BusinessDay 23 Apr 2020

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he confluence of COVID-19 and an oil market collapse means that our oil boom is well and truly over. We have no public sector savings, approximately $85bn (20 percent of GDP) that we have difficulty servicing, unemployment closer to 40 percent than the official 6 percent when adjusted for COVID-19, underemployment and under-reporting. Nigeria is also hobbled by a seemingly endless war in the Northeast, climate change and decades of gas flaring devastat-

A crisis not to be wasted ing the South-East and Niger Delta, industrial output below 40 percent, daily public electricity averaging less than 5,000 megawatts, augmented by an alternative power market that delivers over 30,000MW at an estimated daily fuel cost of over N1.5 billion. We are indeed up the proverbial creek without a paddle. And the boat is leaking.

To crown it all, President Mu-

FRONT PAGE comment

hammadu Buhari is without his trusted chief of staff.

We can no longer await a post-COVID-19 economic recovery. Nigeria’s leaders must either deliver sterling leadership in a time of crisis or lead us to drown swiftly in the slough of despond. Apprehensive though we are about the coming socio-

class and establish a sustainable platform for moving more Nigerians upwards into the middle class. Policy and law in the coming months, therefore, must encourage private sector investment into ICT, infrastructure, agriculture, manufacturing and, COVID-19 permitting, the services sector. The bedrock of all this is urgent investment in physical (roads, land, sea and air transport, energy transmission) and social (healthcare and

economic upheaval, BusinessDay believes that this may be the long-awaited tonic that compels a comprehensive change in the political economic management of the country. Absent public sector funding, the private sector becomes the engine of regeneration and subsequent growth, as ought to have been the case for long. Economic recovery must benefit the middle

Continues on page 30

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COVID-19 collaborative fight shows Nigeria needs more private investment ... to achieve needed growth MICHAEL ANI & BUNMI BAILEY

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Vice President Yemi Osinbajo (r) and others during a video conference with Shubham Chaudhur, World Bank country director for Nigeria, on the Federal Government’s forthcoming Economic Stimulus Packages, at the Presidential Villa, Abuja.

Wapic offers auto insurance policy holders refund on premiums during COVID-19 MODESTUS ANAESORONYE apic Insurance plc, one of Nigeria’s leading under writers, on Wednesday became the first Nigerian motor insurer to offer customers refunds on their insurance premiums.

It is the company’s way of showing empathy with its customers at a time most drivers are

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Standard Chartered offers clients 3 months holiday on loan payment ... See page 6 stuck at home and unable to use their motor vehicles due to the coronavirus lockdown.

“We know that our customers are experiencing unprecedented circumstances and many are struggling to cope,” Aigboje AigImoukhuede, Wapic’s outgoing chairman, said in a statement last night.

“We want to recognise the sacrifice you are making by

driving significantly less as you support our country’s objectives in flattening the curve of the pandemic. We want our customers to know they can rest assured and we will defeat this pandemic together,” Aig-Imoukhuede said.

The company said that beyond financial and other contributions Wapic is making to fight the COVID-19 pandemic, it considers it necessary to sup-

port its customers, “particularly the most vulnerable, during this difficult time”.

The insurer explained that it took pride in “always putting customers first and continually improving its services to deliver a unique and excellent customer experience”.

Wapic will pass the benefit of Continues on page 30

f there is a striking positive thing that has emerged from Nigeria’s fight against the coronavirus pandemic, it is the fact that Africa’s biggest economy can achieve more when there is a collaborative effort between the private and the public sector, with the latter creating an enabling environment for the former to operate.

This was the view of various stakeholders in the country’s health-care sector who spoke at a webinar session put together

by BusinessDay, West Africa’s leading business paper, in collaboration with MTN, Nigeria’s biggest non-oil foreign direct investment, on Wednesday.

The stakeholders, who spoke on the topic “Financing healthcare in Nigeria”, said universal health care coverage can only be achieved if the collaborative efforts seen between the private sector and the government in the fight against the spread of the coronavirus are sustained.

The webinar session, the third in the series, which hosted over 600 business leaders in Continues on page 30

Inside

FG prohibits pharmacists, chemists from treating COVID-19 patients P. 6

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news World Bank projects 19.7% fall in remittances to low, middle-income countries ONYINYE NWACHUKWU, Abuja

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orld Bank Group on Wednesday projected that remittances to low and middle-income countries (LMICs) would fall by 19.7 percent to $445 billion by 2020.

This means loss of a crucial financing lifeline for many vulnerable households in such countries, including Nigeria.

Global remittances are projected to decline sharply by about 20 percent in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown. The projected fall, which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country.

According to the World Bank, studies show that remittances alleviate poverty in lower- and middle-income countries, improve nutritional outcomes, are associated with higher spending on education, and reduce child labour in disadvantaged households.

A fall in remittances affects families’ ability to spend on

these areas as more of their finances will be directed to solve food shortages and immediate livelihoods needs.

“Remittances are a vital source of income for developing countries. The ongoing economic recession caused

by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies,” said World Bank Group President David Malpass.

“Remittances help families afford food, healthcare, and basic needs. As the World Bank Group implements fast, broad action to support countries, we are working to keep remittance channels open and safeguard the poorest communities’ access to these most basic needs,” Malpass said.

The World Bank is assisting member states in monitoring the flow of remittances through various channels, the costs and convenience of sending money, and regulations to protect financial integrity that affect remittance flows. It is working with the G20 countries and the global community to reduce remittance costs and improve financial inclusion for the poor.

Standard Chartered offers clients 3 months holiday on loan payment SEGUN ADAMS

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tandard Chart e re d ha s a n nounced the provision of a threemonth holiday for personal loans, including business mortgages, to help its Nigerian customers to better manage the financial impact of the coronavirus pandemic, it said Wednesday.

The bank also said under the new reliefs, customers can request for payment holiday for up to three months for credit card payments.

In a statement titled “Standing with You” which was sent to customers on Wednesday, Lamin Man-

jang, Standard Chartered Nigeria CEO, said the bank was acting in line “with the expectation of the CBN that banks should consider providing reliefs to their clients and based on our commitment to be socially responsible and client-focused at all times”.

As part of its policy measures in response to the novel coronavirus outbreak and its fallout, the Central Bank of Nigeria (CBN) had on March 16 granted all Deposit Money Banks (DMBs) in the country leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the pandemic, particularly

oil and gas, agriculture and manufacturing.

“We have put in place measures aimed at easing the financial pressure on our clients, through the provision of temporary reliefs,” Manjang said.

“If you currently pay the total amount that is due on your credit card on a monthly basis, you can request to change this to a monthly payment of the minimum amount that is due on the card which is 1 percent of the outstanding subject to a minimum of a N5,000,” the statement said.

The bank is also providing relief for other retail business loans and a payment holiday of up to three months can be granted.

For corporate clients of Standard Chartered, relationship managers will be calling

them to assess their business needs and discuss how the bank can better support such clients at a time like this.

Manhang, who stressed the investment the bank has made over the years, said “as these rapidly evolving measures may change from time to time, updates will be provided as more directions are received from the federal government”.

Loan restructuring means rather than classifying those loans as bad, the initial terms and conditions have been adjusted to ensure that asset quality does not decline significantly, said Gbolahan Ologunro, analyst at CSL Stockbrokers.

“However, the impact of restructuring will still be felt on lender’s interest income,” Ologunro said.

Manufacturing sector risks recession without stimulus BALA AUGIE

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he outbreak of the coronavirus has significantly impacted manufacturing activities within the country and only a huge stimulus package can prevent the fragile sector from its worst year since oil price crash of mid-2014.

The spread of the virus, which has caused several commercial states across the country to be placed under lockdown in order to curtail it, is expected to add to the woes of manufacturers as demand continues to wane.

The lockdown has also disrupted the supply chain as key distributors in the value chain have opted to stay away from business due to increasing health risk associated with production.

Analysts say several firms have seen demand plummet, and there has been a change in consumer behavior since households now spend their income on essentials.

Before the coronavirus pandemic, operators in the industry had been facing gridlock at the Apapa Port that caused delay in the delivery of products to site, unreliable power supply from the grid, a weak consumer purchasing power, and border closure by government.

Even after the pandemic, poverty-stricken consumers won’t be able to purchase most

of the products, say analysts.

Nigeria is world’s poverty capital, according to the Brookings Institution, with 87 million potential consumers earning less than $1.90 per day.

Nigeria’s listed manufacturers are operationally inefficient as they aren’t turning each naira invested in sales into higher profit as industry average combined net margin fell to 7.071 percent in December 2019 from 10.30 percent as at December 2018, according to data gathered by BusinessDay. Their combined net income reduced by 17.85 percent to N385.55 billion in the period under review from N469.33 billion the previous year, while industry operating profit dipped by 12.97 percent to N468.44 as at December 2019.

A breakdown of the figures by sectors shows net income of the largest industrial goods firms dipped by 17.72 percent to N315.62 billion in the period under review while operating profit margin fell to 25.011 percent in December 2019 from N27.63 percent the previous year.

The largest consumer goods firms saw combined net income slump by 23.05 percent to N59.68 billion as at December 2019, while net income hit a negative territory of -2.98 percent in the period under review from 5.64 percent the previous year. www.businessday.ng

Babajide Sanwo-Olu (m), Lagos State governor, with doctors, nurses and Intensive Care professionals during the unveiling of the 80-bed Isolation Centre with 10 Intensive Care Unit facility and four ventilators for COVID-19 treatment, at Landmark Convention Centre, Oniru, yesterday.

FG prohibits pharmacists, chemists from treating COVID-19 patients … warns it may cancel their licences ... says working with Kano to unravel truth about mass burial TONY AIELEMEN, HARRISON EDEH,JAMES KWEN,INNOCENT ODOH, ABUJA

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he Federal government has threatened to cancel the licenses of pharmacists and medicine patent stores embarking on the treatment of persons with covid-19.

Osagie Ehanire, health minister handed the warning during the Presidential Task Force (PTF) daily briefing in Abuja, warned: “Patent and preventive medicines vendors, pharmacists and chemists are henceforth prohibited from attempting to treat persons diagnosed with or suspected to

beCOVID19patients,otherwise their licenses may be cancelled.”

He also enjoined private hospitals seeking to treat such patients to apply through their state ministries of health and follow the laid down protocols to achieve their aims.

“Patent and Proprietary Medicine Vendors (PPMVs) and Pharmacists be forthwith prohibited from attempting to treat persons diagnosed as, or suspected to be COVID-19 patients, or else have their operating licenses cancelled. Private hospitals desiring to manage

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COVID-19 patients apply to their State Ministries of Health for permit, meet standard IPC standards and be accredited by a FMoH certified State team after compliance with Protocols, before being granted”, he said.

Speaking on the mass burial in Kano he said, “with regard to Kano and the around there regarding mass burial, the federal ministry of health and the Kano state government through the Chief Epidemiologist in the public health department of Kano state and officers news of NCDC are there to find out what is true about the news about the burial going on there.”

“Those cases in Duale, @Businessdayng

Dala, kombosto,Darsumi ,Nassarawa and Kano municipal Local government .The state public health department is still looking into it ,to find out why this death is out of normal and further questioning of the story “Since there was no record, no test done on the deceased, the answer will come up in a few days’ time, when the epidemiologists bring their results”, he said.

According to the minister, “yesterday the 21st of April, the Ministry of health conveyed a successful emergency national council on health meeting via teleconference.

Thursday 23 April 2020

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NEPZA offers 60% of jobs to host communities on concerns of labour crisis HARRISON EDEH, Abuja

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igeria Export Processing Zones Authority (NEPZA) says it is putting modalities in place to ensure that its policy on allocation of 60 percent of jobs in Free Trade Zones in the country to host communities is fully implemented.

Bitrus Dawuk, acting managing director of NEPZA, stated this in Abuja on Tuesday, while reacting to the recent labour crisis at OgunGuandong Free Zone, Igbesa, Ogun State.

Dawuk said the industrial dispute between the workers and management of Goodwin Ceramic Free Zone Enterprise (FZE) located in the Zone was necessitated by the extension of lockdown by government to curtail the spread

of coronavirus pandemic, which prompted several workers of the Enterprise mostly from the NorthEast demanding additional payment to stay or vacate the Zone.

Despite the pleas by the Zone’s management and security agencies that the workers stay in order not to expose themselves to the COVID-19 pandemic and the financial payment provided for them to cater for their needs, Dawuk said such appeals landed on deaf ears.

He expressed delight that the labour crisis had been resolved despite wrong accounts from some media, saying it was during the incident that the Authority discovered that its policy on 60 percent recruitment of people from the catchment area was not fully enforced by the Free Zone Enterprise.

“Until this dispute, it was not

obvious that more than 80 percent of the workers of the Enterprise of Ogun-Guandong Free Zone were not from the catchment area. The current Resident Zone Administrator said he inherited the problem when he assumed duty in December 2019, after the retirement of the immediate past Resident Zone Administrator.

“The Authority is already putting a mechanism and template to redress the situation to ensure that youth within the vicinity and location of any Zone in the country regulated by the Authority are given 60percent of all job slots while 40percent will be distributed to other parts of the country,” he said.

It was however gathered that the zone management representative of Goodwin Ceramic Free Zone

Enterprise said the enterprise’s decision to engage workers from other part of the country was due to the fact that indigenes of the host community most of the times were either not willing to take up available jobs or not committed to do it.

He said most people in the catchment area of the Zone often considered available jobs as menial and prefer more skilled jobs that were not usually available.

He said before the lockdown, the company provided free accommodation and highly subsidized feeding to almost 80 percent of the workers because they are not from the host state, adding that the company was surprised when on 13 April, 2020, the workers were demanding N200 thousand apart from improved feeding and a payment of full month salary.

Atiku urges strategic oil reserve in Nigeria Seyi John Salau

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tiku Abubakar, a former vice president, says this is the right time Nigeria built a strategic crude oil reserve, with massive storage capacity that could hold at least a month’s worth of Nigeria’s OPEC (Organisation of Petroleum Exporting Countries) production capacity.

In a release personally signed by him, a copy of which was sent to BusinessDay, Atiku, said: “The global oil market continues to suffer from the vagaries of the coronavirus pandemic, as prices continue to crash due to the sudden, massive and unexpected drop in worldwide demand for crude oil.

“The features market for commodities is a turbulent one, due to unforeseen hazards that come and go. Today, it is COVID-19; tomorrow, it will be something else.

“It is time for Nigeria to protect her economy from being tossed to and fro by circumstances beyond our control. We must assert our sovereignty, by exerting more influence over the global trade in crude oil, and other features.”

According to Atiku, “If we build such an infrastructure, we will not have to sell our crude at a production loss. We will be in a

position to stockpile the product in our reserve until such a time as prices improve.”

Atiku, who was the presidential candidate of the People’s Democratic Party (PDP) in the 2019 general election, noted that indeed, “other nations take such measures to protect their economy. North American and European nations have such internal controls to protect almost every sector of their economy - from agriculture, automobile, and even intellectual property. Nigeria cannot be left behind. We must be in business for the best interest of our economy.

“I would also strongly recommend that we discuss with our partners in the Organisation of Petroleum Exporting Countries, and obtain a concession, whereby we can defer our daily quota, such that when we undersell, due to a crash in the price of crude oil, we can oversell when the prices stabilize, subject to the condition that we balance out our quota.

“Nigeria’s oil industry remains more susceptible to outside influences, than to internal control. This measure can flip that, and make our oil industry more stable, even when there is global instability. This will translate to greater economic independence on our part.”

Coronavirus: Edo records 2 new cases, 1 death, steps up measures against spread IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

E Gurvinder Singh (l), head of sales; Shadrach Yacim, general manager, and other members of the Mardi Mari Investment Limited team from the Aquadana premium drinking water factory, Lagos, presenting a truck of bottled water to Lagos food bank as contribution towards the fight against COVID-19.

How new proposed US restrictions on chip-making equipment will affect Africa SEGUN ADAMS

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ome senior officials in the President Trump administration have agreed to new measures to restrict the global supply of chips to Huawei Technologies, at a time when the Covid-19 pandemic impacts economic growth around the world.

According to Edison Xie, director of media affairs, Huawei Southern Africa Region, under the proposed rule change, foreign companiesthatuseUSchipmaking equipment would be required to obtainaUSlicencebeforesupplying certain chips to Huawei.

Analysts say the proposed change of trade rules will backfire on US companies as the later will develop their own supply chain.

A report by the Boston Consulting Group states further escalation in US export control to Huawei will result in and end the leadership of US in semiconductor and will consequently decouple the US and Chinese technology industries.

The semiconductor industry is widely recognised as a key driver and technology enabler for the whole electronics value chain.

With expanding tech industry and deepening innovation culture, Africa has proved its potential to be a competitive force in technology in the future. How this unilaterally proposed change of rules by US would hurtAfrica’sfastgrowingtechnology industry?

In 2019, the global market for semiconductors was projected to shrink by 12% due to growing economic uncertainties from the

US-China trade war. This year’s COVID-19 pandemic is further shaking up the global semiconductor industry. A new IDC report says the semiconductor industry will fall by 6%.

TheproposedmovebysomeUS officials will create more uncertainties in the global industry of semiconductor, the centrepiece of ICTs that transform society for the better.

These technologies that enable new technologies like artificial intelligence, 5G and the Internet of Things, have been playing a critical role in Africa’s social economic development. When the COVID-19 pandemic is behind us, ICTs and digital economy will also play a crucial role in economic recovery.

Ifwelookcloselyattheproposed change of rules, we can see that it aims for imposing restrictions

on the use of equipment that has already been sold. This will severely undermine the basic principles of international trade. The post-sale rules change will ultimately erode trust in the global supply chain, nullifying established norms and regulations overnight. Needless to say, Africa will also be the victim.

Theglobalsemiconductorvalue chain has taken decades to build.

Semiconductor modules are highly interdependent, and no company or country can build up a comprehensive supply chain on their own.

If these new rules were to take effect,evenifmerelyonepieceofUSorigin equipment, say a screwdriver purchased from the US years ago, was used at any step in the production of chips, chipmakers outside of the US would have to seek approval from the US government.

Emerging Africa Capital partners governments, NGOs in COVID-19 relief efforts BUNMI BAILEY

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merging Africa Capital Group (Emerging Africa), a leading African provider of capital raising, wealth management, trusts and asset management services, recently announced that it had partnered with Lagos, Ogun and Oyo states as well as with an NGO, Women in Finance Nigeria (WIFNG), to provide relief for Nigerians in the fight against the COVID-19 pandemic in the country.

Whilst channelling its first round of contributions to the

different public funds set up by the Lagos, Ogun and Oyo State governments to contain the menace, Emerging Africa has also supported an initiative

by WIFNG which involves the distribution of food packages as palliatives to vulnerable Nigerians, specifically widows and elderly persons in various communities, as well as partnership with other credible initiatives such as the Private Sector led Coalition Against COVID-19 (CACOVID). Other initiatives under contemplation include the purchase of medical supplies www.businessday.ng

and personal protection equipments (PPEs) for health workers and Nigerians.

Emerging Africa is also providing support to the Capital Market COVID-19 Support Initiative recently launched by Mary Uduk, acting director-general, Securities and Exchange Commission (SEC), who has set up a N1 billion Capital Market Support Fund for COVID19.

“Emerging Africa will continue to provide all kinds of support including financial donations, professional services, thought leadership and aware-

ness creation in Nigeria and the rest of Africa, until this scourge is over,” Toyin Sanni, group chief executive officer, said.

Approving these measures, Onikepo Akande, group chairman of Emerging Africa, said as a responsible corporate citizen and key player in the Nigerian private sector, Emerging Africa is “wholly committed to playing our part in fighting this scourge and in being a part of the solution to probably the greatest challenge that has confronted our nation and our world in the last century”.

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do State commissioner for health, Patrick Okundia, has disclosed that the state has recorded two new cases of coronavirus (COVID-19) and one death, reassuring that the state government has intensified measures to prevent further spread of the virus.

The state Wednesday confirmed the death of a 57-year-old police officer of Coronavirus.

Okundia, who confirmed the death of the police officer in a telephone interview with BusinessDay in Benin City, however, described the death as unfortunate.

Okundia, who did not give the name of the police officer, however, said it was not very clear how he got the infection but he developed some illnesses.

Okundia, who spoke with journalists in Benin City, said Edo now had 17 confirmed cases, two deaths, eight active cases, seven discharged persons and 142 suspected cases spread across 14 local government areas (LGAs).

He noted that the 17 confirmed cases were recorded in Oredo, Esan West, Egor, Ovia North East, Ikpoba-Okha and Uhunmwode LGAs, noting that a total of 346 persons

with various levels of contacts with confirmed cases have been line listed and are being followed-up.

The commissioner assured that the remaining eight active cases in the state are being managed at various isolation centres and are responding well to treatment.

He urged all residents to make themselves available for screening, which is currently ongoing at different centres across the state, adding that the screening exercise will help government ascertain the pattern of spread in order to enhance strategies at containing the virus.

