BusinessDay 21 May 2020

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MODESTUS ANAESORONYE

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mployees enrolled under Nigeria’s Contributor y Pension Scheme (CPS) face a tough future of low benefits as the ravaging CO-

sectors arising therefrom, will lead to drop in value of pension fund assets, number of contributors and overall benefits to employee contributors.

Contributory Pension Scheme is a type of pension in which both the employer and

Nigeria lags as nations battle to reignite own economies

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employee pay money into the employee’s Retirement Savings Account (RSA), accessible to the employee at a later date, either as a result of retirement or job loss.

“Being a contributory scheme, Continues on page 7

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Employee pensions at risk as lockdown, job losses threaten remittances VID-19 pandemic has affected employer-employee contributions, industry experts tell BusinessDay. The experts say the lockdown of key sectors of the economy to curb the spread of coronavirus, and job losses across different

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NGUS apr 30 2025 583.44

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COVID-19: Under-testing, PPE shortage endanger patients, medical personnel at LUTH …hospital’s system leaves no room for spread – CMD Temitayo Ayetoto

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he Lagos University Teaching Hospital (LUTH) risks spreading the deadly COVID-19 to staff and patients as manpower and equipment shortages impede its fight against the disease in Nigeria’s largest city, a source within LUTH’s system confided in BusinessDay. According to the source, who spoke on condition of anonymity because of the sensitivity of the matter, over-stretched doctors, inadequate testing capacity and shortage of personal protective equipment (PPE) are mainly responsible for this development.

At the biggest hospital in Continues on page 7

Inside

Doctors withdraw services to protest police harassment in Lagos P. 6 Coronavirus leaves Nigeria with no alternative to critical infrastructure spending P. 6

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Thursday 21 May 2020

BUSINESS DAY

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‘Covid-19 presents opportunity to reset Africa’ …advocates Martial Plan to boost electricity, ease debt burden

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L-R: Tony Okpanachi, MD/CEO, Development Bank of Nigeria (DBN); Shehu Yahaya, chairman, board of directors; Uche Orji, nonexecutive director, and Shofola Osho, company secretary, during the bank’s 3rd annual general meeting in Abuja.

Benin River Port: Edo evaluates transaction advisors for project

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he Edo State government has commenced evaluation exercise for top bidders for the provision of Transaction Advisory (TA) Services for the Benin City River Port Project, in Gelegele area of the state.

Chairman, Benin City River Port-Project Technical Committee (BRP-PTC), Greg Ogbeifun, disclosed this to journalists in Benin City, during the bid evaluation exercise, which held in Government House.

The bidders are Samuel A. Akhibi, representing CPCS Transom, with a total cost figure of N397, 901,183.00; Christopher A. Borha, representing Maritime and Transport Business Solution (MTBS) Felak Consortium with a total cost figure of N545,668,852.00, and Em-

manuel Oluleye, representing Global Maritime and Port Services (GMAPS) Lloyds-Jeffwood consortium, with a total cost figure of N990,000,198.00.

According to Ogbeifun, “Today is the continuation of the bid evaluation. The committee decided to go through due process for a Transaction Adviser to drive the project. We are all experts in our areas of specialization but none of us here has built a port, hence, we should have a technical adviser with the know-how to mobilise the different skills-set and elements in building a port.

“Most of the bidders here have experience internationally and the essence of this exercise is to identify who has the competence, knowledge and capacity to mobilise resources in a manner that the state would not

be in large term indebtedness; it should not be a burden rather an asset.”

Head, Edo State Public-Private Partnership (PPP) Office, Ikponwosa Edward Osayande, said the project will boost economic growth in the state, as most port businesses will be done in Edo. “Port businesses will no longer going through Lagos to the East, rather from here straight to the East. This will attract both foreign and local investors”, he added.

Other officials present at the evaluation exercise include Charles Iyare, representing Civil Society Organizations; Osayamen Mokogwu, representing Edo Public-Private partnership (PPP Office); Sunday Mgbejume, an independent consultant, and Henry Enabulele, representing

COVID-19: Kano releases new guideline on lockdown Adeola Ajakaiye, Kano

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ano State government has released operational guidelines for the controlled easing of the pandemicinduced restriction, following the extension of the lockdown imposed by the Presidential Task Force (PTF) in the state by another two weeks.

The government says under the new guideline, the lockdown is now to be partially lift between the hours of 10am to 2pm on Sundays, Wednesdays and Fridays, as a way of bringing relief to the residents.

Mohammed Garba, Kano commissioner for information, who made the disclosure, said the measure was to bring a relief of 12 hours per week to the residents, as recommended by the Presidential Task Force.

“Governor Abdullahi Umar Ganduje has directed the state Hisbah Board to hold meeting with Imams and deploy its personnel to Friday (Jumu’at Mosques) across the state to ensure that worshipers comply with personal hygiene through maintaining social distancing, hand washing with soap, use of hand sanitizers and face masks.

“Government considers it

convenient to allow the conduct of Eid Prayers on the Sallah day in all the five Emirates in the state during which restriction of movement has been lifted from 6:00am to 2:00pm under strict observance of safety and prevention protocols,” the commissioner stated.

He, however, explained that there would be no Sallah festivities in all the Emirates including the visit to Gidan Shettima, Hawan Daushe, Hawan Nassarawa, and Hawan Dorayi in Kano and all other similar traditional Sallah celebrations in the four other Emirates.

Garba added that a Committee under the commissioner for environment had been formed by the government to distribute face masks and sanitation materials to Jumu’at mosques.

Other members of the committee are: Commissioners for local government, religious affairs and that of information; Ibrahim Mu’azzam Maibushra, Muhammad Tabi’u, Awwalu Kawu, Sa’idu Muhammad, Sarkin Yarabawa, Oba Abdullahi Salihu Olowo, Bala Muhammad, state ALGON chairman, managing directors of REMASAB and KAROTA, commander general, Hisbah Board and its chairman, Sheikh Shehi Maihula. www.businessday.ng

Edo Ministry of Physical Planning and Urban Development.

The Edo State governor, Godwin Obaseki inaugurated the Benin City River Port Project Technical committee recently, to propel the actualisation of the legacy project as part of the state’s industrialisation drive.

The governor said the terms of reference for the committee will include organising a procurement process for the engagement of a project transaction adviser, adding, “You will work with the Project Transaction Adviser to determine potential project sponsors and project structure and maritime model; examine the project financing arrangement, introduce and commence correspondence with the relevant regulatory authority, among others.

Nigeria commends Saudi Arabia on crude oil production cut … receives 292 Nigerian evacuees from Saudi Arabia HARRISON EDEH & Innocent Odoh,

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ederal Government of Nigeria has commended the Saudi Arabia government over the country’s voluntary reduction in its daily crude production by over one million barrel.

The commendation was given in a statement issued by Timipre Sylva, minister of state for petroleum resources.

The Saudi Arabian government had in the recent past, acted in compliance with the resolutions of a meeting by OPEC+ member states on April 12, 2020 by cutting its daily production supply by well over a million barrel.

It was agreed at the meeting to cut up to about 10mb/d as a measure of preventing a further drop in the global price of crude, which at the time was sliding towards an all-time low of $10 per barrel.

It is by such difficult sacrifices made by the Saudi government and a few other OPEC members that the global economy can recover faster than envisaged, he said, adding that the gradual revamp of crude oil prices is not unconnected with the timely sacrifices by the Saudi

Arabian government and other OPEC and non-OPEC members.

The minister restated Nigeria’s commitment to the April 12, 2020, OPEC+ resolutions regardless of mounting challenges.

Meanwhile, the Federal Government has received another batch of 292 Nigerians stranded in the Kingdom of Saudi Arabia following the deadly coronavirus pandemic.

Minister of foreign affairs, Geoffrey Onyeama, stated this in his Twitter handle @Geoffrey Onyeama, stressing that a large number of the evacuees were nursing mothers and children.

The minister tweeted this Wednesday morning: “We received 292 evacuees stranded in Saudi Arabia yesterday. The Saudi Government transported them to Abuja. A large number of them are nursing mothers and children and they are all comfortably settled in hotels under the mandatory 14 days of quarantine”.

The Federal Government has earlier repatriated about 600 Nigerians from the UAE, UK and the US out of the nearly 4,000 Nigerians that have expressed interests to return home from different parts of the world following the COVID-19 pandemic.

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hairman of United Bank for Africa (UBA) plc, Tony Elumelu, has stated that the coronavirus (Covid: 19) pandemic currently ravaging the world presents an opportunity to reset the African continent so that Africans can be empowered to become more productive and self-reliant.

He said this Wednesday at the high-level roundtable discussions made up of African leaders including Ngozi OkonjoIweala, the special envoy of the African Union on Covid-19, and Tidjane Thiam, who is also a Covid-19 special envoy responsible for mobilising international economic support for Africa.

During the session titled ‘Resilient World: An African call for a new world order,’ Elumelu said, “I see this pandemic as an opportunity to reset Africa.”

While pointing out that Africa as a continent has all it takes to emerge into a strong digital economy, the UBA Group Chairman advocated a Martial Plan that would galvanise the entire continent and make Africa less dependent on the ‘circularity of debt’ from developed nations, which according to him, had been a major setback for decades.

“I feel that as we engage the rest of the world in providing relief, we need to look for a more fundamental solution to Africa’s

challenges. I have often argued for a Martial Plan overtime.

We need to mobilise everyone.

If we have a martial plan that mobilises resources to address particular issues, then we can mitigate against this constant begging for assistance.”

Explaining further, he pointedly said, “The truth is that we have resources to help mobilise people. As the founder of the Tony Elumelu Foundation, we committed to endow $100m to support young African entrepreneurs and we have been seeing the positive results this has yielded so far. It is evident that if we can fix access to electricity, ensure stability of the macro-economic environment, ensure prioritisation of the youth, empower our small and medium scale enterprises and fix youth migration, then we are in for a better and more resilient economy’.

“There is the urgent need to prioritise our youths and empower our SMEs. The people who work hard need to be encouraged.”

Tidjane Thiam, who supported what Elumelu had proposed, said rather than depend on international assistance at every point, there was the need for governments and institutions to invest in activities that would prioritise the youths and create a better enabling environment.

APC releases timetable for Edo, Ondo governorship primaries James Kwen, Abuja

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head of the September 19 and October 10 governorship elections in Edo and Ondo states, the ruling All Progressives Congress (APC) has released the timetable for primaries to nominate candidates that will fly its flag at the polls.

According to a schedule of activities signed by Emma Ibediro, APC national organising secretary, the party will commence the sale of expression of interest and nomination forms for Edo State from Wednesday, May 20 to Tuesday, June 2, while that of Ondo State will start from June 11 to July 1.

The schedule indicated that the Edo governorship primary election would hold on June 22, while that of Ondo holds July 20.

The party has fixed N22.5 million for form, out which N2.5 million is for expression of interest form and N20 million is for nomination form, while there shall be no separate charges for deputy governorship aspirants.

However, female and physically challenged aspirants are to pay only 50 percent of the prescribed fees for each of the forms, and all payments are to be made into the party’s bank accounts.

The schedule also showed that: “Screening of aspirants (Edo) – Wednesday, June 10 – 11, 2020.

Screening of aspirants (Ondo) – Wednesday, July 8, 2020. Screening appeal (Edo) – Friday, June 12, 2020. Screening appeal (Ondo) – Friday, July 10, 2020”.

AfDB approves $1.7m grant for road construction in Abia - commissioner GODFREY OFURUM, Aba

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frican Development Bank (AfDB) is funding about 37 road projects in Abia State, Bob Ogu, the state commissioner for works, says.

Ogu disclosed this Tuesday in Aba, the state’s commercial hub in an interaction with journalists.

According to Ogu, “There are about 37 road projects that are being funded by AfDB in the state and the projects are to be done in phases. We have recruited consultants that will do the designs, but the current lockdown, occasioned COVID-19 pandemic is delaying things. @Businessdayng

“When the designs are completed, we will send it to them for approval and subsequent release of funds for the actual construction.”

When the country is opened the bank’s personnel will pay a visit to the state to supervise the progress of the projects, he said, explaining that the Abia State University Teaching Hospital (ABSUTH) road was also being worked on by the China Zhonghau Construction Company handling the Osisioma flyover.

“The state’s agreement with the Chinese firm is that they will ensure that the road is completed before the end of the year,” he said.

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Coronavirus leaves Nigeria with no alternative to critical infrastructure spending Segun Adams

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f Nigeria needed a reason to stop paying lip service to the its infrastructure needs and return the country to full economic strength, the fallout of the new coronavirus outbreak makes a compelling case.

The virus-related economic disruption and oil market downturn are expected to hammer a 3.4 percent contraction on the economy going by IMF’s predictions and have caused the FG to roll out palliatives to households and businesses.

While paying people’s wages, supporting the most vulnerable and keeping businesses afloat are important priorities in the immediate term during an unprecedented crisis, these measures

alone will not bring longlasting results, said Ernst & Young Global in a report on “Repairing the damage from COVID-19.”

“By contrast, investment in new infrastructure, such as hospitals, schools, renewable energy and digital networks, will create jobs and deliver tangible assets that will fuel long-term economic growth,” said E&Y. The idea that government can help stimulate the economy through its spending is one that can be traced back to the economist John Maynard Keynes during the 1930s. The relevance today is unquestionable.

According to a 2014 study by the IMF, an unanticipated increase in capital spending of 1.0 percent of GDP leads to a 0.4 percent uplift in output that same year and a 1.5 per-

cent rise four years later.

“This economic dividend occurs because building new infrastructure lays the groundwork for future economic growth, whether that’s an improved transport network to move goods, a digital backbone to power a new economy or education facilities to train a skilled workforce for the future,” said E&Y. “Moreover, countries that spend on new capital stock tend to attract more private investment.”

For Nigeria which will need a quick rebound from COVID-19 blows as opposed to the low growth cycle suffered post-2016-recession, this means investing in new infrastructures is the only way out.

Old message The call for the government to focus on critical in-

frastructure investment in the country of 200 million people isn’t new.

The African Development Bank (AfDB), The World Bank, IMF, trade unions and associations, economists and even public office holders have clamoured for more investment in the country.

Last year, Zainab Ahmed, minister of finance, budget and national planning, said Nigeria’s infrastructure gap would require an estimated sum of $3trn to bridge over a 30-year period.

Compared to emerging market economies, Nigeria’s infrastructure gap is 35 percent of GDP, with major challenges in the electricity sector, low and inefficient capital spending, and road and port infrastructure constraining transport and trade, according to the IMF in 2019.

Real estate sector seen losing 50% revenue as coronavirus impact weighs CHUKA UROKO

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xperts in the real estate sector of the Nigerian economy have said that the impact of the deadly coronavirus on the sector may be the worst in history, projecting that the sector could be losing an estimated 50 percent of expected revenue by the turn of 2020.

The whole of Africa is in for it with Nigeria and Angola predicted to be the worst hit in terms of job losses and unemployment levels, the experts added, fearing that the current experience could take the sector back to the 2005 global economic crisis situation.

The deadly virus which has proved that it is no respecter of persons, places or positions, is hitting global real estate so hard that even mature markets like the UK, US and others are caving in as the impact of the virus weighs heavily on them.

In the US, for instance, there are over 43 million renters nationwide. The rental market makes up nearly 40 percent of all housing in the country where it is reported

that at least 20 million jobs were lost in April. While outof-work renters scramble to make their payments, landlords are wondering how to service an avalanche of debt and unpaid taxes.

According to an Urban Institute Survey from last month, almost half of renters report some kind of financial hardship. The cascading effect of unemployment is severe, especially in shut-down cities like New York, where nearly 70 percent of the population rents.

The Nigerian experience seems worse. According to a Pison Housing Company report on ‘The State of the Real Estate Market’, about 80 percent of Nigeria’s 200 million population are renters and majority of them are the ones currently facing paycuts and job losses in various workplaces.

Chudi Ubosi, principal partner at Ubosi Eleh+Co, estimates that 60 percent of renters in the country won’t be able to pay their rents in the coming months, meaning that six out of 10 renters will default in their rent payment on account of COVID-19 impact.

Nigeria remains stuck on imported fuel as 20.8bn litres of petrol was shipped in 2019 ... PPPRA clears marketers to import petrol ISAAC ANYAOGU & DIPO OLADEHINDE

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L-R: ‘Laoye Jaiyeola, CEO, Nigerian Economic Summit Group (NESG); Abubakar Suleiman, MD, Sterling Bank; Asue Ighodalo, chairman, NESG; Doyin Salami, chairman, Presidential Economic Advisory Committee; Niyi Yusuf, vice chairman, NESG, and Yinka Sani, CEO, Stanbic IBTC Holdings, during the annual general meeting of NESG in Lagos.

Doctors withdraw services to protest police harassment in Lagos JOSHUA BASSEY

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edical doctors in Lagos State have withdrawn their services in protest against continued harassment and intimidation by men of the Nigeria Police.

The police on Tuesday night threw caution to the wind as they swooped on persons categorised as essential workers and exempted by the Federal Government’s curfew to check the spread of COVID-19. Medical workers and journalists are among those exempted, but some of these categories of persons were arrested and detained at some police stations in Lagos while heading home after the close of work Tuesday night.

The doctors under the aegis of Nigerian Medical Association (NMA) said the action remains indefinite

until they receive a written assurance clearing the air on the “conflicting directives by the government and incessant police harassment” of medical doctors and other health workers in the state.

The Lagos branch of the NMA, in a statement jointly signed by Saliu Oseni, chairman, and Ramon Moronkola, secretary, said the sitat-home order began from 6pm on Wednesday, May, 20, 2020.

They maintained that it was no longer safe for their members to continue to provide healthcare services under the present confused arrangement. They said the development became necessary as a result of the numerous complaints of police harassment from their members who were either going home after close of work or on transit to heed to emerwww.businessday.ng

gency calls at the various hospitals.

The doctors lamented that whereas the directives of President Muhammadu Buhari, through the Presidential Task Force on COVID 19, was clear on the exemption of essential workers including doctors and other healthworkers, Hakeem Odumosu, the commissioner of police in Lagos State, has been issuing conflicting directives that essential workers, including doctors and other healthworkers, were not exempted.

“As a direct result of the conflicting directives of the government and the Lagos State Commissioner of Police, the NMA was inundated yesterday (Tuesday, 19th of May, 2020) evening of several cases of harassments and intimidation of doctors and other health-workers by officers and men of the Lagos

State Police command. The healthcare workers were either resuming duty, returning home, or on-transit to heed an emergency call,” Lagos NMA said.

The body said there was a most disturbing case of an ambulance conveying an injured patient which was prevented from moving to destination while the attending health-workers were harassed and temporarily detained.

“You will recall that this same ugly situation had occurred sometime in the early phase of the ongoing lockdown/restriction of movement based on similar conflicting directives from the State Commissioner of Police. It took the intervention of the governor of the state, following a petition by the association, for normalcy to be restored,” it said.

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frica’s biggest oil producer imported 20.89bn litres of Premium Motor Spirit (PMS) in 2019, which comes to about 57.2 million litres every day, to augment supply from the country’s rickety refineries, data from the National Bureau of Statistics (NBS) show.

Nigeria has a problem. The country is one of the world’s largest exporters, yet it remains heavily dependent on the importationofpetroleumproducts since its four major oil refineries have been under-utilised.

According to NBS report, PMS is currently topping the chart on the volume of refined petroleum products imported into the country, as a total of 20.89 billion litres was brought into the country in 2019.

Other imported petroleum products include Automotive Gas Oil (AGO) of 5.15 billion litres, Household Kerosene (HHK) of 128.1 million litres, aviationturbinekerosene(ATK) of 1.o7bn litres, Low Pour Fuel Oil (LPFO) of 45.98 million litres and Liquified Petroleum Gas (LPG) of 526.06 million litres.

Yomi Akinola, an analyst with the rating agency Agusto & Co said access to credit from financial institutions given the weak financial condition of operators (particularly in@Businessdayng

dependent marketers), who are burdened by soaring receivables from the Federal Government of Nigeria under the Petroleum Support Fund programme, as a major constraint to growth.

In terms of distribution and consumption, the Agusto report stated that Lagos leads in PMS, AGO, LPG, Aviation fuel consumption given the strong population in the state as well as the fact that a good number of airlines prefer to refuel in Lagos.

“Rivers leads in consumption of household kerosene (HHK). This has seen significant reduction because of the increase in the use of cooking gas by people,” Akinola said in an Agusto report.

Also, information gathered from Petroleum Products Pricing Regulatory Agency (PPPRA) revealed private oil marketers have now joined the Nigerian National Petroleum Corporation (NNPC) in the importation of petrol.

Before the downstream oil sector was liberalised in March this year, the NNPC used to be the sole importer of petrol, a task it handled for more than two years.

“Many of them (marketers) have gone to import because they took QMs from us to bring in products and I am sure they are doing that already,” PPPRA’s General Manager of Corporate Services, Kimchi Apollo, said.

Thursday 21 May 2020

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news Employee pensions at risk as lockdown...

Continued from page 1

the economy has to be up and running for workers to be able to make contributions,” Paddy Ezeala, a pension expert and public affairs analyst, told Business-

Day in a WhatsApp response to questions.

He said contributions to Retirement Savings Accounts (RSAs) would have been irregular by now. Even retiring workers would have difficulty processing their documents now that offices are not operating at full capacity.

“You should know that payment of entitlement for government workers is often delayed because of the lateness in the payment of accrued rights. This situation is now being worsened by the pandemic,” he said.

He, however, noted that the beauty of the CPS is not only in the contribution and amassment of funds, but also in the ability to grow the funds.

“When investment options are not doing well, pension funds are affected. Also, when inflation rate is higher than the rate of Return on Investment (ROI), it erodes the gains that are being made. It should also be noted that pension funds would lose real value in the face of unfavourable exchange rate or currency devaluation,” Ezeala said.

He further said the worst hit should be the micro-pension scheme which provides a great opportunity for Micro, Small and Medium Enterprises and even individual artisans.

“This sector has almost

been completely shut down by the pandemic and no one now talks about their enlistment into the CPS. As important as the pension scheme is, it is relegated to the background when existential challenges take centre stage,” Ezeala said.

“The point, however, is that the pension industry must be supported and contributions must continue because there is a tomorrow; there is a post-pandemic economy and people would continue to work and retire,” he said.

Oguche Aguda, chief executive officer, Pension Fund Operators Association of Nigeria (PenOp), said the pandemic would definitely affect the pension industry to the extent that some formal workers are losing their jobs or having their salaries slashed.

“However, the extent of the impact will not be fully felt as the lockdown has persisted for just two months – we will understand the full extent in the coming months,” Aguda said.

Agudah, however, said the industry is engaging on a number of strategies to cushion the supposed effects on operators.

As the COVID-19 pandemic mounts pressure on economies and inflicts financial pain on firms, it’s been a difficult time for employers who are fighting a gruelling battle to keep staff, Timothy Olawale, director-general, Nigeria Employers’ Consultative Association (NECA), the umbrella organisation of employers in the Organised Private Sector, had told BusinessDay in an interview.

In a bid to remain afloat,

COVID-19: Under-testing, PPE...

Continued from page 1

Lagos, supposedly noncoronavirus patients seeking care at its gate could, in fact, slip into harm’s way because doctors are unable to test all patients to distinguish those with the novel coronavirus before admission, the source said.

“We are using probability to allow people into the hospital. The people who are given priority for protection are those who are treating COVID-19 patients and those who are the first contact in triage, deciding whether a patient should enter or not,” the source told BusinessDay. Under the current circumstances, where the method of determining which patient should be isolated is predicated largely on assumption or probability due to insufficiency of testing kits, there are multiple layers of danger unfolding.

Although the Nigeria Centre for Disease Control (NCDC) had conducted 38,231 tests as at May 20, the Nigeria Medical Asso-

ciation (NMA) has raised a red flag against the deficit in the smart testing technique adopted by the centre, arguing it has failed to capture the real incidence of the COVID-19 in Nigeria.

Consequently, doctors screening patients at the largest tertiary hospital in Nigeria’s commercial capital are in the dark, a gaping loophole through which coronavirus patients could fall through into the wards other than its 60-bed isolation centre.

Unfortunately, health workers in the accident and emergency ward of LUTH are not given the standard of protection that workers in the COVID-19 isolation centres enjoy based on the faulty assumption that they work with low-risk patients, the source said.

BusinessDay understands that it is not rare for doctors to buy surgical masks and gloves out-ofpocket since the outbreak of the pandemic. As doctors, nurses and porters among others work with poor knowledge of the stawww.businessday.ng

L-R: Ibrahim Gambari, chief of staff to the president; Boss Mustapha, secretary to the government of the federation; Vice President Yemi Osinbajo, and President Muhammadu Buhari, during a virtual meeting of the Federal Executive Council NAN (FEC), at the Presidential Villa in Abuja, yesterday.

Olawale said, some employers are now engaging cost-cutting measures which include, sadly, reduction in the number of staff, negotiation and agreement on the terms of salary or other benefits for adjustments with their employees, and renegotiation of different contracts.

Hadi Sirika, minister of aviation, had said the aviation sector is the worst hit by the coronavirus pandemic, warning that many airlines would not survive the crisis with N17 billion losses monthly, while airline operators see over 120 aircraft parked during the period.

Staff layoffs in the private sector, which employs some 90 percent of the country’s total workforce, will worsen what is

already a precarious economic situation for Africa’s most populous country already grappling with high unemployment and poverty rates, say analysts.

Staff layoffs mean that many more people are going to file for their pension benefits, but these benefits may not be readily available because the pandemic has adversely impacted contributions.

“Yes, the pandemic, no doubt, will affect contributions,” a CEO of one of the Pension Fund Administrators (PFAs) told BusinessDay in a telephone interview. He, however, said it would be up to the end of May before the real impact in terms of numbers could actually be evaluated.

“What I can say is that we

are still receiving about 50 percent of the contributions of our customers, but I am sure by end of May it would have started being clearer what we did during the period,” said the CEO who asked not to be mentioned.

“For now, we cannot know whether some of our customers were unable to implement a business continuity plan during the period, or whether they shut up completely, but we are reaching out to them,” he said.

He hinted that the PFAs were working with the regulator to come up with modalities for relating with retirees who need to file request for benefits, without a face-to-face encounter, stating that discussions were at advanced stage to ensure there was smooth

process of customer engagement during this period.

Joan Omoregbe, a former employee of one of the local airlines who has just been laid off, said she sees a drastic decline in pensions fund assets as well as number of registered contributors from the month of March.

“Now that a lot people will be out of job, with many companies being unable to pay salaries regularly, remittance of pensions will be impacted negatively,” Omoregbe said.

As at the end of February 2020, total pension fund assets under management by PFAs stood at N10.507 trillion, while number of registered contributors stood at 8.85 million as at September 2019.

tus of the patients, there is a risk the virus will accidentally spread from patients to health workers, from health workers to other patients and their relatives who come daily to care for them.

At the end of each day, these unprotected workers could take the virus home, exposing their family, friends, relatives and other members of society they interact with on the false assumption that they only treat non-coronavirus patients. Health workers at the forefront of the pandemic, on the other hand, are housed in the hospital’s residences and guest lodges during this period.

“The risk of LUTH becoming a super-spreader is very high because of the lack of very strict testing,” the source at LUTH said. “If you use the NCDC criteria, most of the patients should be tested because they mostly have a fever, cough, and tiredness. Our criteria for testing are more robust.

We are constrained and can only test so many. We have tried to have a scoring system based on symptoms but it is not working because

COVID-19 patients can start masquerading.”

But Chris Bode, LUTH’s chief medical director (CMD), when contacted said the hospital’s system didn’t leave room for spread of the virus.

Bode said no doctor at the tertiary health facility has been infected amid effort to manage the crisis. He did not, however, respond to the question about the challenge poor provision of PPE or lack of testing facing LUTH’s frontline workers.

Across the country, the number of infected doctors has increased as a full-blown community transmission of COVID-19 is now responsible for most infections, though initially it was recent arrivals to Nigeria.

Saliu Oseni, NMA chairman, Lagos chapter, estimates nearly 500 healthcare workers had been infected in Lagos as of May 19 – the distress and demoralisation among medical professionals, especially doctors, is palpable.

Also, the combination of these challenges implies a critical part of the Nigeria healthcare chain is weakened when mass testing,

well-equipped hospitals and fully protected health workers are a must if the pandemic is to be contained.

Since the race began to contain the virus in Nigeria, LUTH has had to part with two of five blocks available for managing patients.

Initially, an entire block that handles about 120 beds was yanked off and converted to a full COVID-19 isolation centre of 60 beds. Following that, another block close to it was added for coronavirus treatment, decimating the operating capacity of the poorly equipped and short-staffed hospital further by 40 percent.

What it means is that non-emergency cases and procedures including elective surgeries have not only been shuttered, patients who are, in fact, in need of urgent medical attention are being turned away due to the overstretched capacity.

“This has been useful to reserve safety equipment for healthcare workers managing COVID-19,” AbdulRasaq Lawal, a consultant surgeon at LUTH, told BusinessDay earlier. “We are focusing on services that

are meant to preserve lives like emergencies. Emergencies cannot wait until after COVID-19. We have to treat them right away.”

Before COVID-19, LUTH was already at breaking point – barely 20 from about 65 patients seeking care daily got admitted to an A&E ward with less than 35 bed spaces.

The system relied on transferring, discharging or death to make bed spaces available. On good days, a doctor could see about 13 patients.

One doctor can attend to 20 patients on bad days which are frequent.

The coronavirus outbreak has further reduced that attention but neither the number of patients with illnesses or requiring emergencies has stopped.

“My main fear now is lack of testing, lack of manpower and lack of protection,” the source told BusinessDay. “I also fear the complete collapse of the health sector.

We are not far. Politics is still going on in the way we are responding to the pandemic. Today we are trying to give an impression that we are in control and on top of the situation.”

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Reddington Hospital successfully performs first complex open heart surgery

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eddington Multi-specialist Hospital, Lagos, has announced a successful complex heart surgery involving a Coronary Artery Bypass Graft and Mitral Valve repair in a 66-year-old man, Oluwatoyin Adebiyi.

The complex surger y was performed by the new Tristate Reddington Cardiac programme led by consultant interventional cardiologist, Kamar Adeleke, a professor, and consultant cardiothoracic surgeon, Michael Sanusi, a doctor.

