attended several executive trainings in world-class institutions, including Harvard Business School.

@Businessdayng

Tuesday 21 July 2020

BUSINESS DAY

‘The pandemic is gaining momentum... Continued from Back page

clues about the so-called “excess deaths” that may be down to Covid-19. “We’re really fumbling around in the dark here,” says Ms Sgaier. There is also tentative evidence emerging that African countries may have a high prevalence of asymptomatic cases thanks to its young population. An antibody study conducted by the Mozambican government in the northern city of Nampula with a population of 750,000 found that some two-thirds of people infected had suffered only very mild symptoms or no symptoms at all. In addition, the study found that 5 per cent of people in the community and 10 per cent of market vendors had been infected with coronavirus. Yet only four Covid-19 deaths have been recorded in Nampula province out of nine in the country as a whole. Even Mr Nkengasong at the Africa CDC, who has strongly cautioned against complacency, acknowledges that the continent’s young population means the death rate is likely to be lower. “We see these young people running around with Covid, just living their lives normally,” he says. “But we need to back this up with appropriate studies.” A plea for more testing This competing evidence makes it difficult for African governments to determine what to do next. But, say researchers, they must persevere with policies to mitigate risk. There is a middle way between full lockdowns — difficult to maintain in poor communities — and letting the pandemic take its course, they say. Cooper/Smith, a Washington-based professional services organisation that uses data to inform policymakers, has run statistical models indicating that social distancing could stop millions of infections and save 9,000 deaths in Malawi alone. Hannah Cooper, its managing director, says: “African countries don’t need to make a Sophie’s choice” between damaging lockdowns and “letting the epidemic run rampant”. Even in the absence of robust data, she says, there is enough information to tailor responses to specific communities. Ibrahima Kassory Fofana, the prime minister of Guinea, says his government has implemented mitigating measures that stop short of full lockdown. Its experience with the 2014-16 Ebola epidemic — which killed more than 11,000 people in west Africa — has stood it in good stead, he says. Guinea has

closed its airspace, encouraged hand washing, banned mass gatherings, including in churches and mosques, and sealed off the capital, Conakry, from the rest of its territory. The country of 13m people has recorded 6,200 cases with 38 deaths. “In terms of managing the pandemic, so far it is under control,” says Mr Kassory Fofana. “We are optimistic because our population is much younger.” The second lesson is that more testing is urgently required. South Africa is testing around 50,000 people a day and countries such as Djibouti, Ghana and Morocco have made concerted efforts to test widely. Yet, according to an analysis by Reuters, African countries had on average tested 4,200 per 1m people by July 7, compared with 74,255 in Europe. Strive Masiyiwa, a Zimbabwean businessman appointed as a special envoy of the African Union, says that a pan-African medical supplies digital platform he has helped establish should enable a massive rampup in testing capacity. The platform, which went live in July, is backed by a $3.8bn credit line from the African Export-Import Bank. It allows African governments and organisations to pool their orders, making it easier to benefit from bulk pricing. “There is now no excuse to say we can’t get test kits and therefore we can’t test,” says Mr Masiyiwa, who adds that governments can also use the platform to equip hospitals with oxygen units, protective equipment, medicines and ventilators in preparation for a coming wave of infections. Armed with greater testing capacity and policies aimed at slowing the spread of the disease, many African governments are gearing up for the next, possibly more serious, phase of the pandemic. In the coming months, says Prof Checchi of the London School of Hygiene and Tropical Medicine, some countries will have to move from the suppression stage to one where they seek to reduce the impact of the virus. “There is no shame in saying that we cannot suppress this epidemic for another year and a half until we get a vaccine,” says Prof Checchi. “That we are going to try to mitigate it through social distancing, curtailing unnecessary gatherings and subsidising soap and water,” he says. “A few policies like that can make a significant difference in terms of the ultimate death toll.” www.businessday.ng