He said, “As government intensifies efforts at curtailing the spread of this infectious disease in Edo State, we urge all citizens to abide strictly with government directives on social distancing, use of facemask in the public, regular hand washing with soap and running water or using alcohol-based sanitisers, cough etiquette and compliance with the stay-at-home order.

“Also, we appeal to everyone with symptoms of the disease to come out for screening, testing and treatment as prompt detection and treatment increases the chances of survival. COVID-19 is not a death sentence and not a lifelong disease.

FG, states, LGs share N780.926bn March allocation Cynthia Egboboh, Abuja

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he three Federating units, on Wednesday shared a total of N780.926 billion as March 2020FederationAccountAllocation.

This was contained in a StatementofAccountsissuedinAbujaby the Federation Account Allocation Committee(FAAC),whichreported Excess Crude Account (ECA) balance at $72.221 million.

The monthly FAAC meeting where the revenues and disbursements were discussed was held through virtual since members could not meet in Abuja due to the lockdowninthecountryoccasioned by the COVID-19 pandemic.

The N780.926 billion shared comprisedStatutoryRevenue,Value Added Tax (VAT), and Exchange Gain, FAAC stated.

The gross statutory revenue for @Businessdayng

the month was reported at N597.676 billion. This was higher than the N466.058billionreceivedinFebruary January 2020 by N131.618 billion.

The Value Added Tax (VAT) yielded gross revenue of N120.268 billion in March 2020 as against N99.552 billion in February 2020, resulting in an increase of N20.716 billion.

A total of N62.928 billion was available from Exchange Gaininthe month under review.

The Statement of Accounts indicatedthatfromthetotalrevenue ofN780.926billion,theFederalGovernment received N264.330 billion, the State Governments received N181.487 billion, and the Local Government Councils received N135.950 billion. The Oil Producing States received N38.751 billion as 13% derivation revenue, while the cost of revenue collection by Revenue Agencies and allocation to NEDC was N160.408 billion.

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COVID-19: Rosabon targets workers with N6m personal loan at low interest rate Daniel Obi

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osabon Financial Services, Nigeria’s non-bank financial services provider, has announced continuous availability of its Personal Loan packages, offering of up to N6 million at a low interest rate to eligible salary earners in light of the Coronavirus crisis.

Eligible individuals, upon meeting the set terms and conditions, can get non-collateralised personal loans up to N6 million, with a flexible repayment plan of up to 15 months. Rosabon, in a statement, says the loan is available to both new and existing customers.

The rapid spread of the virus and the sudden measures implemented by the authorities to curtail its spread have put a heavy financial strain on individuals, their families and the economy, as many households already have their income cut or stopped altogether.

For those whose income would be halted during the lockdown period, Rosabon personal loans provide financial access to sustain livelihood and meet pressing needs; be it feeding, rent or other financial emergencies.

Speaking on the provision of the private sector loan facility, Chukwuma Ochonogor, managing director of Rosabon Financial Services, in the statement, notes, “As Nigerians deal with the growing challenges of COVID-19, our priority is to support them in any way possible. The goal is to provide critical cash flow during this economic crisis at a low interest rate.”

Ochonogor states that the provision of the company’s loan service became imperative “in the wake of the lockdown due to the ongoing spread of Coronavirus.

“Our hope is that these personal loans will provide individuals access to funds in these dire times, to support their priority short term financial needs.”

4 soldiers, 21 bandits killed in Zamfara Godsgift Onyedinefu, Abuja

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efence Headquarters on Wednesday said troops of Operation Hadarin Daji have killed no fewer than 21 bandits after a fierce encounter at Zurmi in Zurumi LGA of Zamfara State.

John Enenche, coordinator, Defence Media Operations, who disclosed this in a statement,regretted that four soldiers died in the encounter that occurred April 20.

Enenche however informed that the troops in high morale have commenced aggressive patrols in the area for domination and confidence building among the locals.

The coordinator also informed that the Air Component of Operation Gama Aiki had also killed several armed bandits at Maguga in Rafi Local Government Area of Niger State.

He explained that the operation, which was conducted in support of Operation Thunder Strike, was executed April 19, 2020, sequel to reports that some armed bandits, clad in black attire, had been sighted along with a large herd of rustled cattle in the area.

“Accordingly, the Air Compo-

nent scrambled its aircraft to attack the location. Upon sighting the approaching attack aircraft, the armed bandits scampered to conceal themselves under nearby shrubs but were engaged with cannon fire which led to the neutralisation of several of them,” he said.

In the same vein, the coordinator informed that 13 Boko Haram/ ISWAP terrorists had been killed by troops of 159 Battalion in Sector 2 in conjunction with the Air Task Force of Operation Lafiya Dole in a fierce exchange of fire on April 20, at Geidam town, the headquarters of Geidam Local Government Area of Yobe State.

He said the terrorists were forced to retreat, scampered in disarray into different locations and within surrounding bushes. “At the moment, troops are on pursuit of the fleeing terrorists,” he said.

He added that two gun trucks with Dushkha guns and six AK 47 rifles were captured during the encounter.

“Presently, the terrorists have been subdued, situation in Geidam town and environs has been normalised and troops are currently on a follow up/exploitation operation,” he said.

COVID-19: Nosak Group supports Lagos with medical supplies SEYI JOHN SALAU

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igerian business cong l o m e rat e, No s a k Group, has donated basic essential medical supplies to the Lagos State government in support of the fight against COVID-19 pandemic.

The donation is part of the group’s desire to support the government and the people of Lagos, especially at a critical time like this when the world is battling the spread of the virus.

“As an organisation, it is in our culture to identify with the government and the people of the state in times like this with the donation of basic medical supplies in support of the efforts put in place to manage the medical crisis from COVID-19, which has affected our usual activities”,

said Kenneth Adejumoh, the corporate communications manager for Nosak Group, while presenting the donation at the office of the permanent secretary, Lagos State Primary Health Care Board.

According to Adejumoh, the state government must be commended for its swiftness in managing the pandemic and showing the ability to curtail the spread of the virus.

Adejumoh opined that the medical teams have shown a can-do spirit, which according to him is yielding results with the growing number of recoveries in the state.

“From the confirmation of the index case, the government has demonstrated the highest level of responsiveness and capabilities to curtail the virus from spreading,” Adejumoh stated. www.businessday.ng

Maurice Iwu (l), chairman, Imo State COVID-19 Prevention and Control Committee, receiving documents from Reginald Omeni Ikpewujo, chairman, Aurebel Gas, when the latter donated 600 cubic metres of gas to the state government to support the fight against coronavirus.

Nigeria posts $434.85m crude oil export sales in January Olusola Bello & Harrison Edeh

… as vandalism of NNPC pipelines spikes

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tion of the series.

The release said vandalism of NNPC pipelines across Nigeria recorded a phenomenal spike of 50 percentage increase in January, saying during the period, 60 pipeline points were vandalised, compared to the 40 incidents recorded in December last year.

Atlas Cove-Mosimi and Mosimi-Ibadan axis pipelines accounted for 50 percent and 17 percent of the breaks, respectively, while all other routes accounted for the remaining 33 percent, according to the report.

It however explained that NNPC, in collaboration with the local communities and other stakeholders, was working in harmony to curtail this menace.

The report stated that to ensure steady supply and effective distribution of Premium Motor Spirit (PMS), otherwise called petrol, across the country, 1.20bn litres of the white product, translating to 38.68m litres/day, were

igeria recorded crude oil and gas export sale of $434.85 million in January, 2020, an increase of 94.30 percent pitched against the December 2019 figures, the Nigerian National Petroleum Corporation’s (NNPC) Monthly Financial and Operations Report, released Wednesday in Abuja stated.

The statement by the corporation’s group general manager, group public affairs division, Kennie Obateru, said the month’s crude oil export sales contributed $336.65 million (77.42%) of the dollar transactions for the period, compared to the $136.36 million sales in the previous month.

It added that export gas sales in January amounted to $98.20 million, even as it noted that 2019 to January 2020 crude oil and gas transactions valued at $5.18 billion was exported. The January 2020 edition of the monthly report of the corporation is the 54th edi-

supplied for the month, stressing that the corporation had continued to diligently monitor the daily stock of fuel to achieve smooth distribution of petroleum products and zero fuel queue across the nation.

In the Gas Sector, out of the 253.09billion cubic feet (BCF) of gas supplied in January 2020, a total of 151.16BCF of gas was commercialised, consisting of 36.20BCF and 114.96BCF for the domestic and export market, respectively.

This translates to 1,167.80million standard cubic Feet (mmscfd) of gas supply to the domestic market, with 3,708.23mmscfd of gas supplied to the export market during the month.

It stated that 59.89 percent of the average daily gas produced was commercialised, while the balance of 40.11 percent was re-injected, used as Upstream fuel gas or flared.

Gas flare rate was 7.90 percent for the month under review i.e.

643.59mmscfd, compared with average gas-flare rate of 8.46 per cent i.e. 671.40mmscfd, for the period January 2019 to January 2020.

Out of the 1,167.80mmscfd of gas supplied to the domestic market in January 2020, about 639.70mmscfd of gas, representing 54.78 percent was supplied to gas-fired power plants, while the balance of 528.10mmscfd or 45.22 percent was supplied to other industries.

The report said 640mmscfd of gas delivered to gas firedpower plants in January 2020 generated an average power of about 2,683mw, compared with December 2019, where an average of 596mmscfd was supplied to generate 2,498mw.

The report explained that for January 2019 to January 2020, an average of 1,203.93mmscfd of gas was supplied to the domestic market, comprising an average of 693.73mmscfd or (57.62%) as gas supply to the power plants and 510.20mmscfd or (42.38%) as gas supply to industries.

Microsoft pledges commitment, cloud services continuity to customers BUNMI BAILEY

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ithCOVID-19continuingto challengetheworldatlarge, organisations have started making the move to full-time remote work for the safety and well-being of their employees. This has meant a huge reliance on cloud services.

Over the past several weeks, organisations like Microsoft have come together to battle the global health pandemic. During this time, companies around the world are adjusting the way they manage their daily work and how their workforce continues in the face of extraordinary changes to their professional and personal lives.

“With a new way of working now becoming a reality for businesses the world over, our

customers are starting to realise the true power of the cloud more than before. As expected, there are many questions about what organisations are doing to ensure business continuity during this time, and we are ready to answer,” says Jared Spataro, corporate vice president for Microsoft 365.

During this time, communication is key - the organisation aims to continue communicating regularly and openly, so customers can have insight into what is being seen, learnt and done. As companies operationalise to address new and unique challenges, Microsoft has mobilised its global response plan to help customers stay up and running during this critical time.

“We are actively monitoring performance and usage trends

24/7 to ensure we are optimising our services for customers worldwide, while accommodating new demand. We are working closely with first responder organisations and critical government agencies to ensure we are prioritising their unique needs and providing them our fullest support. We are also partnering with governments in Africa and around the globe to ensure our local data centres have on-site staffing and all functions are running properly,” Spataro notes.

In response to health authorities emphasising the importance of social distancing, the organisation is supportingmanylarge-scalecorporations, schools, and governments in the mobilisation of remote workforces. Solutions such as Microsoft Teams is helping millions of people

adapt to remote work. Dynamics 365 Customer Service has been leveraged to help contact centre employees provide consistent, personalisedsupportwhileworking remotely.Ensuringgovernmentand organisational functions can continue while keeping safe distances is critical to our society today.

“As demand continues to grow, if we are faced with any capacity constraints in any region during this time a clear criterion has been established for the priority of new cloud capacity. Our top priority is going to first responders, health and emergency management services, critical government infrastructure organisational use, and ensuring remote workers stay up and running with the core functionality of Teams.

Abule Ado explosion: Families get N2.5m each from Lagos Joshua Bassey

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agos State government says it has commenced disbursement of N2.5 million to each of the families who lost their loved ones in the Abule Ado pipeline explosion.

Over 23 lives were reportedly lost in the incident that occurred

on Sunday, March 15, 2020, at Abule Ado in Amuwo-Odofin Local Government Area of Lagos.

More than 300 properties were also destroyed and hundreds of residents displaced in the aftermath of the incident.

The Lagos State Emergency Management Authority (LASEMA) in a statement, Wednesday,

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said in keeping with the commitment to assist victims and families affected by the explosion, Governor Babajide Sanwo-Olu had approved the disbursement of the money.

“This approval has been conveyed to victims/families affected by the incident by the Director General of LASEMA, Olufemi @Businessdayng

Damilola Oke-Osanyintolu in a statement which expatiated the modalities for collection and how much each victim/family is entitled to collect.

“Each named next of kin of a deceased victim of the Abule Soba pipeline explosion will be given N2,500,000 by the Lagos State government,” the statement said.

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Trust but verify in the infodemic wars The Public Sphere

CHIDO NWAKANMA

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uring the week, the ramifications of the fake news war unfolded before me.

A friend forwarded information that churned my insides. I shared, only to have egg on my face. Note that my friend trained in the best traditions of journalism. He practised for many years on both the media and client sides of the table. In other words, he is abreast of the issues around ethics and canons of practice.

I was a victim. Luckily, the canons of the profession provide remedies for errors. You publish an erratum and do so quickly. So, I wrote, “The news release about Governor Hope Uzodinma renaming Imo State University signed allegedly by his Chief Press Secretary is fake. Oguwike Nwachuku did not issue any such statement. I withdraw it.

I have apologised to Nwachuku. We all should be careful nowadays. A trusted media person was my source. He must also feel very bad to be used.”

The initial story posed as a news release from the Chief Press Secretary to Governor Hope Uzodinma of Imo State. The statement claimed that the governor announced to visiting of-

ficials of the Imo State University that Uzodinma would rename it after the recently deceased Chief of Staff to Mr President Mallam Abba Kyari. It was inflammable in the context of Nigeria’s power relations and geopolitics.

It would have ended there if my friend shared my concern. He was not sorry. On the contrary, he led me to an understanding of the new war that has weaponised information.

We are in the season of plagues in Nigeria. In addition to coronavirus, there is concern over the economic epidemic with the collapse of the oil market. Another war, insidious and harmful, is around the deployment of information as a weapon.

My conversation with my friend, DIO for short, exposed some of the motivations, objectives and interests around the weaponisation of information resulting in fake news. Fake news is not an innocent act or error in most cases. It is deliberate, planned and purposive.

To my lamentation about falling victim and sharing fake news, DIO retorted, “Yes, I shared it too, but wondering if some fake news isn’t needful or kite flying.” Was he merely playing the devil’s advocate or was this part of the divide in the politics of his home Imo State? Draw your conclusion from our dialogue.

Chido: We should not be part of fake news for any reason, charitable or otherwise.

DIO: I would not deliberately share fake news, but I would not shy away from commentaries they throw up.

Chido: You are saying otherwise.

You are not sorry for sharing this fakery.

You do not care that it made me look unprofessional.

DOI: It is nothing personal. All of us are victims. But any such information, fake or genuine, is an invitation to discourse and we should not shy away from that.

In between, Oguwike Nwachukwu issues a rebuttal in which he directly accuses political opponents of his principal with responsibility for the fake news.

DOI: Here we go, from one extreme to another, from fake news (wrong) to accusatory attribution (again, wrong).

But just in case the original (fake) news may have sounded a note of warning should the thought be contemplated.

Perhaps fake news might have its uses as public opinion gauging plot.

Chido: There are more strategic ways of playing the game of public opinion. Fake news is a contravention of the Cybercrimes Act 2015.

DOI: Subterfuge is safe when it serves the public good. When governments hack computers, spread viruses, release disinformation, they haven’t forgotten the fine prints of rational laws.

There are many takeaways from this dialogue. Some people are willing to be vectors if not originators of fake news.

The wrong information is a weapon of choice for some persons, deployed to achieve various objectives. Information technology is the building block of the economy in the Information or Digital Age. The economy, in turn, affects all other conditions of man, thus the development of digital tools for different areas of man’s existence, from the social to the medical and spheres in-between. There is suddenly a surfeit

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Some people are willing to be vectors if not originators of fake news.

The wrong information is a weapon of choice for some persons, deployed to achieve various objectives.

Information technology is the building block of the economy in the Information or Digital Age

he reasons why some Nigerians, want their leaders dead is not far-fetched.

When the coronavirus broke out, a lot of the Nigerian masses expressed their desire for the virus to visit and wreak havoc at the seat of power. The desire to have death fight the course of perceived injustice or poverty is nothing but a timid willingness of the “querulous”. The change of leadership and systems during the Arab springs were examples of people who went beyond wishing their leaders dead, but people who are truly united in purpose and action. A desire strong enough to change nations and political status quo.

The recent demise of Mallam Abba Kyari, the former chief of staff to President Buhari was an eye open just like the virus that killed him. Abba Kyari’s death and the reactions are two edges of the same sword of governance in Nigeria. While the poor are at most indifferent but want more of such news, the affluence, and people in the corridor of power are eulogising Abba’s virtues known to them and unknown to the suffering masses. What a paradox! While the masses who care less are judging the parts by the whole, the eulogisers are judging the parts by the parts as it concerns or favours them and, not by the whole.

Some in-depth analysis and synthesis of systems are required for us to dissect and understand the feelings of both the masses and a few elites as expressed by the responses to Abba’s death. In the book, Decoding Potential: The Science of Achievement, the author, Robert J. Fowler, posited some facts on systems. He wrote “breaking the whole into its parts is an analysis which helps one to gain knowledge.

Building parts into wholes is synthesis. When you take a system apart and analyse it, it loses its properties. To understand systems, you need to look at them as wholes.”

You need to see the video of a Nigerian in Italy who collected a palliative fund sent to his account at the cash machine. He thereafter

rains curses of abuses on Buhari and his team up to the local government councillors wishing them dead by thunder. Why is he wishing for the demise of the political officers in Nigeria? He has simply compared two systems as a whole and not in parts, and if you care to know, his position is likely to be an objective analysis and synthesis of governance in Italy and Nigeria.

For him, an ordinary immigrant in Italy, to have qualified for a palliative fund to cushion the effects of the lockdown is unimaginable compared to Nigeria where the palliative is done in parts and with unaccountable sentiments. It is a mockery of governance intents and organisation for a minister of the federal republic to be moving around sharing food and cash. Evidence of no or poor system in place.

Where are the BVNs and much talk about development in Nigeria?

In Africa, it is a moral crime to speak ill of someone in the higher realm. We are beclouded by religion and culture. A commissioner lost his appointment in Kano state for the same offence. However, making fair comments about what one has used his (or her) lifetime to do or fail to do should not be a taboo except there are no lessons from such experience.

Let us now look at Abba Kyari, representing the parts of a system viz-a-viz the responses from the two sides of the divide-the ruling elites and the poor masses.

President Buhari scored a good leadership point by appointing Abba Kyari as his Chief of Staff. He takes a secured leader to appoint someone more qualified and intelligent as his aid. In the private sectors, it is rampant to see unsecured leaders who are timid by the brilliance of their subordinates for fear of their positions. I was a victim of such insecurities and had to go the unnecessary miles to give comforts to the unsecured leaders. No doubt Abba Kyari with his education, exposure and experience is no match for the President. He

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was a better-qualified candidate to govern a complex system like Nigeria save for the President’s predestination. He wasn’t a product of the quota systems that helps the backward parts of a system to equate and dominate the progressive parts. His appoint was merited from education and experience perspectives, but more likely on religion and political ideology.

He was a detribalised Nigerian who cannot be better described than how his friend, Geoffrey Onyeama, the minister for foreign affairs did. Abba, a devoted Muslim Kanuri man, was so sociable to have agreed to be the best man of a catholic man at a wedding ceremony. He was also the godfather of Geoffrey’s first son, which mean Abba has entered the church as a full participant of the events on two occasions to count the least. Geoffrey Onyeama could not have done better in his tribute to Kyari.

His tribute reinforces the possibility of a united Nigeria if our diversity is not mismanaged.

Nigeria is a case study of a mismanaged diversity on the platform of religion, ethnic superiority, greed, and power hustling. That is a topic for another day. Onyeama is truly Abba’s friend in life and in death with his defence and response to some allegations against the deceased. There are relationships lessons to be learnt from Geoffrey and Abba’s friendship.

You can trust me to write out the lessons in another article to teach my readers and followers the importance of building diverse and mutual relationships.

There is no doubt to the intelligence and competence of Late Abba Kyari, and all the eulogies are likely to a representative sample of the late chief of staff. The first problem is that those who have been in the corridors of power, describing the positive sides of Abba are not trusted by the poor Nigerian masses.

Nigerians don’t trust their leaders. Of course, they can’t be trusted after many failed elections promises and selfish enrichment of few

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of information.

The World Health Organisation is the latest to warn about the misuse of information, calling it infodemic. An infodemic is “An excessive amount of information concerning a problem such that the solution is made more difficult.”