According to the group medical director of Reddington Hospital, Olutunde Lalude, this involved temporarily stopping the heart to carry out the procedures by first, putting the patient on a Heart Lung Machine. Thereafter, the heart was opened and the malfunctioning Mitral Valve was repaired. In addition, the three blocked vessels supplying blood to the heart of the patient were bypassed and the blood flow was restored.

The heart was then successfully re-started.

At a media briefing in Lagos to announce this feat, Lalude said the patient’s recovery was almost instant as he started talking, eating and drinking less than 24 hours after the surgery. “The complex surgery performed by a 19-man team of Nigerian specialists demonstrates our ability to expand the range of what is possible in Nigeria, particularly at this time when access to overseas medical travel has been restricted,” the group medical director said.

He said but for the Covid-19 pandemic which has restricted air travel, the patient would have probably chosen to do the complex surgery abroad where

he will spend thousands of dollars encouraging capital flight.

Head of the surgical team, Kamar Adeleke, said the COVID-19 pandemic had shown that every country needed to look inward for solutions, adding that with borders closed, the Tristate Reddington Cardiac Programme is ready to offer treatments to complex heart issues, as it has a duty to help Nigerians with such conditions.

He said: “This underscores potential Nigeria has. Reddington practically has everything needed for the success we are celebrating today. It contributed 99 per cent of what you are seeing, but the remaining one per cent was also very vital, which we sourced from outside.”

On how the surgical process went, Adeleke, who is a Consultant Interventional Cardiologist, said when the team first realized the patient’s heart rate was fast going low, it gave him a temporary pacemaker, which enabled him breathe normally and then embarked on the seven-hour repair of the patient’s leaking valves and other tissues, emphasising that the 19 team members are experts from different areas.

He said: “The following day, the patient went into complete kidney failure, but because we had all expertise here, the kidneys were worked on and in a few days, his body system started working perfectly and he began to urinate normally.”

Adebiyi, who is presently recovering after the surgical operation, said when his health deteriorated in the middle of the COVID-19 lockdown, he thought this was the end as no one was allowed to leave the country for treatment abroad.

Firms seek intervention over oil, gas free trade zone regulation HARRIDON EDEH, Abuja

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irms operating in the oil and gas sector have called for intervention over the purported attempt

by Oil and Gas Free Zones Authority (OGFZA) to roll out its regulation on oil and gas operations in Snake Island Integrated Free Zone (SIIFZ).

The firms, Nigerdock Nigeria plc, Simco Freezone Company and Nigerdock Nigeria plc-FZE, expressed serious concern over the latest plan by OGFZA to assume total control of activities in the zone.

The affected organisations had in 2016 dragged OGFZA before a Federal High Court in Lagos to seek judicial intervention that would prevent the Authority from regulating operations within SIIFZ. The suit also has as defendants - the Attorney-General of the Federation and the Minister of Industry, Trade and Investment.

Speaking on the issue, counsel to the plaintiff, Qudos Mumumey, who said the last time the suit came up in the court, presided by Justice Chukwujekwu Aneke, was February 26, revealed that June

1, had been fixed for definite hearing.

Mumumey, however, expressed dismay that OGFZA still went ahead to issue letters on implementing a ministerial directive that empowered the Authority to assume full regulatory powers over the zones, even when the case was still before the court.

He said the OGFZA by issuing such letters acted upon an uninformed directive of the Minister of Industry, Trade and Investment, adding that the move was a clear attempt to undermine the powers of the court.

BusinessDay confirmed further that Nigerdock and others had by an Originating Summons filed at the Federal High Court in 2016 seek to know whether by the clear provisions of the Nigeria Export Processing Zone Act, Cap No. 107, Laws of the Federation of Nigeria 2004, Snake Island Integrated Free Zone (SIIFZ) should be regulated by the Nigeria Export Processing Zone Authority (NEPZA) being the Authority vested with the power to regulate all Export Processing Zones. www.businessday.ng

L-R: Kamar Adeleke, consultant interventional cardiologist; Oluwatoyin Adebiyi, patient, and Tunde Lalude, group medical director, Reddington Hospital, at the press conference to announce the first complex open-heart surgery in Nigeria

by Reddington Hospital in Lagos.

NIMASA, aviation, oil/gas sector get FEC’s approval to spend N3.920bn on infrastructure, training Tony Ailemen, Abuja

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ederal Executive Council (FEC), on Wednesday, granted approval for several infrastructure projects and Consultancy Training Services for various sectors of the economy, including the maritime industry, aviation, oil and gas, as well as road infrastructure.

Minister of information, Lai Mohammed, who unveiled the various contracts while briefing State House correspondents at the end of FEC meeting presided over by President Muhammadu Buhari, said the contract include those awarded to SWETS Marine Consultancy in the sum of $454,050 for sea-time training for the Nigerian Seafarers Development Programme.

The training captures cadets on-board foreign-going vessels by the Nigerian Maritime Administration and Safety Agency (NIMASA).

The consultancy training ser-

vices aimed at building capacity of Nigerian youths, is geared toward empowering them to take over lucrative jobs available in the maritime sector, hitherto dominated by foreigners locally and to export excess Nigerian seamen to fill available spaces globally.

Over 1000 idling Nigeria seafarers that have graduated, but yet to obtain requisite certificate of competency required of them to be gainfully employed as officers and masters on board ships, are billed to gain from the initiative.

The search for the sea-time training opportunities for these sets of cadets had been on since completing their course work several years ago, making this a golden opportunity for them to acquire necessary professional training.

There is currently global scarcity of sea-time training spaces on-board merchant ship, thereby making it imperative for NIMASA to take advantage of the opportunity to build requisite capacity.

The initiative will also cre-

Africa needs more than $200bn, suspension of debt payment to lift its economy - UN secretary-general Olusola Bello

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N Secretary-General Antonio Guterres has warned that the coronavirus pandemic threatens Africa’s progress and could push millions into extreme poverty.

Guterres stated this Wednesday, saying that to help address the devastating economic and social consequences of the pandemic, Africa needed more than $200 billion and an across-theboard debt standstill for African countries unable to service their debt, followed by targeted debt relief and a comprehensive approach to structural issues in the international debt architecture to prevent defaults.

In recent years, Guterres said economic growth in Africa had been strong, the digital revolution had taken hold and agreement had been reached on a free trade area.

The UN chief said in a video message while launching a policy report on “The Impact of COVID-19 in Africa” that countries on the continent had responded swiftly to the crisis, and as of now reported cases

were lower than feared with more than 2,500 deaths.

The virus is present in all African countries with most recording fewer than 1,000 cases, the 28-page UN report said.

According to Associated Press, the UN said the relatively low numbers of COVID-19 cases confirmed thus far “have raised hopes that African countries may be spared the worst of the pandemic,” the report said.

“Caution is warranted, however, as these are early days in the life cycle of a disease that is still not fully understood and where we have seen repeated patterns of first slow, then exponential growth in the number of cases.”

The UN said the low numbers could be linked to minimal testing and reporting, pointing to a World Health Organisation warning that the pandemic “could kill between 83,000 and 190,000 people in 47 African countries in the first year, mostly depending on governments’ responses.”

WHO also warned that “the socioeconomic impacts could `smoulder’ for several years,” the report said. Guterres said “much hangs in the balance.”

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ate jobs and reduce unemployment rate in the country as Messr SWETS Marine have given guarantee of adequate spaces to absorb 170 cadets, in addition to guaranteeing job placement on-board Chevron vessels for all cadets that would excel during the training.

The Bureau for Public Procurement BPP, had reviewed downward, the Ministry offer from $510,000 to $454,050, which has been accepted by the contractor.

“Adequate provision have been made in the 2019 and 2020 budget in the sums of N1,338,093,214 and N1,008,093,214.23, respectively.”

Nigerian Content Development and Monitoring Board (NCDMB) also got FEC approval for the award of contract for the Nigerian Oil and Gas Parks Scheme at Odukpani, Cross River State in favour of Messrs Kinetic ElectroMechanical Limited in the sum of N2,923,480,976.70, inclusive of all taxes, and with a completion time of 15 months.

He disclosed that due dili-

gence as per the competence of the contractor mentioned above was done, even as BPP had issued certificate of no objection for the contract sum reviewed downward from N3,170,155,068.00 to N2,9923,480,976.70 which has been accepted by Messrs Kinetic Electro-Mechanical Limited A provision of N2b had been made in the 2020 budget, while the balance is to be provided for in the subsequent budget. When completed, the project will provide additional infrastructural facility for the manufacturing of Oil and Gas components for the sector, boost capacity in the oil and gas for sector, Provide job opportunities Nigerians as well as boost economic activities in the Odukpani area of Cross River State.

The Council also approved an upward review of the contract awarded to Messr Stabilini Company for the construction of Boeing 737 full flight Simulator Building for the Nigerian Aviation Technology, Zaria.

How Nigerians in Diaspora can strengthen our economy - minister Innocent Odoh, Abuja

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inister of state for foreign affairs, Zubairu Dada, has said Nigerians in the Diaspora have the capacity to improve the nation’s economy beyond the yearly remittances to the country if properly harnessed.

He stated this in an interview granted to the media team of the Nigerians in the Diaspora Commission (NIDCOM) led by Gabriel Odu as part of the activities to mark one year anniversary of the agency in Abuja, a statement issued on Tuesday by special assistant on media to the minister, Ibrahim Aliyu, said.

Dada said, “With an estimated population of over seventeen million, Nigerians in Diaspora and estimated remittances of over twenty two billion dollars annually Nigerians in Diaspora no doubt have the capacity of improving the nation’s economy if properly harnessed.”

He noted that the establishment of NIDCOM by the present administration had @Businessdayng

clearly shown the commitment of President Muhammadu Buhari to the cause of millions of Nigerians in the Diaspora, saying the agency had come out with so much waves that people began to wonder if it had not existed for more than one year.

The minister, who went down memory lane, recalled that before the establishment of NIDCOM, Nigerians in the Diaspora coordinated their activities through the Nigerians in Diaspora Organisation, NIDO, a non -governmental organization, and other several Diaspora organisations all around the globe.

But he said with the coming of NIDCOM government has given them a great sense of belonging, the statement added.

He commended NIDCOM for recently organising a States Diaspora Focal Point Officers Summit in Abuja where twenty seven states keyed into the programme and appointed their own Focal Persons who will liaise with the agency to champion the cause of millions of Nigerians abroad.

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The bequest of the Catholic Church and other COVID-19 stories The Public Sphere

CHIDO NWAKANMA

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he Nigerian arm of the world’s biggest charitable organisation rose for the count recently when the Catholic Bishops’ Conference of Nigeria donated 425 hospitals and clinics to the Presidential Task Force on COVID-19 for use as isolation and treatment centres.

The bequest of the Catholic Church in Nigeria aligns with a history of two millennia of charitable acts by the Church.

It is one of the positive narratives of these COVID-19 times in Nigeria.

Boss Mustapha, Chairman of the PTFCovid19 and Secretary to the Federal Government, received Bishop Ignatius Kaigama and his team that visited to hand over the assets to the government formally. Now we speak of real “assets” from the hard work and benevolence of members and their church leadership, not the type the Minister of Justice ascribed to a felon.

Mustapha thanked the Bishop’s Conference for the donation. A report noted that “The SGF particularly commended the Conference for the donation in view of the spread of the health facilities which are found in several locations across the country and would provide

the required assistance to various state governments to leverage on”. At the daily media briefing later, the PTFCovid19 Chairman directed the attention of state governors to the catholic endowment.

“As part of efforts to support the states in the establishment of the isolation and treatment centres, I wish to remind our governors that the Catholic Bishops Conference has volunteered all the 425 hospitals and clinics nationwide for adaptation and use as isolation centres,” Mustapha said. “Governors are encouraged to please approach Catholic Bishops in their states to access these facilities.

“As a further cost-effective measure, I also wish to remind sub-national authorities that the Nigeria Institute of Architects has pledged the pro bono services of their members to modify, design and supervise all COVID-19 related projects nationwide. Again, we urge that this offer be taken up speedily.”

Pastor Tunde Bakare, General Overseer of The Citadel Global Community Church, formerly known as Latter Rain Assembly, keyed into the spirit of charitable giving. He tweeted, “The CGCC is offering the LASG parts of our current Church facilities at Akilo Road, Ogba, to be used as an isolation centre for Covid-19 cases. The CGCC Medical Missions will onboard LASG officials to ensure the best utilisation of this space #Thread #MyBrothersKeeper”. Bakare’s Church also offered facilities in Ogun State to the Ogun State government.

ThisDay Media and Technology Group then led some donors to gift PTFCovid19 a 267-bed isolation centre as well as a 90-room hotel in Abuja.

The gift of the Catholic Church is a message for these times. We must do all that we can to look after each other.

It flows from the foundation of Catholic spiritual teaching that incorporates spreading the gospel and Catholic social teaching on support for the sick, the poor and the afflicted through the corporal and spiritual works of mercy.

Not surprisingly, “the Catholic Church is the largest non-governmental provider of education and medical services in the world”.

The Catholic Church uses “the strategy of non-coercive power” in its developmental work. One account credit it with running 5, 500 hospitals, 18, 000 clinics, and 16, 000 homes for the elderly and those with special needs. Sixty-six per cent of these facilities are in underdeveloped and developing countries.

“The Church, adhering to the mandate of Jesus… during her history, which has lasted two millennia, has always attended to the sick and the suffering,” reported the Pontifical Council for the Pastoral Care of Health Care Workers in 2013.

Accountability PTFCovid19 must soon account for the assistance and donations in kind and cash that it has received thus far in the name of the people. Recall that the body sought to commandeer hotel and other facilities to create isolation centres.

Now it is getting such facilities from donors. It will enhance its credibility if PTFCovid19 incorporates accountability reporting into its regular briefings. Such reporting would entail medical, social and financial information. Who gave it what? What is the value of what it has received in monetary or other terms?

How is it deploying the gifts?

PTFCovid19 has issued a benchmark of 3000 hospital beds in each state as the goal for which State Governments should aim. I add that while doing so, the

‘

The gift of the Catholic Church is a message for these times.

We must do all that we can to look after each other. It flows from the foundation of Catholic spiritual teaching that incorporates spreading the gospel and Catholic social teaching on support for the sick, the poor and the afflicted through the corporal and spiritual works of mercy

Sustaining your mental balance in life

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ife is said to be full of ups and downs.

Despite the valleys and peaks of life, humans have always found a way around it and going on in life is often inevitable. The world survived the wars and the Spanish pandemic of 1918. The current COVID-19 is, therefore, not an exemption.

We would overcome this valley and move to the peaks of life again.

If COVID-19 is a collective race, there is individual responsibility in it. As an individual, it is according to your faith. It is what you see that you will get at the end of the pandemic.

Coronavirus will be over; some people will be grounded, and someone will rise and rise above the circumstance. Most often, life’s circumstances or adversities are neutral. It is our disposition, reactions or responses that determine if the circumstances are turning to positive or negative situations for us. This accounts for why some people have become invincible coming out of adversities strong and better. What are their secrets?

The paramount secret for surviving adversities is sustaining a positive mental balance.

Before, we look at how to maintain or sustain a healthy mental emotion and stability during times like this, let’s look at what is our mental health.

According to the Mental Health Foundation, United Kingdom, your mental health is how you think and feel. It is your outlook on life, and how you cope with life’s ups and downs. It is an essential part of your health.

In simple terms, it is what you think about your current situation and your future which determines what you see ahead of you and how you feel now. The most common secret of all achievers is their ability to maintain a positive outlook during adversities focusing on what they can control and doing things

that would make the situation better.

As a life coach, I have the experience of coaching people passing through phases in their finance, relationships, career, or health and people seeking to develop their leadership effectiveness. Some are passing through grief, crisis or a different phase of life unique to them. Keeping them in a mental balance is an essential perspective without which it might be challenging to achieve a successful outcome. Here are few tips on how to maintain your mental health and stability during a transition period like COVID-19.

The starting point to a healthy mental life is your perspective. Perspective is the way you see things that determine your responses to your situation. Whenever we are passing through something that is not the norm, we call it different names. To some, it is a phase or crisis period. I do admonish you to see life as full of ups and downs or peaks and valleys.

When you are at the lows of the peaks, rather than giving your situation a name that vibrates negative emotions, why not change the name of the game? I call my lows of the valleys, the transition periods. It is transitionary periods because nothing tough stay tough forever.

What you to see at these periods, either in your finance or marriage are transition rungs to another level. With a transition’s mindset, you will have positive emotions to learn the lessons and do things that will take you back to the peaks as quickly as possible.

Having established the mindset, you need to return to your original state. The default state your creator wants you to be is a state of love, joy, and peace. Anything outside these three attributes will destabilise your mental health and balance. Whenever the unexpected happens, get the perspective that it is another transition period, then find your way

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back to your best state of mind where peace, joy, and love dominates. When you are in this state, you will be calm, function well mentally and see possibilities.

Seeing possibilities is excellent but useless unless you act. You need to avoid a state of idleness. Idleness mostly is the reflection of the state of your emotions. However, I have seen people who are in a state of joy, love and people and allow unbelief to hold them static.

If you believe the situation will get worse and you have no chance of getting out of it victoriously, you will give up and fold your hands.

Idleness does not make things better but gets them worse than it was. Idleness is, therefore, a criminal offence against your future and destiny. In this era of lockdowns, when we are operating below our average capacity, you have all the time to start what you have ever wanted to do.

If it is a business, you can begin to learn about it online conceptually and getting all your facts and figures together. Beware of nothing using your days effectively by counting the days. It would be best if you made the day counts as the virus might not go soon.

We must live with the reality of our time. The truth is that we are outside the automatic, our comfort zone and on a journey to creating a new world order.

Immediate you start acting after positive perspective, dominant mental state of love, peace, and joy, you will move to the learning zone from the dungeon of fear. The acting or learning zone is vital to your mental balance as it will elate your moods and enable you to see a glorious day ahead. In your learning zone is the new skills and confidence to navigate your career, marriage, health, and finance after COVID-19. In doing this, be mindful of the potential new order of the world. Some

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states should ensure that they put down at least one standing hospital. They may call it Covid19 Hospital afterwards. The lesson of these times is that we should seize the opportunity to deliver value in sustainable projects of outstanding value.

The N78.2 million Madagascar herbs Madagascar invoiced Nigeria N78.2 million for its COVID-Organic herbal remedy. The charge repudiates claims that it was a donation. It continues to raise queries.

PTFCovid19 stated as one of its objectives at the inauguration on 17 March that it would “lay a foundation for scientific and medical research to address all emerging infectious diseases.” Instead of acting on this potentially rewarding objective, Boss Mustapha soon spoke about getting the untested drug from Madagascar. We did not order a sample.

First, a consignment of COVID-Organics has landed in Nigeria. Now the federal government has remembered testing and ascertaining the appropriateness of the drug.

Meanwhile the Madagascans have the African Union behind them in levying invoices on countries such as Nigeria that leap before looking. If we could order untested medication from Madagascar, what prevents us from ordering from Pax Herbal in Ewu, Edo State with a proper laboratory and manufacturing facility? When will our local herbs get N78 million attention?

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

Positive Growth with Babs Babs OlugbemI

jobs will be off the radars of employers while others will be in high demands. Digital illiteracy will not be acceptable and working from home will become the order of the day.

Also, there will be a need for you to develop a new level of relationship and emotional intelligence to managing behaviours post coronavirus.

With action comes learning and with both comes the arrival of growth. Growth is an inevitable component of your progress in life. When you grow, you develop a new set of awareness and mental faculty to operate at your next peak and levels. Remember that what you do at your valleys will determine how quickly you get back to the peaks. What you do at the peaks will determine how long you stay at the peaks before the next valley.

Unfortunately, the valley is COVID-19 is universal and unplanned for and might stay longer than anticipated.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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Nigeria: The epicentres of coro-politics… I remember General Abacha

ik MUO

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agos is known for its traffic madness, caused by the quantum of human and vehicular traffic, disequilibria with some of the roads and the key one, driver-indiscipline.

One day, about 20 years ago, the traffic was so bad that people trying to leave Lagos drove against traffic on the Carter bridge. The traffic officials came around but when they noticed that it was impossible to turn back or arrest the offenders, they concluded that the best thing was to make way for them. In effect, they legalised the illegal driving activities of the renegade drivers. The WHO has just indicated that we may toe a similar path; that since we cannot contain and defeat Coro, we may have to prepare to live with it!

The worrisome declaration was made

by Ryan, its Emergencies Director, who told us without any element of diplomacy that “this virus may become just another endemic virus in our communities, and may never go away…HIV has not gone away”. This is not a good one, but life MUST go on and as such I continue with my discuss on the coro-induced political “roforofo” around the country.

Nigerian politicians are as diverse as Nigeria but they have certain common traits. They are incredibly optimistic; they are most likely to steal (stealing, not pick-pocket) from the public purse than not; they are imperial in speech, and actions; they will always go overseas, at least in search of foreign investors (in this teleconferencing and zoom era), they rarely think about tomorrow, they are always on the attack mood against the opposition (even when they don’t know what to attack for) and at times their

interpretation of events and situations is against common sense.

These traits have been obvious in the current war against Coro and the consequential political roforo. In the coro dictionary, there is only one epicentre at a given point in time. But in Nigeria coro-politics, there are several epicentres and that is why Nigeria is Nigeria. Unfortunately, I will start from River State, where I stopped last week On 26/3/20, Federal Government made a grant of N10 billion to Lagos for the war on coro and immediately, Governor Wike, the “akshion” Governor of Rivers fired his first or major political cannon: “It is quite unfortunate that the containment of coronavirus has been politicised by the Federal Governments.

While Lagos State received a grant of N10 billion as a commercial hub, Rivers State as the nation’s oil and gas hub that produces a greater percentage of the nation’s wealth has not received any support from the Federal Government, wondering why the FG should single out Lagos.

As at that date, Lagos had 115 cases while Rivers had one. Even as at 19/5/20, Lagos has 2624 while Rivers had 53. (This is not a medals table but that is where we are). When I looked at the statistical differential and shrugged. That is why I don’t understand politicians. He then he reminded Abuja that “Every day, we are inundated with letters from the Federal Government to allow oil companies to fly in expatriates to drill Oil”. Not long after that, Wike personally oversaw the arrest of Calverton Helicopter pilots and 10 Nigerians for Coro contraventions in PH. That was despite the fact that the company obtained all necessary approvals including one from the Nigerian Civil Aviation Authority (NCAA) to continue providing flights for the oil and gas industry for an initial period of three months, dated April 1.

Wike got them arrested, dumped them in cell, got a judge to try them despite the fact that the courts were in suspended animation, arraigned them later and mercifully they were granted bail. The Rivers State Commissioner of Police, Mustapha Dandaura who lost his

job in the process, join the fray, saying that the mission of the passengers was suspicious, that they might have come to “sabotage the activities of the state and the security agencies.”

The Governor also declared the company a corporate enemy and persona non grata in of Rivers State, declaring with imperial finality that it ‘can only chose to operate in any part of Rivers State at its own risk as Local Government Chairmen have been directed to close their offices and prevent their operations.” Immediately thereafter, the Chairman of Obio-Akpor local government Council, Solomon Eke, sealed the office of Caverton Helicopters in Port Harcourt, Rivers State and made a public show of it Not long after that, the River state government arrested 22 offshore staff of Exxon Mobil, including the firms CSO who were moving with a police convoy.

21 of the workers are members of the Petroleum & Natural Gas Senior Staff Association of Nigeria, while the other is the firm’s Chief Security Officer, CSO. The governor himself said the arrest was against security advice but that “as a responsive government”, he authorised that they be quarantined in line with the relevant health protocols.

When PENGASSAN threatened to show its strike power, Wike backed down.

And just the other day Wike whom some people have “appointed” the Commanding Officer, 101 Waterside Brigade, Special Lockdown Forces, also accused the FG of double standards on the Almajiri relocation issue. because When they started relocating the almajiri in the north, the FG said nothing. Immediately they heard that we have relocated some almajiri, they came up with the declaration that it is against the inter-state movement. Why this double standard.

But the political ballistic missiles flying in and around PH are not just unidirectional. Earlier this week, an APCian, Chief Chukwuemeka Eze accused Wike of not cooperating with UniPort Teaching Hospital and its CMD, thereby working against COVID-19 testing and containment. He also accused the governor of undertaking a sudden

‘

Nigerian politicians are as diverse as Nigeria but they have certain common traits. They are incredibly optimistic; they are most likely to steal from the public purse than not; they are imperial in speech, and actions; they will always go overseas, at least in search of foreign investors

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

COVID: Between a pandemic-sized rock and an impoverished hard place

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OVID-19 has thundered through the world. We will speak of the pandemic for centuries to come. When children have their devices floating in the air as they waddle to school, and robots have replaced humans in many positions at the workplace, the virus that pushed the world to its knees will be one of the highlights of the history books. Tales would be told, hundreds of pieces of information would have gotten lost in translation, movies and songs would try to replicate its effect.

Less than six months ago, when Nigerians anticipated the cross-over religious services, end-of-the-year carnivals and the end of the #dettydecember (a hashtag made popular on social media platforms such as Twitter, Instagram, Facebook, etc., to celebrate the last month of the year), it didn’t cross any minds that the year 2020 would bring with it so much pain and anguish. Well, if anybody knew, Nigerians were not listening to whisperings of doom. We went about with our celebrations and waited for the year that would signify the boost in billions of lives. Poor, delusional us.

The world is approaching the end of the first half of the year 2020 and there have been stories, articles, posts, tweets, memes clamouring for the return of the year 2019. Until the powers that be figure out a way in the time-space continuum that will afford us to travel in time, the 2019 shuttle is gone forever. The world has looked to leaders across the nations. America’s Trump has turned into a twitter joke (or not); Nigeria is playing the lockdown yo-yo with lives; China is showing the

world that its mass-producer status stands even during a pandemic that slipped through its cracks; Germany’s swift moves are allowing a gradual and tentative step to normalcy; Great Britain is hobbling as it sorts through its post-Brexit situation, etc. The world is at varying levels of comatose.

As at 11:50 pm (WAT), Saturday May 16, 2020, there were 4,635,830 confirmed cases and 311,821 deaths. The world is in mourning for the lives that have been lost to the talons of a virus that in most people’s opinion should have been curtailed if the world was informed on time.

Trillion-dollar civil cases against China aside, the apparent question is - what is the solution? A solution that we can use, right now. After some chugged chloroquine to prevent being infected, there have been other promising news. Despite scepticism, approval was granted to the first antibody test for the virus by Public Health England.

Other countries have hunkered down in the race to find a suitable vaccine that may take at least one year to filter down to the rest of the world.

Madagascar swears by a highly disputed herbal concoction, COVID-Organics.

In Nigeria, there have been over 5,600 cases and more than 170 deaths. It takes two to 14 days for persons exposed to the virus to possibly become symptomatic. The 14-day mark since the laxing of the lockdown procedures by President Muhammadu Buhari has come and gone. And understandably, fears are rising that there might be an exponential spike in confirmed cases.

Virtual religious gatherings across the country have rallied to stop this with prayers and fasting.

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Whether or not God is listening to a country so warped in its own special breed of corruption will be the talk of another day. Sadly, it stands to reason that with eager Nigerians searching for the elusive “daily bread” on crowded streets - with little to no regard for the fundamentals of social distancing indeed a jump in numbers is imminent. Pray, we can; act, we didn’t; so, pay, we must!

There are debates, polls and discussions on whether another lockdown should be imposed. A lockdown would be the opportune time to ramp up testing in order to ascertain the number of the affected; isolate these from those that aren’t; and find ways to flatten the curve. However, at the rate Nigeria is testing its people, we would leave our houses on a sunny day, sometime in 2040! The country barely had the infrastructure to sustain its residents when the going was bearable, and is buckling easily in the reverse case.

Millions of Nigerians live below the minimum standard, and can barely afford to feed each day.

The meagre “income” that many receive from menial jobs can scarcely sustain a family. Which means that rushing headlong into another lockdown without catering to those who cannot afford to stay indoors would be insensitive. Yet, can we also afford not to be on lockdown? We have been caught between a pandemic-sized rock and an impoverished hard place! Who will save us?

The Nigerian government is tottering under the weight of inadequate materials, infrastructure and personnel. Private sector big players such as Coca Cola, Guaranty Trust Bank, Zenith Bank, MTN Nigeria, Nigerian Breweries are searching

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lockdown-easing in PH to enable the PDP to inaugurate its state executive followed by a thanksgiving. The PDP stalwarts allegedly violated NCDC & RVSG physical distancing and crowd limit (<20) protocols and wondered who will quarantine the disobedient party members and auction their vehicles and when the Obi Wali Cultural Centre venue of the event will be demolished (an allusion to the two hotels demolished earlier). He also stylishly reminded him that the venue was built by Amaechi, who was driven into politics by unemployment.

When you examine these developments with the proverbial eye of an elder, it becomes obvious that it is all about politics. I doubt if they are in the interest of Rivers State, the Riverians, or the war against coro. It is all about politics!

Other Matters: I remember General Abacha We all know him. Even those who were not here then know about Abacch, our most reviled Head of State. Nigerians, or rather most Nigerians, spoke and still speak ill of him. I say most Nigerians because at least our president believed and believes that he was a good man. But today, I remember Abacha in a special way… and for two reasons. Just the other day, $311 million was received from the inexhaustible Abacha-loot, making it about $5 billion recovered by 5 different Nigerian Governments in the past 22 years. Luckily, part of the funds will be deployed to the 2nd Niger Bridge, which some fellows informed us had been completed in the run-up to the last election. Corolary to the above is the brazen attempt by Buba galadima to rewrite recent history and dramatically alter the established and disenabling narratives in our very before. The self-acclaimed Abacha Boy and a gerontocrat has disclosed his “completely different idea” about the Abacha loot.

Iretomiwa Akintunde-Johnson for spades to help pull us from the chasm we are about to freefall into. Nigerian families have turned herbalists and physicians, mixing various concoctions - garlic, ginger, onions, honey - downing anti-malaria drugs to prevent the whispers of fever symptoms or any sickness at all.

And Nigeria’s healthcare system may just be upending the Hippocratic oath while they are at it. Reports surfaced on social media in April, where an angry mother of a young boy who had taken her injured son (like exuberant boys, he had played the game of football with a little more zest than needed) to a Lagos hospital, was left speechless. By the time the mother left the hospital, the boy was back to his excitable state. Why was the mother of a perfectly healthy boy angry?