News FG generates N362bn from 3 tranches of sukuk issuance

... as DMO hands over N162.557bn to Fashola for 44 road projects Onyinye Nwachukwu, Abuja

ederal Government has so far raised some N362.557 billion from three tranches of Sovereign Sukuk, all of which are for the rehabilitation and reconstruction of road projects across the six geo-political zones of Nigeria. Patience Oniha, directorgeneral, Debt Management Office (DMO), announced this Monday in Abuja at the symbolic presentation of N162.557 billion cheque to Babatunde Fashola, minister of works and housing, for the funding of 44 key road projects in the 2020 Appropriation Act. The N162.557 billion cheque - the proceed of the third tranche of the sukuk issued in June was presented by Zainab Ahmed, minister of finance, budget and national planning. Recall that the third Sovereign Sukuk, which followed the debut issuance of N100 billion in September 2017 and

a second issuance of another N100 billion in December 2018, attracted 446 percent subscription as investors jostled for the instrument in show of confidence. Subscription by investors totalled N669.124 billion as against the N150 billion that was on offer. The 7-Year Ijarah Sukuk due June 2027 was offered at a rental rate of 11.200 percent per annum - lower than 15.743% in 2018. N162.557 billion was finally allotted to investors. The proceeds of Sukuk issuances are project-tied and are used to finance specific projects and that of the latest issuance will be used to finance 44 critical Road Projects across the six geo-political zones of Nigeria. Oniha said the event was a celebration of successful completion of the Third Sovereign Sukuk and that the strong response by investors indicated confidence in the economy, good market awareness and acceptance of

sukuk as a financial product. She said benefits from the earlier Sukuk Issuances, which were also used to finance roads, include improved safety on the roads, faster travel times, access to markets for farm produce and opening up parts of the country for development. “Many road users have confirmed that they have had a better travel experience on the projects financed through Sukuk. “This is besides the many benefits such as job creation, financial inclusion and development of the domestic capital market arising from the Sukuk Issuance,” she stated. She announced DMO plans to continue to use Sukuk and Green Bonds, both of which are project-tied, to support the development of infrastructure and other capital projects. She, noted that extent to which the DMO can achieve this, would of course, depend on how much is allocated to projects in the annual budgets.

At the event, Finance minister, Ahmed said the N162.557bn is strictly dedicated to the financing of Road Projects in the Revised 2020 Appropriation Act. “It also means that with the release of N162.557 billion to the Federal Ministry of Works and Housing, the amount appropriated for Road Projects financed by Sukuk in 2020 budget has been fully released,” she said. She said government had been greatly encouraged by the tremendous success recorded with regards to improvements in road infrastructure across the six geo-political zones with the intervention of this special funding. “Besides the fact that the evidence of the use of the proceeds by way of works done are there for all to see, the comments and feedback received from commuters, transporters, other businesses, investors and other wellmeaning Nigerians have been heart-warming.”

L-R: Lamido Yuguda, DG, Securities and Exchange Commission (SEC); Ali Pantami, minister of communications and digital economy, and Bagudu Waziri, assistant director, SEC, during a meeting between SEC and the minister in Abuja. Picture by Tunde Adeniyi

MAN expresses concern over imminent closure of 3rd Mainland Bridge GBEMI FAMINU

anufacturers Association of Nigeria (MAN), Apapa branch, has drawn the attention of the Lagos State governor, Babajide Sanwo-Olu, to some of it concerns, especially the proposed partial closure of Third Mainland Bridge. In a press release Monday signed by Frank Onyebu, chairman, MAN, Apapa branch, and seen by BusinessDay, the MAN notes, “We commend the government’s plan to repair the bridge; we believe the timing is wrong. This bridge being a major link connecting the Mainland to the Island is one of the key livewires of the economy.”

The branch consists of industrial clusters stretching from Apapa, from where it derives its name, all the way to Epe and Badagry Expressway. It covers industrial areas in Isolo/ Mushin,Iganmu,AmuwoOdofin, Kirikiri, Lekki Free Trade Zone, to mention but a few. “We would like to first of all acknowledge the effort of the Lagos State government towards catering to the over 25 million people that call Lagos home. We appreciate the enormity of the challenges facing the government, especially at this difficult time. “This is why we need to commend the governor, Babajide Sanwo-Olu, and his team for their giant strides in the area of infrastructural develop-