Gladiators of the infodemic are fully armed. They are willing to destroy the pillars of media, such as source credibility. While I wrote this column Tuesday, they leaned on the reliability of Eng Mrs Joanna Olu Maduka, a pioneer female chartered engineer, to spread fake news about the Infectious Diseases Hospital and the number of coronavirus deaths in Lagos. Luckily Mrs Maduka issued a disclaimer in about four hours.

Anyone can be a victim. It is essential, however, not to remain a victim.

Rebut all such negativisms, quickly and professionally. For consumers of information, trust but verify. A crisis communication expert of the International Association of Business Communicators declared at a conference in 2013 that in this digital age, companies must respond to negative news about them within eight hours. Audiences accept the information as accurate if there is no rebuttal in eight hours because of the speed of information in this age.

What are your thoughts and takeaways on the weaponisation of information in this age, dear reader?

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.

Abba Kyari: Judging the parts by the whole (1)

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Positive Growth with Babs Babs OlugbemI

political appointees. How come the masses who should feel the impacts of leadership, especially the good qualities and acclaimed contributions of Abba Kyari are indifferent or happy when people in power are socked with calamity? Is it the personalities we are electing or the system that is producing bad out of good or average political class?

Going by the way I started, the reasons are not farfetched. The masses are judging from the whole and not by the parts. The essence of leadership is to influence the systems to make lives better. The Nigeria system is bad enough to make worse of any great intention to serve Nigerians.

Garba Shehu in his attempt to prove how honest Late Abba Kyari was exposed the failure of our system. Before the President was elected after a series of failed attempts, he was polished and repackaged with only one song. The song is fighting corruption. Nigerians believe corruptions was the only problem standing against their prosperity as individuals and as a nation.

That was right when common stealing is not corruption under President Jonathan Goodluck. Is the President fighting corruption they way corruption should be fought?

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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Thursday 23 April 2020

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Kyari: How are the mighty fallen!… An Easter like no other (2)

ik MUO

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Abba Kyari: How are the mighty fallen! riday, 19/4/2020 was a particularly bad day for Nigeria.

We had 51 new cases, the highest number of fresh infections since the onset of this COVIDious pestilence, making it a total of 493. Incidentally, we did not (and do not) pay attention to the increasing number of recoveries which at that date stood at 159. And that was the day that COVID claimed its highest political victim in Nigeria, somebody whom many described as the hand (of Essau) behind the voice (of Jacob). I did not know Abba Kyari but I commiserate with his family.

I also condole with the nation because, given the alleged concentration of power around and about him, we have to pay some price, especially, during the transition process.

But before Kyari, Coro has proved that it meant serious business by attacking the high and mighty. One of them was the UK Prime Minister, Boris Johnson. When Johnson was afflicted by oga-coro, everything, I mean, everything, was in the “obediential”.

The whole world knew when he was knocked down; we knew how he fared daily; we knew when it went from bad to worse and he had to be moved to the dreaded ICU; we knew when he got better and left the ICU. We also knew when he received the much-valued clean bill of health and he publicly applauded the UK health system and staff who saw him through.

In the case of Kyari, (who was not the numero-uno himself but happened to be an overactive gate-keeper), it took long before we knew that he was down and everybody pretended not to know.

Indeed, the usually calm Minister of Health lost his cool when an inquisitive journalist asked him about Kyari.

Ne body knew when he fell sick and nobody knew where he was because

even his stay in Lagos was a rumour, especially as the State Commissioner of health allegedly denied knowledge of his whereabout. (Meanwhile, my heart goes out to the Lagos commissioner of Health. When I compare his chubby and fresh visage last month from what he looked like yesterday (20/4/20) I get worried.

Please those who are close to him should tell him to take it easy as I continue to pray that his efforts will continue to yield bountiful fruits. And then, the man died! How are the mighty fallen?

Proclaim it not in the streets of Abuja and Lagos… (I Sam1: 19-20)! Like other cases, we have seen that all is vanity and that our possessions, positions and connections cannot save us from coro or from the ultimate destination of all mortals. But these three factors affected the course of events after his death.

Despite the closure of our airports, he was flown to Abuja. Despite the fact that the corpse was not to be released (Ask Lai), his corpse was released for burial and an unprecedented crowd that had no respect for social or physical distance were at his burial. And then, we learnt that he died in a private hospital, which the government had relentlessly spoken against. Indeed, the day before, the overworked boss of NCDC and Minister of Health stressed themselves to tell us that COVID cases should not be taken to private hospitals.

But thereafter, LASG, who told us that 12 out of the 14 fatalities died in private hospitals, informed us that the private hospital in which he died was certified for COVID cases. The government has apologised for violating its standards in the Aba Kyari case. Good. I never knew that this government knew how to apologise. I don’t know where Lai Mohammed, Femi Adesina and Garba Shehu were when they rendered that apology. Because they would have blamed everything on frustrated politicians and jobbers or to save time. Call it a combination and fake news and hate speech As I said earlier, I didn’t know him apart from what I gleaned from the public square. I knew that all the failings of this government (and they are many), including lopsided security architecture and egwu-eke 1-3 were blamed on him.

I learnt that only those who found favour in his eyes could see the baba himself and that he placed himself on the board

of NNPC. I am aware that he was fighting dirty with the National Security Adviser and that he had a lot of issues with the woman of the other-room about housekeeping issues. I also learnt that he had his birthday celebrations overseas the other day and that he travelled to Germany over our electricity challenges (as if we do not have a minister and ministry of power.

However, I am taken aback by the kind of first-class testimonies people have been given about him since his death. The best has been from Ministry of Foreign Affairs Onyeama, Adams Oshiomhole, who just survived the battle for his political life, and The South East Governors forum. The Governor of Imo State has declared his intention to rename the Imo State University, which another governor built, after the dead Chief of Staff. So, why did all these people fail say all these good things while he was alive, when everybody was buffeting him from all corners? Surely Onyeama had almost a life-long relationship with him and such a heart-rending tribute should be expected. However, what of Adams and Uzodimma? Is it a genuine testimony or a posthumous reward his role in their various political travails and victories?

Anyway, Abba Kyari has gone the way of all mortals. He has proved once more that all is vanity. He was once like us and soon, (at a date, time circumstances and place who can never know) we shall be like him. Let’s I forget, I also extend my condolences to PMB.

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Abba Kyari has gone the way of all mortals. He has proved once more that all is vanity. He was once like us and soon, … we shall be like him

Other Matters: An Easter like no other (2) Then the kings of the earth, the princes, the generals, the rich, the mighty, and everyone else, both slave and free, hid in caves and among the rocks of the mountains. They called to the mountains and the rocks, “Fall on us and hide us from the face of him who sits on the throne and from the wrath of the Lamb! For the great day of their wrath has come, and who can withstand it?”

(Revelation,6:15-17). Beyond the unusualness of the season (An Easter like no other,16/4/20), there was a gloomy atmosphere everywhere, with many people feeling that the end had come.

That foreboding atmosphere affected the mood of the Easter and the messages from all the pulpits across the country.

They were messages of hope in a period

Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

PDP on point notwithstanding

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he Peoples’ Democratic Party (PDP) in its reaction to President Muhammadu Buhari’s second address to the nation on Monday 13 April, 2020 on the state of the nation vis-à-vis Coronavirus pandemic, knocked most of the points in the President’s address. Though, PDP is arguably known with carpeting all actions of the ruling party which justifies the caption, “campaign of disorganisation”, nonetheless the opposition party has a salient point this time on account of the situation on ground.

The Senior Special Assistant (Media & Publicity) to President Buhari had exploded over PDP’s remarks against President Buhari’s address citing the remarks by European Union delegation to President Buhari as evidence that suggests the government has done well.

“Something must definitely be wrong with People’s Democratic Party (PDP) if they wouldas they did yesterday- dismiss the important national broadcast by President Muhammadu Buhari as “disappointing,” a speech for which the European Union, through their Ambassador to Nigeria, congratulated the President, describing it as ‘‘a very powerful address to the

nation last night”, Garba Shehu stated in his opening paragraph.

Without a doubt, President Buhari deserved commendations for his efforts so far in the fight against the spread of the dreadful pandemic, and therefore such remarks by external visitors are apt. Remarkably, President Buhari ensured that one of his daughters that returned from the United Kingdom self-isolated herself for the specified period as recommended by local and global health authorities. The deed alone is sufficient to attract encomiums to the President for not allowing personal interest override the interest of the general public.

However, it is important to note that the Head of EU Delegation commended President Buhari over his reported interventions, and not on appraisal from the streets and communities.

By making provision for 2.6 households in dire needs, the President deserved a thumb-up. The question is how far has the implementation by government officials gone? Does it reflect Mr. President’s budget and targets or reflect the reality on ground?

Without doubt, under PDP, the social intervention will not only be diverted to individual

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pockets but looted lavishly with impunity, for as far as it is concerned, stealing is not corruption. However, the system must be strengthened to thrive. Thus, all avenues to corruption must be blocked for everyone. The cries of helpless masses including starving children and babies that are subjected to hunger by the lockdown demand a sober reflection.

Now, the crux of the matter is the fate of the masses that are crying and dying of hunger. This is what matters at the moment and not whatever any delegation said to the President. Buhari in his address noted that a lot of citizens live from hand to mouth which implies they struggle and survive through daily efforts and without any savings anywhere. This is the position of many artisans in the country.

The presidential address emphasised that palliatives packages would get to them which is commendable. But the question is how many will eventually get the relief package as announced by the President?

Certainly, PDP having been in power for 16 years are not novice of the weak system we operate to the advantage of public officeholders, at the detriment of the masses. Yes, PDP

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of COVIDious mess as priests preached the risen Christ in a season of crises We were reminded that the Church was (is)not a physical building but within us and that we should preach the risen Christ by lives we live and the examples we show. We were told that just as God removed the slab from the tomb, he will remove the scourge, troubles and trials of this time(coro) and that just as the Satan flees when we are in Christ, so should coro flee because Jesus Christ lives in us. Archbishop Adewale Martins who blamed the coro-scourge on ecocide among others, asked us to stay strong, because it would soon be over and that the hand of God would see us through. He likened 2020 Easter like the Passover which the Israelites ate during plagues, uncertainty and deaths in Egypt because we had virus, lockdown, fear uncertainty and death.

Pope Francis told us not to yield to fear, and to be messengers of life in this season of death. We were reminded that the women who went to the tomb early in the morning were filled with fear and confusion as they left the graveside. However, when they met Jesus, he replaced their fear and confusion with joy. In a similar manner, the Lord will remove the coro-induced fear and confusion. We were also reminded that as people are dying, more are being discharged and that we should have faith in God who holds the whole world, including his virus, in his hand!

Emeka Nwosu liked one of the outcomes of the coronised Easter: The return of simplicity in everything, including the way we worship, live and relate. He prayed we would internalize this paradigm going forward. And from the territorial Commander of Salvation Army Nigeria comes this message We have no firm knowledge of what tomorrow will bring; we don’t know how and if our communities will withstand the devastating pandemic and in our plight, our minds cry out: “my God, My God, why hast thou forgotten me” and then he reminded us of the song of Bill Gaither “because he lives, I can face tomorrow” He assured us that we would survive, face tomorrow and tell the coro story in the years to come. Sure, it shall come to pass and we shall tell the tale.

Carl Umegboro knows that Nigerian politicians must exploit the scheme to their advantages. It is immaterial whether the officials are in PDP, APC, APGA, YPP and so on and so forth. The truth is that abuse is inevitable.

In fact, none of the developed countries in the world will adopt such primitive approach of entrusting any person with public funds to share by cash without any accountability mechanisms in place. So, this is a critical point PDP raised that will not go like its other propagandas. The party had asked for identity of 2.6 households that are beneficiaries of the intervention funds to be provided before adding funds for additional one million households.

Irrefutably, that makes sense.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Umegboro, a public affairs analyst and Associate, Chartered Institute of Arbitrators (United Kingdom) can be reached via: https:CarlUmegboro.com

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Abba Kyari and the narcissism of our middle class ‘ This typifies CHRISTOPHER AKOR

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round 2012, the federal government initiated a Presidential Special Scholarship for Innovation and Development (PRESSID).

Open only to first class graduates of mainly science disciplines from Nigerian universities and following a highly competitive selection process, the recipients were expected to study up to PhD levels at the top 25 universities in the world. They signed a bond obliging them to return to the country at the end of their studies to become effective change agents in Nigeria. Of course, the scholarship was to cover tuition, accommodation and heating, return flight tickets, living expenses, local travels and other special costs during the course of study. The Tertiary Education Trust Fund (TETFund) and the National Universities Commission (NUC), joint-sponsors of the scheme, also wrote to all schools under the programme guaranteeing full sponsorship for all the scholars for the full duration of their studies.

The first batch of PRESSID scholars left the country in the third quarter of 2013. Expectedly, they excelled in their studies, finished their Masters and promptly enrolled for their doctorates.

Then, in 2015, Goodluck Jonathan, the initiator of the scholarship, lost his reelection battle to Muhammadu Buhari.

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Suddenly, accusations that PRESSID was meant for the south and systematically excluded northern graduates became rife. Luckily, before the Buhari administration could settle in, the tuition and living expenses for the 2015/16 session was paid without issues.

However, without warning or even premonition, the payment stopped the next session. Worse, there was no word from their supposed sponsors - the Tertiary Education Trust Fund (TETFund) and the National Universities Commission (NUC). The only rumour from the grapevine was that the scholarships had been transferred to the federal scholarship board. That was the end of the matter. No word from the NUC or even the Federal Scholarship Board, the new sponsors of the programme.

Suddenly, Nigeria’s brightest scholars became destitute in the countries they went to study. Instead of focusing on their studies, their main focus became survival and staving off harassment by bailiffs. Due to accumulated debts to the schools, most of them were served eviction notices from their accommodation, their access to university portals, laboratories, libraries, and facilities were limited and most of them eventually found themselves on the streets without accommodation or even food.

It is at that point they began a campaign to draw the attention of Nigerians and the world to their plight. They made representations to the Nigerian High Commission in London, organised protests on the streets of London, had interviews with television stations in Nigeria and got some of us at home to join the fight, calling out the government for reneging on the contract it signed with them.

For me also, the fight was personal.

I had a bosom friend on the PRESSID

scholarship studying at Cambridge.

What was more, my friend was the face of the struggle and was the official spokesman of the group.

However, some months later, my friend stopped talking about their plight. When I tried to enquire, I got evasive answers. Not wanting to cry more than the bereaved, I let the matter be. I later got to know that many of the scholars were either forced to abandon their studies or look for alternative sources of funding. I never got to know how my friend was able to secure his funding to complete his programme until last week. After the death of Abba Kyari was announced, my friend wrote a beautiful tribute to the late Chief of Staff. In it, he detailed how he met the late Kyari in Cambridge and they hit it off from there. He gushed about how so approachable, humane and humble the late Chief of Staff was, the book gifts he received from him and even displayed the emails they exchanged thereafter. He also mentioned, as an aside, how Abba Kyari helped facilitate the payment of his scholarship funds to help him complete his studies.

It all made sense to me at that point.

He has been sorted and all is now well even when the rest of the PRESSID scholars are wallowing in despair and some of us who joined the fight are still in the bad books of the Nigerian authorities with Femi Adesina describing some of our criticisms as “Satanic verses!”

This typifies the behaviour of the Nigerian middle class – a topic I’ve had to return to again and again on this page. That selfish and narcissistic streak in us that prioritises personal survival and prosperity over societal/group emancipation and progress is exactly the reason why we cannot make any progress as a society. It is why, despite

the behaviour of the Nigerian middle class … that selfish and narcissistic streak in us that prioritises personal survival and prosperity over societal/group emancipation and progress is exactly the reason why we cannot make any progress as a society

our huge potentials and human capital, we remain rooted at the bottom of the world poverty index.

Since the death of Abba Kyari was announced, I have read many beautiful eulogies written by his countless friends and even critics. But like Cheta Nwanze beautifully puts it: “pretty much everyone who spoke glowingly of the late Abba Kyari either knew him personally, or benefitted from him, and therein lies one of the problems.

No one appears to care for the country, just self.”

It doesn’t matter to them that in a country of over 200 million people, not everyone would meet Abba Kyari.

Yes, he was only the Chief of Staff.

But he was the most powerful Chief of Staff in the history of Nigeria. And with a boss in diminished health and mental capacity, he not only became the gatekeeper to his boss and the only channel through which communications to and from his boss is conveyed, but also became the engine room of the government and the brain behind all the disastrous policies of the government that has collapsed the economy and deepened poverty.

Besides, we are talking of a nonelected government official who successfully hijacked and wielded presidential powers without any accountability. Like Olu Fasan noted sometime back, “nothing undermines democracy and good governance more than shadowy people who wield so much power but are unaccountable.” In saner climes, parliament, who constitutionally performs oversight functions on the executive, will publicly name and quiz such individuals and protect the Presidency from being hijacked. But of course, this is Nigeria. And now at his death, we are being regaled with how excellent a human being he was!

Global Gas and Refining Ltd v. SPDC: Is Lagos pro or anti arbitration? - A rejoinder

A

recent article by Mrs Funke Adekoya SAN in BusinessDay of 26 March 2020, entitled “Global Gas and Refining Ltd v. SPDC: is Lagos pro or anti arbitration?”, gave me pause.

The essential thrust of the article is that a ruling by the High Court of Lagos State setting aside a single arbitration award, undermined the practice of arbitration and the arbitration process in Lagos; and that this is so, notwithstanding that the legal challenge to the award was premised on an alleged breach of one of the most fundamental duties of arbitrators to safeguard the integrity of the arbitration process: the duty of the arbitrator(s) to disclose any circumstances or relationships which may cause their impartiality to be questioned by a party to the proceedings.

The conclusion of the article “that for as long as this decision stands unchallenged, Lagos cannot claim to be pro-arbitration”, is an astonishing one!

I must be careful not to overstate the case, as I argue that Mrs Adekoya’s article does, and suggest that the breach of the duty of disclosure by an arbitrator must ipso facto result in the annulment of his or her award. That is certainly not the law.

But it has been my understanding, after over five years as a member of the ICC International Court of Arbitration, between 2001 and 2006, reviewing countless awards and challenges to arbitrators, and as a practitioner in this field for more than 25 years, that the setting aside of an award is sometimes necessary and almost inevitable in certain situations. One of such circumstances occurs when the losing party establishes that the arbitrator is aware of certain circumstances or relationships that existed or have come to exist and are evidently relevant

to his proposed appointment as arbitrator and might affect perceptions about his or her ‘likelihood of bias’, but chooses to keep silent.

By doing so, such an arbitrator deprives the aggrieved party of the opportunity to question his or her impartiality or independence on account of the undisclosed circumstances or relationships, and thereby compromises the legitimacy of any award the arbitral tribunal renders.

Undoubtedly, the facts of each case matter. Each set of circumstances will influence the outcome of a review by the courts, whose limited supervisory jurisdiction is embedded in every system of arbitration.

Public confidence in arbitral proceedings is absolutely critical to the process of arbitration.

The requirement that arbitrators ‘must not only be impartial but must be seen to be impartial’ is therefore critical to ensure that this confidence is not eroded.

The setting aside of arbitration awards by national courts is indeed envisaged in Article V of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). Significantly one of the grounds provided is that a signatory state may refuse to recognise or enforce an award that has ‘been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made’.

The New York Convention however leaves the grounds on which an arbitral award may be set aside to be defined in national legislation, particular to each jurisdiction.

The award in the matter of Global Gas and Refining Ltd v. SPDC was made pursuant to the Arbitration and Conciliation Act Cap Laws of Nigeria (ACA) which expressly provides that “Any person who knows of any circumstances

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likely to give rise to any justifiable doubts as to his impartiality or independence shall ,,, forthwith disclose such circumstances to the parties”, and that “this duty shall continue and subsist ,,, throughout the arbitral proceedings, unless the arbitrator had previously disclosed the circumstances to the parties”.

Under its Rules of Arbitration the ICC demands a similarly stringent protocol of disclosure of arbitrators in all arbitrations it administers and in particular of the arbitrators it appoints.

Section 30(1) ACA specifically empowers the Court defined as “the High Court of a State, the High Court of a Federal Capital Territory, Abuja or the Federal High Court”, to set aside an arbitral award if an arbitrator has misconducted himself or herself. The instances of misconduct set out by the Supreme Court of Nigeria in Taylor Woodrow (Nig.) Limited v. S.E. GmbH [1993] 4 NWLR (Pt 286) 127 by necessary inference, include a deliberate breach of the duty by an arbitrator to disclose “any circumstances likely to give rise to any justifiable doubts as to his impartiality or independence” This is precisely what the trial Judge in the High Court of Lagos was faced with in the application to set aside the award in favor of SPDC in the case of Global Gas and Refining Ltd v. SPDC. What matters here is whether there is a reasonable apprehension of bias. Once this has been established, the underlying proceeding ought to be set aside as void. It becomes unnecessary to embark on any further inquiries as to the merits, which in the case of Global Gas and Refining Ltd v. SPDC itself, sadly leaves much to be desired.