The receipt she was given was allegedly labelled “COVID-19 353”, which would suggest that the case was COVID-related. When she tried to clarify the reason behind the labelling, she was allegedly given a placating smile with a flimsy explanation that the nurse had been instructed to label cases as such. As if it was the norm! If this happened once, who knows how many more times this has happened since the pandemic reached our shores?

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Akintunde-Johnson is a Lawyer and Public Relations Consultant living in Lagos.

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Thursday 21 May 2020

BUSINESS DAY

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Up-bringing doesn’t make dictators; political systems do ‘ True, social CHRISTOPHER AKOR

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ast week, Remi Adekoya, a respected BusinessDay columnist wrote an interesting piece titled: “Why are Nigerian leaders so dictatorial?”

His main argument was that Nigeria’s system of excessively harsh and punitive parenting and schooling systems set up children to become dictators when they grow up.

According to him, “the idea a society where children are brought up learning might is right will somehow magically produce leaders who are empathetic democrats is asking a bit much.” He therefore concluded that: “Nigerian leaders do not suddenly become dictators when they get into power. They have been dictators in the waiting since childhood. Hungry to experience compensation for all the moments they were made to feel powerless. Now, finally, they get the chance.”

This is a compelling argument on the political socialisation of children.

The only problem is that this theory of Authoritarian Personality is not new.

It has been around for a while and has been repeatedly attacked and debunked for its flawed methodology and bias.

Authoritarian personality was first propounded in 1950 by a team of social psychologists and philosophers Theodore W. Adorno, Else Frenkel-Brunswik (refuges from Hitler’s Germany) and Daniel Levinson and Nevitt Sanford, all researchers at the University of California, Berkeley. They had set out

to account for and measure factors that led to the rise of anti-Semitism and fascism in Western societies. In fact, the study started at the Frankfurt school where Adorno was a leading member.

However, most members of the school, predominantly Marxists, fled Germany when Hitler shut down their Institute for Social Research.

After the war, the team continued the research but dropped its controversial Marxist and radical leanings. They administered questionnaires to about 2000 respondents to measure attitudes and personality and concluded that due to excessively harsh and punitive parenting, there was “no difficulty in finding subjects whose outlook was such as to indicate that they would readily accept fascism if it should become a strong or respectable social movement.” Although the work became highly popular in the decade after its publication, its power of analysis was weakened by the ascendancy of democracy in the Western world. Critics soon began to criticise its focus on western societies and exclusion of left-wing authoritarianism.

Soon researchers began to deploy it to study left-wing tyrants. However, by this time, the study’s deep methodological, procedural and substantive errors (for which there won’t be time and space to examine) had become apparent that some scholars even regarded it as “the most deeply flawed work of prominence in political psychology.”

By the mid-1960s even staunch supporters of the study felt the story was ‘largely complete’ and by 1990, that authoritarianism – whether left or right – was dead. That is the theory that Dr Adekoya, without mentioning it, was deploying to explain authoritarianism or dictatorship in Nigeria. Of course, the prevalence of child abuse in Nigeria means there are deeply troubled and psychologically imbalanced adults in Nigeria, but it cannot be the cause of dictatorship in Nigeria. True, parents and

schools play a leading role in political socialisation, but it is widely accepted that political structures cause actions while agents only provide reasons for acting. Our political system vests almost unlimited powers in elected leaders with little or no institutions of restraints to constrain their exercise of those powers. There is very little agents can do to change the situation.

True, social and economic dislocations of the 1920s and 30s led to the weakening of institutions of restraints in Western Europe and the rise of authoritarian and fascist regimes. But those countries have largely learnt their lessons and have now built strong democratic institutions to prevent the emergence of authoritarian regimes.

With the right political system and institutions in place, up-bringing and the tendency for the development of a fascist personality becomes largely unimportant. Even if we assume one’s upbringing predispose him/her to the development of a fascist personality, the political system and institutions, to a larger extent, has provided a natural check on that impulse. James Comey, former FBI Director argued recently in a piece in the Washington Post that “since the beginning, the United States has built a system with bad and incompetent leaders in mind,” and as Frederick Douglass opined, “Our government may be in the hands of a bad man...We ought to have our government so shaped that even when in the hands of a bad man we shall be safe.”

But in Africa, our systems are built for only good men; and we know there are hardly good men in politics, especially in Africa where there are little checks on the powers of leaders and where politics is like war. Like I opined on this page some months ago, our political systems in Africa, on the most part, is one of three things: ‘there are no institutions in place, the institutions are weak and unable to check the excesses of politicians, or

and economic dislocations of the 1920s and 30s led to the weakening of institutions of restraints in Western Europe and the rise of authoritarian and fascist regimes. But those countries have largely learnt their lessons and have now built strong democratic institutions to prevent the emergence of authoritarian regimes

there is what is called isomorphic mimicry - the creation of institutions that act in ways to make themselves “look like institutions in other places that are perceived as legitimate,’ but which in reality are not.”

In fairness though, Nigeria and much of Africa inherited states that were, according to Claude Ake, unusually statists and relied more on coercion than authority to achieve compliance.

The colonial state needed not only to be absolute but also arbitrary in service of the colonial enterprise. But even with the gaining of independence, the character of the inherited state did not really change and the nationalist leaders, for most part, were more interested in inheriting the powers and privileges of the departing colonialists than “broadening the social base of state power.”

In Nigeria, the ruling class were not even satisfied with the more collegiate and democratic parliamentary system bequeathed to them at independence.

They instead went for a more authoritarian presidential system with little checks on the powers of the president.

The 49 Wise men, who drafted Nigeria’s 1979 constitution, not only lauded the structural elegance of the presidential system, but also scoffed at the idea of sharing of power and putting too many checks on the powers of the chief executive.

In summary, the reason why Nigerian leaders have dictatorial tendencies has very little to do with their upbringing than the political system we run.

It is clear that one of the most critical challenges facing Nigeria at the moment is how to build and strengthen its institutions of restraints to rein in the worst instincts of its politicians and leaders. Only then can we hope to build a capable state.

This piece benefitted from critical comments from Promise Ejiofor, a PhD student at Cambridge University

From the blogs

COVID-19 and the bazaar of corporate cash: An agenda for corporate Nigeria

A

s the pandemic spreads over the world like wildfire, the effect continues to paralyse activities across our country Nigeria through its mass adoption of imported solutions – lockdown, border closures. Efforts are underway in all facets of humanity to curtail the scourge of the pandemic.

How well our fragile economy will respond to the twin bombs of COVID-19 and the apocalypse of oil price is unimaginable.

The response of governments has been fairly commendable, but the effort of the organised private sector is overwhelming. In Nigeria, as of April 1st (not an April fool joke), the newly birthed Coalition Against COVID-19 (CACOVID) has realised the sum of N19 billion (about $47.5m) - confirmed redeemed pledges.

Superlative response!

Recently, the Minister of Finance put forward a proposal of a N500 billion intervention fund for the upgrade of medical facilities across the country. One can only imagine the fate of all the capital expenditure that has been budgeted to this critical sector over the years.

A quick review shows the capital expenditure provision of the federal government over the last three years: 2018 (N71bn), 2019 (50.15bn), and 2020 (N46bn).

Unfortunately, the country has budgeted below the WHO benchmark, 13 percent of the annual budget to be allocated to healthcare. It has also budgeted far below the Abuja Declaration of 2001 under which African leaders agreed to commit 15 percent of their annual budget to improve the healthcare sector. The same

situations abound in the sub-national governments with over 70 percent of the sector budget expended on recurrent expenditure.

Whilst the sector has suffered from massive under-budgeting, the amounts allocated have not been prudently utilised as exemplified by the abysmal quality of our healthcare infrastructure.

Little wonder a notable “His Excellency” in one of the states commissioned with pomp and pageantry a world-class, first of its kind state-ofthe-art hospital in his state but unfortunately, upon a minor accident was flown abroad for treatment. What happened to the state-of-theart hospital rather “abattoir’? George Orwell remarked that some animals are more equal than others. One of my good friends’ critique of my last article was my inability to rebuke the government in strong terms, I had retorted, “I write about the living and not the dead”.

Evidently, the government has relegated this sector through under-provision of resources, massive corruption, politicisation of healthcare, mediocre policies, poorly built and maintained infrastructure, and the dearth of modern equipment. The effect has been the massive brain drain of our medical personnel.

According to them it is perpetually frustrating to practice the profession in Nigeria where you witness children and adults die daily due to lack of ordinary oxygen or patients are compelled to purchase medical disposables for their examination and treatment.

The doctor to patient ratio is still around 2500:1. The scale of this problem has unfortu-

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nately become too gargantuan and a Sisyphean task for the government to resolve. An African proverb says, “One person does not hear the sound of the gun”. We are therefore condemned to seek the intervention of the private sector.

But these corporates pay their statutory taxes and levies to the various tiers of government in addition to the onerous operating environment. Hence, they have no obligation to further take up these existential roles of government. Incidentally, recent events have reaffirmed the old labour slogan, “An injury to one is an injury to all”. Our government has failed and whereas we continue to demand accountability from them, we need to pick up the gauntlet and make hay while the sun shines. We can no longer stand and gaze or sit and look.

The private sector has not only shown expertise in the management of their various firms but has demonstrated elegant competence in rescuing the government in its core and critical functions – education, security and public infrastructure. Several corporates have provided equipment to the security agencies, built a couple of facilities/research centres for various educational institutions, and even rehabilitated roads and other public amenities.

But the question beckons, what has been the fate of these facilities long after being handed over to the authorities? Is there a mechanism for a post-handover review of these projects to ensure the retention of standards? How well have they met the objective over time? We can wildly conclude that most of them have been mismanaged shortly after handover. Corpo-

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Chijioke Uzosike

rates need to review their existing model of Corporate Social Responsibility (CSR) to build sustainable institutions.

My call is for business leaders to press the reset button and review their fanfare, advert-based, “photo/social media charity” CSR models/programmes. Several examples abound of where corporates have adopted a self-sustaining approach to build, operate, and manage. This model has been adopted by the international oil companies (IOCs) to bring relative peace in the Niger Delta region.

They (IOCs) have succeeded in building several facilities jointly owned and managed with the host community with economic and social benefits.

Available data also shows that the Dangote Foundation has constructed faculty buildings across several universities in the country amongst other projects. The current road reconstruction undertaken by Access Bank around the Oniru axis, the Zenith Bank reconstruction, and maintenance of the Ajose Adeogun Road all in Victoria Island are handy examples among others.

Note: The rest of this article continues in the online edition of BusinessDay @https://businessday.ng Chijioke, a banker and financial services consultant, writes from Lagos

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BUSINESS DAY

Thursday 21 May 2020

Editorial Nigerians abroad: Surplus in a time of shortages

Publisher/Editor-in-chief

Frank Aigbogun

Nigeria’s true asset is human capital, her population

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

I

t’s estimated that more than 4,000 Nigerian doctors practice in the US; over 5,000 in the UK and 568 in Canada (a 200 percent increase in 10 years). Poor pay and lack of opportunities are the primary reasons doctors are leaving the country.

Who benefits or loses when Nigerian doctors emigrate? A lot is lost: the skills and knowledge, the cost of training (it costs $5,000 to $10,000 a year to train doctors in Africa, according to one estimate), lives (2,300 children and the 145 women die every day from preventable diseases and causes), savings and taxes?

There are benefits too. A 2011 survey of 1,759 African doctors based in the US and Canada found that half were trained in their country of origin, had worked for at least five years before emigrating and sent home on average more than $6,500 a year. These African doctors had

been in the US or Canada for an average of 21 years. In summary, the survey found that African doctors born and trained in their country of origin had each sent home roughly $130,000 (N47 million).

Do the benefits outshine the costs? According to data on remittances i.e. money Nigerians living abroad send home, money sent home from Nigerians abroad via money transfer has outstripped what the country earned from oil for the past four years.

According to PwC, a consultancy, the $25 billion Nigerians living overseas sent home in 2018 represents 6 percent of all the goods and services Nigeria produced that year. PwC further notes that the figure is equivalent to 83 percent of the 2018 budget and 11 times the amount foreign companies invested in the same period.

Nigeria exports human capital not oil.

For the President, his advisers and the heads of ministries, departments and agencies this is an after-

thought. Nothing is done to harness this immense gift. On the contrary, their comments, attitudes, and actions come across as a deliberate effort to frustrate Nigerians out of the country. You’re free to go, they say. And so they leave.

Either legally, Nigerians are among the fastest-growing immigrants in the UK and do well at school. In the US, they are among the best-educated; or illegally, every year, thousands risk their lives (knowingly and unknowingly) across the Mediterranean in order to work as prostitutes or at manual jobs in Europe. In 2016 and 2017, the most common nationality of people that arrived in Italy by sea from Libya was Nigerian – 37,550 of them in 2016. They send money home too.

If the conditions that are causing Nigerians to emigrate continue, Nigeria will run out of talent to export. The state of our public schools and hospitals and roads does not suggest we intend to be the talent factory of the world,

exporting brainpower wherever it is needed.

Ironically, the money sent home pays for the things the government is meant to provide. Retirees battling with hypertension or cancer but without any hope of receiving their pensions rely on money sent from abroad to buy their drugs.

Younger relatives’ only chance of getting a decent education depends on the euros an aunt sends from Italy.

Over four years ago, bright young Nigerians returned either to work for multinationals or to found start-ups in the flourishing technology sector. Their alumni network from some of the best schools in the world opened doors to foreign investors. The influx has reversed.

We ask, rewording the Pauline rhetoric: What then? Is the government going to make things more difficult in order to force more bright young Nigerians abroad?

By no means. At home or abroad, Nigeria’s true asset is human capital, her population.

GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

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Thursday 21 May 2020

BUSINESS DAY

RESEARCH&INSIGHT

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In association with briu@businessday.ng

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

08098710024

Global Health Statistics: What has changed?

ADEMOLA ASUNLOYE

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report from the World Health Organisation (WHO) on world health statistics revealed that the global life expectancy increased by 5.5 years to 72.0 years in 16 years from 2010, while healthy life expectancy increased by 4.8 years to 63.3 years.

The likelihood of women dying during childbirth has grossly reduced because skilled health personnel attended to more births unlike in the past. Efforts to reduce neonatal deaths and deaths in children aged under 5 years are underway and childhood stunting has been on the decline. Despite this earnest and conscientious activity, it was estimated that 303,000 maternal deaths and deaths of 5.4 million children aged under 5 years occurred globally in 2015 and 2017 respectively.

Consequently, to curb the rate of infectious diseases, vaccination coverage rates increased while incidence rates for several infectious diseases, prevalence of tobacco smoking, exposure to environmental risks and premature NCD mortality decreased at the global level.

Life expectancy at birth in low-income countries is lower than recorded in high-income countries. It was gathered that in low-income countries, life expectancy at birth is 18.1 years lower than in high-income countries—the difference is attributable to preventable and treatable conditions.

As a result of the long-term nutritional deprivation in children in low-income countries, more than a third of them are stunted (short for their age), and one child out of every 14 born will die before his or her fifth birthday.

Maternal deaths contributed more to the differences in life expectancy in low-income countries between men and women than any other single cause.

age is another reason why women live longer than men, some diseases can be more common in women. For example, the lifetime risk for Alzheimer disease is greater in women than in men, partly because more women survive to ages at which the disease most commonly occurs, and women also appear to be more susceptible to the disease in some locations.

Global life expectancy and healthy life expectancy, 2000–2016

SOURCE: WHO

At least there is 1 death from maternal causes out of every 41 women who die. Such deaths rarely occur in upper-middle and high-income countries.

As at 2016, life expectancy in men was 4.4 years lower than for women. A major causative factor for the lower life expectancy for men was the high death rates due to cardiovascular diseases, road injuries, lung cancer, chronic obstructive pulmonary disease and stroke.

Generally, men are more exposed to increased occupational risks, they have higher prevalence of tobacco use and they have higher per capita consumption of alcohol. Also, unlike women, men use health services less, even after taking into account reproductive-related consultations. This health gap between men and women is widest in high-income countries.

Between 2000 and 2016, the global life expectancy at birth, for both male and female combined, increased by 5.5 years, from 66.5 to 72.0 years. Also, healthy life expectancy (the number of years lived in full health) also increased from 58.5 years in 2000 to 63.3 years in 2016.

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Healthy life expectancy is greater in women (64.8) than in men (62.0 years) at birth and at age 60 years, it is 16.8 years and 14.8 years respectively for women and men. However, the number of equivalent years of full health lost through living in poor health from birth is also greater in women than in men (9.5 versus 7.8 years).

In 2019, it was estimated that more than 141 million children were born: 73 million boys and 68 million girls. Recent mortality risks showed that boys will live 4.4 years less than girls: an average of 69.8 years in boys and an average of 74.2 years in girls.

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Global life expectancy and healthy life expectancy, 2000–2016 Although, the sex ratio at birth has been in the range of 105– 110 males to every 100 females globally, mortality rates are higher in males; hence, the ratio changes as the population ages.

For instance, in 2016, there were 100 men for every 100 women between the ages of 50–54 years, and 95 men for every 100 women between the ages of 60–64 years; and this continue to fall as the ages increase.

Although, the incidence of different diseases varying with

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Major factors affecting life expectancy between males and females Several conditions contributed to the reduced life expectancy of males compared to that of females. Of the 40 leading causes of death, 33 contribute more to reduced life expectancy in males than in females. These are :ischaemic heart disease (0.84 years), road injuries (0.47), lung cancers (0.40), chronic obstructive pulmonary disease (0.36), stroke (0.32), cirrhosis of the liver (0.27), tuberculosis (TB) (0.23), prostate cancer (0.22) and interpersonal violence (0.21).

Unlike men, breast cancer (0.30 years), maternal conditions (0.23) and cervical cancer (0.15) are the causes of death that mostly reduce female global life expectancy.

“Some of the differences in mortality rates and life expectancy are due to biological sex differences between females and males. For example, X-linked immune regulators may enhance immune responses in female children, resulting in reduced mortality among girls aged under 5 years”, the World Health Statistics reports.

Also, the income level is a major factor that affects life expectancy at birth. The report showed that the life expectancy at birth in low-income countries (62.7 years) is years lower than in high-income countries (80.8 years). Most of the people who die in high-income countries are old; whereas, in low-income countries, almost 1 in 3 deaths are of children aged under 5 years.

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Thursday 21 May, 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

NSE All Share Index

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759.72

125.24

402.49

215.04

1,706.08

1,034.88

900.33

962.20

1,035.45 1,027.78

282.41

762.45

282.33

124.54

411.55

218.40

1,691.48

1,012.32

906.95

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1.29 -16.46

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1.56

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-7.81

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-2.18 -5.88

NSE Pension Index

0.74 -13.96

‘Many companies will turn to debt capital market this year’ United Capital Plc is a leading African investment banking group providing capital and financing solutions to African governments, companies and individuals. Its Group Chief Executive Officer, Peter Ashade speaks to Iheanyi Nwachukwu in this interview. Excerpts Now that Covid-19 has changed the IPO ecosystem, what is your outlook on that? ike its global counterparts, Nigeria’s financial markets have been hit hard by the novel COVID-19 p a n d e m i c . No t a b l y , majority of the stocks listed on the Nigerian Stock Exchange plunged by more than 20percent since the outbreak of the virus which was exacerbated by crude oil price crashed. With the sharp drop in share prices vis-à-vis market volatility, poor outlook for growth amid serious supply chain disruption, corporates are unlikely to approach the capital market for IPOs or equity capital this year. However, many companies will turn to debt capital market this year, encouraged by the low interest rate environment, especially at the short end of the yield curve. Clearly, the Covid-19 shock has created a need for corporates to raise short term capital to plug their unanticipated shortfall in liquidity. Accordingly, we have seen series of activities at the commercial paper (CP) segment. Also, we have seen further activities at both the sovereign and corporate bond segment. Notably, companies like ours, Dangote, Nigerian Breweries, LAPO Microfinance, Union Bank, Sterling Bank, Flour Mills, are recently in the market to raise either CP or bonds. Also, the targeted liquidity injections by the CBN to sectors such as Healthcare and Agriculture, are likely to further dampen the prospects any fresh equity capital for operators in the space.

Securities dealers are leveraging technology in trading remotely because of the pandemic. What le ss ons can op erators and regulators learn from this new normal?

The outbreak of COVID-19 has passed a major message to all capital market stakeholders, which is the ability to adjust processes from rigid/manual to flexible/ automated/remote processes, thanks to technology. No doubt, operators and regulators need to review previous processes, embrace innovation, and adopt a new business models to thrive within the context of today’s realities.

Many fundamentally sound stocks are trading at their record lows as Covid-19 ravages markets.

What sectors are your stock picks in?

It is true that many fundamentally

L

Peter Ashade

sound stocks are trading at a record low particularly because the country risk factor is high now. However, we believe some stocks will continue to benefit from a near term rebound in global economic activities. In our opinion, the companies that are likely to come out strong includes those in the Telecommunications space, we think the tier 1 Banks will remain resilient, also corporates with huge margins and low leverage such as the major players in the Cement and Consumer goods sector will be fine due to their high level of cost efficiency and finally, the Agric players.

As crude oil price decline is forcing Federal Government to further review its budget benchmark price, what’s your take on the impact on markets, economy and businesses?

With oil prices hovering around $30/barrel, its lowest since 2015/2016, the FGN has increased its need for deficit financing, as the decline in oil revenues bits harder into the initial budget estimates. We have also seen huge capital flow reversals and less foreign participation in Nigeria’s financial markets. Recall that the CBN also had to adjust the local currency. Accordingly, the impact is negative on both the economy and businesses regardless of how you look at it. On one hand, pressure on consumer spending due to naira adjustment will hurt revenue, on the other hand higher cost of production which is not fully passed on to consumers will hurt operating www.businessday.ng

margins. However, with the OPEC+ crude oil production cuts underway and the start of mild recovery in world economies, the price of crude oil is beginning to tick up gradually, with positive implications for Nigeria.

What is your outlook on FX? Our outlook for the FX market remains dependent on what is happening in the oil market, which broadly reflects the strength of the Nigerian economy. Our belief is that the recent IMF loan of circa $3.4billion will improve the CBN’ ability to continue to defend the naira over the next 1-3 months. And this is supported by the recent improvement observed in the parallel market were rates moved from N450/$ to N424/$ after the CBN resumed FX sales to BDCs. Also, we think the external reserves at over $33billion will support this over the next few months. However, if the situation in the external environment does not improve over the next 1-3 months, the local unit may be further pressured.

As a listed company, what strategies do you have in place to mitigate the challenges economic slowdown throws up on your business?

Ni g e r i a G D P g ro w t h h a s weakened since 2014 averaging circa 2percent annually compared to average circa 6percent annual growth in the five years preceding 2014.

The current slowdown in economic activity is driven by the same events that culminated in 2016 recession being the slump in global oil prices primarily, but this time, induced by

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COVID-19 pandemic which has also crippled sectors such as Aviation and Hospitality to mention a few.

Notwithstanding, It is not all doom and gloom. The Group has remained resilient even in the face of COVID-19 crisis as evidenced in our strong financial performance thus far in 2020 financial year. We expect that the current economic slowdown will throw up new opportunities in terms of wealth redistribution and capital formation and we are positioned to exploit them. Our Regional businesses are key to executing our growth strategy in the domestic market by reaching new client segments. We are deepening our relationships with commercial banks, DFIs and governments in sub-Sahara Africa countries where we see opportunities towards providing bespoke solutions in the African market within our risk appetite. We are strengthening our digital business capabilities to extend our growing bouquet of financial and investment service offerings to reach more clients.

What is your medium-to-long term cost containment strategy as Covid-19 ravages many sources of corporate earnings?

As a financial institution, we strive to be operationally efficient through effective resource allocation to maximize value creation. The COVID-19 pandemic necessitated that we activate a virtual operating model, also partly in response to Government lockdown directives.

This has eliminated certain cost elements such as travel and office supplies but may require investments in areas such as technology infrastructure to be sustainably effective. Our cost-income-ratio guidance hovered around circa 40percent in the last few years but we will be targeting circa 35percent in the near term by sweating our existing resources to drive revenue growth.

W ha t a re y o u r B u s i n e s s continuity plans post Covid-19?

We commenced complete virtual operations across all business locations on March 24 with minimal disruption to our service delivery to our clients and our workplace interactions have been seamless most times. Our digital platforms InvestNow (mobile and web) and KashNow platforms (USSD & web) are available 24/7 to serve customers with our bouquet of product offerings.

Other back-end solutions used by key functions have remained poweredup to ensure uninterrupted service @Businessdayng

delivery. Our service professionals and client advisors across our businesses and regional offices are in constant interaction with clients towards meeting clients’ respective financial goals amid the lockdown. The last few months have not been easy as we had to adjust to a new operational model, but we are encouraged by the fact that we are building a more resilient organisation.

What is the future of Investment Banking in a slowing economy.

Typically, in a slowing economy, the performance of investment banks come under pressure in line with the rest of the economy. However, economic slowdowns do not last forever, and they are usually a precursor to economic expansion.

The current COVID-19 pandemic on the other hand is a different type of economic downturn and the recovery process provides a huge number of opportunities. The pandemic has revealed the liquidity and capital adequacy weaknesses of companies around the world and these companies will be looking at fixing those problems once the economy begins to pick up steam.

There is going to be a huge market for restructuring, working capital needs, M&As, financial advisory and capital raises. The opportunities are limitless and we as a company are working actively not to be just an investment bank but to be a business solution provider.

What sectors will you rather not play big in 2020, and what sectors are you still bullish?

No doubt, we are very weary of operators in the Oil & Gas, Aviation and Hospitality sectors, they are clearly the worst hit sectors. The outbreak has eroded not just their profitability but also their revenues by more the 60 percent on average.

However, we believe rebound will be sharp ones normalcy is restored across the globe. Also, we have some level of concern for the banks, due to their credit exposure to these sectors. But as mentioned above, the pandemic has provided more opportunities for Telecommunications, Consumer essentials & personal hygiene, Healthcare services and medical supplies, as well as Internet service providers, due to the growing demand for their key products and services. Furthermore, we see a lot of prospects in the agriculture sector, e-commerce, digital marketing and logistics

Thursday 21 May, 2020

BUSINESS DAY

15

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equity Market: Investors gravitate towards the Consumer Goods sector

T

he equities market took a bearish turn after two consecutive weeks of gains. The broad index declined by 0.7percent week-on-week (w/w) to close at 23,871.3 points, bringing the year-to-date (YtD) loss to -11.1percent.

A l s o, i nve s t o r s l o s t N90.7billion, as market capitalisation clos e d at N12.4trillion. In terms of activity, average volumes and value traded were down 44percent and 49percent, to N1.9billion and 185.9million units, respectively.

Across the sectors that we cover, we observed a positive performance in two out of five.

The Consumer goods sector (+2.3percent) stood out, as UNILEVER (+20.9percent) and NESTLE (+4percent) gained.

The Oil and Gas sector ( + 1 . 6 p e rc e nt ) f o l l ow e d , supported by MOBIL (+9.9percent) and TOTAL (+6.8percent). On the other hand, the Industrial goods sector (-2.2percent) closed lower, dragged by DANGCEM (-4.3percent) and BUACEMENT

PAT down 71.4percent to N2.3billion, dividend of N6.7/ share declared), TOTAL Q12020 (Revenue down 9.3percent to N70.2billion and a Loss after Tax of N163million), and finally, LAFARGE Q1-2020 (Revenue up 9.8percent to N63.7billion and PAT from continuing operations up 28percent to N8.1billion), all filed their quarterly earnings reports with the NSE during the week.

This week, we expect the equities market to remain tepid as the global and macroeconomic environment remain lukewarm. However, we expect market players to react to more Q1-2020 earnings released.

Money Market: Auction rates for 91 & 182-Day Bills increase In the previous week, overall system liquidity was buoyant, evident by the significant decline in average interbank funding rates open buy back (OBB) and overnight (OVN) to 3.1percent from 7.9percent in the preceding week. Notably, inflows during the week were in form of OMO maturities (N209billion) and TBills

(-0.9percent). This was followed by the Insurance sector (-0.6percent) due to sell offs in AIICO (-5.4percent) and WAPIC (-3percent). Finally, the Banking sector depreciated by -2bps on the back of ACCESS ( - 2 . 3 p e rc e n t ) a n d U B N (-8.6percent).

Elsewhere, investors sentiment was downbeat, as market breadth came in at 0.4x vs 2.1x in the preceding week.

AIRTEL FY-2019/20 (Revenue: up 11.2percent to $3.4billion, PAT down 4.2percent to $408million, dividend of 3cents/ share declared), NESTLE Q12020 (Revenue down 0.9percent to N70.3billion, PAT down 12.9percent to N11.2billion), TOTAL FY-2019 (Revenue down 5.1percent to N292.2billion,

maturities (N33.8billion), while only Tbills sales (N142.8billion) was outflowed.

At the Nigerian Treasury Bills (NTB) primary market, stop rates for the 91-day (2.50percent versus 1.85percent previously) and 182-day (2.85percent versus 2.50percent previously) i n c re a s e d s i g n i f i c a n t l y , while the 364-day remained unchanged at 3.84percent.

Similar to previous auctions, demand remained strong, with N165.6billion subscription, vs N33.8billion offere d.

Accordingly, N142.8billion was allotted, in line with the DMO’s revised strategy to increase domestic borrowing by taking advantage of the depressed market rate. Also, the CBN was in the market for OMO, to sale

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N70billion worth of bills. While demand was strong across all tenors, with total subscription at N344.2billion, no sale was made.

At the secondary market for TBills, excess funds from the unmet demand at the auction filtered in, causing average yield to decline by 38 basis points (bps) to 2.28percent. Similarly, given the failure of the OMO auction and a large amount of foreign portfolio investors with idle funds - waiting on dollar supply from the CBN – the performance of secondary market for OMO bills was bullish. Notably, average OMO yield fell by a whopping 163bps to 8.45percent.

This week, we expect system liquidity to tighten slightly, as no OMO maturity is scheduled to hit the system, with only N8.5billion expected from Bond coupon payments. Our position of tighter liquidity is also buttressed by the bond auction taking place, as well as at least one OMO auction to be floated by the CBN, to mop up liquidity.

Bond Market : Average Eurobond yield falls 43bps In the previous week, s entiments at the lo cal secondary bond market were largely bearish, as investors were taking profit and raising liquidity in anticipation of the primary auction scheduled next week. On a w/w basis, average FGN bond yield increased by 33bps, to end the week at 10.55percent.