https://www.facebook.com/businessdayng

ment, security provision, environmental protection, prudent financial management, to mention but a few. We are well aware of the revenue shortfalls that resulted from the Covid-19 pandemic, which makes the effort of the government all the more commendable,” according to the release. According to the MAN, our concern arises from the fact that some of the alternative access routes are also in some form of partial closure. These include Eko Bridge by Costain Roundabout,ApapaBridgebyIjora,etc. It said it would like to appeal to the government to delay commencement of work on the Third Mainland Bridge until some of the alternative access routes had been com@Businessdayng

pleted and opened to traffic. “We also want to draw the attention of the governor to the pitiable state of the roads within the Amuwo Odofin as well as the Kirikiri Industrial areas. These roads, which have deteriorated beyond imagination, have now been turned into illegal trailer parks and dumpsite for empty shipping containers. “We want to appeal to the government to see to the construction of the roads within the Amuwo Odofin industrial areas and indeed other industrial areas in Lagos State. This is becausemanufacturersnotonly contribute to the revenue of the government for but also contributetowardstheemployment generation goal of government.

Thebigread

BUSINESS DAY Tuesday 21 July 2020 www.businessday.ng

‘The pandemic is gaining momentum’: Africa prepares for surge in infections A rise in cases is dashing hopes that the continent’s younger population would spare it from the worst of coronavirus David Pilling

ithin days of his inauguration in June, Evariste Ndayishimiye, Burundi’s president, ended months of official denial about coronavirus by ordering mass testing in the commercial capital of Bujumbura. Well he might. His predecessor, Pierre Nkurunziza, who had scoffed at the virus and entrusted Burundi’s protection to God, paid a heavy price for his nonchalance. He died, almost certainly of Covid-19 itself. After months in which Africa escaped the worst of the coronavirus pandemic as the global centre shifted from Asia to Europe and then to the Americas, the number of African infections — and deaths — has begun to increase sharply. At least 14,500 people have now died out of 667,000 confirmed infections. That has raised concern among some experts that the world’s poorest continent may be about to enter a critical phase of the coronavirus outbreak. “The pandemic is gaining full momentum,” says John Nkengasong, director of the Africa Centers for Disease Control and Prevention, which has mounted an effective continent-wide response. As transmission of the virus gathers pace, he warns, the danger is that “our hospital systems will be overwhelmed”. That is already happening in South Africa, the worst affected country on the continent, where confirmed cases are doubling every two weeks and intensive care wards in Johannesburg and Cape Town are overflowing. At the current rate, more than 1m people will be infected by early August. Deaths have topped 5,000, and the number of fatalities is escalating sharply. One health official caused panic by suggesting, erroneously, that Gauteng province was preparing 1.5m graves for the dead. Cyril Ramaphosa, the president, in a speech in which he compared the virus to a storm blowing in with the cold winter winds of the southern hemisphere, warned that few parts of the country would be spared. Not all of Africa has been severely struck. Some countries, such as Botswana, Namibia and Gambia, have registered few infections and barely any deaths. The island of Mauritius successfully stamped out an early rash of imported infections and has not recorded a single case of local transmission for nearly three months. “At the beginning, we thought we were going to see a massive

disaster,” says Mo Ibrahim, a Sudanese businessman who is the head of an eponymous foundation. “The numbers so far don’t show that,” he says. “African governments probably responded better than governments in the UK or the US. And fortunately, in Africa, the virus doesn’t seem to like us.” ‘A new phase’ However, new spikes of infections in several African countries are clouding such optimism. Of the states that have been harder hit, more than half of recorded cases have been in just five countries — South Africa, Egypt, Algeria, Nigeria and Ghana — although that partly reflects their higher testing capacity. But the pandemic has spread much further than that. According to the World Health Organization, in 22 of the continent’s 54 countries, cases have more than doubled in a month, with states such as Ethiopia, Kenya, Cameroon and Djibouti showing sharp rises. After a long period in which most infections in Africa were imported, mainly from Europe, two-thirds of countries on the continent are now reporting community transmission, the WHO says. Malawi, a tea-producing country of 18m people in south-