The curious and I dare say unprecedented

https://www.facebook.com/businessdayng

Odein Ajumogobia phenomenon of the majority award making copious references to the dissenting arbitrator’s findings and conclusions, as if the majority award was a rebuttal of the dissenting award, rather than the other way around, is obviously beyond the scope of this article.

The recent decision of the British Columbia Court of Appeal in Canada, in Hunt v The Owners, Strata Plan 2018 BCCA 159, is instructive in reaffirming that the longstanding maxim that “justice must not only be done, it must be seen to be done” is applicable not only to courts of law, but to international arbitration also. What was of interest to the Court of Appeal was not the substantive matter in dispute in the arbitration, but rather the existence of ex parte communications between counsel for one the parties and the arbitrators in the course of the proceedings! These private interactions were not disclosed to the losing party by either the successful party or by the arbitrators.

Following their discovery, after the award had been issued, the losing party brought a petition to set aside the arbitration award, on the basis that there was a reasonable apprehension of bias. The petition was dismissed in the High Court. The Hunts appealed to the Court of Appeal.

Note: The rest of this article continues in the online edition of BusinessDay @https://businessday.ng Odein Ajumogobia SAN, is a Senior Partner at Ajumogobia & Okeke

@Businessdayng

12

BUSINESS DAY

Thursday 23 April 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun

Covid-19: FG must urgently rejuvenate MSMEs to save jobs, economy

editor Patrick Atuanya

Initiate a well-coordinated, corruption-free post-coronavirus programme for MSMEs

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

Bashir Ibrahim Hassan

S

erious governments across the world are unveiling pragmatic programmes to rejuvenate small businesses that have been hard hit by the coronavirus-induced lockdown.

The United States’ president Donald Trump introduced a $350 billion stimulus package and is requesting more approvals from the Congress to revive and retool small businesses.

Similarly, German Chancellor Angela Merkel announced a limitless loan programme for the country’s small businesses and will lend as much as $862,000 to one business. This is targeted at enabling them to pay rents and cover other costs resulting from demand-supply disruptions. Also, France’s Emmanuel Macron is spending $50 billion to help businesses and their employees struggling with coronavirusrelated stress.

On the continent, South Africa has set up a Debt Relief Fund to support MSMEs and save the already stressed economy from a deeper mess.

These governments are providing the loans to save millions of investments, jobs and prevent their economies from caving into recession or depression.

In Nigeria, MSMEs are the bedrock of the economy, accounting for over 95 percent of all the businesses. The 41.5 million MSMEs contribute 50 percent to Nigeria’s GDP and account for 86.3 percent of employment (59.6 million jobs), according to a 2017 report by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).

However, the survival of millions of these businesses are threatened while Nigeria fight COVID-19 with lockdown measures.

Some operators of micro businesses are among 87 million extremely poor population earning less than $1.90 per day. Available statistics shows that micro businesses from “akara” balls seller to kiosk operators account for 99.8 percent of the 41.5 million MSMEs in Africa’s biggest economy.

Many of these businesses are not sure of returning after the

lockdown, concluding that 2020 is already a lost year even in the absence of a well-coordinated relief programme from the Nigerian government.

Millions of workers in these businesses may not return to their jobs after the pandemic, pressuring up unemployment rate with currently reads 23.1 percent.

President Muhammadu Buhari is planning to borrow $6.9 billion and has asked the National Assembly to approve N500 billion intervention fund. The government also has wads of cash from donations and the Sovereign National Fund.

Rather than waste money on white elephant ventures when available, we urged the government to initiate a well-coordinated, corruption-free post-coronavirus programme for MSMEs to save the Nigerian economy from plunging into a steep slump.

Like it is done in other countries, small businesses can be provided with single-digit loans and given moratorium of two to five years.

Those in job-creating sectors such as manufacturing, IT, telecoms, entertainment and agriculture may

be given priority.

This measure will yield results as long as the right businesses are targeted and identified. Such a programme must be politically-neutral and managed by development banks such as Bank of Industry, Bank of Agriculture and Development Bank of Nigeria. The loans must also be long-term to enable these MSMEs stand strong enough.

Failure to do this may not be palatable for the economy because unemployment gets worse whenever small businesses begin to shut down.

For instance, between 2016 and 2017, about 272 MSMEs were forced to shut down. About 180,000 jobs were lost within the period, according to a survey jointly done

by NOI Polls, the Manufacturers Association of Nigeria (MAN) and Centre for the Studies of Economies of Africa in 2017.

Unemployment, as is evident today in Nigeria, comes with all forms of social vices such as armed robbery, kidnapping, banditry, rustling, terrorism, theft and a lot of others. Nigeria can stop these crimes from getting worse by supporting people’s livelihoods.

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

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

Enquiries NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

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@Businessdayng

Thursday 23 April 2020

BUSINESS DAY

13

Investor Helping you to build wealth & make wise decisions

Market capitalisation

NSE All Share Index

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

908.65 983.01

263.53

117.98

334.59

206.11

1,464.45

960.57

837.21

275.99

118.96

386.68

209.14

1,606.43

1,010.17

874.27

4.73

0.83

Week open (09-4–20)

21,384.03

N11.144 trillion

1,786.28

877.07

734.99

Week close (17-4–20)

22,921.59

N11.946 trillion

1,942.94

929.05

734.99

Percentage change (WoW) Percentage change (YTD)

7.19 -14.61

8.77 -8.19

5.93 -19.34

0.00 0.00

8.18 -16.54

-22.66

-5.45

5.16 -34.78

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

1.47

9.70

5.16

4.43

-20.34

-12.44

-6.08

-17.06

‘We are working to deepen the market, ensure improved confidence’ Mary Uduk, acting Director General, Securities and Exchange Commission (SEC) in this interview with Iheanyi Nwachukwu speaks on efforts made by the apex regulator, the Self Regulatory Organisations (SROs), market operators and issuers to ensure Nigeria’s capital market functions effectively despite Covid-19 lockdown. Excerpts.

What are your thoughts on the Covid-19 lockdown as it affects Capital market? es, it’s not looking very good but we have put measures in place to ensure our market doesn’t shut down, presently trade is going on in the various exchanges that make up our market.

The Nigerian Stock Exchange is continuing with trading, the FMDQ and all the Exchanges are actually continuing and everything is going well.

In the past we talked a lot about FinTech or Financial Technology and how it has disrupted the market but now its COVID-19 that has also disrupted the market, disrupted everything. Therefore as human beings we have to adapt to be able to ensure that our lives continue and not allow COVID-19 to put our lives on hold, and therefore we are leveraging on technology. Initially people were afraid of technology but right now it has become a saving grace given the COVID-19.

Most of us are leveraging technology, we have put our Business Continuity Plan (BCP) in process, staff are working remotely, we are interacting with market operators they are also working remotely.

Our staff are equipped to be able to continue to work remotely and support the market in every area.

We have also issued circulars to capital market operators guiding them, also on how we expect that the market would remain open and that the market continues to function seamlessly.

Like you know we use phones, we have had meetings using phones, in the last three days we use phone to hold meetings for 2 to 3 hours both my staff and other market operators.

We use Zoom to also have meetings if we want to see each other and so many other ways.

We are happy with the way the Capital Market is going, we have released about three circulars concerning the action against the COVID-19. One of them was to tell the entire Capital Market Operators who we regulate to give us report on their Business Continuity Plan and processes (BCP) and as you can see the market is trading and everyone

Y

Mary Uduk, acting director general, SEC

has activated their BCP, the stock exchanges, the clearing houses and even the brokers, all capital market are all operating with their BCP. We have also asked the public companies to ensure that they continue to send out information in line with their responsibilities to make sure that investors are informed.

We have said that they should give out information on how COVID– 19 would affect them, if possible make forecast and outlook to let investors know how the pandemic can affect their operation and others.

On our part, we have put up email address that people can use to send returns, applications. They are all on our website. What we have done is for the Capital Market to continue to work while we are on lockdown.

We have advised everyone to under our purview and investors on how to invest.

How supportive is the SEC towards remote trading on the Exchanges?

Most of the exchanges particularly when you talk of the Nigerian Stock Exchange, FMDQ, NASD and the new Commodities Exchanges have all www.businessday.ng

activated their remote business plan and all of them are trading remotely.

Also an exchange like the NSE over the years had spent a lot of money to put in place a lot of technology related infrastructure and right now is beginning to reap the fruit of all of that investments and same with other exchanges.

All of them have put in their BCP in place and are trading remotely, for instance all of them have moved staff very close to their offices where they are able to support the market, the dealers, issuers and trade remotely as well as ensuring that investors reach their investments and also make investments decisions.

The Commission also issued circulars to ask the exchanges and other market operators to activate their remote trading processes to support the market and also ensure they let the Commission know what their plans are to support the market and business to continue so that the market does not suffer in anyway.

Everybody talks about bringing back confidence in our Nigerian market, how well are we able to do that at this time?

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There is a gap in every market not just ours, I am sure you have been following the foreign markets in the US, Europe and Asian. They have had many ups and downs during this period and I would even say that in the past two weeks our market has been more resilient than most of them.

Talking about confidence in this period of COVID-19, we have not done badly, our trading has continued but, for confidence over time, the SEC has been doing a lot to ensure that we have a robust investor confidence.

We lost some confidence in 2007/08 when there was the crisis, we had a lot of the retail part of the market exit the market. But that was because we did not have a lot of things in place, but now we have many measures we have put in place to improve market confidence.

One of them is the e-dividend system we have put in to ensure investors get their dividends paid directly into their accounts. The dividends don’t have to be routed through stockbrokers any longer.

We also have continued to educate investors on how to approach the market. We have continued to ensure that the market conduct improves, we are working to deepen the market to ensure there is improved confidence.

We are optimistic that confidence in the market will continue to improve.

What is the SEC doing to protect investors?

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

As the regulator, what we are interested is: do you have an efficient market?, Do you have a liquid market? ...so that transaction cost will be reasonable, so that someone does not take advantage of another person.

But market can move up or move down. All we can do as a regulator is to ensure that people do appropriate disclosure so that they don’t have one information and hide it and then use that information at investors detriment. But if all those are done @Businessdayng

and market moves up or down, there is almost little or nothing we can do about it and that is the essence of investment.

But for investor protection, we ensure that nobody takes your money away in an illegal manner, but the protection is not that somebody will compensate you when the market moves down.

When market moves up it is an advantage to some people and when it comes down it is also an advantage for some people to buy. The cardinal of the market is buy low and sell high, so when it moves up there are some people who are ready there to take profit and that is why when we say market goes down on the back of investors taking profit. So whichever way the market goes, as long as investors monies are not taken illegally the cyclical movement of market is just a natural way that a capital market operates.

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

During the last Capital Market Committee (CMC) meeting, the Investor Education Committee came up with quite a few things. They are undertaking few initiatives, the first as you may know is the inclusion of Capital Market Studies in basic and advance school curriculum, that is the secondary and primary school.

The thrust now is to begin to prepare teachers guidelines, and also we are now looking at the university curriculum so that people understand capital market from the basics as they go through their education.

Another thing is the e-dividend issue, so far we have about 2.8 million accounts mandated for e-dividend and we are looking to increase that.

We want more people to be aware of what it is and that you can get your dividends directly into your own account. We believe that will increase Continues on Page 14

14

Thursday 23 April 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equity market: NSE-ASI gains whopping 7.2% week-on-week

T

he previous week was extremely bullish for the local equities market, as investors dived into attractive stocks at relatively cheaper prices.

Notably, the NSE All share index gained a whopping 7.2percent week-on-week ( w / w ) , m o d e rat i n g t h e year-to-date (YtD) loss to -14.6percent. Also, investors gained N801.3billion in value, as market capitalisation closed at N11.9trillion. In terms of activity levels, average volumes and value traded declined by 38.8percent and 35.3percent, to 231.6million and N2.6billion respectively.

Across the sectors under our coverage, green was the colour of the week, as all five sectors closed positive.

The Consumer goods (+15.6percent) sector was the star performer, due to massive gains in NB (+45.7percent), NE STL E (+16.5p ercent) and DANGSUGAR (+15.4percent). This was followed by the Industrial goods (+5.2percent) sector, as

sentiment, market breadth stood at 1.9x, with 34 stocks advanced w/w compared to 18 decliners for the week. In other news, FBN Holdings Plc announced that it has commenced discussions with Sanlam (PTY) Limited, to sell its 65percent stake in FBN Insurance Limited.

In the weeks ahead, we expect sentiments to improve but with less intensity as stock prices find a new level. Also, the influx of first quarter (Q1) 2020 earnings by listed companies is on the watchlist of investors, and will shape interest.

Money Market: Bullish sentiment dominated OMO & NTB markets At the start of the previous week, Interbank funding rates -open buy back (OBB) and overnight (O/N) rates were in the single digit region, as system liquidity remained buoyant.

This was further elevated by major inflows from OMO maturities (N135.9billion) and NTB maturities (N58.5billion) during the week. Also, in terms of outflows, the CBN took advantage of the buoyant

DANGCEM (+16.2percent) and BUACEMENT (+3.4percent) moved up.

The Banking (+4.7percent) sector also gained w/w, owing to GUARANTY (+10.3percent), ZENITH (+7.1percent) and STANBIC (+5.8percent). In addition, the Oil & Gas (+1.5percent) sector edged upwards, pushed up by CONOIL (+32.3percent).

Finally, the Insurance (+0.8percent) sector gained marginally, due to CORNERST (+9.3percent) and WAPIC (+3.9percent). Elsewhere, in the Telecoms space, MTNN gained +6.8percent w/w.

In terms of investors’

system liquidity to mop up N134billion via OMO sales and total NTB maturities via an NTB auction. As a result, average interbank funding rates ended the week at 2.1percent.

At the primary market, the CBN allotted 134percent of the total OMO bills on offer, selling N134billion vs N100billion put on offer. Notably, there was an oversubscription across board, with strong demand for the 82-day bill (bid to cover: 3.2x), the 166-day bill (bid to cover: 3.6x), and the 362-day bill (bid to cover: 1.1x). Also, stop rates declined marginally to 12.75percent (previously:12.8percent) at the

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long edge of the curve, while stop rates on the 88-day was 11.50percent and the 166-day at 11.54percent. Meanwhile, at the primary NTB market, local players continued to bid aggressively for the tenors offered, with bid to cover for the 91-day at 2.2x, 182-day at 3.6x and the 364-day at 2.2x.

Despite the impressive bid, the CBN only allotted what was offered, at N58.5bn. Notably, stop rates declined across all tenors: 91-day bill at 1.9percent (previously: 2.2percent), 182day at 2.7percent (previously: 3.2percent) and 362-day at 4percent (previously: 4.3percent).

Elsewhere, at the secondary market, we observed some buying interests, as players with idle liquidity took positions in NTBs. Thus, average NTB yield declined by 23basis points (bps) w/w to settle at 3.1percent. Also, a similar performance was observed at t h e OMO s e c onda r y market, as average OMO yield declined by 1.1percent w/w to 11.26percent.

This week, we expect the financial system to remain awash with liquidity, given maturities from OMO bills (N267.7billion). Also, with the trend of better turnouts seen at previous OMO auctions, as well as the bullish sentiment in the OMO market, we expect the CBN to float at least one OMO auction.

Bond Market: Yields at the secondary market continue to decline In the previous week, the local secondary bond market continued to attract buying interests, fueled by the buoyant level of system liquidity. As a result, average yield dropped by 31bps, to end the week to 11percent. Notably, the decline was across all bond maturities, as yields on majority of the instruments declined.

At the Eurobond market, the historical oil production cut was unable to rescue the dwindling Brent crude oil price, as weak global oil demand outweighed any positive effect. As a result, a mild selloff occurred on Nigeria’s sovereign Eurobonds, as average yield ticked up marginally by 11bps w/w, to 11.53percent.

•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

COVID-19: Capital Market Support Committee to raise N1bn Iheanyi Nwachukwu

I

n a bid to support the fight against COVID-19 and its impact on the Nigerian economy, the capital market community has launched an initiative with the aim of raising N1billion within the shortest possible time.

The money will be used to provide palliatives to the impoverished and medical equipment to designated hospitals and isolation centres.

This was stated on Tuesday by the Acting Director General of the SEC, Mary Uduk.

Uduk disclosed that the fund is expected to assist in cushioning the effects of the pandemic on poor and venerable Nigerians as well as providing some critical medical supplies.

She said, “The Committee has commenced work and has set a target to raise the sum of N1billion from market participants and stakeholders within the shortest possible time. The money will be used to provide palliatives to the impoverished and medical

equipment to designated hospitals and isolation centres.

While acknowledging on-going efforts at providing critical medical supplies and palliatives to Nigerians, Uduk stated that the Nigerian capital market community recognises that more still needs to be done, especially for the vulnerable and less privileged in the society.

“To this end, the Nigerian capital market community, led by the Securities and Exchange Commission, on Thursday, April 16, 2020, inaugurated a market-wide Committee, the Capital Market Support Committee on Covid-19, to coordinate the capital

market community’s effort in mitigating the medical and economic impact of the pandemic on the vulnerable and the less privileged. ” This is a challenging time for everyone and the capital market community cannot afford to stay on the side-lines in the fight against Covid-19.

We urge fellow Nigerians to continue to take all necessary safety precautions and abide by all directives issued by the Federal Government and its relevant agencies. Together, we will overcome this pandemic” she added.

Recall that following the confirmation of the COVID-19 index case in Nigeria on February 27, 2020 and the subsequent identification of other cases, the Federal and State Governments have introduced several measures to contain the spread of the disease. The private sector has also thrown its weight behind the Government in an effort to contain its spread and alleviate the economic, and medical hardship brought about by the pandemic.

‘We are working to deepen the market, ensure...

Continued from Page 13 or improve market confidence and make a lot of retail investors return to the market.

We are also introducing new products, as you may be aware we are trying to build a commodities market. We believe that Nigeria is ripe for vibrant and a robust commodities market. There has been engagements with the stakeholders such as the Standard Organisation of Nigeria (SON) to establish standards for our commodities, so that we can create market and build market for it. We have a commodities ecosystem world group that has come up with all those very inciting recommendations on what we need to do to have a good commodities market.

We are also looking at the derivatives market, the rules have been exposed to the

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market and it would soon be approved and out, very soon we hope to have an exchange traded derivatives in the market.

All these are to deepen the market, improve liquidity in the market, make the market more vibrant and more attractive for investors.

You have zero tolerance to Ponzi schemes in Nigeria since you assumed this position.

Can you tell us the objectives behind this?

Ponzi scheme is prohibited by the provisions in Section 38(1) of the ISA that does not allow people that are not registered to collect money from the public or authorized by SEC to do so. Therefore, whoever collects, money from the public without being registered by the SEC, first has done that illegally.

In terms of Ponzi scheme, it is different from people just collecting money illegally, but Ponzi schemes are those who collect money from people @Businessdayng

and promise them mouthwatering interest which are not sustainable.

Some of them like the MMM, Jung-Dong and so many of them and others that have collected money from the public in the past promising them those kind of interest that their business fundamentals do not support.

They collect money from the first set of people and pay them mouth-watering interest, by the time they don’t have people bringing money again they are not able to pay subsequent people that they are collecting money from and before you know it they close their doors and disappear. People will start crying that the Commission is not protecting them and therefore we are saying to the investing public that every capital market operator that is licensed to operate in this market must be registered by the Commission and their names are on the website of the Commission.

Thursday 23 April 2020

BUSINESS DAY

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cityfile Covid-19: UMTH intensifies contact tracing of index case

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L-R: Shakirat Adeosun, director, Pharmaceutical Services, Lagos State Primary Health Care Board; Olugbemiga Ayoola, permanent secretary, Lagos State Primary Health Care Board and Kenneth Adejumoh, the corporate communications manager, Nosak Group during the presentation of essential medical items to support Lagos State government in the fight against COVID-19 pandemic recently.

Stay-home order: Niger women embrace family planning

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ome childbearing age women in Niger State are now accessing family planning following the lockdown imposed by the state government to curb the spread of the Covid-19 pandemic.

Hassana Amos, the assistant officer in charge of the family unit at the Family Support Programme (FSP), a primary healthcare facility in Limawa area of Minna, disclosed on Tuesday.

Amos spoke at a one-day Challenge Initiative (TCI) media field trip on family

planning to the FSP facility.

She said more women were coming to the facility to access two-month injectable method of family planning to avoid getting pregnant during the period of the lockdown.

“We are attending to more women during this lockdown, especially on off-day (alternate days when people are allowed to go out of the house) within the week.

“Many of them preferred the injection type for two months.

“They preferred the injection because they feel it will still enable them to get pregnant

immediately when they are ready without delay,’’ she said.

According to her, blood pressure examination and pregnancy test were also conducted on the women to ensure they were fit to access the family planning.

Amos added that the facility rendered family planning services such as injectable pills, implants and IUCDs. She said men also come for family planning and were given male condoms.