At the secondary Eurobond market, the sustained recovery in global crude oil prices fuelled demand for Nigeria’s sovereign Eurobonds. As a result, average yield on sovereign Eurobonds fell by 43bps w/w, to 9.97percent.

The positivity also flowed into the corporate Eurobond segment, with average yield declining by 66bps w/w, to settle at 13.04percent.

This week, we expect the Eurobond market to continue to track the performance of the crude oil market. Also, following the approval to increase local borrowing, the DMO released the revised Q2 2020 FGN bond issuance calendar. Notably, for June-2020, the government is set to increase amount on offer from N60billion to N165billion.

For this week, the May-2020 bond auction is set to take place, with a total of N60billion across 5yrs, 15yrs and 30yrs tenor.

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

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

E-mail: iheanyi.nwachukwu@businessdayonline.com

Economy and Market

Investors brace up for turbulent week as risks to stocks’ rally remain Iheanyi Nwachukwu

N

igerian stock investors should still brace up for turbulence in the market this week, as some of the risks to its sustained rally persist.

Currently, many investors are watching the progress of Nigeria’s states in recent gradual reopening of their economies without fueling a resurgence in Coronavirus (Covid-19) cases.

A pile-up of worrying domestic and international news prompts these investors to pull back on equities after the record rally in April.

Among others, the reoccurring risks to investors decisions to raise equities bet on the Nigerian Stock Exchange include outlook on 2020 economic growth, crude oil price, concerns on FX supply, dwindling corporate earnings, corporate job losses, etc.

The stock market ended the trading week to Friday May 15 on a negative note as uninspiring performance in heavy weighted counters like Dangote Cement and MTNN dragged the All Share Index southward.

“We expect the market to witness the same sentiment in the next session”, said equity research analysts at FBN Quest.

The domestic bourse had retreated after two consecutive weeks of gains.

Also in their opinion, Cordros research analysts said market risks remain on the horizon “due to a combination of the increasing number of Covid-19 cases in Nigeria and weak economic conditions.”

“Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks”, they added.

Stock nvestors on the Nigerian Bourse had pricedin risks to Nigeria’s economic growth as petro dollar income dwindled.

Naira was seen weakened on the black market to N450/$ as dollar demand

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increas e d from foreign investors and importers with payment obligations that accumulated amid hard currency shortages triggered by an oil price crash.

Meanwhile the naira was seen rangebound on the official and over-the-counter spot markets as bidders resisted weakening the currency since the majority of dollar supply is from the Central Bank.

Though, last Friday the price of Brent crude oil rose to $32.50 as new data pointed to a rebound in demand around the world as more countries begin gradual easing of economic lockdown.

In t h e t ra d i n g w e e k ended May 15, the NSE All-Share Index and Market Capitalisation both depreciated by 0.72percent to close at 23,871.33 points and N12.441 trillion respectively.

Summary of price changes shows 32 equities appreciated in price lower than 39 equities in the preceding week.

Twenty-eight (28) equities depreciated in price, higher than 22 equities in the preceding week, while 1 0 3 e q u i t i e s re m a i n e d unchanged, higher than 102 equities recorded in the preceding week.

All other indices finished lower with the exception of NSE Main Board, NSE CG, N SE Pe n si o n , N SE ASeM, NSE AFR Bank Value, NSE Mer i Grow th, NSE Consumer Goods and NSE @Businessdayng

Oil/Gas which appreciated by 1.29percent, 1.52percent, 0.74percent, 0.36percent, 1.65percent, 4.76percent, 2.25percent and 1.56percent respectively.

The market had also ended last week with total turnover of 926.418 million shares worth N9.768 billion executed in 20,910 deals by investors on the floor of the Exchange, in contrast to a total of 1.662 billion shares valued at N18.205 billion that exchanged hands the preceding week in 28,791 deals.

The Financial Services i n d u s t r y ( m e a s u re d by volume) led the activity chart with 676.072 million shares valued at N5.053 billion traded in 10,753 deals; thus contributing 72.98percent and 51.73percent to the total equity turnover volume and value respectively.

The Conglomerates i n d u s t r y f o l l ow e d w i t h 71.117 million shares worth N399.502 million in 445 deals; and the Consumer Goods industry, with a turnover of 48.835 million shares worth N1.569 billion in 3,497 deals.

Trading in the Top Three Equities namely, FBN Holdings Plc, Guaranty Trust Bank and Zenith Bank Plc. (measure d by volume) accounted for 335.075 million shares worth N4.061 billion in 4,885 deals, contributing 36.17percent and 41.58percent to the total equity turnover volume and value respectively.

16

Thursday 21 May 2020

BUSINESS DAY

DEBT MANAGEMENT OFFICE NIGERIA After

Before

Lokoja - -Okene My investment helped in building that road

Put your money where it works for you Invest in FGN Sukuk today and enjoy a low risk investment, attractive returns and infrastructural development.

Financial Advisers: Lotus Financial Services Limited and FBNQuest Merchant Bank Limited Receiving Banks: First Bank of Nigeria Limited, Jaiz Bank PLC, Stanbic IBTC Bank PLC, Sterling Bank PLC, Taj Bank Limited, Unity Bank PLC, Zenith Bank PLC

Open From 21st May - 2nd June 2020 For more information, please visit www.dmo.gov.ng or email enquiries@dmo.gov.ng www.businessday.ng

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@Businessdayng

Thursday 21 May 2020

BUSINESS DAY

17

Live @ The Exchanges Market Statistics as at Wednesday 20 May 2020

Top Gainers/Losers as at Wednesday 20 May 2020 LOSERS

GAINERS Company

Opening

Closing

Change

DANGCEM

N147.5

N150

2.5

ZENITHBANK

N15.85

N16.5

0.65

BUACEMENT

N31.8

N32.4

0.6

Company

Opening

Closing

Change

WAPCO

N11.3

N11

-0.3

ACCESS

N6.6

N6.55

-0.05

UNITYBNK

N0.52

N0.5

-0.02

N0.58

N0.57

-0.01

N0.31

N0.3

-0.01

GUARANTY

N23.3

N23.85

0.55

WEMABANK

STANBIC

N32.5

N32.85

0.35

UNIONDAC

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

24,452.23 5,195.00 436,838,465.00 5.410

Global market indicators FTSE 100 Index 6,067.16GBP +64.93+1.08%

Nikkei 225 20,595.15JPY +161.70+0.79%

S&P 500 Index 2,978.15USD +55.21+1.89%

Deutsche Boerse AG German Stock Index DAX 11,223.71EUR +148.42+1.34%

Generic 1st ‘DM’ Future 24,552.00USD +394.00+1.63%

Shanghai Stock Exchange Composite Index 2,883.74CNY -14.84-0.51%

12.743

Dangote Cement, Zenith, BUA Cement, others spur equity market’s N130bn gain ...BUA Cement proposes N1.75kobo dividend amid N66.2bn pre-tax profit in FY’19 Stories by Iheanyi Nwachukwu

M

ore investors at the Nigerian Stock Exchange (NSE) on Wednesday May 20 renewed their buy decisions in favour of some mid/large cap stocks like Dangote Cement Plc, Zenith Bank Plc, BUA Cement Plc and GTBank Plc. Investors bargain mood amid relatively less supply of these value stocks and others impacted positively on pricing with corresponding effect on value of listed stocks on the Bourse. Investors booked N130billion gain.

While investors continue to see value in Dangote Cement, and the banking counters, they also saw the need to make the list of those that will qualify for BUA Cement Plc’s proposed dividend of N1.75kobo for its full year ended December 31, 2019.

BUA Cement released its 2019 audited results for the period ended December 31, 2019.

Key highlights of the results show revenue grew by 47.5percent to N175.5billion from N119billion in 2018. Profit before tax grew by 69.1percent to N66.2billion. Profit after tax declined by 5.4percent to N60.6billion.

Net Assets grew by 17.8 percent to N363.7billion from N308.6billion in

2018.

The company’s proposed dividend of N1.75kobo is payable to shareholders on October 23.

Its share price rose to

N32.40k on increased bargain.

As buying interest in a number of mid/large cap stocks continues to rise, it signposts a renewed interest at the equities space.

While the domestic market extended its winning streak, barring any external shock, analysts anticipate another bullish session on Thursday, though profit taking on some of the gains made recently cannot be overruled.

The share price of Dangote Cement Plc increased from N147.5 to N150, after adding N2.5 or 1.69percent. Zenith Bank also increased from N15.85 to N16.5, adding 65kobo or 4.10 percent.

BUA Cement rose from N31.8 to N32.4, adding 60kobo or 1.89 percent.

While the value of GTBank stock increased from N23.3 to N23.85, up 55kobo or 2.36percent.

The Nigerian Stock Exchange (NSE) All Share In-

dex (ASI) increased further by 1.03percent at the close of trading session on Wednesday May 20.

The NSE ASI rose from 24,202.87 points recorded the preceding trading day to 24,452.23 points.

Likewise, the value of listed stocks increased from N12.613trillion to N12.743billion, up by N130billion.

The stock market’s year-to-date (YtD) negative returns moderated to -8.90percent.

In 5,195 deals, equity dealers exchanged 436,838,465 units valued at N5.410billion. Zenith Bank, Access Bank, Guinness Nigeria, UBA and GTBank were actively traded stocks on Wednesday.

NSE, IFC to host virtual seminar on impact Amolegbe emerges as New President of of Covid-19 on women in workplace Chartered Institute of Stockbrokers

R

ecent reports from bodies such as the United Nations suggest that the Coronavirus (Covid-19), will have differential socioeconomic impacts on men and women, with women predicted to face more negative impacts. Issues such as this will be closely examined in an upcoming webinar hosted by the Nigerian Stock Exchange (NSE) in partnership with the International Finance Corporation (IFC) under the Nigeria2Equal Programme. The webinar with the theme, “Gender Implications of Covid-19: Supporting Women as Employees in the New Normal” is targeted at female professionals and C-Suite Executives, and will hold on Monday May 25, 2020. Interested participants should register at www.nse.com.ng/webinar.

Speaking to the critical need to amplify these issues, the Head, Shared Services Division, NSE, Bola Adeeko said, “In the present home-based work, female employees are likely to experience a significant burden

on their time given the multiple care responsibilities for family members while striving to meet job targets. In recognition of the threat that this poses to the treatment of women in the workplace, we have partnered with the IFC to emphasize the need for deliberate action and proffer actionable solutions to Nigerian corporates on how we can protect and support female employees even as we navigate this new terrain.”

Adeeko will serve as co-host of the event alongside Country Manager, IFC Nigeria, Eme Lore Essien. The event will also feature thought leaders across

Bola Adeeko www.businessday.ng

business, academic and the civil society spaces including: Head, Trading Business Division, NSE, Jude Chiemeka; Director, Sustainable Business Initiative, University of Edingburgh, Professor Kenneth Amaeshi; Founder, Women at Risk International Foundation, WARIF, Anita Kemi DaSilva; Country Head, Human Capital, Stanbic IBTC, Funke Amobi; and Chief Executive, CSR-in-Action, Bekeme Masade-Olowola.

It would be recalled that the NSE announced its strategic partnership with IFC on the Nigeria2Equal Initiative at its 2020 International Women’s Day symposium earlier this year. The three-year project will see the NSE and IFC collaborate to reduce employment and entrepreneurship gaps in Nigeria through the private sector. The program will support the private sector to increase women’s participation as leaders, employees, customers and entrepreneurs through favourable workforce policies and practices.

T

he Chartered Institute of Stockbrokers (CIS) has announced the election of Olatunde Amolegbe as its new President and Chairman of the Governing Council, succeeding the incumbent President, Adedapo Adekoje after the Institute’s colourful maiden virtual Annual General Meeting (AGM).

Amolegbe, an accomplished investment analyst, and a Fellow of the Institute was until his election, the First Vice President.

Oluwole Adeosun, the Second Vice President, has become the First Vice President while Oluropo Dada, the Chief Executive Officer, Network Capital won the keenly contested election to emerge the new Second Vice President. In a statement by the Institute’s Registrar and Chief Executive, Adedeji Ajadi, the following members were re-elected to the Council: Garba Kurfi, Chiemeka Jude and Edoka Nkoli while the trio of Babarinde Sunday, Martins Olaolu and Momoh Mohammed were elected.

By the institute’s conven-

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tion, Adekoje will formerly hand over to Amolegbe at a later date in a high profile ceremony, called investiture.

In his valedictory speech, Adekoje who assumed office as the President in April 2018 expressed satisfaction that his administration was able to achieve landmark projects despite the inclement operating environment. He attributed this to divine intervention and unflinching support of every member of the Institute. He pledged to continue to support the Institute in whatever capacity and urged members to rally round the in-coming administration for sustainable achievements. “ The operating environment was, and still is, very challenging for our members, as a result of which only about 25percent of them are able to pay their annual subscriptions to the institute. On top of this, the general macroeconomic situation of the country also meant that getting grants from benevolent institutions became very difficult. “ We tasked ourselves in Coun@Businessdayng

cil, financially and otherwise; sacrificed a whole lot of our normal privileges, and like true Generals, led the battle from the front. By so doing, we gave inspiration to other members who came out to serve in various committees and other who expressed their support in various other ways. “ It gives me exceeding fulfilment to note that I am leaving the office of President with a solid foundation laid for the financial recovery of the institute and our renewed march towards the restoration of the Securities and Investment profession as the major driver of the Nigerian economy well on course.

CHANGE OF NAME

I, formerly known and addressed as OluwaYemisi Gbemisola Omowunmi Nnamdi-Manuel, wish to be known and addressed now as OLUWAYEMISI ÓMÒBÓLÀŃLÈ OMOWUNMI GBEMISOLA OLUWASAKIN. All other document remain vialed.

General public please take note.

18

Thursday 21 May 2020

BUSINESS DAY

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@Businessdayng

Thursday 21 May 2020

BUSINESS DAY

19

FEATURE Sunmonu to extend Wapic Insurance legacy of Excellence

O

ver its 62 years of existence as a corporate entity, Wapic Insurance Plc, may never have had a more definite plan for its future than at this present time. In the last 8 years the company has benefited from a comprehensive corporate transformation programme led by one of Africa’s distinguished business leaders, Aigboje AigImoukhuede CON in his then capacity as Board Chairman.

Following Aig’s retirement in April this year the Company’s Board of Directors and future direction will be led by Mutiu Sunmonu CON, another talented leader in the African business community.

Today Wapic Insurance is equipped financially and managerially to compete favourably for insurance sector leadership. The company is totally free from the burden of unpaid claims, outdated operational processes, weak capital base and low brand awareness.

Wapic Insurance has totally transformed and is positioned for extra-ordinary exploits in the second phase of its growth agenda.

The man to lead this new phase of transformation, Mutiu Sunmonu CON, succeeds Aig-Imoukhuede as Chairman of the company’s Board of Directors. He is not a newcomer to the art of leading organisations to achieve outstanding performance and distinction. Over the last three decades, Sunmonu has established himself as a re-

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spected private sector leader and has become a highly sought-after boardroom player in Africa.

Sunmonu’s track record and multi-sectoral experience are expected to be warmly embraced by Wapic’s shareholders. It is inevitable that after Aig-Imoukhuede’s outstanding innings, shareholders would want another capable leader to succeed him and sustain the Wapic’s transformation program. With the lot falling on Sunmonu, shareholders are certain t h a t t h e i r i nv e s tments are secure, and Wapic Insurance will continue to grow in leaps and bounds.

The confidence in Sunmonu, a former Managing Director and Country Chair of Shell Petroleum Development Company in Nigeria, is well placed. It is a valid deduction from his glittering profile and rich history of performance, locally and internationally.

In h i s n e w ro l e Sunmonu is expected to drive Wapic Insurance’s strategic vision at board level while working with the management team, the company is expected to occupy a top 3 industry position and become a regional leader. It is therefore certain that whilst Sunmonu’s job is cutout for him, he has the capacity to build on the achievements recorded during AigImoukhuede’s 8 year tenure as Chairman of Wapic Insurance Plc and take the company to even greater heights.

Sunmonu will focus on providing purposeful leadership in his usual style. As the Chairman @Businessdayng

of Wapic Insurance at this period when governments, businesses and individuals across the world are facing uncertainties because of the ravaging effect of COVID-19, Sunmonu will bring his scenario analysis and contingency planning skills from Shell to deliver results in unusual conditions and situations.

Fo r a v i s i o na r y to lead the Board of Wapic Insurance on the back of his multidisciplinary and variegated professional experiences garnered across industries over 4 decades, can only mean that the company is in good hands. It is a rarity to experience Board leadership succession that matches the quality and profile of Wapic’s baton exchange between AigImoukhuede and Sunmonu. The succession process is a testament to business leaders who have focused on building entities that will outlast them.

Sunmonu is one of the finest and brightest home-bred Nigerian graduates. He graduated from the University of Lagos in 1977 with a first-class degree in Mathematics and Computer Science. After 36 years of commendable service, Sunmonu retired as Managing Director of SPDC, and Country Chair of the Shell Companies in Nigeria.

After his tour of duty as the Country Chief Executive at SPDC, he was appointed the Chairman of the Board of SPDC companies in Nigeria. He is also the current Chairman of the Board of Julius Berger, Imperial Homes Mortgage Limited as well as Petralon Energy Limited and SanLeon Energy Uk.

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Thursday 21 May 2020

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

You got served!

…Substituted service of court processes through social media: looking beyond covid-19 or not to grant the relief sought.

This is underscored by the theme that our legal system is premised on the concept of ‘notice’. Very often, we begin each application with ‘motion on notice’, which drives this point home. Thus, an applicant seeking an order for substituted service must explain why he/she believes that the address proposed for service is a current and valid one.

Ultimately, the question the courts will ask is whether the party seeking to effect service by substituted means has shown that the method proposed will have some likelihood or a reasonable possibility of bringing the document to the other party’s attention.

SIXTUS IWUOHA

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ubstituted service orders by social media are becoming increasingly common. These orders reflect the reality of the “new normal” and today’s methods of communication, which are increasingly electronic. Many of such orders are not reported and are based on affidavit evidence which confirms the facts relating to the defendant’s social media or email accounts. By their nature, applications for these orders are rarely opposed. As a result, the reported jurisprudence does not paint a complete picture of the frequency with which courts permit service by substituted means through these new and novel means. Social media platforms such as Facebook, Twitter, Instagram, WhatsApp and LinkedIn are likely more frequently the subject of substituted service orders than the case law would otherwise suggest.

Functional utility of substituted service As a general rule, a party should be personally made aware of claims against him/her within a timely manner. Substituted service is the exception rather than the rule. The exception applies only where the

plaintiff has shown that reasonable efforts have been made to serve a defendant personally and that it will be impractical to serve by face-to-face or hand-delivered means. Impractical is not a synonym for inconvenient.

Without dabbling into the propriety or otherwise of substituted service on certain fictional entities, the essence of substituted service is to convey to the relevant

party the notice of the pending case in which he/she is involved and the date he/she is required to appear in court, since it is difficult to serve through formal/ personal means. The rules relating to substituted service are designed to permit a certain degree of discretion and flexibility. However, a judge is required to consider the rights of all parties, not simply the applicant, in deciding whether

What do the Rules say?

The High Court of Lagos (Civil Procedure) Rules 2019 provides for service of an originating process by substituted means. Specifically, Order 9 Rule 5 (1) states: “Where personal service of an Originating Process is required by this Rules and a Judge is satisfied that prompt personal service cannot be effected, the Judge may upon application by the Claimant make such order for substituted as may seem just, including service by electronic mails.”

Paragraph 11 of the Lagos State draft Practice Directions on remote hearings further provide

that service of court processes may be effected by email, WhatsApp or as otherwise directed by the court.

The corresponding provision in the High Court of the Federal Capital Territory, Abuja (Civil Procedure) Rules 2018 is worded differently and contemplates service through social media. Order 7 Rule 11 (2) (e) (i) states: “Every application to the court for substituted or other service, or for the substitution of notice for service shall be supported by an affidavit setting forth the grounds upon which the application is made.

Where it appears to the court (either after or without an attempt at service) that for any reason prompt service cannot be conveniently effected, the court may order that service be effected either by: Email or any other scientific device now know or later developed and courier service or any other means convenient to the court.”

By far, the National Industrial Court of Nigeria (Civil Procedure) Rules 2017 (“NIC Rules”) contains elaborate and expansive provisions for service of court processes through channels other than formal/personal means. For example, a considerable portion of Order 7 of the NIC Rules is Continues on page 22

Economic fallout of COVID-19 means a reduction in legal spend for many organisations - Experts …As they discuss the new face of legal practice LB CORRESPONDENT

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xperts at the online event organised by the Nigerian Bar Association Section on Business Law (NBA-SBL) Law Firm Practice Management Committee, have said that the economic fallout of the coronavirus pandemic could mean a reduction in legal spend for many organisations.

Speaking during the session on ‘Driving Law Firm Resilience through Technology’, John Edokpolo, Lead Commercial Attorney for Microsoft, Middle East and Africa (MEA) Emerging Markets, disclosed that businesses including those not severely affected by the pandemic are putting a freeze on operating

expenses and legal spend is not left out.

He observed that business owners were cutting cost and

Templars advises on biggest

looking to pay less, without comprising efficient legal services.

According to him, the clients want their lawyers/legal advisors

Senate introduces Bill to legalise virtual court proceedings

INSIDE transaction in Africa

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to be proactive and revealed that one way to achieve this and still drive efficiency was to go digital.

“This is the time for law firms to stand up as trusted advisors to their clients, by providing proactive legal services. Many law firms now provide free advice on their websites and through newsletters on COVID-19 related legal challenges. Firms that are not, should begin to do so. Your clients expect it,” he said.

Edokpolo thus urged both modern and traditional law firms to toe the line of many 21st century businesses who have established themselves online, as everything else was online.

“Law firms who want to survive, will have to ‘ride that wave’.

And as they go remote, the

A-z of corporate reorganisations - types of restructuring

benchmark should be, “do we have to go into the office for anything?” They need to ensure that their staff have all the resources required to ensure that they do not have to go into their offices to meet their client’s needs. The basic requirements include; hardware such as laptops, internet modems and backup power; basic communication software, many of which are free and secure and remote accesses to data.”

Move from Communication to Collaborative tools Participants also noted that whilst many firms have operated with digital tools, others Continues on page 23

Emergency economic stimulus bill 2020: the need for a more inclusive package 23

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Thursday 21 May 2020

BUSINESS DAY

DEALDAY

BD

Templars advises on biggest transaction in Africa

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op commercial law firm, Templars has advised an assortment of 31 lenders on a precedent-setting US$3 billion multi-tranche corporate financing provided to Nigeria LNG Limited (NLNG) for the development of its Train 7 Expansion Project.

The financing, which is supported by substantial cashflows from NLNG’s existing six-train LNG plant, is record-setting for being the first time ever that a multi-sourced corporate finance lending would be utilized to fund an LNG project anywhere in the world.

The US$5.7 billion project is scheduled for commissioning in 2025 and will include a new liquefaction unit, an 84,200m³ storage tank, a 36,000m³ condensate tank and three gas turbine generators. It is expected to increase NLNG’s production capacity from 22 to 30 million tonnes per annum, thereby placing the company among the top five producers and exporters of LNG in the world.

A consortium comprising leading engineering contractors, Saipem, Chiyoda and Daewoo has been appointed EPC contractors with responsibility for detailed design, engineering and construc-

tion works on the project.

The lenders include three export credit agencies, Export-Import Bank of Korea (KEXIM), Korea Trade Insurance Corporation (K-SURE) and Servizi Assicurativi del Commercio Estero (SACE); two regional development finance institutions: African Export-Import Bank and Africa Finance Corporation; 16 international commercial banks under an international commercial facility tranche; and 10 Nigerian commercial banks, under a Nigerian commercial facility tranche.

Commenting on the transaction, Templars Managing Partner Oghogho Akpata said “We are pleased to have played a role in creating this

first-of-its-kind financing technique, which happens to be the largest financing on the continent so far in 2020. It continues a trend of Templars advising on a majority of the largest and most complex infrastructure projects in the Nigerian market, be it in the area of gas, pipelines, power, roads, ports, telecom infrastructure or petrochemicals.”

Commenting fur ther, partner and Finance Practice Group Head Chike Obianwu added that “Quite apart from its size and the uniqueness of the hybrid corporate finance technique being used on a deal of this nature, this was a standout deal for a number of other reasons…. And it is quite remarkable that

the parties were able to pull this off in the middle of the COVD-19 pandemic and a particularly trying period for the Nigerian economy …. It has been a pleasure to have contributed to the success of the transaction and we wish NLNG all the best with the development of the project.”

The Templars team on the transaction was led by Chike Obianwu and Finance partner Zelda Akindele, with support from Oghogho Akpata, Senior Associate Modupe Dabiri and Associates Benita Ogbodo, Ebuka Ogbodo and Bernard Ehigiamusor.

Compliance law partner Emmanuel Gbahabo advised on environmental law and compliance issues; Senior Associate Sesan Sulaiman and Associate Promise Madubuobu advised on tax issues; whilst Disputes partners Godwin Omoaka, S.A.N. and Igonikon Adekunle together with Senior Associates Victor Igwe and Stanley Nweke-Eze provided support on complex enforcement-related issues.

A large team of lawyers from the London, Milan and Seoul offices of White & Case led by the London-based partners, Jason Kerr, David Baker and Richard Hill acted as international counsel to the lenders.

INDUSTRYFILE Olumide Akpata, others mourn with Judiciary as Yobe state loses Chief Judge

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ncomiums have continued to pour in, as members of the Nigerian bar join the judiciary to mourn the passing of the Chief Judge (CJ) of Yobe State, Hon. Justice Garba Musa Nabaruma, who died on Monday May 18th 2020 at an Abuja hospital.

Condoling with the Judiciary over the death of Yobe State Chief Judge, NBA Presidential aspirant, Olumide Akpata expressed his “deepest sympathies to the entire Nigerian judiciary, particularly the Yobe State Judiciary, on the passing unto glory of the Chief Judge”.

He said, “Justice Garba Nabaruma played a significant role in shaping Nigeria’s jurisprudence. “ The s er vice of the learned Chief Judge to the Judiciary and indeed the legal profession in Nigeria, was invaluable and unprecedented in both quality and length in Yobe State. Until his death, he was considered the longest-serving Chief Judge of Yobe State and in that position, he played a substantial role in shaping Nigeria’s jurisprudence”.

Akpata added that Nabaruma’s death was a sad

Late Hon. Justice Garba Musa Nabaruma

event not just for the judiciary but also the NBA, more especially, the branches in Yobe State that were geographically closer to the learned Chief Judge and under his jurisdiction.

He continued, “I also express my sympathies to the family and friends of the late Justice G.N. Nabaruma.

I pray that the Almighty God will comfort his family, friends, colleagues, and all of us during this difficult time, and also give everyone that is affected by his death the fortitude to bear this loss. May he continue www.businessday.ng

to rest in the bosom of God forever and ever,” Olumide Akpata said.

In his condolence message, another aspirant to the office of the NBA President, Dr. Babatunde Ajibade, SAN, expressed shock and great sadness at the news of the demise of the CJ. “I had interacted closely with Justice Nabaruma over the last two years in the course of a national assignment we were both involved in. He was a perfect gentleman, humble and gentle of spirit.

I join the Yobe State Judi-

ciary, the Yobe State Bar and his family and loved ones in praying for the peaceful repose of his soul. I pray that God will grant his family and loved ones the fortitude and strength to bear this loss”.

A close relative and ward of the late CJ who is also a lawyer expressed sadness at the passing of his guardian, saying, “I have lost a father, a guardian and a mentor.

He told me few days ago “Giwa, I will see you when I get home” but he passed on yesterday. ADIEU”.

Legal Business gathered that the late CJ who was sworn-in as Yobe’s Chief Judge in 201, passed away at the National Hospital, Abuja after a prolonged illness and was buried according to Islamic injunctions on, Tuesday, 19th May, 2020.

Nabaruma is considered to be among the longest serving Chief Judge since the creation of the State on 27th August, 1991. May his soul Rest in Peace.

Stories by THEODORA KIO-LAWSON (LB Editor). Mails to: legalbusiness@businessday.ng

https://www.facebook.com/businessdayng

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LegalBusiness

WIPO launches national essay competition in Nigeria

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he World Intellectual Property Organisation (WIPO) Nigeria office has launched a national intellectual property essay competition for students (graduate and undergraduate) of tertiary institutions across Nigeria. The organi-

Senator Ihenyen (Lead Partner, Infusion Lawyers).

Another member of the panel of judges, Senator Iheyen, who is also Lead Partner at Infusion Lawyers, disclosed that the competition will hboost IP awareness among young people and challenge

sation is inviting registered students of polytechnics, universities and colleges of education to submit essay entries which discuss the topic “Making innovation work for a green future in Nigeria”.

Accordingly, a panel of 15 expert judges have been appointed by the WIPO Nigeria Office to assess the entries.

Speaking about the importance of the competition, a member of the panel and Managing Partner, GO Sodipe & Co., Prof. Bankole Sodipo said that the importance of the WIPO National essay competition cannot be overemphasized. “It is an intellectual harvest which helps to harness the prowess of the participants and enriches the current IP right regime,” he said.

The panel of judges for the competition are, Dr. Muhammad Murtala Aminu (Faculty of Law, Usmanu Danfodiyo University, Sokoto); Dr. Desmond Oriakhogba (Faculty of Law, University of Benin); Professor Ruth Okediji (Jeremiah Smith Jr. Professor of Law, Co-Director Berkman Klein Center, Harvard Law School); Professor Muhammed Tawfiq Ladan, (Director General, Nigeria Institute of Advanced Legal Studies); Stella Ezenduka (Registrar, Patents and Industrial Designs Registry); Tunde Mukaila Mustapha (Charge D’Affaires, Nigerian Permanent Mission to the United Nations, Geneva); Engr. Dr. Umar Buba Bindir (Bindir Knowledge Center, Yola, and Former DirectorGeneral, NOTAP); Toyosi Alabi (Partner, Olaniwun Ajayi LLP); Uzoamaka Emerole (Senior Associate, ACASLaw); Chinwe Ogban (Senior Associate, Jackson, Etti & Edu); Professor Bankole Sodipo (Managing Partner, Chief GO Sodipo & Co.); Altayework Tedla Desta, Head, WIPO Distance Learning Program; Martha Chikowore (Counsellor, WIPO Academic Institutions and Executive Program); Faith Aboyeji (Doctoral Candidate, RMIT); and,

them to think deeply about innovation.