ern Africa, is a case in point. On the face of it, its numbers look reassuring, with just 51 deaths and around 2,700 infections by mid-July. But healthcare workers say they are starting to see a significant rise in infections. “Our first case was in early April and since that time we have had this very gradual trickle, trickle, trickle,” says Mina Hosseinipour, professor of medicine at the University of North Carolina’s Malawi project in Lilongwe, the capital. “We were like: when is this thing going to come?” The lack of deadly infections was all the more remarkable, she says, given a series of blunders that might have been expected to spell disaster. Many of the Malawians who were sent home by the busload from South Africa, where they had been working, returned with Covid-19. Some escaped from ill-equipped quarantine camps, risking spread in their communities. Nor was Malawi’s government able to impose a lockdown after civil society groups, concerned at the dire impact on people’s livelihoods, successfully challenged the measure in court. Like Burundi, Malawi even ran a national election, the incumbent losing power in a rerun of last year’s poll. Yet, despite these potential

‘‘

The recent experience of Malawi, and many other African countries like it, has tempered, if not entirely scotched, early hopes that the continent might somehow avoid the worst of the pandemic

superspreader events, deaths from the virus in Malawi remained stubbornly low, says Prof Hosseinipour. Until now. “The last two weeks is changing our perspective,” she says, adding that more deaths are being registered and many more people are coming to hospital seeking emergency respiratory care. “The new government is mandating face masks across the country and recommending more serious isolation and social distancing measures,” she says of the sense of urgency the rise in infection has engendered. “We have entered a new phase.” Huge gaps in the data The recent experience of Malawi, and many other African countries like it, has tempered, if not entirely scotched, early hopes that the continent might somehow avoid the worst of the pandemic. “What we are seeing is just the effect of the delayed timeline,” says Francesco Checchi, professor of epidemiology and international health at the London School of Hygiene and Tropical Medicine, who adds that the disease came late to the continent. “I don’t really see any evidence that we’re seeing a qualitatively different course of the pandemic in Africa.” Prof Checchi says that countries with good air links to the rest of the world, such as South Africa, Egypt and Morocco, were the first to import “seed cases”, causing the pandemic to spread more quickly. He praises early efforts by many African governments — all too familiar with the threat of infectious diseases such as tuberculosis and Ebola — to contain the virus through screening, public health campaigns, curfews and lockdowns. But in the end, he says, this is just a delaying tactic. “Lockdowns only gain you time.”

Sema Sgaier, executive director of Surgo Foundation, a non-profit organisation, agrees that the pandemic has much further to run in Africa. Her foundation has compiled an index from open source data of regions most vulnerable to the social, economic and health impacts of Covid-19. Among those highlighted are Cameroon, the Democratic Republic of Congo, Madagascar, Malawi, Ethiopia and Uganda — all countries where the pandemic is yet to really take hold. There remains some cause for cautious optimism, Ms Sgaier says. Even if the virus ends up spreading as widely in Africa as in Europe and the Americas, it is likely to kill fewer people, she says, because of the continent’s more youthful population. Africa has a median age of 19.4 years against 38 in the US and 43 in Europe. Based on age and gender distribution, the Surgo Foundation estimates Africa’s infection fatality rate — the proportion of deaths among those infected — at 0.1 to 0.15 per cent. Adjusting for the poor quality of health services with a lack of oxygen and ventilators as well as for co-morbidities, such as HIV/ Aids, it puts the infection fatality rate at an average 0.55 per cent, with the best countries in Africa at 0.22 and the worst at 0.76 per cent. That compares with 1.3 per cent in the US, meaning that an African infected with Covid-19 is between twice and six times more likely to survive than an American. Still, even if those lower estimates prove correct, it implies that, if 60 per cent of Africans eventually become infected, more than 4m will die. Such calculations are guesses at best. Researchers have to take into account estimates for the rate of non-communicable diseases for which data is almost non-existent in many countries. Diseases such as hypertension and diabetes, which raise the probability of death in Covid-19 patients, are almost certainly lower in many African countries than in relatively affluent South Africa, where such co-morbidities help explain the higher number of deaths. With a median age of 28, South Africans are also nearly a decade older than the rest of the continent. The task of modellers — who must also juggle factors such as malnutrition and HIV — is further impeded by limited records of deaths in many countries. This has forced statisticians researching some countries to turn to satellite imagery of graveyards for Continues on page 31

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.