Amina Mohammed, one of the women who was at the programme, said she was there to access the two-month

family planning method to avoid getting pregnant during the lockdown period.

“My husband is a civil servant and now that he is not going to work because of the lockdown, we are always together at home.

“So, our level of intimacy has increased.

“I am not ready to get pregnant now; that is why I want to do family planning for the period of lockdown,’’ she said.

She said that her husband supported her decision to do the family planning as they were both not ready for another pregnancy now.

GODFREY OFURUM, Aba

promising young man, Friday Arunsi, aged 21, who was killed, by a police constable in his home town, Ebem, Ohafia in Ohafia local government Area of Abia State on Friday, April 17, 2020.

“We demand that the police authorities should publish the name of the culprit and his partners in crime that took the life of this legitimate young businessman, whose only crime was that he was offloading his goods in front of his shop.

“Goods approved by both Federal and State governments to be sold during the lockdown.

They observed that cases of extra-judicial killing has taken a dangerous dimension in Abia state, noting that the killing of Friday Arunsi, has

brought to 5, the number of persons killed during the ongoing lockdown in the state.

“Abia has not recorded any death from Coronavirus, which is the main reason for the lockdown, but security agents have killed five persons.

“Abia residents are not animals that should be killed at will. If in the past cases of extrajudicial killings were treated with levity, it is unacceptable during this lockdown.

“We call on the police to expedite investigation and action on all cases of extrajudicial killings in the state, to serve as deterrent to erring security agents, who think that rifles given to them to protect citizens are meant to kill them at will.

“We also call on the governor of Abia State, Okezie

Ikpeazu to consider relaxing the lockdown within the state and concentrate only at entry points to avoid further loss of lives.

“On several occasions government has warned that it will not tolerate killing of Abians, but since 2015 they have been cases of extra-judicial killings and nobody has been held accountable.

“Aside the soldier who killed one Chimaobi, at Umuokereke Ngwa, in Obingwa local government area of the state, who was arrested and subsequently prosecuted as we learnt, we have not heard of any other culprit prosecuted.

“If words are not backed with actions, matters like this will keep arising in Abia”, they said.

he management of University of Maiduguri Teaching Hospital (UMTH) says it is intensifying contact tracing of possible suspected cases of coronavirus, following confirmation of the first case in Borno.

In a circular issued by the hospital’s head of information and public relations, Justina Anaso, in Maiduguri the management appealed to staff and relations of the index case to contact the Borno Covid-19 committee for test.

The first index case in Borno was recorded on Saturday when a nurse, working with the Doctors Without Borders (MSF), died of the disease.

Anaso said some people who had contact with the index case in the hospital had reported to the committee and were being managed in accordance with the NCDC guidelines.

She said that those who had contact with the deceased but deliberately

OYRTMA to launch rapid response team REMI FEYISIPO, Ibadan

O Group condemns killing of Abians by security agents C

oalition of SouthEast Youth Leaders (COSEYL), a sociopolitical organisation has decried the wanton killing of young people in Abia State, by security operatives, alleging that they have turned the ongoing stay at home order of the state government, to operation kill Abians.

The group in a statement signed by Goodluck Ibem, president general, COSEYL and Kanice Igwe, secretary general, COSEYL, which was made available to Cityfile, demanded full investigation and prosecution of the culprits that perpetrated the inhuman dastardly acts.

“We were alarmed by the killing of a law abiding and

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refused to submit themselves for test “should kindly reach out to the committee to be sure of their status’’.

Anaso called on the staff of the hospital to observe precautionary measures such as social distancing, regular hand washing, use of sanitisers, as well as refrain from touching nose, eyes and mouth.

She said the management had banned all congregational activities in all mosques and churches within the hospital and advised the public, particularly relations of patients, to limit their visits to the hospital.

The management commended the state governor, health officials and Covid-19 taskforce for their spontaneous response and support to UMTH at this critical time of the index case in the hospital.

“Management, however, encourages every staff to work with strict adherence to the NCDC guidelines in respect of COVID-19.’’

yo State Road Transport M a n a g e ment Authority (OYRTMA) says it is launching a rapid response team in collaboration with the Oyo State Fire Service.

This is aimed at enhancing timely intervention incidence of fire outbreaks, especially in market places.

Speaking in Ibadan, the executive chairman, OYRTMA, Akin Fagbemi said that the rapid response team would put an end to the complete blockade of access roads to the markets by the haphazard and indiscriminate parking of vehicles. He said this remained a major setback in fighting fire outbreaks in Oyo. This is coming on the heels of the recent fire incident that destroyed over 20 shops and stores at the Dugbe-Alawo market in

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Ibadan, the state capital.

Fagbemi said OYRTMA as a proactive agency has put in place workable framework to facilitate the joint operation with the state’s fire service.

“While I commiserate with all affected traders in the inferno that occurred at Dugbe, may I seize this opportunity to beseech marketers, both sellers and buyers, to maintain high level of discipline as regards road usage in the market places”, he said.

He explained that the collaboration with the fire service would enhance their effectiveness, especially when operatives of OYRTMA clear access roads to market places before arrival of the state fire service vehicles.

It would be recalled that over 20 shops and stores were destroyed on Wednesday, April 15 when fire broke out at the popular Dugbe-Alawo market in Ibadan.

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Thursday 23 April 2020

BUSINESS DAY

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

In association with briu@businessday.ng

08098710024

COVID-19: What Nigeria should do to reduce economic losses – an 18 per cent drop.

ISAAC ESOWE

W

hat started as a simple feverish condition in Wuhan China, has evolved into a much more global pandemic.

At the heart of this, various conspiracy theories have emerged with many linked to the outbreak to the new 5th generation (5G) set up while others saw it to be a different phenomenon altogether.

Be it as it may, the impact of the outbreak on the global and the Nigerian economy is something to worry about, albeit, exposing countries like Nigeria, among others, that have a weak healthcare system.

The pandemic, however, has impacted negatively on lives and the economies at large. The economic uncertainties and disruptions from this outbreak have a significant cost on the global economy which directly has impacted negatively on the Nigerian economy.

The coronavirus, coded COVID-19, has since spread to 210 countries and territories in every continent and 2 international conveyances across the globe, according to the Worldometer COVID-19 data. The swift spread of the virus across the country presents an alarming health crisis that the world is contending with. In addition to the human impact, there is also significant economic, business and commercial impact being felt globally.

As of April 20, 2020, a total of 2,415,294 million people had been infected, 165,192 deaths were reported and 629,512 infected patients had been discharged globally.

A further breakdown shows that the United Kingdom has the fifth-highest official death

Source: NCDC, BRIU

toll from COVID-19 in the world, after the United States, Italy, Spain, and France, though the figure only covers hospital fatalities and the real number is probably much higher. In Africa, countries with triple-digit death cases include – Algeria with a death toll of 375 people ahead of Egypt, 239, and Morocco,141.

On the other hand, the Nigerian coronavirus outbreak is peaking. Nigeria is currently seating on the 11th position in Africa, with total confirmed cases of 627 infected people, 170 patients tested recovered and 21 deaths were reported as of 20th of April 2020, according to Worldometer COVID-19 data.

With the cases increasing, so are their negative impacts are taking toll on the global demand for Nigeria’s crude oil. This, however, puts a severe pressure on the Nigerian economy, an economy which just recovered from the post-2016 economic recession which was as a result of the fall out of global oil price crash and insufficient foreign

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exchange earnings to meet basic governance activities.

The scenario is playing out again in 2020, in a more subtle manner when compared to an event that led to the 2016 economic recession. In 2016 when Nigeria slipped into recession, oil price hovered around $30 per barrel and the country recorded negative growth in more than four consecutive quarters. More so, there is no escape route from recession in 2020, according to the IMF World Economic Outlook, Gross Domestic Product (GDP) growth rate in Nigeria is projected to decline significantly by 3.4 per cent.

BusinessDay Research and Intelligence Unit (BRIU) findings show that oil prices hit $15 for the first time in 21 Years. This is far below the initial projected $57 per barrel benchmark for the 2020 fiscal year which was later reviewed downwards to $30 a barrel.

Sadly, the Nigerian 2020 fiscal budget was prepared with

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significant revenue expectation from crude oil with the assumption that global demand for oil would increase and market price for the product would remain stable at $57 benchmark and oil output put at 2.18 million barrel per day. Revenue from crude oil production is 31 per cent of 2020 fiscal budget and oil alone account for 90 per cent of foreign exchange.

With the sharp fall in price, this will impact government’s ability to meet its fiscal revenue targets as well as spending, and again, it will also impact hugely on forex reserves and debt repayment obligations especially to domestic and foreign creditors.

Apart from the fall in oil prices, the effect of the coronavirus on various segments of the economy varies differently but with similar peculiarities. For example, the Nigerian Stock Exchange (NSE) recorded a loss of N2.3 trillion in three weeks after the first index case was announced in February 27, 2020

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So far, what measures have been put in place to curtail the spread?

In a bid to keep vital sectors active, the Central Bank of Nigeria made moves to minimize the economic impact of the pandemic. One of the measures taken include the provision of soft loans to the highly vulnerable sectors of the economy. In addition, a stimulus package of N3.5 trillion, this include – 5 per cent interest on loans up to N50 billion to households, airline service providers and hoteliers, ₦150 billion to the pharmaceutical and healthcare sector and N1 trillion for the manufacturing sector.

Among other measures, the decision to cut the retail price of gasoline under a price modulation arrangement is another step taken by the government.

There was the cessation of movement; however, the poorest of the poor are the ones feeling the brunt of the measure. Government’s palliatives to help them are yet to go round. The sheer lack of data to map out the most vulnerable members of our society are hampering the genuine intention of government.

Possible economic measures to curtail the severe impact of the pandemic on the economy If there is any time the Nigerian government needs to take the diversification of the economy seriously, it is now. This is one realistic way to sail through the current economic uncertainties and volatilities. Diversification of the economy will help create institutional structures that would insulate it from oil shocks and ensure strong and inclusive growth. For the main time, businesses also should be helped to prevent massive job losses.

Thursday 23 April 2020

BUSINESS DAY

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Policy & regulatory measures against the coronavirus pandemic in Nigeria

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he Coronavirus Dise a s e ( C OV I D - 1 9 ) continues to significantly impact people’s health, businesses and the global economy. From country shutdowns, disruption of supply chains, crash in stocks, drop in commodity prices, loss of daily income, the negative economic effects are numerous. Now a global pandemic, corporates, regulators and governments across the world are responding to the scourge.

In Nigeria, various measures – championed by the Central Bank of Nigeria (“CBN”), the National Assembly, the Organized Private Sector under the aegis of the Nigerian Private Sector Coalition Against COVID-19 (“Private Sector Coalition”) and other key market players – have been put in place, while others are currently being developed, to cushion the negative impact of the Coronavirus on businesses, households and the larger economy. These measures include special intervention funds, credit support facilities, regulatory forbearance, and tax reliefs. This article highlights the key policy, regulatory and legislative actions being taken to mitigate the adverse impacts of the currently ravaging coronavirus disease in Nigeria.

from 9% to 5% per annum, with effect from March 1, 2020.

Creation of a N50 Billion Targeted Credit Facility – A Fifty-Billion-Naira (N50) facility has been created to provide support for targeted sectors of the economy, particularly households and the micro, small and medium-sized enterprises (“MSMEs”), that are particularly affected by the COVID-19 outbreak. The credit facility, which is established through the NIRSAL Microfinance Bank, is also open to other vulnerable entrepreneurs including hoteliers, airline service providers and healthcare merchants.

Credit Support for the Healthcare Industry – Given the serious pressure brought on the healthcare industry by the COVID-19 outbreak, a special OneHundred-Billion-Naira (N100)

intervention facility has been established, open to pharmaceutical companies, hospitals and healthcare practitioners intending to expand/open their drug manufacturing plants in Nigeria or expand/build their health facilities to first class centers, as the case may be.

Regulatory forbearance – Deposit Money Banks (“DMBs”) have been given leave to extend the tenors of credits granted to businesses and households affected by the Coronavirus outbreak. In this regard, temporary and time-limited restructuring of loan terms are to be considered for all credits granted to businesses, particularly in the oil & gas, agriculture, and manufacturing sectors.

Strengthening of the CBN Loan/Deposit Ratio (LDR) – In

CBN POLICY MEASURES On March 16, 2020, in the wake of the plunge in international oil prices and the COVID-19 outbreak, the CBN, in a move to preserve the stability of the Nigerian financial market, introduced some policy measures via a circular, referenced: FPR/ DIR/GEN/CIR/07/049 and titled “CBN Policy Measures in response to COVID-19 Outbreak and Spillovers”, which provides for the following: Extension of moratorium for all CBN intervention facilities – With effect from March 1, 2020, all CBN intervention facilities have been granted additional one year on all principal repayments.

In this regard, the participating financial institutions are required to provide new amortization schedules for the beneficiaries of the various loans.

Reduction in the applicable interest rates on all CBN intervention facilities – Interest rates on all applicable CBN intervention facilities have been reduced

order to sustain the successful implementation of the existing LDR Policy, in the light of the negative consequences of the COVID-19 on the financial system, the CBN is considering further support for the industry funding levels (by providing liquidity backstops as the lender of last resort) in order to maintain

the capacity of DMBs to continue to extend low-interest and longer-tenured credits to households and businesses.

IMPLEMENTATION GUIDELINES Further to the establishment of the aforementioned policy measures, the CBN issued two governing documents (“Implementation Guidelines”), prescribing the operational modalities for the N50 Billion Targeted

AGF makes post COVID-19 plans

INSIDE for justice sector

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Alhaji Aliyu Umar (san): What will he be remembered for?

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Covid-19 Pandemic and Insolvency Risk: A Critical Assessment 20 of Nigeria’s Response

Credit Facility and the N100 Billion Healthcare Credit Support Scheme.

On March 23, 2020, the first governing document titled: “Guidelines for the Implementation of the N50 Billion Targeted Credit Facility”, was introduced by the CBN via a circular referenced: FPRD/DIR/GEN/ CIR/07/050. Also, on March 25, 2020, the second governing document titled: “Guidelines for the Operations of the N100 Billion Credit Support for the Healthcare Sector”, was similarly introduced via another circular referenced: FPR/DIR/GEN/ CIR/07/051.

Some of the operational modalities, prescribed by the Implementation Guidelines, are shown in the table below.

2. EMERGENCY ECONOMIC STIMULUS BILL In a similar move to the regulatory actions of the CBN, the House of Representatives of the Federal Republic of Nigeria (the “Federal House”), has proposed a bill tagged “Emergency Economic Stimulus Bill 2020” (“the Bill”), for legislative debate and possible passage into an Act of the National Assembly.

Practical steps to improving the three key segments of the electricity supply industry in Nigeria: Improving the attractiveness of the Nigerian electric power sector 20

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Thursday 23 April 2020

BUSINESS DAY

FINTECH

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LegalBusiness

COVID-19: How Fintech companies are flattening the curve and rescuing economic activities in Nigeria SETH AZUBUIKE

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t is no longer news that the Corona Virus (“Covid-19”) pandemic has literally put to an end to economic activities around the world. Though the greatest fear and anxiety caused by Covid-19 remain its spread and attendant loss of human lives, governments and institutions around the world have expressed anxiety over the negative impact of Covid-19 on the world economy. This is particularly so in view of the various lockdown policies and regulations implemented around the world by various governments towards reducing the spread of Covid-19.

A situation which has brought the global economy to its knee.

According to the International Monetary Fund (“IMF”) recent forecast for the world economy, there is a risk that the impact of Covid-19 could be worse than currently expected. In fact, it is feared that the world may experience the worst economic fallout since the great depression. In the case of Nigeria, IMF projects that the country is headed for its worst recession in 30 years, with the economy expected to contract by 3.4% in 2020.

Notwithstanding the foregoing, it would appear that although financial technology (“Fintech”) companies are not totally immune to the impact of Covid-19, they are playing a key role towards (i) sustaining economic activities required for survival as well as (ii) flattening the curve in major African countries, including Nigeria. Below are some of the efforts by Fintech companies: Payment for Goods and Services – let us for a moment imagine how life would have been in Nigeria if there were no automated teller machines, online banking platforms, Unstructured Supplementary Services Data, mobile banking services and other electronic payment channels to consummate basic economic

transactions such as, transferring money to that family member, stocking up necessaries prior to and during the lockdown, buying diesel/ fuel to power our homes (including work from home stations) given the erratic state of the power sector, etc., The truth is, life would have been nothing short of unbearable to say the least. There would have been endless queues in the banks to withdraw money prior to the shutdown and, no possibility of having access to money during the lockdown.

Although Fintech companies have played a key role in our collective economic sustainability in the past weeks, some of them will enjoy the upside in terms of the increase in revenue that will accrue as a result of the exponential increase in the use of their services due to the unavailability of traditional banking activities during the lockdown period. This is more so in view of the fact that the profitability of Fintech companies is typically determined by margins and numbers. Thus, where there is an increase in the pool of transactions executed on Fintech platforms, it will invariably lead to an increase in the revenue and profitability of Fintech companies. This explains

why even commercial banks now focus on Fintech related financial products such as USSD services and mobile banking to drive profitability.

E-Banking as a Social Distancing Tool – prior to the implementation of the lockdown by the federal government, most commercial banks and other financial institutions encouraged their customers to embrace cashless policy and electronic banking as a means of staying safe and reducing the spread of COVID-19.

Whilst this will invariably lead to an upside in the revenue generated from the electronic banking aspect of their business, it has no doubt encouraged social distancing by reducing the number of bank customers who would have been queuing at banks or ATMs to withdraw cash; thereby increasing the risk of the spread of COVID-19. Hence, whilst observing social distancing, we are able to carry out commercial activities in the comfort of our homes.

Indeed, this would not have been possible if not for the disruption of the financial services sector

by Fintech companies and the introduction of various policies, licensing frameworks and regulations, including but not limited to

“the cashless policy” by the Central Bank of Nigeria which has provided the regulatory support required by Fintech companies who provide the relevant infrastructure that drives electronic banking in Nigeria.

According to reports, Fintech companies operating in the Nigeria payment system have also contributed towards flattening the curve by reducing, and in some cases, waved transaction charges typically incurred by customers that utilize their various payment platforms to initiate payment for goods and services. This is all in a bid to reduce physical contact by discouraging payment for goods and service with cash.

Useful to note that the use of Fintech products to encourage social distancing is not peculiar to Nigeria. According to reports, to reduce the spread of Covid-19 in Kenya, the Kenyan government has turned to mobile-money as a public-health tool as the country’s largest teleco, Safaricom, is reported to have implemented a fee-waiver on East Africa’s leading mobilemoney product, M-Pesa, to reduce the physical exchange of currency in response to COVID-19. Ghana has also implemented similar cashless policy as a tool to flatten the curve in Ghana.

Fintech Companies as Viable Investment Vehicles – Whilst it is conceded that the present economic climate is not conducive for investment in Nigeria or globally, there are projections that Fintech companies stand the highest chance to attract foreign or local investment in Nigeria and globally notwithstanding the Covid-19 pandemic. This is understandably so in view of the fact that most Fintech companies have developed business models that guarantee returns on investment notwithstanding the global impact of Covid-19. Put differently, investors who are willing to invest now or post Covid-19 will be look-

ing at products and services that are able to thrive notwithstanding the lockdown. Thus, an increase in investment in the Fintech space will invariably have an impact on the economy as Fintech companies will be able to not only continue in business but may even scale-up their operations to meet growing demands from the public during this period.

In conclusion, whilst we continue to hope that the whole world makes a quick recovery from the Covid-19 pandemic, perhaps events like this has presented an unpleasant opportunity for businesses to reevaluate their business models with a view to leveraging on technology to drive business continuity during this lockdown period. The government must also begin to think of policies that will stimulate economic growth for companies with proven business continuity plans. Some of these policies may include but are not limited to tax reliefs and waivers on other government imposed administrative fees imposed on Fintech companies whose operations are currently driving economic activities and/or flattening the curve. To my mind, policies geared towards economic growth are as important as those that are geared towards sending palliative/relief packages.

Truth is, there is a limit to what the government can provide in terms of basic necessities in the event that this lockdown predictably persists for months. Hence, the policies around economic growth must begin the gain as much attention as the health sector if we all must survive these horrible times. Whilst we continue to pray for the best, let us continue to stay safe, and obey policies introduced by the government to flatten the curve.

Seth Azubuike is a financial technology lawyer. He currently works in Banwo & Ighodalo; arguably one of the best commercial law firms in Nigeria.

INDUSTRYfile

AGF makes post COVID-19 plans for justice sector …As lawyers react

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he Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami, SAN on Monday released operational plans for the justice sector, post covid-19.

In a statement signed by the AGF, Malami underscored the impact and damaging effects of the pandemic on all spheres of human life, noting that the Nigerian justice sector was not immune from these effects.