Chinwe Ogban, senior associate, Jackson Etti and Edu described the competition as “a unique opportunity for young minds to engage topical issues in the IP space”, which, according to Uzoamaka Emerole, will afford them an opportunity to “recognize the value of intellectual property and its significance to the future of [Nigeria’s] economy”.

According to the organisers, winners of the competition will receive a wide range of professional and learning opportunities drawn from the WIPO Academy and from several partners in the field of intellectual property.

Entries, which should be no longer than 1, 500 words should be sent to nigeria. office@wipo.int on or before midnight of May 26, 2020, with the subject title: Initial.surname_WIPD Essay Competition (e.g. T.Olayemi_WIPD Essay Competition).

Winners will be announced in June.

It will be recalled, that the WIPO Nigeria Office in collaboration with the International Trademark Association (INTA), recently facilitated a webinar on April 27, 2020, to explore the role that trademark law could play in ensuring a green future for Nigeria. The webinar, moderated by Busola Bakinson, Senior Associate, Jackson Etti & Edu, also featured, Shafiu Adamu Yauri, Registrar, Nigeria Trademark Registry, Davidson Oturu, Partner, Aelex Nigeria, Uche Nwokocha, Partner, Aluko and Oyebode and Prof. Adejoke Oyewunmi, Professor, University of Lagos, as panellists.

In an engaging discussion, attended by over 150 participants, the panelists discussed the concepts of green innovation, examined some examples of trademark law in advancing green technologies and products, and reflected on some possible administrative and policy opportunities towards supporting future growth in this area.

@Businessdayng

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Thursday 21 May 2020

BUSINESS DAY

IN-LAWS

BD

LegalBusiness

Senate introduces Bill to legalise virtual court proceedings SOLOMON AYADO, Abuja

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he Senate on Tuesday moved to alter the nation’s constitution, introducing a bill seeking to legalise virtual court proceedings.

The bill titled “1999 Constitution of the Federal Republic of Nigeria (Alteration) Bill, 2020 (SB. 418)” is sponsored by Senator Michael Opeyemi Bamidele (APC Ekiti Central).

The bill which was passed for first reading is aimed at ensuring the much-needed corresponding amendment of relevant provisions of the Constitution of the Federal Republic of Nigeria, 1999 as amended, in giving legal teeth to virtual court proceedings.

There have been concerns that virtual court proceedings may not be constitutional – a situation which has grossly affected judicial proceedings across the country.

However, the proposed alteration includes: Section 36 sub-section (3) which states…

“Provided that nothing in

Olisa-Agbakoba

this subsection shall invalidate proceedings of a court or the proceedings of a tribunal relating to matters mentioned in subsection (1) of this section (including the announcement

of the decisions of the court or tribunal) where same is held by remote hearing or any virtual means now in existence or yet to be developed.

“Section 36 subsection (4) is

hereby amended by the addition of sub-paragraph (c) as follows: (c) nothing in the foregoing paragraphs shall invalidate proceedings of a court or the proceedings of a tribunal relating to matters mentioned in subsection (1) of this section (including the announcement of the decisions of the court or tribunal) where same is held by remote hearing or any virtual means now in existence or yet to be developed.

“Section 36 subsection (12) is hereby amended by addition of the following subsection (13): In this section, “remote hearing” means proceedings or hearing of court conducted via zoom, skype, WhatsApp video or any other social media platform or technological innovation,” it stated.

However, Senator Bamidele, the sponsor of the bill explained that section 36 (3) is sufficiently controversial enough now in terms of requirement of public hearing and determination of disputes.

He said if the amendment is not quickly done, the whole judicial functions of the Nation

will remain paralysed.

“It is s a case of emergency now. Upon 2nd Reading, the States can be given three days to make returns so that before the end of the month, the process is completed.

“The National Judicial Council in the wake of COVID-19 pandemic and the inability of Courts to hold courtroom proceedings, had taken steps to ensure continued administration of justice through virtual proceedings in accordance with global best practices, with some State Chief Judges coming out to openly adopt and implement the NJC guidelines.

“However, Nigerian lawyers have been divided over this issue as there has been an ongoing debate among legal practitioners as to whether or not virtual hearing is real hearing as provided for in the Constitution while some are insisting that the word “public” in the Constitution shall continue to mean physical court room or other designated place unless and until the relevant provisions in section 36 of the Constitution are amended,” he said.

…Substituted service of court processes through social media: looking beyond covid-19 Continued from page 20

dedicated to service of processes by electronic means. However, relevant to the extant discourse is the provision of Order 7 Rule 9 which states: “where prompt service of notice or documents authorized to be served by these Rules cannot be effected in any manner provided in this Rule, a party may by motion exparte move the Court for an order of substituted service to be effected by way of posting, publication in the media or any other means possible as the Court may deem effect and just.”

To be sure, some of the ways of effecting service under the NIC Rules include - through email address(es) or any electronic mailing device, as an attachment to an electronic message via the email address provided and/or any other electronic communication and messaging platform.

Unpacking the practical issues O n July 26, 2018, the High Court of Taraba State in Suit No. TRST/11/2018 - Mohammad Awwaldanlami, Esq v. Governor of Taraba State & 24 Ors ordered the service of the originating process and other accompanying processes on the 3rd to 25th Defendants by ‘posting and sharing on social media’. Whilst the ruling is commendable and represents a departure from the norm, the order lacks specificity as social media is an amorphous term encompassing

many interactive online platforms.

With respect, the court (with the guidance of counsel) should have gone further to specify the particular social media platforms where the processes should be served.

It is fundamental that a court in making an order should be conscious and wary of the nature of an order made in order to avoid a diminution of the vast powers of the court, the image of the court and the exposure of its authority to ridicule. Therefore, orders of court must be devoid of vagueness, it must be clear and explicit on what it contains and the parties it will affect.

Another important issue in an application for substituted service is how to satisfy the court that the social media platforms identified by an applicant is in active use by the defendant. Active use will include status updates, picture uploads or liking of other posts.

If the account is private, recent profile picture changes should suffice. Put differently, can it be reasonably expected that the court processes will come to the attention of a party if they are notified about them on the identified platforms? It is suggested that where an applicant has not satisfied this requirement in the affidavit, the court should refuse to exercise its discretion as any order made may turn out to be in vain.

In the context of Facebook, Canadian courts have considered the following factors which are by no means exhaustive: 1. whether the Facebook acwww.businessday.ng

count has the same name as the person sought to be served; 2. whether the Facebook name is a common name; 3. whether the Facebook profile includes photographs, indicating that the account holder and person sought to be served are the same; and 4. whether recent private messages were exchanged with the Facebook account holder.

The onus is on the applicant to show on proper evidence that the method proposed will have some likelihood or a reasonably possibility of bringing the proceedings to the party’s attention. This test is an important one as it brings an air of reality to the process. Unless the court is satisfied that there is a reasonable possibility that notice of a proceeding will reach a defendant when an application permitting substituted service is granted, the point of the entire exercise is lost.

In an Australian decision, the court refused substituted service on the defendant’s Facebook page preferring instead, service to a PO Box where the defendant had his credit card statements sent. In its reasoning, the court rationalized that anyone could create a false Facebook account and, in this case, some of the information on the Facebook page did not satisfy the court that the defendant had created the Facebook account.

In certain cases, and for privacy reasons, a Canadian court ordered substituted service through the private message feature on the Facebook account of the person

https://www.facebook.com/businessdayng

to be served, to avoid unnecessary public exposure or embarrassment. This may be explored by applicants and the court in sensitive and private proceedings such as matrimonial causes and incidental proceedings arising thereunder such as the custody of children.

On the African continent, the South African court has recognised that while Facebook is primarily used as a social network, it could be used for other useful functions such as tracking individuals as well as to obtain essential information. The court eventually ordered substituted service through a personal Facebook message and directed the applicant to publish a notice in that regard in a local newspaper should the defendant lack access to electronic communication devices.

Although Facebook continues to be the most common form of social media, there have been successful rulings by the courts for substituted service using WhatsApp, Twitter, LinkedIn and Instagram. In any event, the courts’ openness to allow new technologies to be used to achieve service is promising and signals a shift in how lawyers interact with technology.

Recent trends in Nigeria Nigerian courts have equally embraced the innovation that technology brings in the area of substituted service of court processes during this pandemic. On March 12, 2020, the High Court of Lagos State in Suit No. LD/865/2011 – Vizada Networks v. Itclick Net@Businessdayng

worx Limited & Ors ordered the substituted service of a garnishee order nisi on the judgment debtors via email, Twitter, LinkedIn and Facebook. Consequently, service was carried out on the judgment debtors by email (in the case of the 1st and 2nd judgment debtors), and on Twitter, LinkedIn and Facebook (in the case of the 3rd and 4th judgment debtors). Counsel to the judgment creditor effected service on Twitter through the law firm’s official Twitter account.

Ultimately, in order for a court to rely on social media as a mechanism of effective service, once an applicant has convinced the court that substituted service is appropriate, they must then convince the court that the account holder is the same person as the person sought to be served, and if it is, that the account has been used recently, which the court will accept as evidence that the account has not been abandoned.

Epilogue Just as service by email took time to become accepted by the courts and the legal community, so will service by social media. In today’s society, nearly everyone uses some form of social media application. These applications may provide a useful option for service when the traditional methods are unsuccessful especially in this period of lockdowns and social distancing. As technology continues to develop, it is important that lawyers are flexible and adaptive in order to best serve their clients.

Thursday 30 April 2020

BUSINESS DAY

MERGERS &ACQUSITIONS

BD

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LegalBusiness

MERGERS & ACQUISITIONS

A-Z of corporate reorganisations types of restructuring to sellers, as capital gains tax is not chargeable in respect of the sale of shares. Also, all the assets, contracts, and intellectual property of the target are transferred to the buyer automatically, making the acquisition less disruptive and expensive.

Asset purchases on the other hand can be complex and time-intensive due to the additional effort needed in finding and transferring only the specified assets less liabilities. Asset sales also come with higher tax consequences such as capital gains tax. Also, buyers may end up losing important non-transferable assets such as permits or licenses.

OLAYEMI ANYANECHI

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n Volume 1 of this Series, we discussed the concept of corporate reorganisations, a redesigning process that changes the ownership structure of a company to increase its long-term profitability. We also mentioned that while mergers and acquisitions may be the most popular form of corporate restructuring, other methods of corporate reorganisation exist.

This Volume will discuss other types of corporate reorganisation, with the aim of giving readers options in structuring transactions, for optimal results. The choice of a structure will ultimately be guided by costs and time efficiency, quantum of the distributable reserves, tax implications and level of regulatory oversight.

Arrangement “Arrangement” refers to any change in the rights or liabilities of members, debenture holders or creditors of a company, other than a change effected under any other provision of CAMA or by unanimous agreement of all parties affected thereby. Arrangement may be on sale of the company’s property during members’ voluntary winding up; or a compromise between a company and its creditors and/or members.

Arrangement on Sale Arrangement on Sale is a method whereby the members in general meeting pass a special resolution for the company to be wound up, and a for liquidator to be appointed who is authorised to sell the whole or part of the company’s assets to another organisation in consideration or part consideration of fully paid shares or other interests in the transferee and to distribute the same in species among the members of the company according to their rights in liquidation.

Under an arrangement on sale, a dissenting member or creditor

may have his interest purchased by the liquidator at a mutually agreed value (in a private company without alien participation) or as valued by the Securities and Exchange Commission (SEC) (in a private company with alien participation or public company). An application need not be made to the Federal High Court (FHC) save where a member obtains an order (i) within one year of the special resolution, granting relief on the ground that the company’s affairs have been or are being conducted in an illegal, unfairly prejudicial or oppressive manner; or (ii) for creditors’ voluntary winding up.

be affected by the scheme. At the court-ordered meeting, a special resolution to sanction the scheme will be passed, and a report of the meeting will be sent to the FHC for an order approving the scheme.

The FHC refers the scheme to the Securities and Exchange Commission (SEC) to investigate the fairness or otherwise of the scheme, and upon approval by SEC, the scheme is sanctioned by the court.

Any form of arrangement or compromise may be achieved under this procedure, provided it can be conceptualised by the company, it is not illegal, and can achieve the requisite majority of votes.

Demerger A demerger may be described as the opposite of a merger. It is the separation of business activities within a group or conglomerate, to be run under separate management, while still retaining the same shareholders.

Demergers may be structured by a parent company declaring a dividend in specie of the shares of the subsidiary being demerged; pursuant to a reduction of share capital; by way of a scheme of arrangement; or by an arrangement on sale. Section 7(a) of the Finance Act 2019, removed the double taxation effect of Excess Dividends Tax on dividends paid out of retained earnings and franked investment income, thereby paving way for more of demergers by way of declaration of dividend in specie in future.

Arrangement or Compromise Arrangement or compromise is a method whereby a company comes to an arrangement with its creditors and/or members to accept less than what they are entitled to as full satisfaction of their interest.

Here, the company is required to make an application to the FHC to convene a meeting of the creditors or shareholders who may

Mergers and acquisitions Mergers and acquisitions may be structured as a share purchase, an asset purchase or a joint venture.

In a share purchase, the buyer acquires majority of the shares of the target company from its shareholders. Consideration for this acquisition may be in cash or the shares of the acquiring company, an issue of loan notes or an amalgam of the foregoing.

Share purchases are beneficial

Takeover A takeover involves an acquiring company making a bid for a publicly listed company, leading to the acquirer becoming the majority shareholder of the target. The Investment and Securities Act (ISA) and the SEC Rules and Regulations provide for a person who – either alone or together with persons acting in concert with him - acquires shares, which carry more than a prescribed threshold of the voting

rights of a public listed company, to make a Mandatory Takeovers (MTO) Bid to the holders of any class of equity share capital in which such person or any person acting in concert with him holds shares.

Squeezing out dissenting shareholders One of the benefits of a scheme (of arrangement, compromise or merger) or. take-over bid is the ability to “squeeze out” dissenting shareholders. A squeeze-out allows an acquirer to acquire the shares of minority shareholders who would rather not part with their shares, once the acquirer can obtain the requisite majority of votes - 75% by way of poll in a scheme and 90% of the shares in a take-over bid.

Conclusion Having given a broad overview of other possible methods of achieving a corporate re-organisation, the next article in the Series drill down a little deeper on the methods to provide more context on what typically informs a choice of one method over the other, before going ahead to discuss the reconstruction process and how advisers like to proceed.

At the end of the Series, readers should have an understanding of what reorganisations entail, gain insight about the legal framework, transaction structures, issues and how they may be addressed, and an overall broad view of the mechanics of reorganisations in Nigeria.

The information and opinions in this publication are provided for general information only. They are not intended to constitute legal or other professional advice. If you would like additional information, please contact the author at o.anyanechi@seftonfross.com. © 2020 Sefton Fross is a leading full-service law firm in Nigeria internationally recognised for its expertise in corporate, commercial and mergers and acquisitions.

Economic fallout of COVID-19 means a reduction in legal spend for many organisations Continued from page 20

have only just come onboard as a result of COVID-19 restrictions.

Tools commonly adopted in this period are video conferencing tools such as zoom and skype. However, it is important to move from such communication software to collaboration tools that enable instantaneous communication and information sharing between law firm team members and between law firms and their clients.

They maintained that in considering what collaborative tools to choose, firms should opt for those that have multiple func-

tionalities - such as chat and email, as well as access to productivity tools, that enable them work from a single platform.

Free is good but paid could be safer.

The legal and technology experts also advocated for more reliable and paid solutions and less use of free software solutions, as it was advisable to invest in paid solutions, with an added layer of security.

Panelists in Session two, which addressed ‘the changed dynamics of managing law firms post COVID-19, Sylvia Nzekwu, principal consultant, Shan consulting limited made a case for www.businessday.ng

strong leadership, culture shift and a change mindset, which she said were fundamental elements for these times.

“So many changes are taking place in these COVID-19 times.

Employers and employees alike are adjusting to the realities of the new normal. Strong leadership is required now more than ever before to guide team members towards a change mindset and the culture shift that is needed to thrive in these times,” Nzekwu said.

She advised law firm management to develop a plan and establish processes for how their firms will run, stating that this was a

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good time to establish guidelines and performance and productivity metrics where none existed.

“It is particularly important so employees who are “remote” and operating in uncharted territory know exactly what is expected of them. Employee health, safety and security must also be prioritized at this time,” she said.

Other top burner issues during the webinar was ‘Financial management’, as experts agreed that it was important for firms to keep an eye on cash flow and maintenance of the books, ensuring that the financial state of the firm stayed healthy. “Everyone needs as everyone is in it @Businessdayng

together”.

During the Q&A session, young practitioners were advised to Upskill or risk irrelevance. “Monitor trends and upskill in line with what your clients require. Fortunately, since everything is now digital or at least going digital, there are now various learning opportunities available online. Make use of them.” Nzekwu said in closing.

The NBA-SBL Law Firm Practice Management webinar was moderated by Kunle Ajagbe, who is the 1st Vice Chairman of the committee. Other members in attendance were the Chairman, and the 2nd Vice, Kanyin Anire

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Thursday 21 May 2020

BUSINESS DAY

PERSPECTIVE

BD

LegalBusiness

Emergency economic stimulus bill 2020: the need for a more inclusive package JOHN-PAUL ARINZE NSOFOR

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usinesses all over the world are battling the pandemic resulting from the novel coronavirus. The present crisis which started as a humanitarian crisis has transformed into system failure, having monumental economic consequences.

Steps taken by governments all over the world to curb the spread of the virus, by restricting movements and shutting down businesses, prompts a stimulus package to avoid bankruptcy and insolvency. Nigeria, having taken a hint from other countries, has proposed the passage of The Emergency Stimulus Bill 2020 into law to absorb the looming economic impact of the pandemic on the lives of its citizens. Amongst other things, the Bill seeks to provide temporary relief to both employers and employees. The main thrust of the Bill is to ensure the security of employees who may otherwise be retrenched as a result of the negative economic impact of COVID-19. The Bill intends to achieve this by proposing a tax incentive to employers from employees’ tax obligation.

The Bill (which also proposes deferred mortgage repayment and import relief to the health sector) prescribes in Section 3 that an employer who maintains the same employee “status” without retrenching its staff from 1st March 2020 to December 31, 2020 shall be entitled to receive a value of 50% of the total personal income tax either paid or payable by its employees during the period. A qualifying criterion for eligibility is that the employer must be a registered business under Part A & B the Companies and Allied Matters Act (CAMA), excluding those in the upstream petroleum sector. This automatically excludes a majority of Nigerians who hold their assets in defective forms with ownership rights not adequately recorded/registered. Majority of these businesses include vendors hawking wares on streets, or in building or shades.

Personal income tax (or PAYE) is a tax obligation borne by employees; the liability, when it becomes due and payable, forms part of the revenue of the government. As such, the government is at liberty to determine how best to distribute its revenue for the overall benefit of its citizens. Whilst the philosophy underpinning the Bill is unassailable, it was inelegantly drafted; creating some ambiguities, one of which arises from the use of ‘rebate’.

The Bill employed the use of the word ‘rebate’ in granting the incentive and in defining the meaning of the word, creates confusion. Section 5 of the Bill defines ‘rebate’ as 100% refund of employers’ income tax which shall be 50 per cent of PAYE Tax due or paid on the employees of such employer. The definition creates some ambiguities. In one breath, it could be interpreted to imply that PAYE is paid by the employer on behalf of the employee. In another breath, the word ‘rebate’ as defined by the Bill could be understood to mean a refund to the employer of its income tax paid or payable either under the Companies Income Tax Act or Personal Income Tax Act in the value of 50% of PAYE due or remitted by the employer. Perhaps, ‘rebate’, which is a refund on excess tax paid, should be replaced with a word that has

a broader meaning (for example ‘incentive’) to better convey the purpose of the Bill.

Sailing away from the inherent ambiguities, the Bill suffers a defect in its purpose, in that unregistered businesses or employers are excluded from benefits derivable from the Bill. This disregards the glaring statistics that a greater percentage of Micro, Small and Medium Enterprises (MSMEs) are unregistered and these businesses are the backbone of economic growth in many countries, including Nigeria.

In a 2017 IMF Report, the informal sector was a major contributor to the country’s economy, accounting for a significant portion of employment and 65% of the nation’s GDP. According to a recent report by the Ministry of Industry, Trade, and Investment, Nigeria has over 37.07 million MSMEs, and they account for more than 84% of total jobs in the country. Conversely, in 2019, the Acting Registrar of the Corporate Affairs Commission revealed that the total number of entities registered with the Commission from its inception stood at 3.1 million (as at 2019). It is evident from the foregoing statistics that most businesses are unregistered, therefore without defined liability.

Most businesses in Nigeria are in the informal sector without any

governmental record. The result is that this palliative fails to cater for about 65% of businesses in Nigeria, thereby defeating the purpose of the Bill.

The palliative provided by the Bill is tied to PAYE tax liability. Unregistered businesses are outside the tax net and are unable to meet the condition enabling access to the incentive. It is therefore proposed that a novel but innovative palliative be made accessible to these businesses. Registration may be made a pre-requisite for accessing the palliative. It would create an opportunity for the government to get more businesses registered, thereby capturing them within the tax net. This may be achieved by commencing a nation-wide free registration of small scale businesses by the Corporate Affairs Commission (CAC) in collaboration with the Presidential Enabling Business Environment Council (PEBEC). That way, the government would exchange palliatives for improved data and contingent future revenue. In the long run, the government will harness great benefits as improved data will assist governmental planning and future economic projections.

These palliatives may be in the form of small scale loans, toolscapital, payroll support, foodstuff and tax forgiveness or temporary exemption. And this may constitute additional palliatives covering all businesses whether registered or not.

The exclusion of the upstream petroleum sector from benefitting under the emergency economic stimulus package is equally of great concern. The current low oil prices constitute a serious problem for oil investors in Nigeria particularly those in the upstream sector. Considering the dwindling price of oil in the global market, the resultant effect on oil producing companies in the upstream sector should be a major concern to the government. In fact, the Oil & Gas sector has been considered by many analysts as the worst hit by the COVID-19 pandemic.

Due to the downturn in the demand of oil globally, many of the oil producing companies have

been unable to generate income to fulfil their financial obligations to their employees. This could result in massive layoff of employees in the service of companies in the upstream sector. Excluding oil producing companies for the palliative notwithstanding the resultant effect of the pandemic on their businesses appears not to have been well thought out. In order to sustain the continuous participation of the players in the upstream sector of the Oil & Gas industry and consequently prevent massive layoff of staff, it is strongly recommended that the palliative should be extended to companies under the Petroleum Profit Tax Act. Other innovative palliatives (i.e. temporary payroll support) may equally be made available to this sector.

Notwithstanding the defect in the Bill, the various steps being taken by the government to ensure a sustainable economy during and after the pandemic are commendable. Notable amongst these, is the CBN’s 50 Billion Targeted Credit Facility, which like the Bill, appears equally limited in its coverage. Thus, whilst the Bill is a welcome development and indeed a bold step by the Nigerian government, the purpose of the Bill will inevitably be defeated if unregistered businesses are excluded.

As is clear from the analysis above, a larger percentage of businesses in Nigeria are unregistered.

If the palliative only benefits very few businesses (registered businesses), large-scale business collapse and unemployment is unavoidable. It is therefore recommended that the Bill be reviewed to introduce a palliative that will also cater for the informal sector/ unregistered businesses. That way, a greater percentage of businesses will be saved from collapse, and the Bill would have achieved its purpose.

John-Paul Arinze Nsofor is a member of the Tax Team at Perchstone & Graeys LP

INDUSTRYFILE Maritime Law Association constitutes Nigeria Admiralty Law and Procedure Reform Committee LB Editor ollowing the steady decline of admiralty law and practice over the years, as a result of sub-optimal procedural rules and poor judicial interpretation of substantive law, the Nigerian Maritime Law Association (NMLA) is leading efforts towards the reform of key procedural rules and substantive law in the sector.

In a statement signed by the president of the association, Chidi Ilogu, SAN and honorary

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secretary, Emeka Akabogu, the association announced the constitution of the Nigeria Admiralty Law and Procedure Reform Committee to contribute to this effort.

In its statement, the committee observed that judicial decisions have not been consistent with standard global expectations while speed, which is at the heart of functional admiralty litigation, has taken a backseat.

“In the result, a number of significant maritime interests are no longer keen on having Nigeria www.businessday.ng

as a jurisdiction for adjudication of their disputes,” it read in part.

Charged with the responsibility of boosting industry confidence in dispute resolution and efficiency for admiralty law and practice in Nigeria, the new committee is expected to propose initiatives and implementation strategies for repositioning admiralty law practice with particular focus on achieving speed in filing, assignment, hearing and determination of admiralty matters.

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The committee’s terms of reference also includes the implementation of a modern fit-for purpose Admiralty Registry; review of procedural rules, in particular - Admiralty Jurisdiction Procedure Rules and the Federal High Court Civil Procedure Rules; reform of substantive law, in particular – the 1999 Constitution Admiralty Jurisdiction Act, and the Federal High Court Act. Among the members of the committee are, Jean ChiazorAnishere (Co-Chair), Osuala @Businessdayng

Nwagbara (Co-Chair), Omolola Ikwuagwu, Nelson Otaji, Chisa Uba, Babatunde Ogungbamila, Adolphus Nwachukwu and Adedoyin Afun, Dr. Echefu Ukattah, Nonso Azih, Olukayode Dada and Kashimana Tsumba.

With an Advisory team that includes Prof. Gbolahan Elias, SAN, Dolapo Akinrele, SAN, Dr. Wale Olawoyin, SAN and Olumide Sofowora, SAN, the committee is expected to commence work immediately and submit its report by the 25th of May 2020.

Thursday 21 May 2020

Innovation

BUSINESS DAY

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

25

TECHTALK

Broadband Infrastructure

Bank IT Security

Facebook builds monster subsea cable to connect Nigeria, 22 other countries in Africa, ME FRANK ELEANYA

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acebook said it has par tnered w ith major African and global operators to build 2Africa, “the most comprehensive” subsea cable which would serve the African continent and Middle East region.

The 2Africa project which it describes as “a transformational cable” is one of the largest subsea cable projects in the world and would interconnect 23 countries in Africa, the Middle East, and Europe.

The longest subsea cable in the world is the SEAME-WE3 or South-East Asia - Middle East - Western Europe 3 an optical submarine telecommunications cable linking those regions.

Nevertheless, Facebook’s 2Africa, at nearly 37,000 kilometres long is nearly equal to the circumference of the earth. The project is also a competition nightmare as it would provide nearly three times the total network capacity of all the subsea cables serving Africa today.

Nigeria has five major fibre cable operators; MainOne (10Tb), SAT3/SAFE (800Gb); WACS (14.5Tb); Glo1 (2.5Tb); and ACE (5Tb), with a combined capacity of 32.800Tbps.

As of 2019, Nigeria had only deployed 38,000 kilometres of fibre optic cables leaving it with a deficit of 82,000 kilometres. The country requires around 120,000 kilometres of fibre network

to achieve pervasive broadband coverage.

When the 2Africa cable is completed, Facebook expects it to deliver an expansive internet capacity, redundancy, and reliability

across Africa; supplement a rapidly increasing demand for capacity in the Middle East ; and support further growth of 4G, 5G, and broadband access for hundreds of millions of people. With thrice the capacity of existing cables, Facebook would by far become the largest network operator in Nigeria and Africa.

Facebook’s interest in the internet segment of Africa and other emerging markets has been an open secret.

The company had in 2016 launched its Free Basics (also known as internet. org), a platform that gives developers the opportunity to make their services

and websites available free of cost to those who cannot afford internet access.

The participating websites are stripped of photos and videos and can be browsed without paying for mobile data. The launch came after the famous visit of Mark Zuckerberg to Nigeria and other African countries.

Although Free Basics has not been a smashing success due to the entrance of competitors like Google in providing internet access to the last-mile, Facebook has sustained its interest in the sector by providing different opportunities for tech entrepreneurs in the country.

Nevertheless, with the 2Africa project is taking a more direct approach in Africa than it did in India where it splashed $5.7 billion to purchase 9.99 percent of the digital assets of Reliance Jio, making it the largest minority shareholder in the company.

“The Investment in 2Africa builds on other investments we have made in the region, including infrastructure investments in South Africa, Uganda, Nigeria and the Democratic Republic of the Congo,” said Najam Ahmad, VP of Engineering, Facebook; and Kevin Salvadori, Director Network Investments, Facebook. The

ongoing COVID-19 pandemic has highlighted the importance of connectivity as billions of people around the world rely on the internet to work, attend school, and stay connected to those they care about. 2Africa will be not only an important element for advancing connectivity infrastructure across the Africa continent, but also a major investment that comes at a crucial time for economic recovery.”

On February 2019, Facebook had announced its partnership with MainOne and local state authorities to build an approximately 750 kilometres of open-access fibre deployment in Edo and Ogun States. The project is to provide metro fibre connectivity reaching more than 1 million people. The goal of the project was to connect mobile operators’ base stations and points of presence (POPs), reducing costs and, more importantly, increasing capacity.

“2Africa is a continuation of our ongoing efforts to expand global network infrastructure. We have collaborated with partners all over the world to build several subsea fibre-optic cables that are leading the industry in terms of reach, capacity, and flexibility,” Facebook said

Nigeria’s first logistics marketplace, Dellyman sees double-digit growth amid lockdown FRANK ELEANYA

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ellyman, the pioneer of asset-free logistics marketplace in Nigeria, has seen record growth in all major indices, including a 45 percent increase in the number of active customers to 1,586 between March and April.

While this represents a 91 percent increase from growth in January, it is coming in a period when businesses in other sectors battle with the devastating impact of COVID-19 pandemic.

Logistics is an old sector that has grown over the years to contribute about 3.5 percent to the GDP of 2019. McKinsey in 2018 puts the eCommerce market in Africa at $25 billion and expected to grow to $75bn by 2025. In 2019, Nigeria’s eCommerce market was estimated at about $17 billion. Using an average basket size of $50 and 2 items in a basket, this could easily translate to about 170 million

deliveries annually. Today, the average cost of a lastmile delivery is about $2.70 (N1,200) putting the value of the last mile logistics industry in Nigeria at $460 million.