The document read in part, “The necessity to prevent the spread of COVID-19 virus has led to, among other things, a nationwide closure of court rooms (save for certain exceptions). Hence, the urgent need for paradigm shift to adjust the judicial process to make for recovery of lost grounds occasioned by the lockdown.”

The AGF who highlighted the

need for the legal profession to adjust to current realities, indicated willingness to work with the Judiciary at the Federal and the State levels to arrive at a workable mechanism for achieving these within the shortest time possible.

He said, “We will continue with www.businessday.ng

the on-going implementation of the National Policy of Justice with renewed vigour, while making necessary adjustments as may be required due to the COVID-19 disruptions. Application of technology is not strange to our Justice Sector/Judicial System. The Judiciary adopted a Judiciary Information Technology Policy in 2012 to guide the use of ICT by the Judiciary. In this wise, the Supreme Court introduced electronic filing and this has also been adopted by some States’ High Courts. One major lesson from COVID-19 is that the Nigerian Justice Sector must seriously leverage technology in the improvement of its capacity and for facilitating fair and speedy administration of justice.”

Malami further disclosed that Information technology will be the tool used to cover the lost ground

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in the judicial system, stating that measures are already on going to address this.

“These adjustments will cover, the Courts’ Administrative Processes (such as filing of Court Processes), Regulation of Access to Court and even sitting arrangements during proceedings (to sustain the gains we must have recorded in trumping COVID-19), tracking and retrieval of information from the courts, scheduling of court proceedings with strict time-allocation.

“Robust use of technological tools to conduct proceedings including virtual proceedings, (this would also enable the Justices/ Judges to preside over matters in their chamber without being physically present in a formal court room, parties and their counsel will @Businessdayng

only connect through teleconference means) etc. Some of these adjustments are not simple and may require certain amendments of the Law (or Issuance of Rules of Court and Practice Directions) as may be necessary. The judges will be sitting and maintaining social distance while the lawyers’ interface with the courts through their digital computers should be considered in certain cases,” the AGF said.

The AGF also committed to the following, with support of relevant stakeholders: 1. Empowering the institutions of the ACJA, 2015 to commence functioning immediately. For instance, Part 46 dealing with the administration of the Criminal Justice Monitoring Committee; Continues on page 19

Thursday 23 April 2020

BUSINESS DAY

BARPERSPECTIVE

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LegalBusiness

Alhaji Aliyu Umar (san): What will he be remembered for?

JOSHUA NWACHUKWU “Live your life well so that we don’t have to lie at your funeral.” Unknown

F

ew days ago, we received the unfortunate news of the death of Alhaji. Aliyu Umar SAN. Even though I never met him, I knew him due to his involvement in the trial of the former CJN, Walter Onnoghen, where he acted as the lead prosecuting counsel. As it’s my custom when I hear of someone’s death, I immediately prayed for the repose of his soul and I prayed for the loved ones he left behind.

After praying for him, I had no intention to either write a tribute or an article, but I had a change of mind after I read tributes from the NBA and lawyers, particularly those vying for political offices.

Let’s look at some tributes. ................................................The NBA described him as “one of the finest silks Nigeria has produced” and that the NBA “appreciates the immense contributions of Alhaji Umar SAN, to the Nigerian Legal industry and practice”.

Dr. Babatunde Ajibade SAN said “He was an influential and highly respected member of the Bar,...... his demise has left a gap that cannot be filled”.

Olumide Akpata eulogized him saying “Alhaji Umar SAN will surely be missed for his indelible contributions to the legal Profession, his wisdom, his guidance, his good works and acts of service”. “He was a trailblazer, a father figure and a mentor to many lawyers -both senior and junior, all of who continue

to hold him in high esteem”.

Dele Adesina SAN said “He served the Bar to the best of his ability including the private bar, the official Bar and of course the inner Bar” ...............................................Unfortunately, many lawyers, the general public and the world indeed cannot relate to the glowing tributes above. We don’t know: the “indelible contribution” “immense contributions” “service to the Bar” “a gap that cannot be filled” etc.

Prior to 2019, he was largely unknown except in a few quarters and he came more to limelight, thanks to his role in the prosecution of the Charge against Honourable Justice Walter Onnoghen which eventually led on Friday, January 25, 2019, to his suspension and the swearing in of Justice Ibrahim Tanko Muhammed as the Acting Chief Justice

of Nigeria by President Buhari.

It is possible that Alhaji Umar, SAN may have done several noble and honourable things prior to his role in the former CJN saga upon which the tributes above may have been hinged, unfortunately the general public is not privy to such information, more importantly, if weighted, his role in the former CJN illegal removal is extremely heavy and it is capable of outweighing and erasing the other noble things he may have done.

This grouse is not unfounded; last year was a most embarrassing year for lawyers, our judiciary and most importantly our democracy.

We saw the Executive arm use legal practitioners both in the Bar and on the quasi-bench to cause an indelible and unholy havoc to the highest office of the Judiciary, an

office almost at par with the office of the Presidency and people expect us to throw undeserving posthumous extolments.

The painful event of the 23 and 25th of January 2019 can never be erased from the hearts and minds of Nigerians. Those dates signify a precedent in executive rascality, a trial that had all the trappings of injustice, witch-hunt, abuse of power, and ultimately the disregard for the rule of law and all those who participated in enshrining that precedent cannot expect to be in the good books of history. Little wonder in Julius Caesar, Mark Anthony said “The evil that men do lives after them” meaning that when someone dies, the bad things they did continue to have an effect on the living.

For the NBA and lawyers aspiring to be president of the NBA to extol not only Alhaji Umar but other lawyers in general, who don’t represent entirely the interest of the Constitution, is appalling to say the least. Indeed, the NBA has to raise the Bar and set high standards.

If the NBA intends to stay true to its motto, it has to be calling out its members, especially those who hold public offices, in particular Attorney Generals, who engage in acts that directly assault the Rule of Law, if the NBA needs to amend its rules of professional conduct to adequately cater for this, then this should be a top priority.

NBA has to help lawyers make a choice, if lawyers want to owe their loyalty to their clients, either private or public, to the detriment of the overriding interest of the rule of law, the NBA should have no business being in bed with such lawyers, rather it should ostracise them, as

no can serve two masters concurrently. The Cab-rank rule cannot be exploited to engage in ignobility.

If the NBA does not do this, then it sends a wrong message to younger lawyers. The professional ethics been parroted from the University to the law school to the call to bar swearing in ceremony will merely be insipid.

CONCLUSION To the living we owe respect, but to the dead we owe only the truth -Voltaire There is a dangerous consensus brewing, that the dead should only be eulogised. Respect for the dead has now been elevated to not speaking “ill of the dead”. I think it is important to differentiate “speaking ill” from “speaking lie”.

I agree that lies should not be spewed and I agree in decency, however, depending on the gravity of the deceased actions, his/her role and status in society, the death of the deceased can be a veritable moment to call out their actions that contributed negatively to society. This will serve as a deterrent to those living that our actions have consequences and those consequences will not be easily forgotten, and if we want to be remembered positively, then deliberate decisions must be taken to engage in good and noble acts, if not it would be the height of fraud, dishonesty and hypocrisy to engage in undeserved praise singing.

May the soul of Alhaji. Aliyu Umar SAN and all the departed continue to rest in peace.

Joshua Nwachukwu is a LagosBased Legal Practitioner and a writer.

AGF makes post COVID-19 plans for justice sector Section 251- witness payment; sections 107 & 108 etc. The net result will galvanize the judicial sector into rapid mode to fast track trials and release of those who are deserving.

2. Deployment of ICT facilities to fast-track taking evidence from witnesses. Digital platforms such as Skype and Zoom can be used. NTA stations across the country can be connected to courts to facilitate taking evidence as witnesses do not have to necessary be physically present in court. It is expected that NTA facilities are to provide the rudimentary structures for video conferencing in view of their digital switchover process. Using their existing IT infrastructure, the courts may only need video screens and bandwidth at the minimum to ensure connectivity between parties to the proceedings.

3. Speedy processing of pending civil matters that have not reached advanced stages of hearing and with the consent of parties and their solicitors to opt for out of court settlement. This may even mean using multi-door mediation avenues in courts that already have one, such in the case of Lagos and the FCT and a few other states.

4. Criminal charges of minor

and non-indictable offences should be summarily tried and sentenced to non-custody penalties. Even in cases where sentenced persons cannot pay their fines, the court should consider other alternative punishments other than jail term. This can include parole or probationary sentences and, if possible, community service like cleaning public places etc.

5. Persons awaiting trial on minor criminal charges should be discharged, especially in cases where adjournments have been at the instance of the prosecution.

6. The passing of the civil equivalent of the ACJA in order to fast track the disposal of civil proceedings. Civil matters are proportionately more in number and tend to clog the speedy completion of civil trials. The proposed law (civil equivalent of the ACJA) should stipulate timeline for commencing and completing civil trials. Front loading of evidence should also be adopted for civil trials in order to fast track hearings.

7. Setting aside special dates and that Courts work extra hours to decongest their case files.

The 2020 court vacation could be suspended as the COVID 19 lockdown period has provided www.businessday.ng

judges with the much-needed break from official duties.

8. Having courts that are fully IT-compliant in order to fast track the digital recording and production of the record of court proceedings. The courts should also be able to automate case filing and cause list management.

9. Appointment of more judges and justices, as appropriate.

Additional judicial decisions of federal courts are to be created.

This will, as a proactive measure, help in decongesting the already loaded court hearing schedules.

10. Payment of court fees is done electronically. All court fees should be done electronically and not in cash. The courts should only receive receipts of payments and this can be transmitted online as well.

“At Courts where hearing electronically may not possible, we can also consider having only few people attend to court matters.

Ensuring that court dockets have only few cases per day can reduce the number of persons in courts.

So, all the pending judgments should be drafted and concluded during short period of time.

According to him, this does not require lawyers to be present.

“Once the judgment is ready, the lawyers should be able to receive them in their email or it should be

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posted on the court’s website for any interested party to download it. This is the way to go and thus provide greater transparency.

“Court proceedings should also be handled in a manner that reduces the number of persons in the courts at any given time.

Although this requires the movement of suspects from prisons to the courts, all such suspects should be tested, in fact everyone entering the court premises should be tested to ensure that they are not already positive, thus risking the lives of other people,” Malami said.

The AGF noted however, that while some of these changes may not happen in the short term, there was need to start the introduction of some of these initiatives immediately through consultations with the Judiciary, NBA, and other relevant stakeholders.

In his closing, Malami urged the judiciary to keep supporting the Presidential task force on COVID -19 by considering how best to start opening up as soon as possible and tow start tackling backlog of cases.

“We will start by seeing how much cases can be handled online or without a face-to-face interaction leveraging on the use of technology,” he said. @Businessdayng

Reactions…

Reacting to the minister’s comments, Prof. Chidi Odinkalu said, “Abubakar Malami is AttorneyGeneral, not (yet) Chief Justice.

What happens in the courts is outside his brief. That is the business of the Chief Justice, NJC and the Chiefs of the respective court systems. He is in egregious error at best when he says “the judiciary should support the Presidential Task Force….” It is not the business of the judiciary to “support” anyone or task force.

The judiciary holds the balance even in these times.

“The examples globally should make that clear. In Malawi, the courts quarantined a lockdown without palliatives. In Zimbabwe, the courts forced govt to guarantee water in the major municipalities as a pre-condition for lockdown and to refrain from harassing journalists covering the lockdown. In Germany, the Constitutional Court has upheld the right to protest even amidst a pandemic. In Wisconsin, the Supreme Court refused to defer an election. In Kenya, the Court compelled the govt to recognise lawyers as essential workers.

To be conntinued next week

Thursday 23 April 2020

BD

BUSINESS DAY

20

LegalBusiness

Covid-19 Pandemic and Insolvency Risk: A Critical Assessment of Nigeria’s Response Continued from last week Stimulus Measures in Other Jurisdictions ntroducing new insolvency rules may flatten the insolvency curve and postpone insolvencies. However, they may not (immediately) solve the liquidity or cash flow challenges. Governments have therefore rolled out stimulus packages to strengthen economies and cash flows.

Australia has earmarked an estimated $197 billion as stimulus package. In addition to other measures, the Australian Banking Association claims banks will grant a 6-month repayment deferral on existing loans worth $100 billion to small businesses. Germany has unveiled a €750 billion stimulus package - the biggest in its postwar history. About €600 billion is earmarked for loans to businesses.

Spain has a $219 billion stimulus package. It has earmarked $110 billion of guarantees for loans to companies and €17 billion to keep enterprises afloat. The UK has earmarked $481 billion, which includes government-backed loans to businesses. The Bank of England has cut interest rates from 0.75% to 0.1% (the lowest in history). UK companies are exempted from VAT till June 2020 (worth $37 billion).

Several countries have also unveiled stimulus packages to cocoon companies from cash flow difficulties. The United States of America has a $2 trillion rescue package (the largest in its history).

About $500bn is earmarked for company loans and $350 billion for small businesses. France has a €45 billion package for businesses and workers. Canada is preparing

I

a package valued at $56.7 billion. It will cover 75% of payroll wages for small businesses and give companies access to one-year interest free loans. Denmark plans to cover some fixed costs which companies cannot pay due to Covid-19 pandemic where they experience more than 40% drop in revenue. Denmark will also pay 75% of salaries of employees of private companies impacted by the pandemic.

Stimulus Measures in Nigeria Since the confirmation of Nigeria’s index case of Covid-19 on 27 February 2020, the Federal Government and the Central Bank of Nigeria (CBN) have rolled out palliatives to, among other things, keep businesses afloat. The CBN

unveiled the first set of measures on 16 March 2020 when it (i) reduced interest rate from 9% to 5% for a year, and (ii) granted one-year moratorium on principal repayments on CBN’s existing intervention facilities with effect from 1 March 2020. Instructively, CBN’s intervention facilities are currently valued at about N3 trillion ($7.7 billion).

The CBN also announced a N50 billion ($128.4 million) facility for households and SMEs affected

by Covid-19 pandemic. This was arguably a drop in the ocean when viewed against the size of Nigeria’s economy ($446.5 billion) and Nigeria’s projected budget deficit of N2.28 trillion ($5.9 billion) for 2020 fiscal year. It was therefore

not surprising when the CBN bolstered the stimulus package

by N1.1 trillion ($2.8 billion) on 18 March 2020. The Bankers’ Committee, on 21 March 2020, also resolved to provide an additional N2.4 trillion ($6.5 billion). About N100 billion ($2.6 million) will be channeled to pharmaceutical companies, N1 trillion for boosting manufacturing and import substitution in diverse sectors and N2.4 trillion as loans to small companies in the manufacturing sector.

From a perspective, Nigeria’s stimulus package appears inappreciable compared to the packages unveiled by some other countries. While Nigeria’s package is about 2% of her gross domestic product (GDP), Australia’s is 5.1%, Germany’s is 20.5%, Spain’s is 15.6%, UK’s is 16.6% and USA’s is 9.8%. The stark reality is that countries can only offer stimulus packages based on their resources.

The CBN has granted regulatory forbearance to banks to explore temporary and time-limited restructuring of the tenor and loan terms for businesses most affected by Covid-19 pandemic. To foreclose any form of abuse, CBN plans to work closely with banks to ensure that the process is targeted, transparent and temporary. This initiative is commendable as it offers banks and borrowers the opportunity to negotiate achievable terms devoid of red tape.

Instructively, as of February 2020, loans from commercial banks to the private sector in Nigeria stood at N26.69 trillion ($68.6 billion).

It is not certain if banks will take advantage of this initiative. However, it is certain that this category of borrowers are at the mercy of

the banks.

The CBN plans to “strengthen” the loan-to-deposit-ratio (LDR) policy and explore incentives to encourage extension of longer tenured credit. In 2019, the LDR was upwardly reviewed twice within three months to force banks to lend to the real sector. Presently at 65%, it is still below the average LDR across Africa which is about 76%. However, there are lingering concerns that the LDR policy may (i) weaken banks’ risk management criteria for lending, (ii) negatively impact assets quality and (iii) increase non-performing loans (NPLs). Interestingly, data from the Nigerian Bureau of Statistics indicate that despite the upward reviews of LDR in 2019, NPLs dropped to N1.05 trillion ($2.7 billion) from N1.79 trillion ($4.7 billion) recorded in 2018.

On 29 March 2020, President Muhammadu Buhari unveiled additional palliatives by ordering a three-month repayment moratorium for: (i) TraderMoni, MarketMoni and FarmerMoni loans, (ii) Federal Government funded loans, and (iii) Federal Government funded loans issued by Nigeria’s Bank of Industry, Bank of Agriculture and the Nigeria Export Import Bank. Although these additional measures are commendable, their impact may be limited given the negligible number of beneficiaries of these loans. For instance, in 2019, N10 billion ($26 million) was appropriated for distribution as TraderMoni. Besides, the 3-month moratorium may be inadequate given the magnitude of damage inflicted on businesses by the Covid-19 pandemic.

info@kubiudofia.comw

Practical steps to improving the three key segments of the electricity supply industry in Nigeria: Improving the attractiveness of the Nigerian electric power sector Continued from last week

Practical Solutions to Improving the Electricity Market in Nigeria One of the most important steps is to for NERC to speed up the process of implementing costreflective tariffs, like it had already started. To combat the inevitable consumer outcry which will result from an increase in tariffs, the increase process should be combined with policies and public campaigns aimed at reorientating consumers on energy efficiency and measures which can be implemented to reduce energy consumption including use of compact fluorescent light (“CFLs”) or Light Emitting Diodes (“LEDs”) for light. This could also continue to create a market for energy saving electrical appliances.

It is germane to note that, the tariff increases should also come with additional obligations on DisCos to ensure reduction of the aggregate technical, commercial and collection losses through technology, personnel and adequate

metering of customers.

In addition, the balance of the Two Hundred and Three Billion Naira Central Bank of Nigeria- Nigeria Electricity Market Stabilisation Facility (CBN-NEMS) facility, which was set up to address shortfalls in power sector revenues, should be completely disbursed to the DisCos, GenCos and gas suppliers to provide these sectors with the necessary liquidity to fund operations. Reports show that as at October 2019 only about One Hundred and Eighty-Three Billion out of the Two Hundred and Three Billion had been disbursed to the market participants.

It is also important for the debts owed to the DisCos to be paid, including the market deficits caused by the lack of cost-reflective tariff (the “tariff shortfall”) and all outstanding debts by MDAs. The DisCos were required by MYTO 2019 to meter all MDAs within sixty (60) days of its issuance and were empowered to disconnect any MDAs defaulting in the payment of electricity. Once this is effected, it would ensure that DisCos www.businessday.ng

are paid for electricity supplied to MDAs. Nigerian Government has already made commendable efforts in electricity generation and it should double down on its efforts to improve gas availability for power generation, including completing the AKK Pipeline as well as the Escravos-Lagos Pipeline 2 and the Obiafu-Obrikom-Oben (“OB3”) pipeline which is meant to transport gas from huge reserves in eastern Nigeria to western Nigeria.

As with the distribution system, the transmission system also requires significant improvements due to the problems highlighted above. There is a need to unbundle the TCN into an Independent System Operator (“ISO”) and a transmission service provider.

The ISO would be independent of the transmission company and be licensed to perform market operation functions. To ensure efficiency, the ISO should be managed by experienced professionals charged with Key Performance Indicators including capacity

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recovery and expansion targets.

The transmission service provider would be solely responsible for the transmission of electricity in Nigeria, due to national security concerns, it would be governmentowned but would concession the right to work the network to a private, preferably foreign, operator to manage. NERC can look to South American countries for inspiration, as these countries have implemented the Build Own Operate and Transfer (“BOOT”) option, in public private partnerships to improve the transmission system. Private companies work with the government to build new transmission infrastructure, operate these for a specified period for financial gain and then transfer the facilities to the government for a fee or other mutually acceptable arrangements.

Even where all these measures are implemented to improve electricity generation, transmission and distribution, the problem of electricity theft, if it persists, would undermine many of the gains made. Customers need to @Businessdayng

be educated on the domino effect which electricity theft has, and DisCos need to improve efforts to prevent electricity theft, including adequate metering as analysed above.

Conclusion In conclusion, for the electricity market in Nigeria to work, adequate and appropriate revenues need to flow up from the electricity consumers up the electricity value chain to DisCos, TCN (the Bulk Trader) and the GenCos. The level of dependence and interconnection in the system, renders any significant improvement in the transmission infrastructure and electricity generation impossible without proper funding, which starts from the consumers. Without this, no matter how much effort is exerted to improve the electricity sector, it will be a lot of motion without any movement.

Dr. Ayodele Oni (ayodele.oni@bloomfield-law.com), an attorney, is a commercial lawyer specializing in international energy (oil, gas, power & mining) investment law.

Thursday 23 April 2020

Innovation

BUSINESS DAY

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TECHTALK

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Tech startups reel from impact of COVID-19 NITDEF to the rescue?

FRANK ELEANYA

T

he efforts to save Nigerian tech startups that are likely to go out of business as a result of the coronavirus pandemic could benefit immensely from the National Information Technology Development Fund (NITDEF), supposing it is available and accessible.