Asset-free logistics marketplace is a new territory at least in Nigeria. To be sure, a marketplace is an online platform where customers and vendors or owners of products can transact business. Customers are able to access products from multiple merchants or vendors from this single platform.

In that sense, a logistics marketplace is an online space where customers looking for logistics services are able to access the assets of multiple logistics companies in one online market. The logistics marketplace aggregates logistics companies and their assets on a platform so that buyers of logistics services can find logistics services with ease.

Launched in March 2019, Dellyman set out to solve same-day, an age-long prob-

lem in the logistics sector that has had dire repercussions on the profit margins of players in the sector and ecommerce.

“Last-mile delivery is complex and tough and only an understanding of the deep problems faced by the market and service providers can help increase the possibility of same-day or even a next day delivery,” Dare Ojo-Bello, founder and CEO of Dellyman told BusinessDay. Beyond impacting the downline of providers, failures in meeting same-day delivery have also left many individuals, retailers and organisations that placed orders frustrated. According to a survey by Convey, of more than 1,500 shoppers in 2018, about 98 percent said that shipping affects brand loyalty, and 84 percent said they are unlikely to return to a retailer after just one negative experience, a 34 percent increase from 2017.

“The model leverages cutting edge technology that guarantees quick pick up and

same-day delivery; provides increased access to logistics assets through aggregation; delivers an on-demand delivery service while offering a delivery infrastructure to retailers and e-commerce platforms so they don’t have to own logistics assets or technologies,” Ojo-Bello said.

Dellyman’s focus on the challenge has seen it grow its revenue 20 times between January and April 2020 with average monthly growth within the same period averaging 145 percent. The company now targets over 5,000 orders in May alone.

The platform has seen 20 average daily customer acquisition, with at about 38 per cent of the total active customers placing at least one order since coming onboard.

“The numbers we have seen within the past two months is a concrete validation of our business model.

We had initially assumed that it is because of the lockdown alone, but we continue to see even a more increased adop-

tion after the phased easing of the lockdown started. We are now looking to even expand our capacity to be able to keep up with the growing demand,” Ojo-Bello said.

Dellyman also secured a major partnership with fintech firm OPay, to boost its

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

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@Businessdayng

delivery assets by deploying some of the idle motorcycle assets from ORide. This saw an increase in the number of riders on the platform and over 3,000 orders completed by the first week of May 2020 - a 93 percent increase from February 2020.

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FT

Thursday 21 May 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

US arrests two men accused of helping Carlos Ghosn flee Ex-Green Beret and son are wanted by Japanese authorities for allegedly aiding ex-Nissan boss’s escape KADHIM SHUBBER

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he US has arrested two men accused of helping Carlos Ghosn flee Japan last year, in the latest twist of the long-running legal saga surrounding the former Nissan chief executive.

Michael Taylor and his son, Peter Taylor, are wanted by Japanese authorities for allegedly assisting in Mr Ghosn’s dramatic escape in December from Japan where he was on bail awaiting trial on charges of financial crimes.

Mr Ghosn led Nissan for almost two decades before his arrest in 2018. He was accused, among other things, of misstating his compensation. He has denied any wrongdoing and denounced the charges as being part of a plot to oust him from the company.

His escape from Japan was “one of the most brazen and well-orchestrated escape acts in recent history”, US prosecutors said in court filings, involving

Carlos Ghosn, the former chief executive of Nissan, fled Japan last year and currently resides in Beirut, Lebanon © AP

“a dizzying array of hotel meetups, bullet train travel, fake personas, and the chartering of a private jet”.

“Ultimately, Ghosn was hidden in a large black box and whisked out of Japan in the private jet without detection by Japanese authorities,” US prosecutors said.

The two men were arrested on Wednesday — just before Peter Taylor was set to fly from Boston to Beirut, Lebanon, according to the court papers.

Mr Ghosn presently resides in Beirut.

Both Michael and Peter Taylor are due to appear before a federal judge on Wednesday

afternoon.

The Boston US attorney’s office said the men were arrested pursuant to Japanese warrants.

Prosecutors have asked that both men be denied bail while they await extradition, arguing that they are “not just capable of fleeing while on bond” but are “expert[s] on the subject”.

An attorney for Peter Taylor said he had no comment at this time. An attorney for Michael Taylor could not be immediately reached for comment.

Japanese authorities initially issued arrest warrants for the pair in January. In February, Michael Taylor, a former US Army Green Beret, flew from Dubai to Boston, followed by his son the next month, according to the court papers.

Japan subsequently filed requests for their extradition after they returned to the US. On May 6, the US requested arrest warrants for both men.

Prosecutors urged the court not to release either man on bail on the grounds that they could contract coronavirus while in prison, arguing that neither were at high risk. They warned of “serious diplomatic repercussions” if the men were granted bail and absconded.

Michael Taylor has previously served 14 months in prison for his involvement in a kickback scheme linked to $54m of military contracts in Afghanistan.

Stocks turn higher as focus turns to pace of reopenings Investors regain confidence after suspending doubts about progress on a coronavirus vaccine PHILIP STAFFORD, ADAM SAMSON, PHILIP GEORGIADIS AND HUDSON LOCKETT

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tock markets and oil prices pushed higher on Wednesday as investors grew more hopeful about the prospect of a global economic recovery from the coronavirus.

The optimism was underlined by continued demand for sovereign debt of some of the world’s biggest economies. The UK sold debt with a negative yield for the first time while the US prepared its first 20-year bond since 1986.

Nasdaq, the benchmark for high-growth stocks, touched its highest point since midFebruary, rising as much as 1.7 per cent in early trading. The S&P 500 rose 1.5 per cent to its highest level since early March.

Investors shrugged off concerns raised by medical news website Stat on Tuesday, that called into question the rigour of an early-stage trial of a Covid-19 vaccine. Optimism for the vaccine, manufactured by Moderna, stoked a rally in equities markets around the world but the article raised doubts over the speed at which a vaccine could be developed.

European equities caught

the mood, reversing early losses to make strong gains in the last hour of trade. The FTSE 100 in London and regional benchmark Stoxx 600 index both closed up 1.1 per cent.

Crude oil rose on hopes grew that a combination of rising demand and falling supply would boost prices. Brent crude, the international benchmark, was up 1.5 per cent at $35.20 a barrel while West Texas Intermediate, the US marker, rose 0.7 per cent to $32.20 a barrel, its best level since mid-March.

Consultancy Wood Mackenzie estimated that national oil companies would cut exploration budgets by more than a www.businessday.ng

quarter on average in 2020.

Dominic Schnider, an analyst at UBS, said that the “bottoming out process had begun” for commodities.

But he said it would be a slow recovery. “Unlike equities, which are strongly driven by expectations, commodity prices are influenced by actual supply and demand dynamics. On this assessment, nothing has fundamentally changed.”

Investors also continued to draw comfort that long-term debt being issued by governments to support their economies was still in demand. The yield on the UK 10-year gilt fell 0.018 percentage points to below

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0.70 per cent. “[Coronavirus] has prompted governments to take massive fiscal support measures,” said Bastien Drut, a senior strategist at CPR Asset Management, part of Amundi. “As a result, public deficits will widen sharply and sometimes reach historically high levels. The sovereign debt markets will enter a new era.”

However after a surge in April, equities markets have struggled to gain ground in May as investors grapple with a series of unknowns — from the prospects for economic recovery to the likelihood of a new wave of infections as countries lift lockdowns.

MSCI’s broad index of global stocks is up just 0.3 per cent on the month. The spot price of gold rose as high as $1,750 per troy ounce, close to an all-time high.

Analysts remain cautious over whether the easing of lockdowns will derail the success many governments have had in lowering coronavirus infection rates. The reproduction number remains below one — the key threshold below which the virus recedes — in many big economies, such as the UK, Germany, France, Spain and Italy, according to figures collated by JPMorgan Chase. @Businessdayng

The Wall Street bank, however, warned in a note to clients on Wednesday that “at the moment, nowhere in Europe has the resources to do the kind of widespread testing that is needed” to track and trace new coronavirus cases effectively enough to staunch a second wave.

“This suggests that if exit strategies continue to be aimed at preventing a second wave of infection — by keeping R [the reproduction rate] below one — restrictive social distancing measures will need to remain in place for an extended period,” JPMorgan said. “The easing in lockdown measures that we are now seeing risks a second wave of infection.”

Asian stocks were mixed.

Japan’s Topix index rose 0.6 per cent on Wednesday, while Australia’s S&P/ASX 200 rose 0.4 per cent. Hong Kong’s Hang Seng rose 0.1 per cent and China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 0.5 per cent.

The rise in Japanese shares came after data showed that core machinery orders — viewed as an indicator of capital spending in the coming months — fell less than analysts expected in April.

Thursday 21 May 2020

BUSINESS DAY

27

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

UK sells negative-yielding government bonds for first time

‘Symbolic moment’ coincides with debate on whether BoE should move to negative rates ADAM SAMSON AND PHILIP STAFFORD

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he UK broke new ground for a bond sale on Wednesday, borrowing at negative rates for the first time in a sign that investors expect more economic stimulus from the Bank of England.

The UK sold £3.8bn of three-year gilts at a yield of minus 0.003 per cent, the Debt Management Office said. The slightly negative yield means investors who hold the debt to maturity will get back less than they paid, when accounting for regular interest payments and the return of principal.

The oversubscribed sale reflects rising expectations that the BoE will increase its £200bn bond purchase programme next month to prop up the economy and try to lift wilting inflation back up towards its 2 per cent target. Policymakers are also facing questions over whether they might cut benchmark interest rates to below zero, a step the central bank has rejected.

Oliver Blackbourn, a portfolio manager at Janus Henderson Investors, said the negative yielding debt sale was “more of a symbolic moment” as investors were becoming ac-

A drop in inflation has highlighted how the BoE may need to take further steps to lift price growth © Getty

customed to negative yields on government bonds around the world.

He added that markets were still adjusting to a disinflationary shock from the coronavirus crisis. “Demand for nominal bonds, even at these levels, may persist. This issue is not going away,” he said.

The UK sold a one-month bill at a negative yield in 2016, but this represents the first time it has sold a conventional longer term bond at a yield

below zero. The UK drew orders of £8.1bn in Wednesday’s auction, 2.15 times the amount the DMO was looking to sell.

The robust demand underscores the appeal of gilts, long considered to be a haven due to the UK’s strong creditworthiness. It also suggests that fears that the large increase in borrowing the UK has undertaken due to the pandemic could deter investors are misplaced.

The BoE chopped interest rates to a record low of 0.1 per

cent in response to the economic shock of coronavirus, but it has resisted following peers such as the European Central Bank into the negative rates they introduced long before the crisis struck.

Asked about negative rates at a parliamentary committee on Wednesday, Andrew Bailey, BoE governor, said the central bank did “not rule things out as a matter of principle” but he did not “rule things in either”.

Andrew Wilson, chairman

of global fixed income at Goldman Sachs Asset Management, said: “Negative interest rates are a tool that has limited value and the escape from negative rates is extremely challenging, as the ECB is discovering.”

Headded:“Ourviewisthatnegative rates are not the way out of this.”

The pressure on the BoE is mounting, especially in light of data released on Wednesday showing annual UK consumer price inflation almost halved to 0.8 per cent last month, the lowest level in almost four years. Much of the decline was due to a plunge in the price of petrol, but some economists have warned the shock to demand caused by lockdowns could cause a wider disinflationary trend. The BoE has a longer term target of keeping inflation within 1 percentage point of 2 per cent.

“I can’t think of an economy where negative rates are a worse idea than the UK,” said Kit Juckes, a strategist at Société Générale.

“The economic benefits are dubious but the power of a cocktail of negative rates and massive quantitative easing to weaken the currency seems clear and if the pound falls enough, it will make QE harder,” he said.

US bank regulator finalises controversial community lending rule Change to act governing loans in poor communities comes as concerns rise about economic fallout ROBERT ARMSTRONG

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he US Comptroller of the Currency, one of the three key bank regulators, has finalised controversial changes to rules on bank lending in poor communities, just as comptroller Joseph Otting was reported to be stepping down from his post.

The reform was one of Mr Otting’s key regulatory priorities.

The OCC declined to comment on his plans.

Legislation aimed at ensuring that banks make loans in the neighbourhoods where they take deposits was enacted under President Jimmy Carter in 1977. The Community Reinvestment Act was written with bank branch networks in mind, and a CRA “score” is considered when banks seek regulatory approval to expand or merge.

The OCC’s changes to the CRA are meant, in part, to update it for an era where branchless banking is more prevalent.

But the law has long been treated

Joseph Otting, the US comptroller of the currency, was questioned by lawmakers about the wisdom of changing community banking rules during the Covid-19 crisis © EPA

as untouchable by Democratic lawmakers.

In a meeting of the Senate Banking Committee last week, Mr Otting and other senior regulators were repeatedly pressed www.businessday.ng

on the wisdom of changing the Act during the Covid-19 crisis.

Sherrod Brown of Ohio, the senior Democrat on the committee, told Mr Otting that “your

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proposal will undermine access to credit by those who are already under served.”

Mr Otting replied that “the goal [of the reforms] is to in@Businessdayng

crease the dollars that flow through the CRA”.

US banking regulators often announce rule changes in unison, but the two other major regulators, the Federal Reserve and the Federal Deposit Insurance Corporation, did not join the OCC in announcing the new CRA guidelines.

Fed Governor Lael Brainard, a former Obama administration official, criticised the OCC’s reform proposals in a speech in January. Mr Otting later described the Fed’s approach as “partisan”.

Mr Otting’s departure was first reported by the Wall Street Journal.

Prior to leading the OCC, Mr Otting was a bank executive, serving as chief executive of OneWest bank and vice-chairman of US Bancorp. At the time Mr Otting led OneWest, it was owned by an investment group headed by Treasury Secretary Steven Mnuchin.

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Thursday 21 May 2020

BUSINESS DAY

BUSINESS TRAVEL

ACI, IATA call for urgent financial assistance to protect jobs and operations Stories by IFEOMA OKEKE

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irports Council International (ACI) World and the International Air Transport Association (IATA) have today come together to call for governments to quickly grant financial relief to assist airport operators and airlines during the unprecedented COVID-19 crisis and support the essential connectivity the industry will provide for economic recovery.

The industry is united with governments around the world in efforts to stop the spread of the virus, and, in the face of massive government imposed travel restrictions, the industry is doing all it can to maintain air cargo operations vital to supporting global supply chains, including medical shipments critical to fighting COVID-19.

The economic impact of these measures on all involved in the global air transport industry has been severe. With passenger demand plummeting to unprecedented levels, revenues are falling beyond the ability of even the most extreme cost-cutting measures to mitigate. Airports and airlines continue to face a financial liquidity

crisis.

The current state of the global air transport industry risks the loss of millions of jobs. The aviation industry supports 65.5 million jobs around the world, including 10.5 million people employed at airports and by airlines, and supports $2.7 trillion in world economic activity.

As the COVID-19 pandemic continues to unfold, airports and airlines around the world are engaged in a battle to sustain essential operations and to preserve jobs.

ACI and IATA are calling for urgent balanced support to the industry via: taxation relief, including alleviation of

payroll taxes, corporate taxes, concession fees or other government incomes from the industry loans, loan guarantees or direct support to maintain financial liquidity across the aviation ecosystem.

Some governments have recognized the urgency of action but time is running out for other governments to provide the necessary financial relief to keep the whole industry viable and ready to support a balanced recovery including ground handlers and other service providers at airports.

“The financial impact of the current crisis is unlike anything we have ever seen

and requires urgent action by governments to assist the aviation industry to protect jobs, ensure essential operations, and plan for recovery,” Angela Gittens, ACI World Director General said.

“Urgent tax relief and direct financial assistance that is to the benefit of the entire aviation ecosystem is needed to help preserve millions of jobs, protect essential operations, and foster a balanced recovery. Preserving the continuity of operations for airports and airlines and protecting aviation jobs today will result in a faster economic recovery tomorrow.”

Alexandre de Juniac, IATA’s Director General and CEO said the situation could not be more dire.

“Governments will depend on aviation to be ready to lead an economic recovery when this pandemic is behind us,” Mr. de Juniac said.

“Governments must act now with financial lifelines that only they can provide for airlines and airports to see them through these extraordinary times. Airlines and airports are in this together. The more financially stable our airport partners are, the more they can help the industry to drive a recovery in air travel that will jump start the global economy.”

SAHCO takes over British Airways ground handling contract

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he Skyway Aviation Handling Company (SAHCO) PLC, a Public Limited Liability company, and a subsidiary of SIFAX Group has taken over the ground handling services of British Airways.

By this development, SAHCO PLC will be providing Passenger and Ramp Handling services to British Airways at the Nnamdi Azikiwe Airport, Abuja and Murtala Muhammed International Airport, Lagos.

In a statement sent by SAHCO, it stated that it has been able to attract and retain the confidence of British Airways due to the seamless, safe and speedy service delivery which SAHCO is known for prompting British Airways to move her Passenger and Ramp Handling services to SAHCO. The move took effect with the handling of the evacuation flight which occurred on the 8th of May, 2020.

British Airways (BA) is the flag carrier airline of the United Kingdom, Headquartered at Waterside, Harmondsworth, near its main hub at London Heathrow Airport.

“In recent times, many foreign airlines have moved their aviation ground handling operations to SAHCO so as to enjoy being handled by a loyal and dedicated workforce who are well trained and whose integrity is undoubtable, delivering their activities in line with global best practices.

“With constant investment in modern aviation ground support equipment fitted with the latest technology; a team of engineers that can build ground support equipment from locally sourced materials which is the first of its kind in Nigeria; a team that is versed in the best of Departure Con-

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trol systems in the Aviation industry, World Tracer and BRS; world class warehousing services; unrivaled customer friendly service delivery in a safe, speedy and efficient culture; SAHCO treats its clients as partners,” Uansohia Vanessa Adetola, manager, corporate communications, SAHCO stated.

In the same vein, Air France has signed another warehousing contract with SAHCO at the Nnamdi Azikiwe International Airport in Abuja. This means SAHCO will provide Cargo warehousing service throughout the country for Air France. SAHCO has been handling Air

France’s Cargo Warehousing in Lagos and Port Harcourt which has influenced decision to include the Abuja operations due to their satisfactory first-hand experience.

The clients of SAHCO include the following; Aero Contractors, African World Airways, Air Cote D’Ivoire, Air Peace, Arik Air, Allied Air, Badr Airlines, Bristol Helicopters, Camair-Co, Caverton Helicopters, Dana Air, DHL Aviation, Ethiopian Airlines, Etihad Airways, Emirates Airlines, Execujets, Ibom Air, Inter Air, Max Air, Middle East Airlines, Overland Airways, South African Airways, TAAG Angola, Tarco Airlines, Value Jet, Virgin Atlantic Cargo.

SAHCO is also the recipient of numerous awards both locally and internationally due to its quality service delivery in aviation ground handling operations in Nigeria. SAHCO is an RA3 and IATA Safety Audit for Ground Operations (ISAGO) certified company. These certifications make the company a preferred gateway to import and export to European countries and the world at large.

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Virgin Atlantic announces flying programme for Summer 2021

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irgin Atlantic has announced its flying programme for Summer 2021 with services operating from London Heathrow, Manchester, Glasgow and Belfast.

As countries start to lift travel restrictions and demand for travel begins to return, it is expected that Virgin Atlantic will steadily increase passenger flying in the second half of the year, with a further, gradual recovery through 2021.

In 2021, Virgin Atlantic intends to fly to 24 destinations around the world on a modern fleet of wide-body, twin-engine aircraft comprising of A330-300s, 787-9s, A350-1000s, as well as A330200s before they retire in early 2022 as planned.

Juha Jarvinen, chief commercial officer, Virgin Atlantic commented: “As the Covid-19 crisis stabi-

lises and demand gradually returns, we are looking forward to welcoming our customers back and flying them safely to their favourite destinations. We have taken the opportunity to pause, reflect and reshape our 2021 flying programme looking at efficiencies in our fleet and connectivity across our network, to ensure it is fit for the future, flying to the destinations we know our customers love to fly.

“We’re delighted that our popular Tel Aviv service, which launched in September 2019, will now increase to double daily, whilst regional flying from Manchester, Glasgow and Belfast will continue to play an important part in offering choice to customers and connecting UK travellers to Orlando, Barbados, New York and Los Angeles.”

COVID-19: Women aviators donate items to NAMA

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n a bid to contribute towards flattening the Coronavirus curve especially in the aviation sector, professional women aviators in the industry under the aegis of International Aviation Women’s Association (IAWA) in Nigeria have donated face masks and hand sanitizers to the Nigerian Airspace management Agency (NAMA).

Speaking while presenting the items on behalf of IAWA at the agency’s headquarters in Lagos, NAMA Legal Adviser, Anastasia Gbem said as working mothers who have put in several years in different areas of specialization, their intervention was inspired by the fact that the health of personnel in the aviation industry remained central to the growth and advancement of the industry itself.

Gbem also noted that as a global organization of professional women advancing their careers and promoting Nextgen professionals, @Businessdayng

“IAWA has a strong affiliation and has been networking with the International Civil Aviation Organization (ICAO), International Air Transport Association (IATA), Boeing and other critical stakeholders in the sector towards moving aviation forward.”

Receiving the items on behalf of the agency, Fola Akinkuotu, managing director of NAMA, recalled that from the inception of aviation, the contribution of women in the sector had been legendary, stressing that over time, women had broken several barriers and made useful impacts and contributions which have remained invaluable to the growth and development of the industry.

While appreciating the gesture on behalf of management, the NAMA boss assured that the items would be judiciously used for the benefit of staff in the different directorates and departments of the agency.

Thursday 21 May 2020

BUSINESS DAY

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Thursday 21 May 2020

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Garden City Business Digest How Shell group spent $40m (N12.4bn) to support oil producing communities in 2019 • Healthcare, enterprise development, take significant space Ignatius Chukwu & Kelechi Esogwa

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etails have emerged how Shell group spent $40m or N12.4Bn in 2019 alone in the Niger Delta to support oil communities in critical areas of development.

The group said it has invested over $252m (about N63Bn calculated at different Dollar exchange rates per year) in the oil communities since 2006.

In its 2019 annual performance report just released, Shell said the amount was directed at community-driven driven programmes most of them chosen, awarded and supervised by communities.

The report said the funds were garnered from Shell Companies in Nigeria (SCiN). They include Shell Petroleum Development Company of Nigeria Limited (SPDC); two other wholly-owned Shell subsidiaries; Shell Nigeria Exploration and Production Company Limited (SNEPCo), and Shell Nigeria Gas Limited (SNG); and the Nigeria Liquefied Natural Gas (NLNG) Limited; an incorporated joint venture in which Shell has a 25.6 per cent interest.

Giving details, the report

Osagie Okunbor

disclosed that Shell Companies in Nigeria have invested in healthcare and education initiatives in Nigeria for decades and they continue to support a range of programmes in two types of social investment activities called direct social investment across Nigeria, health, access-to-energy, road safety and since 2018, biodiversity), and community-driven development programmes and initiatives in the Niger Delta through a Global Memorandum of Understanding (GMoU).

The report indicated that there were 39 active Global Memoranda of Understand-

ing (GMoUs) in Abia, Bayelsa, Delta, Imo and Rivers States.

GMoU system replaced the MoU system by handing over decisions and execution of projects to host communities instead of the MoU system which tried to decide and execute projects for host communities with little or no community harmony or satisfaction.

The report said three new GMoUs were enacted and 10 renewed in communities in 2019, which provide a secure five-year funding for communities to implement development projects of their choice.

“Since 2006, a total of $252 million has been disbursed to

communities through these GMoUs.” A highlight of GMoU in action mentioned was in health insurance where the Obio Cottage Hospital in Port Harcourt stands out. It is a community health insurance scheme launched in 2010 to provide secondary healthcare to the Obio host community.

Obio is now a big model being copied elsewhere as many Port Harcourt residents now throng to the centre for services. It has also become the first choice for pregnant women in the oil city.

Shell thus reports that Obio has helped over 27,000 babies safely into the world since it was launched in 2010. The report said: “The programme has seen a five-fold increase in service utilisation to 4,210 patients in 2019 from an average 833 patients in 2017. It has also provided training for over 130 health workers at community, local and state government levels. In addition to this, it has trained 117 volunteers as facility-based extension workers in house-to-house healthcare.

The Oloibiri Health Programme (OHP) is said to include a refurbishment of the Kolo General Hospital, which was inaugurated in 2019.

Shell’s healthcare schemes seem to stretch in different areas and directions. Shell

explained why; “Affordable quality healthcare is a critical enabler to any community.

It improves health indicators and outcomes and strengthens families, educational attainment and business opportunities. Shell has supported community health programmes in Nigeria since the 1980s with equipment and pharmaceutical donations, emergency care and screening services, hospital maintenance and focused interventions on HIV/ AIDS, malaria, cancer and vision care. Today, Shell seeks to increase access to health services, introduce health insurance schemes and strengthen health systems.”

The report named other healthcare schemes as: “Health-In-Motion community care programme; The Community Health Insurance Scheme (CHIS), a partnership between SPDC, Rivers State Government and local communities.

Shell also promoted the top ten innovators in 2018 which has produced strong entrepreneurs. “In 2018, Nigerian Yolo Bakumor Smith, CEO of De-Rabacon Plastics, won the first-ever Shell LiveWIRE Top Ten Innovators Awards for his business.

De-Rabacon is a Nigeriabased plastic recycling and waste management solution

company that recycles endconsumer plastics to viable commercial products such as pavement blocks, buckets, cans, and carpets.”

Testifying, the CEO said; “Shell’s approach to supporting local enterprises to grow and excel is enabling us to scale up our business and focus on designing ecofriendly, energy-efficient and affordable products. Today, my organisation employs 16 people and has recycled over 800,000 tonnes of plastic waste. We plan to achieve two million tonnes by the end of 2020.”

Two Nigerian enterprises were short-listed in 2019 for the Shell Global Top Ten Innovators Awards -- a global competition which highlights and rewards businesses that demonstrate excellence in innovation as well as giving entrepreneurs a chance to shine on a global platform.

There was also Shell LiveWIRE in Ogoniland within a larger livewire national scheme that has transformed about 7,000 lives.

Shell also reported its Humanitarian Relief in the North East and other feats in 2019.

In its access to energy scheme, Shell mentioned the support to All-On to explore alternative energy and off-grid opportunities.

Simeon Nwakaudu waves a wand Port Harcourt

by Boat

IGNATIUS CHUKWU

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he only piece of news capable of and powerful enough to overtake the Gov Nyesom Wike COVID-19 wars (both against the virus and against his many detractors) could only be the death of Simeon Nwakaudu, the governor’s media aide (Special Adviser on Electronic Media).

Several phone calls began across Nigeria, people asking to know if what they heard was true. Facebook pages were full of hints such as; What are we hearing? What is happening in Government House in Port Harcourt?

At last, the Commissioner of Information, Paulinus Msirim, the pastor, issued what perhaps would be his toughest press statement. He announced the death, saying it took place at the Rivers State University Teaching Hospital (RSUTH) which actually is about one year old. Nwakaudu used to relish in releasing statements of steps being taken to establish it.

The Teaching Hospital was built from funds set aside to relocate the UST from Diobu to the Greater Port Harcourt City near the International Airport in Omagwa. Gov Wike stopped the relocation project expected to gulp at least N150Bn and used the deposit set aside for it to

start the teaching hospital at the current site.

The government statement attributed cause of death to ‘brief illness’, something Nigerian comedians say is a killer disease. This one, indeed, was truly brief illness. Newsmen gathered that Nwakaudu was hale and hearty (?) as recent as Friday. By next day, being Saturday, he was said to have slumped.

He was thus rushed to the state-owned teaching hospital where he was believed to have got the best the place could afford. He became stable later to the great relief of his family and the Govt House coomunity. A twist was said to have occurred later that Saturday evening and there was a relapse, requiring a return to the ICU (intensive care unit). This was the situation till Sunday when Simeon Nwakaudu gave up the ghost.

When the statement from the government talked about shock and deep sympathy, no one should understate it. Gov Wike has deep belief in Nwakaudu; in loyalty, in hard-work, in dedication to duty, in focus, and hard punches to the enemy camps, in everything. Nwakaudu sold himself to his job. He never dared to approach his principal from the left. He knew his limits and stayed within it. He never waited to be looked for. He was ever present, ever dutiful.

He treated his principal as if he was meeting him for the first time. Other aides especially in the media section hardly went far.

Gov Wike talks on the go and releases barrages as he does. He does not want anybody to rephrase his thoughts; he wants his mind communicated. Nwakaudu captures his raw thoughts and words and releases them that way.

He has the right punches in the right sizes for every opponent and target. He delivers them the way the boss likes it, raw.

Nwakaudu has his own character, which is to

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tell you the way he thinks it is and straight to your face. He is tireless and fearless. The pen suited this attribute. Wike did not mould Nwakaudu, and Nwakaudu was not molding Wike; each found the other.

The Umuahia Abia State-born young man joined the Pavilion in Makurdi, Benue State, when it was just being set up by the founder, Babs Usigbe, who just left the Benue State government-owned Voice Newspaper as its Weekend Editor. He became one of the strongest reporters who pulled in some of the biggest exclusives in a multi-ethnic state with many contending issues. He joined the state’s university to grab a degree in Masscom and later joined the Guardian as Benue State Correspondent. It was there that someone linked him to then Minister of State for Education (Wike) as media aide. Soon, Nwakaudu left the Guardian and stayed with Wike and they later moved to Port Harcourt in 2014 to fight the 2015 guber election. They won it and repeated the victory in 2019. All these years,

Simeon Nwakaudu

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that thin-looking reporter soon blossomed in stature and status. He however carried both stoically. It is not yet known if there were hidden health issues but who does not have.

Any person close to Gov Wike is a national figure, especially if you are one of his media aides. You will be authoring some of the fiercest and hair-raising statements. Wike takes on anyone and any battle; and you are the one seen to say them as his spokesman. There can be no dull moment with this governor. Nwakaudu was always ready for war.