Nigerian startups are expected to account for a significant portion of more than 80 percent of tech firms in Africa projected to shut down due to the pandemic. Already some tech companies have placed their staff on unpaid leave while those required to work got their salaries cut.

A BusinessDay investigation found that the NITDEF fund has received over N80 billion from FIRS collection as of the first quarter of 2020 and given away less than N200 million in the form of educational scholarship. Unfortunately, far less has gone the way of IT startups that are desperate for funding.

Recently, the Ministry of Communication and Digital Communication through the National Information Technology Development Agency (NITDA), saddled the responsibility of rescuing tech startups on a ten-man committee drawn from leaders in the ecosystem.

Among their mandates, is creating a report that clearly provides quick and long term solutions for the startups. It is

a mandate that leaves little to work with. The Central Bank of Nigeria (CBN) did not include the tech ecosystem in its financial stimulus plan and the government doesn’t recognise startups as essential businesses hence movement is restricted for all tech firms. NITDA only started lately to compile a list of firms it considers essential.

Nonetheless, conspicuously missing in the committee’s deliberation is how the ministry plans to utilise the National Information Technology Development Fund (NITDEF) to help the startups.

NITDEF was established in 2007 by the National Information Technology Development Agency (NITDA) Act. The fund compels major institutions and organisations including banks, insurance, telecom operators among Information and Communication Technol-

ogy (ICT) entities to devote a percentage of their profits before tax for national IT development.

NITDEF has four sources of revenue.

According to the NITDA Act, the first is a levy of one percent of the profit before tax of companies and enterprises with an annual turnover of N100m and above. The amount paid by the companies is tax-deductible. NITDEF also receives grants-in-aid and assistance from bilateral and multilateral agencies as well as gifts, endowments, bequests or other voluntary contributions by persons and organisations.

Other sources of funding for NITDEF include monies appropriated to it by the National Assembly and all other monies or assets that may, from time to time accrue to the fund.

The Act also provides that any company, agency or or-

ganisation that fails within two months after a demand note, to pay the levy or the import duty imposed under Section 11 of this Act, should be assumed to have committed an offence and is liable on conviction to a fine, to the tune of N1m, while the chief executive officer of such organisation would be liable to prosecution.

The Federal Inland Revenue Service (FIRS) was given the mandate to collect the one percent tax on behalf of NITDEF. The collection of the one percent levy did not commence until 2011 after a board was constituted for it. Since then, the FIRS has published a monthly record of what it had collected as levy from companies.

The tax regulator’s records show that the fund has generated not less than N6 billion every year since 2011 the collection commenced. In

fact, it received N8.67 billion in 2011 and N9.13 billion the following year-- 2016 was the first time the contributions dropped to N6.75 billion. It rallied again to N9.87 billion in the first seven months of 2017. Within an eight-year period, the NITDEF levy has generated N74.51 billion. The FIRS released its reports for 2019 showing that the fund received about N8 billion. The first-quarter report for 2020 has also shown that N690 million came into the fund.

Although the Act doesn’t quite specify how the fund should be used, over the years some of the proceeds have been used to finance the education of a few enterprising people. The NITDEF scholarship, as the programme is called, is specifically for masters and doctoral degrees in relevant areas of information technology and ICT law obtainable in Nigerian universities.

Except in 2016, the scholarship has been successfully awarded to between 50 to 90 candidates who are mostly selected based on federal character. After they are selected the candidates are expected to complete their programmes within one year.

As of 2017, NITDA claims it has awarded scholarships to 247 Nigerian graduates in Information Technology fields at the masters level and 24 for a doctorate. The agency awarded scholarships to 49 candidates in 2019 to bring the total to 320. The cost of execu-

tive masters and doctorate degrees range from N400,000 to N750,000. In essence, NITDA has spent an estimated N128 million on scholarships in the past eight years.

How much does NITDA have as balance in the fund?

While deploying the fund in this manner has contributed to educating more Nigerians, it is highly unlikely that NITDA has a proper follow-up mechanism to ensure that the candidates are contributing to the IT sector after their programmes.

Importantly, the agency has never publicly said how much it spends every year on each of the candidates, how it disburses the money and how much is left after the scholarship scheme is completed every year.

Prior to writing this article, BusinessDay had made efforts to find a tech startup that has ever applied for funding from the NITDEF. No firm has come forward as of the time of filing this report.

The NITDA act clearly states the fund is for national IT development. Tech startups in Nigeria are at the forefront of IT development in Nigeria today. A majority of them find it very difficult to access funding. This is responsible for the setting up of venture funds like Future Africa, Ventures Platform, CcHUB’s Growth Capital fund, Microtraction, TLcom Capital, etc. While these are bridging the gap, larger funds like the NITDEF can boost their contributions considerably.

Theatre operators tap streaming services to grow Nigerian audience amid lockdown FRANK ELEANYA

W

hile the coronavirus pandemic has theatre houses across the country on lockdown, Terra Kulture, home of contemporary visual and theatre arts, is turning to its YouTube channel to keep fans of creative arts productions glued to their favorite entertainment as well as attract new audiences.

Starting from 19 April, the company through its production platform BAP Productions plans to stream a show every Sunday. The first show, Fela and the Kalakuta Queens, which BusinessDay monitored saw thousands of views.

Online platforms not only give theatre lovers the opportunity to see a play, but it also keeps theatre in the minds of

people and will hopefully encourage more people to want to see theatre productions when the lockdown is over.

It is the first of its kind in Nigeria which the showrunners also say will enable them to plug into the evolving trend of virtual theatre arts productions.

Terra Kulture is not the only operator turning to streaming services, Park Theatre Lagos, plan to stream Wole Soyinka’s The Trials of Brother Jero online from Tuesday, 21 April. The company opted for the Zoom platform instead of YouTube.

Theatre arts revenue has taken a direct hit since the pandemic began to upend the economies and lives of different countries and individuals across the globe.

Nigeria is forecasted to be heading for a second recession, barely four years after

emerging from one. Oil prices are at a low last seen since the 1980s and investors have shut off the tap on foreign investment as uncertainties heighten. Coronavirus cases are also on the rise suggesting restrictions on movement won’t relent any time soon.

“We were in the middle of production when the lockdown started. We had to cancel the show and refund tickets that had been sold,” Joseph Umoibom, general manager,, BAP Productions, told BusinessDay in an interview. “We had also completed pre-production on another show that was supposed to run during the Easter season but also had to call it off. We also called off an exhibition we had been planning.”

The company known for globally renowned musical productions like Saro and Wakaa had to incur heavy

losses from the uncompleted projects.

The cost of a production depends on a number of factors including the size of a play, intricacy of the set; costume and props; the technology deployed in terms of sound; lighting; audio-visual projection or 3D mapping; holographic technology and a host of other techniques a director and producer is willing to deploy into creating a fantastic scenic atmosphere on stage. There is also the cost of marketing and PR and the venue. In all, Umoibom estimates that a production company could spend between N3 million and N70 million on one production depending on the factors highlighted and how long the production will be in the theatre.

Successful shows like Fela and the Kalakuta Queens first hit the stage in December

2017, then had another run at Easter 2018 and in Abuja in June 2018. The production went on tour, to Cairo in December 2018 and Pretoria from March to April 2019. The last showing was in December 2019 and January 2020 when it ran for 10 days.

With the lockdown in place as state governments and health agencies race to curtail its spread , the theatre industry is at a crossroads where it must decide to innovate or risk losing everything.

“The way business is done worldwide will definitely change because of this global lockdown,” Umoibom said.

“Lessons have been learnt, fingers have been burnt. A lot of changes will happen across the world to prevent a negative impact on business and avoid being caught napping again should for whatever reason a situation like this rears

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

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its head again in the future.”

Online theatres are one of the changes show producers are making. This model is fast rising across theatre practitioners in the UK and the US. A production company in the US, for instance, is launching a Broadway on Demand service in June which promises a library of recorded plays, exclusive livestream events, interactive platforms, and educational resources. The company plans to monetise it through subscriptions that allow more access to premium services.

“There is a strong possibility that online theatre shows will continue even after the lockdown. There is interest both from producers and aggregators to see how monetisation of theatre content online will form an integral part of theatre revenue going forward,” Umoibom said.

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Thursday 23 April 2020

BUSINESS DAY

BUSINESS TRAVEL

25 million jobs at risk with global airlines’ shutdown - IATA

T

Stories by IFEOMA OKEKE

T

he International Air Transport Association, (IATA) has released new analysis showing that some 25 million jobs are at risk of disappearing with plummeting demand for air travel amid the COVID-19 crisis.

Globally, the livelihoods of some 65.5 million people are dependent on the aviation industry, including sectors such as travel and tourism.

Among these are 2.7 million airlines jobs. In a scenario of severe travel restrictions lasting for three months, IATA research calculates that 25 million jobs in aviation and related sectors are endangered across the world: 11.2 million jobs in Asia-Pacific, 5.6 million jobs in Europe, 2.9 million jobs in Latin America, 2.0 million jobs in North America, 2.0 million jobs in Africa and 0.9 million jobs in the Middle East.

In the same scenario, airlines are expected to see full year passenger revenues fall by $252 billion (-44 percent) in 2020 compared to 2019.

The second quarter is the most critical with demand falling 70 percent at its worst point, and airlines burning through $61 billion in cash.

Airlines are calling on governments to provide immediate financial aid to help airlines to remain viable businesses able to lead the recovery when the pandemic is contained. Specifically, IATA calls for: Direct financial sup-

I am not interested in politics, Air Peace chairman says

port, loans, loan guarantees and support for the corporate bond market and tax relief.

“There are no words to adequately describe the devastating impact of COVID-19 on the airline industry. And the economic pain will be shared by 25 million people who work in jobs dependent upon airlines. Airlines must be viable businesses so that they can lead the recovery when the pandemic is contained. A lifeline to the airlines now is critical,” Alexandre de Juniac, IATA’s Director General and CEO said.

Looking ahead: Re-booting the industry Alongside vital financial relief, the industry will also need careful planning and coordination to ensure that airlines are ready when the pandemic is contained.

“We have never shuttered the industry on this scale before. Consequently, we have no experience in starting it

up. It will be complicated.

At the practical level, we will need contingencies for licenses and certifications that have expired. We will have to adapt operations and processes to avoid reinfections via imported cases.

“We must find a predictable and efficient approach to managing travel restrictions which need to be lifted before we can get back to work. These are just some of the major tasks that are ahead of us. And to be successful, industry and government must be aligned and working together,” said de Juniac.

IATA is scoping a comprehensive approach to rebooting the industry when governments and public health authorities allow. A multi-stakeholder approach will be essential. One initial step is a series of virtual meetings—or summits—on a regional basis, bringing

together governments and industry stakeholders.

The main objectives will be understanding what is needed to re-open closed borders, and agreeing solutions that can be operationalized and scaled efficiently.

“We are not expecting to re-start the same industry that we closed a few weeks ago. Airlines will still connect the world. And we will do that through a variety of business models. But the industry processes will need to adapt.

We must get on with this work quickly.

“We don’t want to repeat the mistakes made after 9.11 when many new processes were imposed in an uncoordinated way. We ended up with a mess of measures that we are still sorting out today.

The 25 million people whose jobs are at risk by this crisis will depend on an efficient re-start of the industry,” de Juniac said.

he Chairman and CEO of Air Peace, Allen Onyema has said that he is not interested in politics, insisting that he is a businessman and does not have any political ambition.

He reiterated that his humanitarian gestures stem from his desire to give back to the society as his own contribution to humanity and not a fillip to aspire to any political office.

Onyema made this known on Sunday while reacting to an online poster by a group known as United People of Nigeria Initiative (UPNI) endorsing him for Nigeria’s presidency in 2023.

The Air Peace Chairman who said that the call was made in bad taste repudiated the endorsement and those behind it and urged them to deist from such campaign in future.

In a statement he signed by himself, Onyema said, “My attention has been drawn to an online poster by a group that goes by the name United People of

Nigeria Initiative (UPNI) endorsing me for Nigeria’s presidency in 2023. One Sir Wealthson Chukwudi was exposed on the poster as President of the group.

“I wish to state clearly that this man, UPNI and its promoters are not known to me directly or remotely and whatever they are saying has not come from me and will never come from me. I am a businessman and not a politician.

“My purpose is to impact humanity and I do not have to be President first before I can continue with what has become part of my essence.

This is my nature. My motivations are different.

“I call on the public to completely ignore this group and any other group or person/s that may come up with such message and mischief about me in future.

I, personally, feel very offended by it all.

“I am very suspicious of the motive behind this unsolicited publication. Once again, I am not interested in partisan politics.”

Allen Onyema

Covid-19: Dana Air to keep middle seats empty upon resumption

I

n line with the social distancing guideline on Covid-19, Dana Air has announced that it will keep the middle seats on all its aircraft empty upon resumption of flights.

Obi Mbanuzuo, the accountable manager of Dana Air said Dana Air will commence this initiative when flights resume, maintain it for a while and listen to the feedback from the airline’s customers.

According to him ‘’Majority of our aircraft are configured with mainly three seats in a row, on either side of the aisle, so when we resume flights anytime soon,

we will keep the middle seats empty so passengers can sit on the window and aisle seats to ensure some physical distancing onboard all our flights. ‘’This is just to give our

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guests some sense of security about their health and well-being when flying with us immediately after the pandemic and it will be for sometime, while we continue to review feedback

from our guests on their thoughts, but we believe it what customers might like to see.’’

Obi stated that ‘’our first concern is the safety and well-being of our staff and

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customers and we have made firm arrangements to ensure that our thorough cleaning and disinfection program continues. We are taking this seriously as we do not know how long this

@Businessdayng

will last.’’

On the impact of Covid-19 on domestic airlines, Obi said, ‘’domestic airlines have lost over 360B to this pandemic and still counting. we do not know when it will be over.’’ ‘’There charges, fees, allowances, salaries, aircraft leases, taxes all pending and over 100 aircraft parked nationwide without generating a dime. The VAT which contributes to the high cost of airfares is yet to be removed. These are the issues and the government needs to seriously consider helping airlines to survive this trying time.’’ he added.

Thursday 23 April 2020

Retail &

BUSINESS DAY

consumer business Luxury

COMPANY

BALA AUGIE

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Flour Mills of Nigeria plc, as consumers are spending more on food-which is largely driven by stockpiling.

Both companies have a diverse portfolio of brands that are considered as essential items by consumers.

Nestle Nigeria’s premium brand such as Maggi cube and cereals is the kitchen of every consumers, while Flour Mills’ have products that are making inroad into the Nigerian markets.

With an operating cash flow of N49.94 billion as at December 2019, Nestle Nigeria has the financial strength to overcome the headwinds and funds future expansion plans.

On the flip side, the restriction in human congregation in most parts of the country will affect the revenue and earnings of brewery

companies such as Nigerian Breweries Plc (NB), Guinness Nigerian Plc (Guinness) and International Breweries Plc (Intbrew).

This is because people can no longer go to bars or hotels as they used before the restrictions, and an extension of the lockdown could bring more pains to brewers.

Brewers are the problem child of the consumer goods sector as weak sales volume and stringent excise duties have deal great blow on bottom lines.

For instance, International Breweries posted a loss of N9.13 to end 2019, as it is struggling with huge debts.

Home care companies such as Unilever and PZ Cussons are not spared the hammer of the economic crisis because consumers are

increasing budgetary allocations to food expenditure.

Analysts fret that the disruption caused by the coronavirus pandemic couldtip the country into a recession unless government embarks on aggressive stimulus package that will help deflate the economy.

The International Monetary Fund (IMF) has predicted a negative Gross Domestic Product (GDP) of 3.4 percent for the country.

The Minister for Finance, Zanaib Ahmed, has already reduced the government’s projection of 2.10 million barrels a day of production to 1.70 million, and it working to Nigeria’s record $35bn budget for 2020.

Capitulating to pressure, the central bank devalued the official Naira rate to N360 to the dollar from N305.

The price of Brent crude fell below $20 per barrel for the first time in 18 years, sliding by more than a quarter on Tuesday as fears over demand caused by the coronavirus pandemic rattle oil markets for a second day.

Brent was recently changing hands at $18.10, down $7.50, or 29 per cent, its lowest level since late 2001.

COMPANY

Unilever’s sales tumble 30.70% as lockdown bites OLUFIKAYO OWOEYE

U

nilever’s sales have dropped by one third so far in the first quarter, showing how the coronavirus crisis is hurting consumer goods firms that are already vulnerable to economic downturn.

For the first three months through March 2019, Unilever’s revenue dipped by 30.70 percent to N13.32 billion as against N19.23 billion the previous year.

The sharp drop in sales was largely driven by a 19.50 percent and 67.96 percent reduction in income from Food Products and Home and Personal Care (HPC) divisions to N7.40 billion and N5.90 billion respectively as at December 2019, and the coronavirus pandemic that caused lockdown of major cities across the country is expected to sting future earn-

Companies

Deals

Spending Trends

CONSUMER SPENDING

Nestle, Flour Mills to surmount coronavirus challenges hen cust o m e r s tighten their belts, sales of consumer goods firms are under pressure. And in most cases profit slumps while margins are beaten down.

The coronvirus pandemic has forced people to stay at home at home and nonessential shops to remain closed, a double whammy for an industry beset by a myriad of challenges such as decrepit infrastructure, closure of borders, weak consumer spending, and unfavorable government regulations.

On 29 March 2020, President Mohammadu Buhari announced a number of measures to curtail the spread of Covid-19 in Nigeria. Notably, the President announced a 14-day (2 weeks) shutdown of economic and physical activities in two states (Lagos and Ogun States) as well as the Federal Capital Territory (Abuja). This was further extended by 14 days (2 Weeks) on Monday, 13 April 2020.

But the shutdown is boon to Nestle Nigeria Plc and

Malls

23

ings Profits also went from N2 billion to N948 million a 52.6% decline year on year.

The makers of Close-Up toothpaste and OMO detergent saw marketing and distribution expenses surging to N2.32billion from N1.57billion as the company sees to regain market share amid intense competition from other brands in the market. Brand and marketing gulped N800million from N383.15million in first quarter 2019.

In 2018, the company sold off its Spreads business which includes the household name

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brand Blueband Magarine.

Players in the consumer goods space are struggling to break even, the county’s tough operating environment, decrepit infrastructure sluggish economic growth and double digit inflation has shrink the wallet of most consumers in the country forcing them to seek cheaper alternatives in smaller, unlisted and most times smuggled brands.

Unilever is not the only platyer caught in this web, other giant such as PZ Cussons, Flour Millers and Brewers have seen their revenue come under intense pressure with no end in sight.

At the last NSE-CEO Consumer goods sector interactive session, which was organized by the Nigerian Stock Exchange to address the declining fortune in the sector, stakeholders suggested incentives such as tax incentives –to create long term and sustainable value creation in

tax collections, consolidating efforts in the public-private partnership especially as regards infrastructure, with more emphasis on de-risking the consumer goods sector to drive down cost of production to improve margins of companies.

With an economic recession looming, food & beverage revenues are likely to come under pressure hence the need to revisit their sourcing strategies, rationalize their product ranges and assess the resilience and agility of their supply chains as well as their route-to-market channels.

E-commerce and distribution networks should be optimized and streamlined. considering the impact of changing commodity prices and other cost-to-serve as well as ways to increase demand, companies will be forced to revisit their pricing and promotion strategies.

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Nigeria’s March food inflation accelerates to 14.98%, highest in 2yrs ... more pressure in coming months BUNMI BAILEY

F

ood prices in Africa’s biggest economy rose by most in two years in March as households stockpile food and essential items ahead of lockdown and movement restriction imposed by government at Federal & State level to curb the spread of novel coronavirus.

According to the March inflation report released by the National Bureau of Statistics, food inflation accelerated by 14.98 percent last month, compared to 14.90 percent in February 2020. The food monthly sub-index, which had earlier moderated by 0.79 percent in February, advanced by 0.84 percent in the reference month, suggesting increased pressure on food prices.

“There is a potential risk that we might see a further acceleration till the end of the year because the imported food inflation which is about a quarter of the index may likely come under increased food pressure due to weaker exchange rate, supply chains issue and some of the movement restrictions that we have now, making farmers to have very little access to market,” Omotola Abimbola, a macro and fixed income analyst at Lagos-based Chapel Hill Denham said.

Abimbola argued that there is a chance that planting season which has already started, might see increased scarcity of some food items at the peak of planting season

by May, which could further drive up food prices.

Nigeria’s statistical agency headed by Yemi Kale, had clearly ruled out possible impact from covid-19 lockdown on the inflation numbers. Nigeria has been on a lockdown for more than three weeks since March 31.

In mid-March, BusinessDay survey of markets across Lagos showed that consumers flooded the markets due to the increasing number of COVID-19 cases and a partial lockdown, making traders take advantage of the excess demand by hiking prices of food items.