Perhaps his closest friend was Mike Chukwu, who joined Pavilion about same time, as an editor. Both of them struck a deep chord. Mike later became a Masscom lecturer in the newly established Benue State University; the relationship transformed from Editor-Reporter to LecturerStudent. Mike later joined newly established Ebonyi State University on better scales, but as he felt he had arrived, he died in a tragic way, died in his sleep. Many years later Nwakaudu has been forced to so do. Sad. His family heard his name, and will surely hear his death. His native name for which he was popularly known in Makurdi Onwubiko, meaning, death please oh. Last weekend, death refused the appeal. His surname is Nwakaudu, meaning that begetting a child sounds bigger than acquiring any other property. It also means that when a son dies, the noise would be loud, very loud. Thus, from Benue to Lagos, Abia to Abuja, Imo to Rivers, its all about the demise of the great writer, the great media aide. But, at home, a tree has fallen. In the profession, a giant has crashed. In Govt House, a wall has cracked, a hole has emerged. It is no small matter.

Rest in peace, Simeon! I was there in your first day in journalism; I was there in your last day.

Sure, we will meet again; in heaven.

@Businessdayng

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Thursday 21 May 2020

BUSINESS DAY

Investing in Rivers State AfriTAL in Save Nigeria’s oil and gas: Experts point to urgent steps to save oil economy post-COVID-19 NLNG model should be adopted for reviving refineries Labour drops opposition to privatization but..

No going back to subsidy, remove price modulation, enact a law Urgent need to pass PIB especially the Host Community component Ignatius Chukwu

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xperts in the oil and gas industry rose from a virtual seminar at the week to table a way forward for the sector, pointing to the NLNG model as answer to privatization efforts of the refineries.

The webinar was at the instance of the African Initiative for Transparency, Accountability, and Responsible Leadership (AfriTAL) led by a seasoned oil gas technocrat and labour expert, Brown Louis Ogbeifun, backed by FOSTER. Key outcomes include recommendation of the NLNG model in privatizing the refineries and any other oil related enterprise.

Other highlights include; that Labour is willing to drop opposition to privatization; there should be no going back to subsidy; and that price modulation should not be retained; a law must be enacted to strengthen government pronouncement on subsidy removal; and there is urgent need to pass PIB especially the Host Community component.

On the NLNG model as the way for others, the participants said: “Stakeholders are expected to support and collaborate with the management of the Nigeria National Petroleum Corporation (NNPC) on fixing the refineries using the NLNG model.

This seems the only plausible way of urgently turning around the refineries for profitability and sustainability, which at the end, would make Nigeria exit importation of petroleum products.”

The experts who include top industry unions said the unions were not averse to the deregulation of the downstream sector. However, the deregulation should not be based on dollar and import driven process.

It was agreed that subsidy regimes in the petroleum sector have been abused and has become a major source of corruption, economic sabotage and the hemorrhaging effect is disastrous to the country.

“Therefore, there would be no need to move from the regime of subsidy into another modulation mode. Price modulation and control would still breed corruption. To give the pronouncement on subsidy the teeth of law, Government needs to move from mere pronouncement to the realm of law, by amending section 6(1) of the Petroleum Act, which vests the power of intervening in petroleum product pricing on the Minister of Petroleum Resources.”

Instead, government should incentivize companies by providing tax holidays and over-laden incentives to investors, which would enable them invest in the refineries.

After the tow-hour robust deliberation and presentations, more resolutions were reached. It was strongly recommended that the Petroleum and Natural Gas Association of Nigeria (PENGASSAN) and National

Brown Louis Ogbeifun

Union of Petroleum and Natural Gas Workers Union (NUPENG) as well as the other critical stakeholders in the oil and gas industry should be engaged by the government and the National Assembly in birthing a new Petroleum Industry Bill (PIB). “The new Bill, should promote good governance, allow for indigenous participation, revitalize the midstream and downstream operations, protect the environment, emplace fiscal regimes that will at the end attract investors and address community concerns etc. A situation where nobody knows where the PIB document is presently, is worrisome.

“Government should urgently create more opportunities for the country through a viable and efficient mid-stream processing, which would help to birth new local industries and also improve local refining capacity.

“There is the need to create a very strong regulatory agency outside the control of the Ministry of Petroleum Resources, which shall be well funded, well-staffed and autonomous. Government should commit to a framework to deal strongly with environmental and community issues. The need to urgently pass the Host Community Bill cannot be over emphasized.

Government should diversify the economy, as a way of mitigating the price fluctuation of hydrocarbons in the global market.

“Civil Society Organizations should advocate for a constitutional review, which should encourage the culture of savings as done in other nations. This is principle behind the Sovereign Wealth Fund management system, which if well managed, would shield Nigeria from the challenges of world oil politics and fluctuations in the prices of crude oil.”

The experts said with climate www.businessday.ng

change, the world is gradually reducing the use of fossil fuels. “This has implications for the industry. COVID-19 has now come with its own deep dive complications and complexities. It has brought new challenges to the world of work, family lives and the ways industrial relations are managed. Therefore, workers must move with the changing times by thinking outside the box if they must move out of the deep.”

It was made clear that companies and employees who would survive the post COVID-19 would require great deal of new social skills in negotiation and technology. “The degree to which companies would survive, shall be dependent on employees’ competence and managers’ empowering people to take decisions either from home or at work. No matter how much companies’ say they care, there are COVID 19 imposed financial and social dilemmas, which would bring about conflicts between unions and management. To successfully manage the conflicts, it will require that unions and management should collaborate, cooperate and hang together.

“Stakeholders should emplace a think-tank, which must include unions, management and employers.

Owners of enterprises, must be ready to have slim dividends while unions and company executives would also need to make sacrifices.

“Management should not arbitrarily exercise its power of hire and fire at this time because oil and gas workers are also in the front line of COVID 19, working to sustain the nation’s economy. Anything done otherwise, would be counterproductive.

PENGASSAN and NUPENG members have displayed empathy and maturity, in providing continuous support in the frontline of COVID 19,

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for the industry and by extension Nigeria. During the Pandemic, employers should ensure that PENGASSAN and NUPENG leaders are consulted, in all matters relating to employment contract relationships as contained in subsisting collective bargaining agreements (CBAs). This is key to the synergy needed for a strong oil and gas industry in the immediate post COVID 19 era.

“Both union and management need collaboration and cooperation to survive challenging COVID-19 times. Emplace efficient, open, accountable and transparent licensing, leasing and acreage management systems, such that it will be impossible for companies to hold on to assets without developing them for a long period. This is important because, if Nigeria was not replacing reserves and growing oil and gas assets, there is no way the country would generate employment for her teeming unemployed youths.

“Fiscal regime should be properly crafted in line with best practices as a way instilling confidence in investors.

PENGASSAN President, Nduka Ohaeri, in accepting to cooperate and collaborate with critical stakeholders, called on them to stand up to their responsibilities as he said; “Though the unions have the responsibilities of wearing both the national caps and looking at the business, we shall however, not be cowed or cajoled into taking actions or speaking for government or speaking for our employers, because they all have their responsibilities. But be rest assured that our responsibilities is not lost on us as a union. When necessary, we will wear the national cap. At other times, we shall wear the cap of labour unions in matters relating to the welfare of our members.”

On his part, the NUPENG President said “Though everybody is saying that the unions should cooperate with the companies to survive, that survival should not be translated into redundancies all the time on the part of the Unions. Our members have been asked to stay at home. Companies are using the COVID 19 situation to close out contracts without recourse to the subsisting collective bargaining agreements. Worse still, the unions are not being consulted under the guise that they cannot be reached.”

The underlying concern was that before January 2020, oil and gas workplaces generally had closely knitted traditional social and physical environments, in which workers worked in close proximities. With the advent of the COVID 19, most of these traditional interactive interdependencies, and the traditional world of work as we presently know it, have drastically changed.

It was the view of the experts that; “The pandemic has also imposed excruciating new socio-economic outcomes on oil and gas companies and the country. Some of the harsh @Businessdayng

realities are oil glut, crash in crude oil price, lockdown of cities and crossborder closures. In order to meet up with its obligations, government had to urgently change some of its policies to reflect the current economic realities. Some of these policies include the management of forex, removal of subsidy on petroleum products, physical and social distancing protocols, change in the model of running the refineries etc.

“On the other hand, with diminishing sales and plummeting crude oil prices, oil and gas companies are incurring extra budgetary expenditures, designing and reordering work programmes. All these pose huge challenges to workers, suppliers, family life, resetting of body clock for global companies, who must attend online conferences with their colleagues in the US and other parts of Europe with different time zones.

“To survive the extra budgetary traps, some companies may need to cut costs, restructure and impose a work-from-home approach, which in turn impose new work attitude.

These initiatives have led to the deployment of only few employees into production areas with majority staying at home. These government policies and company initiatives, have far reaching consequences for the practice of industrial relations in the oil and gas sector.”

“It was consequent upon the above that AfriTAL, a non-governmental organization, will be organizing Webinar series to discuss “Post COVID-19: Oil and Gas Industry Challenges and Prospects” under our Save Nigeria Oil and Gas Industry initiative programme.

The first virtual session was held on May 14, 2020. During the session, two topics were discussed: (i) Managing industrial relations in challenging times by Steve Ojeh PhD, an oil and gas industrial relations’ expert; and (ii) Repositioning the oil and gas industry for post COVID-19 recovery by Israel Aye, a lawyer, energy advisor and an entrepreneur of repute.

The objectives were listed thus; ensure that oil and gas social dialogue partners, were apprised of the current oil and gas challenges; forge a collaborative and cooperative synergy, which would ensure smooth return to post COVID 19 work; and proffer solutions to identified challenges, which would reposition the industry for strong post COVID 19 oil and gas industry recovery.

“Fifty four participants took part in the Webinar. They included participants from PENGASSAN, NUPENG, Ministry of Labor and Employment, NECA, industrial relations managers, Human Resources managers, Academia, Media, civil society organizations, petroleum industry, past and present leaders of oil and gas unions, Institute of Chartered Mediators and Conciliators of Nigeria, Multi Door Courthouses etc.”

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Thursday 21 May 2020

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

The Coming Gale: Inspirational Leadership as Social Responsibility ONUWA LUCKY JOSEPH

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f you’re privileged to chance a corporate leader’s bio, you are apt to find courses he/ she took on leadership at Ivy places such as INSEAD, Harvard, Yale and the rest. Sometimes, it would seem those are the courses that validate their place at the head of the table. As well, when you scan CVs of candidates seeking top jobs, they invariably have the leadership course pegged somewhere in there. If it’s not, you can be sure it would be one of their main answers for what they plan to tick off in the next few years, usually five.

Obviously, as with most other things, there are different schools of thought on the subject of leadership. But they are all agreed, be they of the servant leadership persuasion or the despotic leader inclined, leaders lead; full stop. And at no time is the role of leadership more critical as in this crisis period when people are in between every shaky thing and not sure where or how they stand. Leaders it is who give strength, spine, and a sense of direction.

But the real thing leaders do especially in a time like this is the ability to inspire, to help people see beyond the travails with which they are confronted and to make a beeline for the direction that keeps them grounded despite the shakings. It falls to the leader to point in that direction where hopefully, there’ll be salvation or the foundation to start all over.

Like John Maxwell never tires of saying, “Everything rises and falls on leadership”. It’s the same for nations as it is for organisations and for households. So, even as we all look to the national leadership, which has not been especially inspiring, it falls on the broad shoulders of organizational leaders to help inspire their men and women to see beyond the bleakness that all the indices of the day seem to portend.

The work of hope building must begin from within the organisations. The general who leads his troops into battle, (where some of them are most likely going to meet their end), still needs to keep them enthusiastic and focused with regards to the venture. What do they gain by winning? For those who do not make it out, what is their lot aside the keenly told stories of their valour in battle? Those promises must be made and with a mind to keeping them.

It’s not enough to want to cut your losses as most organisations are going to be doing shortly, or have already begun; what’s even more important to folks invested in

Segun Agbaje, MD GTBank

Herbert Wigwe

your leadership is that they not be left unanchored one way or another. The brutal decisions regarding staff retrenchment should not, as much as possible, be so ungloved as to leave the leaving battered and without after care. One of the major issues of the day, I believe, is for leaders to ask the searing questions: what’s going to happen to my men and women after now? What can I do for my men and women?

This might sound like unnecessary mushy sentiments to the hard charging characters who, having been served well throughout their career by the Machiavellian principle of survival of the fittest have bruised and bloodied their way to the top. And doubtless, many will have no time for such considerations. However, leadership best practices require that the leader feel the pulse of his people; that he/she wear their shoes and know where they pinch. That guidance be rendered for those to be let off.

We are not here asking that people not be let go. The realities are rather stark and that’s the only option open to many corporate leaders, worldwide, not just in Nigeria. But it can’t be done in the cavalier fashion of old where staff are cast in the mould of the negligible dispensable.

And whether there be precedence or none in business literature, leaders must engage with their staff, both those who are going to be retained and those who are being let go, at different levels but for the same purpose: to keep them inspired and to yet believe in the dream from which they are tragically been cut off. Attention to such delicate details can only come from leaders who believe that they are running a critical leg in the relay race to the overall corporate objective. Such a sentiment doesn’t always come layered in facts and figures; they come in dreams and the ability to persuade followers to buy into the dream.

Now if after having bought into it, management deems it fit to pencil down their names as surplus to requirement, what should be the pitch to them? That they just go www.businessday.ng

gently into the dark night? That the dream is too big for puny individuals like them to run with? That they slow down the rest of the team with their lack of pace? That they are better off as cheer leaders in the stands rather than the field of play?

How the message is couched might be of utmost importance even if a go is a go. A leader would know what chord to pull and that would resonate across board. One of these, no one being let go should leave without being dealt a good measure of hope. What can the company do for them in the short term? Say in the next two/three months as they struggle to find their feet? Is there some promise of reabsorption should things improve? Can there be some outsourcing opportunities for which they can consult for the company?

Ultimately, people tend to find their way at the end of the day, after the shock gives way and a man’s survival instinct kicks in. But a leader soulless and unsympathetic to the plight of his people is not a leader. They are his people. They should remain his people. The company should remain their company. The dream should remain their dream. That should be the goal. No way is everyone ever going to align with the same idea, but the effort must be made to keep as many people as possible enthusiastic. That just might be the competitive edge the company has in the long term over rivals

Mauricio Alarcon MD, Nestle Nigeria

not adept at deploying emotional intelligence in dealing with staff, severed and serving.

And in communicating this well, retrenched staff begin to see the world as it truly is; a place chock full of opportunities where in being let go they are being released from their tether and allowed a free range of advantages in stark contrast to the adversity they imagined.

Stepping outside of their respective businesses, Nigeria’s inspirational corporate leaders should keep weighing in on where we find ourselves as a nation. We are at a crossroads, clearly, but this is not the first time we’ll find ourselves here. Nigeria has been a lesson in crossroads. Whenever we have somehow managed to get back on track it’s only to quickly lose track again and wander off until we hit another cross roads.

Taking on the role of champion of ill-conceived government policies therefore does the country no good, although it needs be said, there are consequences for being considered adversarial by an allpowerful government capable of vindictiveness when it feels itself crossed. But leadership takes courage, doesn’t it?

Not courage that’s tactless, however. There’s a need to imbibe some diplomatese even while delivering unsavoury messages. Those who consider themselves influential need to keep speaking up: how

we got here, how we can escape it, what we can do as individuals, as a collective, etc.

And while we are at it, we can’t, for the life of us, forget that our young people are listening in.

What’s in this country for them?

Why are they going to school if the place is all messed up, if their patrimony is up for grabs by Chinese land grabbers and miners, amongst others? The leader’s first responsibility is to the next generation. Without their buy in he/she is an abysmal failure. Unfortunately, Nigeria has run all these years by trampling down on the hopes and aspiration of this critical group.

And that is why, until we rectify that bit, they will keep running away to everywhere else.

How is it so hard to convince young people to the wealth embedded in their country? That brings in foreigners in droves. Foreigners empowered by their own home countries, and ironically, by the Nigerian government. We know it is rarely by individual might or power that wealth is created. The strategy must be in place to empower the young folks so that even when government is talking about how young Nigerians can harness the potentials, they are also sufficiently empowered to do so. Until this happens, those who can pool greater funds together and supported by superior intel will keep getting away with the goods.

Inspirational corporate leaders need not join politics to have an outsize influence. They have a good enough niche already from their corporate pedestals and the accompanying mass media derivatives. And now, with Covid 19, coupled with a lack of predictably good revenue from oil, and a general tanking of the world economy, it’s a good time to deploy their acumen in giving a broad vision and a sense of direction pertaining the possibilities outside of the safety of a salaried job. Let’s hear it from them.

Jennifer Etuh, Still Giving Succour from the After Life

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arly this year, Jennifer Ramatu Etuh, succumbed to cancer, an ailment she had battled for years. She was known, alongside many other kind hearted Nigerian ladies, as a Florence Nightingale. She strove with her husband, Thomas Etuh, to cobble together an ever growing businesses empire that straddles agriculture, chemicals, real estate, amongst others. She was only 45 when she passed on, but she had made a mark especially in the FCT, where her family was domiciled; in

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Southern Kaduna, where she had her roots; and in Kogi where her quiet husband hails from.

Now though she’s gone, her eponymous Jennifer Etuh Foundation is giving succour to many whose livelihood and lives are being threatened by Covid 19. The Foundation shares basic foodstuff to thousands of families in the FCT and satellite towns, some of them in Nasarawa State to help them keep body and soul together and to avail them the basic tools for keeping alive so they can fight another day. @Businessdayng

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FT

Thursday 21 May 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

US arrests two men accused of helping Carlos Ghosn flee Ex-Green Beret and son are wanted by Japanese authorities for allegedly aiding ex-Nissan boss’s escape KADHIM SHUBBER

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he US has arrested two men accused of helping Carlos Ghosn flee Japan last year, in the latest twist of the long-running legal saga surrounding the former Nissan chief executive.

Michael Taylor and his son, Peter Taylor, are wanted by Japanese authorities for allegedly assisting in Mr Ghosn’s dramatic escape in December from Japan where he was on bail awaiting trial on charges of financial crimes.

Mr Ghosn led Nissan for almost two decades before his arrest in 2018. He was accused, among other things, of misstating his compensation. He has denied any wrongdoing and denounced the charges as being part of a plot to oust him from the company.

His escape from Japan was “one of the most brazen and well-orchestrated escape acts in recent history”, US prosecutors said in court filings, involving

Carlos Ghosn, the former chief executive of Nissan, fled Japan last year and currently resides in Beirut, Lebanon © AP

“a dizzying array of hotel meetups, bullet train travel, fake personas, and the chartering of a private jet”.

“Ultimately, Ghosn was hidden in a large black box and whisked out of Japan in the private jet without detection by Japanese authorities,” US prosecutors said.

The two men were arrested on Wednesday — just before Peter Taylor was set to fly from Boston to Beirut, Lebanon, according to the court papers.

Mr Ghosn presently resides in Beirut.

Both Michael and Peter Taylor are due to appear before a federal judge on Wednesday

afternoon.

The Boston US attorney’s office said the men were arrested pursuant to Japanese warrants.

Prosecutors have asked that both men be denied bail while they await extradition, arguing that they are “not just capable of fleeing while on bond” but are “expert[s] on the subject”.

An attorney for Peter Taylor said he had no comment at this time. An attorney for Michael Taylor could not be immediately reached for comment.

Japanese authorities initially issued arrest warrants for the pair in January. In February, Michael Taylor, a former US Army Green Beret, flew from Dubai to Boston, followed by his son the next month, according to the court papers.

Japan subsequently filed requests for their extradition after they returned to the US. On May 6, the US requested arrest warrants for both men.

Prosecutors urged the court not to release either man on bail on the grounds that they could contract coronavirus while in prison, arguing that neither were at high risk. They warned of “serious diplomatic repercussions” if the men were granted bail and absconded.

Michael Taylor has previously served 14 months in prison for his involvement in a kickback scheme linked to $54m of military contracts in Afghanistan.

Stocks turn higher as focus turns to pace of reopenings Investors regain confidence after suspending doubts about progress on a coronavirus vaccine PHILIP STAFFORD, ADAM SAMSON, PHILIP GEORGIADIS AND HUDSON LOCKETT

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tock markets and oil prices pushed higher on Wednesday as investors grew more hopeful about the prospect of a global economic recovery from the coronavirus.

The optimism was underlined by continued demand for sovereign debt of some of the world’s biggest economies. The UK sold debt with a negative yield for the first time while the US prepared its first 20-year bond since 1986.

Nasdaq, the benchmark for high-growth stocks, touched its highest point since midFebruary, rising as much as 1.7 per cent in early trading. The S&P 500 rose 1.5 per cent to its highest level since early March.

Investors shrugged off concerns raised by medical news website Stat on Tuesday, that called into question the rigour of an early-stage trial of a Covid-19 vaccine. Optimism for the vaccine, manufactured by Moderna, stoked a rally in equities markets around the world but the article raised doubts over the speed at which a vaccine could be developed.

European equities caught

the mood, reversing early losses to make strong gains in the last hour of trade. The FTSE 100 in London and regional benchmark Stoxx 600 index both closed up 1.1 per cent.

Crude oil rose on hopes grew that a combination of rising demand and falling supply would boost prices. Brent crude, the international benchmark, was up 1.5 per cent at $35.20 a barrel while West Texas Intermediate, the US marker, rose 0.7 per cent to $32.20 a barrel, its best level since mid-March.

Consultancy Wood Mackenzie estimated that national oil companies would cut exploration budgets by more than a www.businessday.ng

quarter on average in 2020.

Dominic Schnider, an analyst at UBS, said that the “bottoming out process had begun” for commodities.

But he said it would be a slow recovery. “Unlike equities, which are strongly driven by expectations, commodity prices are influenced by actual supply and demand dynamics. On this assessment, nothing has fundamentally changed.”

Investors also continued to draw comfort that long-term debt being issued by governments to support their economies was still in demand. The yield on the UK 10-year gilt fell 0.018 percentage points to below

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0.70 per cent. “[Coronavirus] has prompted governments to take massive fiscal support measures,” said Bastien Drut, a senior strategist at CPR Asset Management, part of Amundi. “As a result, public deficits will widen sharply and sometimes reach historically high levels. The sovereign debt markets will enter a new era.”

However after a surge in April, equities markets have struggled to gain ground in May as investors grapple with a series of unknowns — from the prospects for economic recovery to the likelihood of a new wave of infections as countries lift lockdowns.

MSCI’s broad index of global stocks is up just 0.3 per cent on the month. The spot price of gold rose as high as $1,750 per troy ounce, close to an all-time high.

Analysts remain cautious over whether the easing of lockdowns will derail the success many governments have had in lowering coronavirus infection rates. The reproduction number remains below one — the key threshold below which the virus recedes — in many big economies, such as the UK, Germany, France, Spain and Italy, according to figures collated by JPMorgan Chase. @Businessdayng

The Wall Street bank, however, warned in a note to clients on Wednesday that “at the moment, nowhere in Europe has the resources to do the kind of widespread testing that is needed” to track and trace new coronavirus cases effectively enough to staunch a second wave.

“This suggests that if exit strategies continue to be aimed at preventing a second wave of infection — by keeping R [the reproduction rate] below one — restrictive social distancing measures will need to remain in place for an extended period,” JPMorgan said. “The easing in lockdown measures that we are now seeing risks a second wave of infection.”

Asian stocks were mixed.

Japan’s Topix index rose 0.6 per cent on Wednesday, while Australia’s S&P/ASX 200 rose 0.4 per cent. Hong Kong’s Hang Seng rose 0.1 per cent and China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 0.5 per cent.

The rise in Japanese shares came after data showed that core machinery orders — viewed as an indicator of capital spending in the coming months — fell less than analysts expected in April.

Thursday 21 May 2020

BUSINESS DAY

35

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

UK sells negative-yielding government bonds for first time

‘Symbolic moment’ coincides with debate on whether BoE should move to negative rates ADAM SAMSON AND PHILIP STAFFORD

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he UK broke new ground for a bond sale on Wednesday, borrowing at negative rates for the first time in a sign that investors expect more economic stimulus from the Bank of England.

The UK sold £3.8bn of three-year gilts at a yield of minus 0.003 per cent, the Debt Management Office said. The slightly negative yield means investors who hold the debt to maturity will get back less than they paid, when accounting for regular interest payments and the return of principal.

The oversubscribed sale reflects rising expectations that the BoE will increase its £200bn bond purchase programme next month to prop up the economy and try to lift wilting inflation back up towards its 2 per cent target. Policymakers are also facing questions over whether they might cut benchmark interest rates to below zero, a step the central bank has rejected.

Oliver Blackbourn, a portfolio manager at Janus Henderson Investors, said the negative yielding debt sale was “more of a symbolic moment” as investors were becoming ac-

A drop in inflation has highlighted how the BoE may need to take further steps to lift price growth © Getty

customed to negative yields on government bonds around the world.

He added that markets were still adjusting to a disinflationary shock from the coronavirus crisis. “Demand for nominal bonds, even at these levels, may persist. This issue is not going away,” he said.

The UK sold a one-month bill at a negative yield in 2016, but this represents the first time it has sold a conventional longer term bond at a yield

below zero. The UK drew orders of £8.1bn in Wednesday’s auction, 2.15 times the amount the DMO was looking to sell.

The robust demand underscores the appeal of gilts, long considered to be a haven due to the UK’s strong creditworthiness. It also suggests that fears that the large increase in borrowing the UK has undertaken due to the pandemic could deter investors are misplaced.

The BoE chopped interest rates to a record low of 0.1 per

cent in response to the economic shock of coronavirus, but it has resisted following peers such as the European Central Bank into the negative rates they introduced long before the crisis struck.

Asked about negative rates at a parliamentary committee on Wednesday, Andrew Bailey, BoE governor, said the central bank did “not rule things out as a matter of principle” but he did not “rule things in either”.

Andrew Wilson, chairman

of global fixed income at Goldman Sachs Asset Management, said: “Negative interest rates are a tool that has limited value and the escape from negative rates is extremely challenging, as the ECB is discovering.”

Headded:“Ourviewisthatnegative rates are not the way out of this.”

The pressure on the BoE is mounting, especially in light of data released on Wednesday showing annual UK consumer price inflation almost halved to 0.8 per cent last month, the lowest level in almost four years. Much of the decline was due to a plunge in the price of petrol, but some economists have warned the shock to demand caused by lockdowns could cause a wider disinflationary trend. The BoE has a longer term target of keeping inflation within 1 percentage point of 2 per cent.

“I can’t think of an economy where negative rates are a worse idea than the UK,” said Kit Juckes, a strategist at Société Générale.

“The economic benefits are dubious but the power of a cocktail of negative rates and massive quantitative easing to weaken the currency seems clear and if the pound falls enough, it will make QE harder,” he said.

US bank regulator finalises controversial community lending rule Change to act governing loans in poor communities comes as concerns rise about economic fallout ROBERT ARMSTRONG

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he US Comptroller of the Currency, one of the three key bank regulators, has finalised controversial changes to rules on bank lending in poor communities, just as comptroller Joseph Otting was reported to be stepping down from his post.

The reform was one of Mr Otting’s key regulatory priorities.

The OCC declined to comment on his plans.

Legislation aimed at ensuring that banks make loans in the neighbourhoods where they take deposits was enacted under President Jimmy Carter in 1977. The Community Reinvestment Act was written with bank branch networks in mind, and a CRA “score” is considered when banks seek regulatory approval to expand or merge.

The OCC’s changes to the CRA are meant, in part, to update it for an era where branchless banking is more prevalent.

But the law has long been treated

Joseph Otting, the US comptroller of the currency, was questioned by lawmakers about the wisdom of changing community banking rules during the Covid-19 crisis © EPA

as untouchable by Democratic lawmakers.

In a meeting of the Senate Banking Committee last week, Mr Otting and other senior regulators were repeatedly pressed www.businessday.ng

on the wisdom of changing the Act during the Covid-19 crisis.

Sherrod Brown of Ohio, the senior Democrat on the committee, told Mr Otting that “your

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proposal will undermine access to credit by those who are already under served.”

Mr Otting replied that “the goal [of the reforms] is to in@Businessdayng

crease the dollars that flow through the CRA”.

US banking regulators often announce rule changes in unison, but the two other major regulators, the Federal Reserve and the Federal Deposit Insurance Corporation, did not join the OCC in announcing the new CRA guidelines.

Fed Governor Lael Brainard, a former Obama administration official, criticised the OCC’s reform proposals in a speech in January. Mr Otting later described the Fed’s approach as “partisan”.

Mr Otting’s departure was first reported by the Wall Street Journal.

Prior to leading the OCC, Mr Otting was a bank executive, serving as chief executive of OneWest bank and vice-chairman of US Bancorp. At the time Mr Otting led OneWest, it was owned by an investment group headed by Treasury Secretary Steven Mnuchin.

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Thursday 21 May 2020

BUSINESS DAY

ANALYSIS FT Time to buy a car? Industry hopes for coronavirus silver lining

Health concerns are driving sales as consumers shun public transport PETER CAMPBELL, JOE MILLER, CLAIRE BUSHEY AND KANA INAGAKI

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ebecca Coleman has not owned a car since 1999.

But in early March, as the coronavirus pandemic started to grip New York, she and her wife grew wary of using public transport and bought a Honda from a dealer in Queens via video chat.

“I didn’t want to have a car,” she says, but needed one to visit family outside of the city safely. “Basically, I caved on everything I would never cave on before. I think we both did.”

As carmakers around the world contend with a near total collapse in sales, and months of uncertainty even after they restart their plants, Ms Coleman’s tale offers a slim glimmer of hope to an industry caught in the grip of the pandemic.

For years carmakers nervously watched vehicle ownership rates slide among young people and urbanites, as better public transport and the increasing ubiquity of ride-hailing services chipped away at the appeal of having a private car.

In response, manufacturers from General Motors to Germany’s Daimler poured billions of dollars into new services offering car sharing, taxi services or the option to access vehicles without the hassle of a purchase.

Covid-19 may have turned the tide.

Indications from China, which came out of lockdown as Europe and the Americas were just entering theirs, are of a sharp rise in individual car use as commuters shun public transport.

“In the month following the deep impact of corona in China, there was a pretty major interest shift away from public transportation,” says Jürgen Stackmann, Volkswagen’s brand sales chief.

By the middle of April, congestion in major Chinese cities was back to 90 per cent of pre-lockdown levels, while subway use lingered at just 50 per cent, according to figures from Bernstein.

“We suspect the recent shift among Chinese consumers in favour of private transport will persist as long as fears around Covid-19 linger,” writes Bernstein’s Hong Kong-based auto analyst Robin Zhu. Sales in the country recovered faster than anyone would have dared to hope, propelled in part by health concerns. Premium brand Volvo reported that sales in China were 20 per cent higher than in 2019, while the whole market in April was 4.4 per cent higher than a year earlier.

Auto-industry executives are under no illusions about the economic headwinds they face. At the very least, most developed economies are facing a sharp recession; at worst, a prolonged depression as new virus outbreaks bring economies to a halt again. But the signs of a shift in consumer attitudes to cars could protect them from the worst of the economic fallout.

“There is something almost you

could call revenge buying,” Volvo chief executive Hakan Samuelsson told the FT’s recent Global Boardroom conference. “People are really tired of sitting at home locked in and they really want to go out and buy.”

Private transport revival Marketing executives have leapt into action to capitalise on anxiety about using public transport. A recent newspaper advert in Germany from a dealer showed a huge face mask draped across the front of a VW Tiguan, each ear loop stretched over a wing mirror. “Safety first,” read the bolded white lettering underneath.

Where engine power or comfort once drove sales, health concerns are now at the wheel. Ford in China used the lockdown to re-engineer the air filtering systems on its vehicles. While not claiming to prevent the virus, it offers greater protection from smog and other airborne particles wafting into the car. Once dealerships reopened, the brand sold 40,000 upgrades almost instantly, including significant numbers of retrofits.

The big question is whether the pace of the Chinese rebound can be replicated in Europe and North America. Despite precipitous sales falls in April when dealerships and factories were shut, there is some evidence of bottled-up demand among car buyers.

In the UK, interest in car buying has surged since Boris Johnson announced in early May a slight easing in lockdown rules. Anyone returning to work was urged by the prime minister to “avoid public transport as much as possible” — a phrase that was catnip to dealers who had been forced to close showrooms eight weeks earlier.

Traffic on Auto Trader, the UK online car marketplace, peaked on the day of the speech at more than 1m views, the highest since the lockdown began in March.

At Citygate Automotive, which operates 13 showrooms across west London and Berkshire, what started as a trickle of orders in the hours after the speech has risen to a torrent. “The world has woken up in dramatic fashion,” says chief executive Jonathan Smith.

By the end of this week, the company expects to have returned to pre-lockdown order levels, before it has reopened even a single www.businessday.ng

showroom, albeit mostly for used cars.

Robert Forrester, who runs the listed Vertu Motors dealer group with close to 100 sites across England, has tracked orders throughout the downturn. “We are increasingly back in business and, armed with a face mask made by my mum, I can’t wait,” he says on Twitter.

A recent survey by Auto Trader found that more than half of UK driving licence holders without a car are considering buying one in order to avoid using public transport after the coronavirus lockdown ends.

A similar pattern is emerging in the US. A fifth of 3,000 residents polled in mid-March by Cars.com, a Chicago company that sells subscriptions to US dealerships to list their inventory online, said they were considering buying a car because of Covid-19.

About 43 per cent of respondents said they had stopped using public transport, almost the same percentage as those hailing fewer ride-shares.

“The pandemic has the potential to reverse long-term trends of non-ownership among younger consumers, 35 per cent of whom say they’re looking at buying a vehicle,” says Markus Winkler, head of automotive at the consultancy Capgemini.

Although auto companies now have the opportunity to create a new base of loyal customers, he says they will need to take a new approach. “Almost 80 per cent of 25- to 35-year-olds have never owned a car, so traditional messages based on intricate knowledge of other products on the market won’t necessarily work,” he adds.

In the US, seven times more people searched for the term “is it a good time to buy a car?” between March 15 and 21 than during the same week a year earlier, even as stay-at-home orders forced dealerships to close their doors.

The lockdown has also failed to deter the most dogged buyers. Jordan Jeong and his fiancée added a second car because of the pandemic, signing the paperwork at their apartment after the dealership delivered the car, while the sales representative stood six feet away.

“It was almost too easy,” he

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says, given the price tag. “The biggest piece of anxiety with getting a car sight-unseen is: ‘Am I getting ripped off?’”

In the short term, the move has been transformational. His hourand-a-quarter subway ride from their Brooklyn home to the hospital where he is an emergency room doctor has shrunk to a half-hour drive. “It has been surreal driving through New York City with no traffic whatsoever,” he says.

Subscriptions and sharing Where people are unable to buy cars — even cheaper models or used cars — they are using other services to get access to private vehicles.

Zipcar, the sharing service owned by rental group Avis, saw a rise in demand in cities across the US after launching a dedicated feature that offers exclusive vehicle use for several days at a time.

“In the past Zipcar has not served as an option for the suburb to city commute,” Zipcar president Tracey Zhen told the FT. “We anticipate more people may want exclusive access to a vehicle for short-term use, which we’re ready to provide.”

In Japan, concerns about public transport have sparked interest in car subscriptions — a relatively new trend that had gained little traction before the outbreak. Idom, one of the country’s largest used car dealers, launched a $280 monthly subscription service from February and orders have doubled in just two months.

Demand has been particularly strong from medical professionals and women requiring daily transport to grocery stores and schools.

Before the pandemic, 70 per cent of its subscription users were male.

Naoki Yamahata, manager in charge of Idom’s subscription service, says financial hurdles to owning a car remain high in Japan. “People are seeking a service that allows them to partially own a car without the actual risk of owning an asset and that demand has been fuelled by coronavirus,” says Mr Yamahata. “Subscription service fills the needs that fall between car ownership and car rental or sharing.”

In the past three weeks, German start-up Cluno says it has seen a 53 per cent rise in subscriptions to its service. “Despite massive eco@Businessdayng

nomic uncertainty among many customers, we have returned to a pre-corona level and the trend is strongly upward.”

Yet as more people return to work, and the roads clog up again, the appeal of sitting in traffic may wane. Cities have spent years dissuading motorists, introducing charging schemes for entering city centres and repurposing road space as cycle lanes. “In big cities, the private car is really not a very practical concept,” says Mr Samuelsson.

This week London restored the congestion charge for driving in the centre of the city, announced an increase in the fee and unveiled plans to make some central thoroughfares car-free.

Volkswagen global sales chief Christian Dahlheim says the push towards cars is “probably not” a long-term shift. “Obviously, it’s unthinkable that we replace public transport by individual transport in all major cities,” he says. “But we believe it might drive demand in the shorter term.”

While the surge of inner-city interest may be shortlived, other changes will be permanent. One of those is the shift to online buying.

When Ms Coleman bought her family Honda in New York, she did so without visiting a forecourt, or taking a test drive. Instead, a sales representative previewed the car in a FaceTime call.

“I anticipate that [virtual marketing] is here to stay,” says the dealership’s general manager, Brian Benstock.

A year ago, online transactions accounted for 7 per cent of sales, he says. Now that it is up to 100 per cent, Mr Benstock says he expects interest to remain high even after New York eases its lockdown.

“The toothpaste is out of the tube,” he says. “It’s just easier.”

In China, many of Volkswagen’s 2,000 dealerships have taken to live-streaming from showrooms on platforms such as TikTok or Kuaishou, after the company trained more than 70,000 people to communicate online in February.

“Car salespeople are becoming entertainers,” says Michael Mayer, VW’s head of sales in the country, adding that even customers who bought cars online wanted some form of human interaction at the end of the process.

Thursday 21 May 2020

BUSINESS DAY

37

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Oilfield servicing companies lost half of their values to COVID-19 olusola Bello

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orld renowned oilfield servicing (OFS) companies that have huge presence in Nigeria are some of the worse hit by Covid 19 pandemic as their capital base have been seriously eroded.

Some of the companies, such as Schlumberger, Halliburton, Saipem, Transocean, Baker Hughes dominate the oil servicing industry in Nigeria.

The implication of this is that their investment portfolios in Nigeria are going to be severely affected. This situation might lead to cuts in the number of their employees in the country and this may increase the already high unemployment figure in the country.

Oil field servicing companies are very strategic in oil production and exploration as they engage in series of activities that culminated in the production of crude oil.

They are the ones contracted by oil companies to carry out seismic data activities drilling of oil wells and even construction of oil and gas pipelines among others A Rystad Energy analysis reveals that stocks in OFS

companies have collectively lost half their value since the beginning of 2020.

Analysing a representative group of 116 listed OFS companies, accounting for around 71percent of the traded equities in the sector in 2019, Rystad Energy found that the firms have lost approximately 49percentof their market capitalization since the beginning of this year.

The best performers among service companies were in the Engineering, Procurement, Construction and Installation (EPCI) sector, which only saw

market capitalization drop by 27percentcompared to the value erosion of between 39percent and 54 per cent for most other service segments.

The most affected stocks were in offshore drilling, a segment that has nosedived by about 80percent since the beginning of this year.

“In a nutshell, our analysis indicates that companies with exposure to EPCI, facility leasing, maintenance and inspection services, SURF or subsea equipment have been less punished by investors, who have prioritized limiting their

NCDMB to Spur O&G Innovation with BrentPlus olusola Bello

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he Nigerian Content Development and Monitoring Board (NCDMB) has launched BrentPlus, a series of initiatives that will stimulate innovations in the oil and gas industry and ancillary sectors and create a platform for local creation of digital technologies.

Simbi Wabote, executive secretary of NCDMB, unveiled BrentPlus during a webinar titled “Innovating for the future of Nigeria’s Oil & Gas Industry and its Linkage Sectors.” He added that one of the strategic initiatives under the Nigerian Content 10-year roadmap is to promote the development of innovative in-country solutions in the oil and gas industry.

The webinar was the first by the Board since the outbreak of the Coronavirus pandemic and according to Wabote, it will form part of the new channels and technologies NCDMB will be using henceforth to engage stakeholders of the oil and gas industry.

He listed the processes of BrentPlus to include Problems Definition, Call for Innovation, Nigerian Oil and Gas Technology Hackathon, Incubation Olusola Bello, Team lead,

and Scale-Up. Providing details of the Problems Definition stage, the executive secretary said the Board will administer surveys to focus groups and stakeholders to understand the biggest challenges facing the sector.

He promised that the Board will soon hold a Webinar to get feedback on the opportunities for digital innovation.

“The problems must not be related to the oil and gas sector.

It can be daily life problems,” he clarified.

Subsequently, NCDMB will pick out the biggest challenges and call for innovations from interested teams with ideas, prototypes, solutions and relevant experiences, after which, the applications will be reviewed by judges and shortlisted, with a few selected.

He stated that the third stage of the BrentPlus process will be a Hackathon- a threeday residential camp where “participating teams will meet with industry stakeholders and further understand the challenges. Teams will revalidate their solutions and pitch at the end of bootcamp. Five winning teams will be selected.”

Wabote explained further that Hackathon enables crowd sourcing of digital innovations

Graphics: Joel Samson.

that will solve challenges. The idea is to provide a platform for individuals to get together for a short period of time to collaborate on a project, he added.

He hinted that during the incubation, which is the fourth stage of the process, ”five winning teams will get $10,000 equity-free grant each. They will also get work-space, expert mentors, global partners and unprecedented market access over three-months, ensuring they become commercial and investor-ready.”

He added that “at the end of the incubation, the teams will participate in a showcase day to demonstrate their progress.

This showcase will aim to connect them with investors and industry stakeholders where they can further amplify their market access.”

Specifying the criteria for eligibility, the Executive Secretary said participants ”must be a team/company of at least two or more members with at least 75 percent of the founding team as Nigerians. The team/ company must be a registered, or intending to register as a profit/business entity. The solution described in response to the challenge must be driven by digital technology- Software, Hardware or both.”

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exposure to well services, drillers, acquisition contract seismic and the North American market,“ says Rystad Energy senior energy service analyst Binny Bagga.

Another general trend is that share prices of companies that have consistently paid dividends/distributions over the past years have dropped less than non-dividend-paying companies.

One explanation for the EPCI performance is that a significant proportion of EPCI company revenues stems from industries outside of the oil and

gas sector. Another respite for the EPCI segment is that the average contract cycle time is longer than for most other segments, which means that these companies are more likely to be busy with existing projects even if new sanctioning activity is low.

The second-best-performing service segment consists of companies with multi-segment operations, and three elements stand out in particular here. First, this segment index is positively impacted by largecap companies, especially those with significant exposure to EPCI, facility leasing, inspection and maintenance services.

Most of the better-performing names also have diversified geographical exposure.

The index performance, in general, is negatively impacted by companies dependent on North American well services.

Lastly, about half of the companies in this service segment index have consistently paid dividends over the past three years. Most of these companies have been rewarded with a better share price performance or less market value erosion compared to non-dividend-paying companies.

In the seismic and G&G service segment index, around three-quarters of the companies have seen their market cap

erode by more than 60 per cent this year. This segment is highly vulnerable to exploration cost cuts by E&P operators, and to complicate matters further the segment’s average contract recycle duration is around two years.

The plight of well services companies with strong exposure to the North American (NAM) region is well known in the market. More than half of the companies in our NAM well services index have had market cap erosion of more than 60 per cent this year, with some players slumping more than 80percent. Overall this segment is plagued by little service differentiation, which is expected to have a profound impact on pricing and utilization as E&P operators continue to slash their budgets.

The story is much the same for onshore drillers. Many offshore drillers, the worstperforming service segment, are in the process of exploring financial restructuring options, while some of the others have engaged in share repurchase options to shore up stock prices.

For more analysis, insights and reports, clients and nonclients can apply for access to Rystad Energy’s Free Solutions and get a taste of our data and analytics universe.

Shell, ExxonMobil donate medical equipment to states to fight COVID-19 olusola Bello

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ivers State is set to start testing for COVID-19 in Port Harcourt with the receipt of the state’s first set of testing equipment from the Shell Petroleum Development Company (SPDC) among many other medical hardware and consumables presented to the state governor, Nyesom Wike .

Osagie Okunbor, managing director and Country chair, Shell Companies in Nigeria, who presented two Polymerase Chain Reaction (PCR) machines, the main testing equipment, ventilators and other medical items at the government house in Port Harcourt, said SPDC and its joint venture partners were committed to supporting the state to stop the spread of COVID-19 or any disease outbreak in the state.

Okunbor, who was represented by the deputy managing director of SPDC, Simon Roddy, said, “While we remain committed to supporting the state government to deepen its efforts at managing the pandemic, we recognise inadequate testing capability in the

Niger Delta and it is in response to this that we are presenting the state with COVID-19 compatible PCR machines and kits, while further extending medical equipment support to the holding centre at the Eleme General Hospital.”

The SPDC boss said the donation, the third in a series, was aimed at further enhancing the clinical capacities and capabilities at the Rivers State University Teaching Hospital.

Also Mobil Producing Nigeria, an ExxonMobil affiliate, and operator of the Nigeria National Petroleum Corporation/Mobil Producing Nigeria Joint Venture is donating two ambulances, 20 additional vehicles and medical supplies to various state governments and the Nigeria Centre for Disease Control to assist in the country’s fight against the COVID-19 pandemic.

The Akwa Ibom State Government is receiving two ambulances for emergency cases and 15 other vehicles, while Rivers State is receiving five vehicles.

Medical supplies, including World Health Organization certified COVID-19 test kits, sample collection kits and hospital beds valued at more than

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N90 million will be distributed to the Nigeria Centre for Disease Control, as well as Akwa Ibom and Rivers states.

“We are actively working with our partner, the Nigeria National Petroleum Corporation and other stakeholders on ways to assist in halting the spread of the virus,” said Paul McGrath, chairman and managing director of ExxonMobil companies in Nigeria.

McGrath said that the NNPC/MPN JV’s efforts are being guided by government agencies’ advice with regard to specific requirements and determining the areas of greatest need.

“Supporting Nigeria’s fight against COVID-19 requires a broad, collective effort that should follow the guidelines established by the Nigeria Centre for Disease Control, as well as the state and federal governments.”

ExxonMobil’s donations are part of an oil and gas industry effort coordinated by the Nigeria National Petroleum Corporation to provide medical supplies, deploy additional equipment and to support medical infrastructure and in-patient treatment.

38

Thursday 21 May 2020

BUSINESS DAY

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Thursday 21 May 2020

BUSINESS DAY

Live @ The STOCK Exchanges

39

Prices for Securities Traded as of Wednesday 20 May 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 232,821.23 6.55 -0.76 226 50,760,970 UNITED BANK FOR AFRICA PLC 227,426.15 6.65 3.91 252 31,469,476 ZENITH BANK PLC 518,042.15 16.50 4.10 687 75,074,197 1,165 157,304,643 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 184,860.76 5.15 0.98 313 25,596,788 313 25,596,788 1,478 182,901,431 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,259,350.95 111.00 - 166 1,328,831 166 1,328,831 166 1,328,831 BUILDING MATERIALS DANGOTE CEMENT PLC 2,556,076.11 150.00 1.69 259 6,484,279 LAFARGE AFRICA PLC. 177,185.75 11.00 -2.65 386 18,973,335 645 25,457,614 645 25,457,614 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 280,334.99 476.40 - 6 1,898 6 1,898 6 1,898 2,295 209,689,774 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 9,338.94 3.50 2.94 3 4,302,245 3 4,302,245 3 4,302,245 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 3 4,302,245 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 98,000 OKOMU OIL PALM PLC. 61,431.80 64.40 4.04 46 2,974,021 PRESCO PLC 41,500.00 41.50 - 46 508,141 93 3,580,162 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 2,100.00 0.70 - 1 8,000 1 8,000 94 3,588,162 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 198.47 0.51 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 31,298.95 0.77 5.48 53 16,021,159 U A C N PLC. 20,889.40 7.25 4.32 43 1,013,919 96 17,035,078 96 17,035,078 BUILDING CONSTRUCTION ARBICO PLC. 344.52 2.32 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 35,640.00 27.00 - 87 1,179,525 ROADS NIG PLC. 165.00 6.60 - 0 0 87 1,179,525 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,078.72 0.80 - 13 65,832 13 65,832 100 1,245,357 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 5,950.42 0.76 - 6 27,700 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 37,236.51 17.00 - 271 34,204,666 INTERNATIONAL BREWERIES PLC. 130,281.03 4.85 - 47 1,061,799 NIGERIAN BREW. PLC. 299,883.83 37.50 - 57 373,151 381 35,667,316 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 154,200.00 12.85 0.39 80 1,905,556 FLOUR MILLS NIG. PLC. 86,107.97 21.00 - 41 1,111,509 HONEYWELL FLOUR MILL PLC 7,930.20 1.00 2.04 18 796,610 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 1,500 NASCON ALLIED INDUSTRIES PLC 29,408.77 11.10 0.91 29 800,726 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 169 4,615,901 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 14,274.34 7.60 1.33 66 1,026,609 NESTLE NIGERIA PLC. 788,692.97 995.00 - 62 201,210 128 1,227,819 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 7,004.73 5.60 2.75 32 1,319,503 32 1,319,503 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 18,264.19 4.60 1.10 36 670,063 UNILEVER NIGERIA PLC. 86,462.33 15.05 - 95 937,001 131 1,607,064 841 44,437,603 BANKING ECOBANK TRANSNATIONAL INCORPORATED 92,665.23 5.05 3.06 112 10,297,428 FIDELITY BANK PLC 53,023.88 1.83 1.64 77 6,377,350 GUARANTY TRUST BANK PLC. 701,933.62 23.85 2.36 315 31,074,709 JAIZ BANK PLC 17,678.55 0.60 9.09 24 2,783,136 STERLING BANK PLC. 38,867.06 1.35 3.85 53 3,046,469 UNION BANK NIG.PLC. 195,109.04 6.70 4.69 20 270,263 UNITY BANK PLC 5,844.67 0.50 -3.85 16 1,109,298 WEMA BANK PLC. 21,987.45 0.57 -1.72 41 3,277,114 658 58,235,767 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 11,216.90 0.99 4.21 89 11,939,971 17,955.00 1.71 - 4 32,500 AXAMANSARD INSURANCE PLC CONSOLIDATED HALLMARK INSURANCE PLC 2,926.80 0.36 - 4 48,860 CORNERSTONE INSURANCE PLC 8,248.52 0.56 - 11 364,900 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,830.86 0.25 8.70 33 20,128,470 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 - 5 53,463 LINKAGE ASSURANCE PLC 3,280.00 0.41 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 16 11,351,323 10,825.03 2.05 2.50 9 302,421 NEM INSURANCE PLC NIGER INSURANCE PLC 1,547.90 0.20 - 4 1,476 PRESTIGE ASSURANCE PLC 3,229.53 0.60 - 2 70,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 12 12,456,917 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 1 70,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 7,437.42 0.31 6.90 12 595,085 202 57,415,386 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 4,504.68 1.97 1.55 39 1,807,010 39 1,807,010

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,671.82 1.36 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 1.27 70 4,137,842 CUSTODIAN INVESTMENT PLC 34,408.91 5.85 - 4 67,000 495.00 0.33 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 35,644.88 1.80 3.45 41 10,731,639 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 3 26,765 345,088.18 32.85 1.08 17 761,697 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 15,720.00 2.62 2.34 75 5,252,601 210 20,977,544 1,109 138,435,707 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 1 702 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,065.94 0.30 -3.23 4 258,000 5 258,702 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,780.67 3.25 4.84 59 2,582,451 GLAXO SMITHKLINE CONSUMER NIG. PLC. 8,251.55 6.90 1.47 53 928,241 5,434.49 3.15 3.28 67 3,276,820 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,500.33 0.79 - 10 129,554 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 189 6,917,066 194 7,175,768 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 5 79,450 5 79,450 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 911.95 0.31 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 0 0 287.07 0.58 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,033.13 0.22 4.55 14 1,996,400 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 14 1,996,400 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 5 248 5 248 24 2,076,098 BUILDING MATERIALS BERGER PAINTS PLC 2,028.76 7.00 - 0 0 BUA CEMENT PLC 1,097,205.07 32.40 1.89 50 657,648 CAP PLC 14,455.00 20.65 - 19 55,674 MEYER PLC. 265.62 0.50 - 0 0 1,769.32 2.23 - 2 4,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 71 717,322 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,624.37 1.49 - 18 177,453 CUTIX PLC. 18 177,453 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 3 1,150 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 1,150 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 92 895,925 CHEMICALS B.O.C. GASES PLC. 1,664.98 4.00 - 9 52,000 9 52,000 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 9 52,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 7 1,110,000 7 1,110,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 34,559.33 2.78 1.09 53 1,071,990 53 1,071,990 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,789.30 176.90 - 8 760 ARDOVA PLC 20,839.70 16.00 - 19 117,920 CONOIL PLC 13,254.49 19.10 - 25 249,766 ETERNA PLC. 3,338.61 2.56 - 24 379,539 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 5 3,029 TOTAL NIGERIA PLC. 34,902.84 102.80 - 68 92,336 149 843,350 209 3,025,340 ADVERTISING AFROMEDIA PLC 1,376.10 0.31 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,158.86 3.41 10.00 35 1,426,210 412.59 0.88 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 35 1,426,210 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,181.71 2.70 - 0 0 IKEJA HOTEL PLC 2,182.74 1.05 - 3 6,300 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 1 394 4 6,694 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 181.44 0.30 - 1 500 LEARN AFRICA PLC 956.60 1.24 3.33 5 132,108 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 448.67 1.04 - 0 0 6 132,608 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 580.20 0.35 - 1 22,000 1 22,000 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 1 6,375

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BUSINESS DAY Thursday 21 May 2020 www.businessday.ng

Changing Nigeria’s approach to industrialisation (3) ... the policy part Odinaka Anudu

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he last two pieces drew attention to how improper uses of funding and protectionism have stalled Nigeria’s industrialisation efforts over the years. This week’s piece examines how abandonment of worthy industrial policies has halted the country’s industrial prosperity, stalling it from transmogrifying from the current primary stage of development to the secondary stage.

In other words, it focuses on policy inconsistency as one major clog in the wheel of Nigeria’s industrial progress. Nigeria has never been short of industrial policies. After Independence, the then Nigerian government came up with the Import Substitution Policy, with a view to reducing over-dependence on imports, creating a high number of local jobs and saving the foreign exchange. This was seen as a diametrically fantastic policy that was targeted at transforming the country from an agrarian to an industrial economy. But the policy failed because the British did not prepare Nigeria for industrialisation, according to a paper written by two researchers, Gabriel Aza Nyor and Dodo Ayuba Chinge. Without bias, economic historians aver that the British colonialists merely paid attention to agriculture, which was supplying them with essential raw materials needed in their overseas factories. But on the flip side, this launched Nigeria into the global market as a strong agro nation. As of 1960s, Nigeria was world’s biggest producer of palm oil, accounting for 45 percent of global output.

The country was also a major exporter of cocoa and rubber to the rest of the world.

However, the Import Substitution Policy crashed because early policy makers, like the current ones, believed that protectionism was a cure-all for the country’s fledgling economy. An apparently young country pursuing an industrialisation mission thought it wise to start barring importation even when some of its industries would need foreign raw materials. Inevitably, this policy died a natural death and was replaced with the indigenisation policy. This later policy, also known as the Nigerian Enterprises Promotion Decree, was meant to transfer ownership of firms operated by foreigners to Nigerians. Foreign firms were limited to certain businesses to allow locals to thrive and set up industries. More so, it was pursued as part of the then government’s development plan

of 1970-1974. More than 1,000 hitherto foreign-owned firms were handed over to the locals.

This policy attracted a lot of criticisms and was marred by corruption. Many Nigerians became suddenly rich and bought shares of several enterprises through the back door. Some fronted for foreigners who were still silently controlling the businesses.

However, it was a major set-back because of poor management and obvious lack of local skills to run those enterprises. Chibuzo Ogbuagu, a former assistant professor of Political Science at the University of Pennsylvania, Philadelphia, the United States, postulated that the policy was merely predicated upon the feeling of economic and political nationalism and that economic efficiency might have been compromised because of a strong surge of nationalism.

It was later amended in 1977 to limit the number of companies an individual could have control over and streamline the type of businesses that would be done by foreigners. It must be admitted, however, that these two policies, which coincided with Nigeria’s first and second development plans, raised a bar for Nigerians and encouraged

the rise of several industries and supporting infrastructure. Such industries like Ajaokuta Steel Complex, Aluminium Smelter, Delta Steel and many textile and palm oil firms sprang up within this period, making Nigeria an industrial giant. Kainji Dam and Ughelli Thermal Plant, among other infrastructure projects, also sprang up during this period.

Two development plans preceded the Structural Adjustment Programme (SAP) introduced by the self-acclaimed civilian president, Ibrahim Babangida.

But before SAP, the foundation laid earlier had been shaking, as crude oil had become the new darling. Even with oil glut and fluctuations in the crude oil market, policy makers and leaders had committed less money to research and development, while allowing companies to die due to high production costs and interest rate.

The SAP liberalised trade, and encouraged privatisation and exports. But it also ushered in unbridled importation of cheap and sub-standard products. In a liberal market, players must be fair. But this was lacking as local manufacturers could not compete partly because of high cost of production and influx of cheap goods. Also, there was no

‘‘

The result of an off and on policy flipflops was that manufacturing growth rate fell from 11 to 3.5 percent in 2009 while capacity utilisation in industries followed the same trajectory, falling from 70 to 34 percent, according to the Central Bank of Nigeria Bulletin

protection for infant industries which, like children, needed protection.

The result of an off and on policy flip-flops was that manufacturing growth rate fell from 11 to 3.5 percent in 2009 while capacity utilisation in industries followed the same trajectory, falling from 70 to 34 percent, according to the Central Bank of Nigeria Bulletin. As the cost of production was rising, the government introduced Cargo Tracking Note, raising production costs higher. The Manufacturers Association of Nigeria (MAN) said in 2009 that 839 firms shut down that year. Within this period, policies on automotive industry, palm oil, rubber, cocoa and other non-oil export products were never implemented religiously.

Here is the policy part. These firms shut down because governments after governments had fluctuating import and export policies. Import duties were unilaterally relaxed or lowered by some regimes without due consultations with all the stakeholders. Export policies were inconsistent. The Export Expansion Grant (EEG), which was targeted at raising the competitiveness of Nigerian products at the global market, had been suspended five times by 2009. By 2013, it was suspended again, putting a lot of firms who borrowed from banks in jeopardy. Firms had borrowed from banks to process their exports on the hope that the government would, as promised, give them incentives. But the government in 2013 suddenly suspended it. The EEG is not a Nigerian thing. It is the tool used

by China to dominate the export world. Several other countries are providing it to their exporters to make them competitive. But up till now, it is yet to be reinstated, though a lot of processes have

been undergone by exporters, including approval by both houses of the National Assembly.

The level of policy failures in recent times has been worrisome. Think about the cassava bread policy, which has now died a natural death. The Goodluck Jonathan administration, which promoted it, did not follow it through and those who invested money into cassava production with an eye on that policy might have lost a lot of money.

Consider the Automotive Policy, which was sincerely meant to enable Nigeria make its own cars at cheaper rates.

Today, the policy is not implemented, though government officials make it seem otherwise.

The 2013 National Automotive Policy imposed 35 percent levy and 35 percent duty on imported vehicles, amounting to a total of 70 percent.

Even with 70 percent fees paid on imported vehicles, importers of damaged or ‘accidented’ vehicles officially enjoy a rebate of 30 percent. What this has done is to encourage the importation of rickety vehicles, which make up 70 percent of imported cars today.

The age of most imported used cars in Nigeria is 15 years, whereas that of Algeria, Angola, Chad, Mauritius and Seychelles is three, according to a research done by PwC’s Andrew Nevin, partner and chief economist at PwC Nigeria.

This has kept most car assemblers out of business. The prohibitive levy and duty paid on imported cars have encouraged smuggling of vehicles into Nigeria. Officially, market for cars in the country is just 6,999 as against 555,716 in South Africa; 181,001 in Egypt; 168,913 in Morocco, and 94,408 in Algeria.

But hundreds of thousands of vehicles come into the country each year. So, of what merit is the policy?

Finally, the Goodluck Jonathan administration had genuine technocrats willing to industrialise Nigeria, though some players took advantage of loopholes in the policies to make money. But the 2013 National Industrial Revolution Plan (NIRP) represents Nigeria’s most comprehensive industrial policy since Independence. Where is that policy, prepared by experts from reputable global and local institutions, including UNIDO? Like others before it, major sections of that policy have been abandoned and left in the shelves by the current Muhammadu Buhari administration.

Assuming that investors banked their investments on that policy, what happens to those humongous investments?

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