Analysts expect food prices to maintain an upward trajectory in coming months as the country is headed fully for the planting season, which usually marks a period of reduced agricultural output.

“Food prices will face increased pressure in the next two months due to supply @Businessdayng

shortage as planting season kicks in fully. For April, food inflation will break into the 15 percent territory as the lockdown directive significantly destabilized the agricultural value chain” Adeshina Adewale, a Lagos-based economist said.

Adewale positioned that the outlook for higher inflation numbers in coming months amid weak macro environment make the price stability task of the Central Bank more difficult.

Headline inflation accelerated to almost a two-year high to 12.26 percent in March, some 0.06 percent points higher than the 12.20 percent reported in February 2020.

Abimbola said, “The uptrend was a function on many things. There was a secondround effect on the increase Value Added Tax rates that was very apparent in the core index and we saw a weaker exchange rate in March which begun to pass through in prices. We also saw a number of supply chains disruptions towards the end of month after restrictions were imposed so all these factors led to a higher inflation rate.”

Core inflation was recorded at 9.73 percent, up by 0.3 percent when compared with the 9.43 percent recorded in February. NBS said core numbers were pushed up majorly by prices of Passenger transport by air, Tobacco, Household textiles, Major household appliances, Domestic services and household services, Pharmaceutical products, Maintenance and repair of personal transport equipment, Water supply as well as Catering services.

“Going forward, inflation numbers in coming months will maintain an upward trajectory due to uncertainties around lockdown directive and commencement of planting season. Putting these together makes the price stability mandate of the Central Bank of Nigeria more difficult,” Adewale said.

The Nigerian economy is yet to recover fully from a recent recession as the growth of the wider economy which printed at 2.27 percent in full year 2019 underperforms population growth rate estimated at some 3 percent.

This indicates that Nigerians are getting poorer even as GDP per capita or income per head, a perfect proxy for living standard, fell by 40 percent between 2014 and 2018, official data show

24

Thursday 23 April 2020

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Covid-19 Lockdown:

It’s time business leaders spoke up!

Onuwa Lucky Joseph

D

espite the misgivings of many Nigerians who think that the Federal Government cannot be trusted with the CACOVID Funds that corporate organisations and some individuals are putting together (to help alleviate the sufferings occasioned by this unanticipated emergency), concerned corporates and individuals have stayed consistent with throwing in their contributions in the hope that government would surprise everyone and do a job that leaves Nigeria the reference point for all.

So far, unfortunately, that has not been the case. Grumblings and murmurings and incidences of near rioting have been the norm in many places where government intervention is channeled by way of basic foodstuff. What is supplied is so inadequate, the people consider it insulting and a measure of the lack of value that government places on them. And meretricious comments from government officials notwithstanding, the people are walking by sight, not by propaganda.

The Conditional Cash Transfer scheme, for instance, has a very limited sharing radius, relative to the wide span of pan Nigeria misery it is supposed to help ameliorate. Plus, the parameters that inform its sharing policy are, to put it charitably, nebulous. Funds from the commonwealth are not being channeled equitably thereby instigating anger rather than commendation.

Another spanner in the mix is government’s increasingly limited revenue intake. As of the time of this writing, oil, our revenue mainstay was selling at $10.50 per barrel.

Most likely, we will increasingly

Kayode Falowo

Abdulsamad Rabiu

start hearing from our officials how even basic salaries are difficult to pay, not to talk of relief measures for starving folks under lockdown.

Many farmers are compelled to observe the lockdown. Farm owners, who would normally travel from the cities on weekends to supervise their farms in the villages and bushes, can no longer do so, despite this being the onset of the rainy season. The rains are falling but it’s the grasses that are growing.

There isn’t much cultivation going on. Ditto for livestock. They are now at the mercy of farmhands, most of whom are happily derelict in their duties except where strict supervision is applied.

The world economy is taking a horrid beating, but would you know where it’s worse? It would be over here, of course. And so, again, like was said last week on these pages, we must be original with our solutions. It would be a sad day when our country, already run over in some parts by Boko Haram, bandits, kidnappers, and militant herdsmen, is finally taken over by criminals who have not been shy in showing their hands. The lockdown hasn’t been on for a month, the ef-

fect on the economy (of dirt cheap fuel price) is not yet telling – we had buffers); and yet the criminals, driven by desperation for wealth or mere survival, are already wreaking havoc.

The question we must ask is, all things considered, can Nigeria afford this ill-managed lockdown?

And by affordability I do not mean merely in the short term. Is it to our long term advantage, seeing how it’s been most difficult to enforce the lockdown due to gaps in formulation and application, wouldn’t it be wiser if we stayed at work, if we stayed productive (at least let’s produce and sell food!); wouldn’t it make more sense if government adopted the Cross River State model of policing social distancing and preventive wear (face masks) while citizens are out and about their jobs?

The lockdown can even be time specific: • Let’s work 8- 2pm and allow for till 5pm for everybody to be home.

• Lockdown begins at 6pm every day.

• No bars open. No gardens open.

• Hotels under strict instructions to enforce social distancing.

• Markets open every day, but with social distancing in place.

• Senior citizens (those 65 and above) to stay at home • Schools to stay online for now until the risk tapers down.

It is important that we think for ourselves, and that we envision our collective future beyond Covid-19.

Every country is looking out for itself and we would be remiss in our responsibilities as representatives of this generation (which likes to think of itself as enlightened) to imagine even if for one minute that the US, China, Russia, the UK, France, Germany, WHO or any of the UN organisations is losing sleep over our predicament. They are all engrossed in theirs and have deliverables that, shorn of diplomatic flatulence, do not include us.

So who speaks for us at this time?

We would rather our business leaders spoke up and maybe help give government a sense of where they should be going this period. Nigeria needs to stay productive. Hopefully, oil prices would rebound, but for now, we can’t count on oil. Our

creative sector needs to keep working. The technology sector needs to stay cranking. Our industries can’t stop humming. We can and should be the model rather than copying models that, being exogenous, are likely most inapplicable.

Let our business leaders speak up, not from their own personal profit motive, but from the collective. Will they be misunderstood?

Yes, they will. Just in the same way as this writing is sure to be misunderstood and issues taken with it. That is okay. But the responsible thing is to speak up, not merely for one’s own beliefs, but from an informed position based on a topical as well as visionary analysis of the situation.

The stats don’t lie: we are on a downward slide with our halfhearted lockdown which equals total non-compliance at the end of the day.

Let our chambers of commerce speak up. Show us the projected figures vis a vis figures from elsewhere.

Help Nigeria take an informed lifeor-death decision If the economy stays on lockdown, the CBN N50Bn intervention Fund, for instance, will end up going for food and everyday survival rather than the business stimulus for which it was supposedly designed.

Austria, as at the time of this writing, is exploring ways of reopening some businesses. Israel, South Korea, and Germany also, as well as India are all itching to get back into the fray. Donald Trump, of course, is bullish and mulish about that particular course of action despite opposition from many sides.

And Nigeria? It should not be that after the dust settles on Covid-19, that beloved country Nigeria would have only managed to reinforce its dependency status of going cap in hand to other economies which are only too happy to negotiate choice deals that leave us open to their economic takeover.

COVID-19: An opportunity for Africa?

Temitayo Ade-Peters

C

OVID-19 has not only created a health crisis; it has metamorphosed into an enormous economic situation that will have far-reaching impact now and even in the long term. It has exposed the weaknesses in the world’s systems we have grown to trust, testing the very fibers of globalization and its essence, and forcing leaders to have a rethink about what matters most and why.

Since the worldwide outbreak began in February 2020, it has literally brought global productivity to a halt, with collective efforts focusing signifi-

Mo Ibrahim

Ndidi Nwuneli

cantly on survival measures. A number of organisations have had to quickly transform their manufacturing outlets into fitfor-purpose production lines for COVID-19 medical equipment

or protective kits such as masks, alcohol disinfectants, gloves etc. Even hotels have stepped up to provide their spaces as makeshift hospitals to bridge the gaps created by inadequate

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medical facilities.

In parts of Africa, there’s an additional layer of security challenges emanating from youth unrest. Africa is the youngest continent, having about 80% of its population less than 35 years old with over 50% of them being unemployed or underemployed. While there are many underlying factors to blame including youths themselves, in reality, this translates into the fact that there are able-bodied young men and women, most of whom are willing but unable to maximize their potential mostly due to lack of, and access to opportunities.

In Lagos, one of the most vibrant cities on the continent, prior to the outbreak of the pandemic, a number of these young @Businessdayng

fellows wake up in the morning and head to the streets for ‘collection’ from public transport players: cab and bus drivers, tricycle riders and motorcyclists.

They act as quasi modern-day tax collectors, who harass these players and are often blamed for the hike in prices.

Additionally, a lot more do daily menial jobs from which they get something to ‘carry hold body’ (to keep body and soul together). They leave in the morning with just the transport fare to get to their place of business and some cannot even afford a meal until they have made their first sale of the day. Since they hardly make enough money to Continues on page 31

Thursday 23 April 2020

BUSINESS DAY

25

Corporate Social Impact

Contributors, so far, to the CA-COVID Relief Fund 1.

2.

3.

4.

5.

6.

7.

8.

9.

Central Bank of Nigeria – N2Bn Aliko Dangote – N2Bn Flood Relief Fund – N1.5 Bn Abdulsamad Rabiu – N1Bn Segun Agbaje (GTBank) – N1Bn Tony Elumelu (UBA) – N1Bn Oba Otudeko (First Bank) – N1Bn Jim Ovia – (Zenith Bank) – N1Bn Herbert Wigwe (Access Bank) – 1Bn 10. Femi Otedola – 1Bn 11. Raj Gupta (African Steel Mills) – 1Bn 12. Modupe & Folorunsho Alakija – 1Bn 13. Mike Adenuga – N1Bn 14. Nigeria Deposit Insurance Corpo ration (NDIC) – N1Bn 15. John Coumantatous (Flour Mills of Nigeria) – N1Bn 16. MTN Nigeria – N1Bn 17. Deji Adeleke (Pacific Holdings) – N500m 18. Rahul Savara – (Wacot Rice) – N500m 19. Tolaram Enterprise Africa Ltd – N500m 20. Bank of Industry – N500m 21. Friesland Campina WAMCO – N500m 22. Union Bank Plc – N250m 23. Sterling Bank Plc – N250m 24. Standard Chartered Bank – N250m 25. Stanbic IBTC – N250m 26. Citibank Nigeria – N250m 27. FCMB – N250m 28. Fidelity Bank – N250m 29. Ecobank – N250m 30. Africa Finance Corporation – N250m 31. Multichoice Nigeria – N200m 3 2 . A P M Te r m i na l s Ap ap a – N150,000 33. FSDH Merchant Bank – N100,000 34. FBN Merchant Bank – N100,000 35. Rand Merchant Bank – N100,000 36. Coronation Merchant Bank – N100,000 37. Sun Trust Bank – N100,000 38. Providus Bank – N100,000

William Kumuyi

Folorunsho Alakija.

39. WEMA Bank – N100,000 40. Unity Bank – N100,000 41. Heritage Bank – N100,000 42. NOVA Merchant Bank – N100,000 43. Polaris Bank – N100,000 44. Keystone Bank – N100,000 45. KC Gaming Networks – N100,000 46. Ports and Terminal Multiservices – N100,000 47. Ports & Cargo Handling Services – N75,000 48. Five Star Logistics Ltd – N75,000 49. ENL Consortium – N 70,000 50. Josepdam Ports Services – N60,000 51. Systemspecs – N50,000 52. Globus Bank – N50,000 53. Titan Trust Bank – N50,000 54. Takagro Chemicals – N50m 55. Atiku Abubakar – N50m 56. WA Container Terminal – N50m 57. Ports & Terminal – N50m 58. Pastor WF Kumuyi (Deeper Life) – N50m 59. KAM Wire Ltd – N30m 60. De Damak Nigeria Ltd Automo bile – N25m 61. Ahmadu Mahmoud – N20m 62. CWAY – N20m 63. Adron Homes Properties Ltd – N20m 64. Ekeoma Eme Ekeoma – N10m

65. LADOL Logistics – N10m 66. Greenwich Trust Ltd – N10m 67. SIL Chemicals Ltd – N10m 68. ECN Terminal – N10m 69. Apapa Bulk Terminal – N10m 70. Cowry Asset Management – N9,999,838.75 71. Jennifer Ramatu Etuh Founda tion – N5m 72. Mecure Industries – N5m 73. Comet Shipping Agencies Nige ria – N5m 74. Jubali Brothers Ltd – N5m 75. ADG International Resources – N2.5m 76. Ocean Lords Ltd – N2m 77. Norrenberger Investment Capital – N2m 78. Proshare – N1m 79. Few Chore Finance Company – N1m 80. Tarabaroz Fisheries Ltd – N504,451.25 81. Abayomi Folorunsho – N500,000 82. Kanakala Lakshmipathi Naidu – N100,698.75 83. Usman Ahmed – N50,000 84. Manji Yabwahat Longmut – N10,000 85. Jayakumar Selvam – N10,000 86. Anyaehie Stanislaus Ikechukwu – 10,000

Femi Otedola

87. Frederick Kigha – N10,000 88. Mr & Mrs Ojo Edward Oluwajoba – N3,000 89. Hamza Muhammad Kamba – N2,000 90. Kamalu Aminu – N1,000 91. Oluwadamilola Fagbiye – N1,000 92. Mohammed Ghali Muhammed 93. Adamu Yusuf & Uchendu Collins (N100 each) 94. Bashir Auwal (N60); Bilal Abdulsalam (N50); Umar Nafiu Usman (N50); Sani Alto Isah (N20); Bashir Sulaiman (N20); Abubakar Shehu (N10); Sanni Zakariyya (N10); Ibrahim Moh’d Bello (N8); Idris Mohammad (N5); Alhaji Mallam Musa (N5); Abubakar Ismail Abubakar (N2); Bello Shuaibu (N1); GH (N1) TOTAL = 25,893,699,791.00 TAKE-AWAYS from the List: • The billionaires on the list donated in their corporate rather than individual capacities. Most of these businesses are PLCs so would have required some emergency board resolution. The donations are from the businesses.

• Some have donated in what seems like their individual rather than corporate capacity.

• Would we be asking for too much if we say we still expect more from these captains of industry and the businesses they represent? Not necessarily to the Fund, but in other ways that help lighten the heavy Covid-19 burden.

• Some MIA industry captains: Aigboje Aig-Imokhuede, Fola Adeola, Otunba Subomi Balogun, Peter Obi, Atedo Peterside, etc.

• Former office holders MIA: Ghali Na’abba, David Mark, Olusola Saraki, Anyim Pius Anyim, Sule Lamido, Attahiru Bafarawa, Dino Melaye, etc.

• Curiously, also, there are no Chinese companies represented here.

But nice to see a number of Indian as well as Greek and Lebanese businesses represented on the list.

• Some of the organisations here seem to have punched well below their weight….

• Pastor Paul Enenche’s N2Bn worth donation not here mentioned. Maybe as it was in kind rather than cash.

• Kudos to the CBN for making the list available. That’s the first step in transparency. The next step is for donors and citizens to police the spending…

COVID-19: An opportunity for Africa? even sustain their basic lifestyles, there’s often no savings left. Did I hear you say investment?

Again we have the young entrepreneurs who are trying to build something across sectors.

Many have realized that there are no jobs hiding anywhere and that an engineer can actually be a great tailor. Some are in the tech space hoping to hit the next Airbnb-kind-ofidea, or become the next Mark Zuckerberg. A few have gotten some investment and exposure here and there. However, the story remains the same: young Africans generally feel betrayed and somewhat helpless, lacking opportunities and access to capital, and those in Lagos are not left out of this dilemma.

With the initial two weeks stay-at-home directive by the government, there were already murmurings about the inability of different groups of people

to cope. The government announced some relief packages to be distributed to the most vulnerable but as expected, this will hardly suffice. By the last week of the directive, some young chaps had started taking advantage of the situation to help themselves through criminal activities. The spate of armed robbery attacks had gone up, with communities and streets reporting invasions by groups of 200 or more coming in single attacks.

Now that the Federal Government of Nigeria has issued an additional two weeks of extended lockdown directive, one will begin to wonder what new turns the security challenges will take, and how people will cope without savings and no new business from which to earn money. Without discounting the Federal Government’s announcement of plans to exwww.businessday.ng

pand the relief support to more households, if there were already significant turbulence in the first two weeks, how will we manage the next two weeks, bringing the stay-at-home to one full month?

Of course, as matter of urgency, just as many people have cried out, the expectation is that government will put more effort into security of lives and property this period. As with the COVID-19 hotlines, security hotlines need to be working effectively at this time. If not handled properly, breeches in security will eventually affect the social distancing rules and cause a total breakdown of health and order.

However on a long term view, the government and indeed all key players including the private sector, civil society and the academia will need to develop innovative approaches towards Africa’s sustainable

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development. Drawing from the Milken Institute’s Prosperity Formula, the development strategy must focus on four focal elements: human capital, social capital, real assets and financial innovation.

Coming right from the continent are organisations such as Mo Ibrahim Foundation, LEAP Africa, Co-Creation Hub, WeForGood International and many more that have stepped up to play their part. For example, WeForGood International, an innovative tech company that brings people together to act on causes they care about, launched the Sustainable Solutions Africa Project in 2019.

Through this project, the organisation provided coaching, training and funding to young entrepreneurs who in turn impact over 500,000 people.

While these are great, there is more to be done for significant @Businessdayng

impact to be made on the continent. More than anything else, the governments must provide an enabling environment for innovation to thrive. Directly tied to this is the need to set policies in place that allow for positive exploitation of human capital, social capital, real assets and financial innovation in a way that ensures predicable prosperity.

The outbreak of the COVID-19 pandemic presents our continent with an opportunity to rethink our place and strategy, with the realization that a prosperous Africa is not only possible and good for this generation and for those yet unborn, but it is essential for our sustainability as a people in every sense of the word.

(Kindly send feedback to 08023314782 / csrmomentum@gmail.com)

26

FT

Thursday 23 April 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

International oil prices rebound following Trump warning Brent bounces back from two-decade low after US president takes aim at Iranian vessels Myles McCormick and Hudson Lockett

O

il prices rebounded on Wednesday after Donald Trump stoked geopolitical tensions with an announcement that he had ordered US warships to “shoot down and destroy” Iranian vessels.

The intervention by the US president sent Brent crude back above $20 a barrel, after the international benchmark tumbled to its lowest level since 1999 in the morning on concerns over the collapse in oil demand caused by the coronavirus crisis.

“I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea,” Mr Trump said in a tweet.

The prospect of renewed tensions in the Middle East gave crude a lift during a week where prices have struggled to contend with an evaporation in demand brought about by the Covid-19 pandemic.

Brent rose 11 per cent to trade at $21.47 as markets opened in New York. The S&P 500 rose 1.6 per cent following two days of back-to-back falls, while the tech-heavy Nasdaq Composite

West Texas Intermediate earlier this week fell into negative territory for the first time © Bloomberg

climbed 1.9 per cent.

West Texas Intermediate, the US marker, rose 25 per cent to $14.43. It almost halved during the previous session and earlier in the week fell into negative territory for the first time as producers were forced to pay buyers to take oil off their hands ahead of the expiry of futures contracts.

Brent crude remains down around 30 per cent so far this

week as lockdowns and travel restrictions enacted by governments have caused oil demand to tumble by as much as a third from pre-crisis levels.

Oil production levels have remained robust even as the virus destroys demand, triggering a global supply glut. An unprecedented cut of almost 10 per cent of global supply by Opec and its allies is set to take effect next month, but traders

worry it is not enough to offset the collapse in consumption.

The head of the International Ene rg y Ag e n c y o n Tu e s day called for the output reductions to be expedited and deepened.

Opec members met by phone overnight but there was no hint of a change in their plans.

But with global storage locations reaching capacity, analysts at JBC Energy said the Opec cuts cannot “come fast enough”.

“The logistical realities of tank tops and mounting offshore storage require swift action, with refineries no longer a reliable taker of crude as their own product inventories fill to the brim,” they said.

Iran’s oil minister Bijan Namdar Zanganeh said on Wednesday that cuts already agreed would take time to be felt in the market and called for greater global cooperation on curtailing supply, particularly by North American shale producers. “Opec on its own cannot resolve the current problem,” he told state television.

European stocks shifted higher, with gains of 1.6 per cent for the continent-wide Stoxx 600 index.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said the distortions in oil markets were likely to make themselves felt across equity, fixed income and foreign exchange markets in the coming weeks.

“But our view is that the recent period of extreme dislocation in the US oil market should pass in the second half of the year,” he added.

In fixed income, the yield on the 10-year US Treasury ticked up 0.04 percentage points to 0.605 per cent as investors moved out of the core government debt.

US restaurant closings spur farmers to destroy food Supply chains for commercial kitchens prove ill-equipped to serve grocery stores

Aime Williams

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atie and Jim DiGangi, who run a dairy farm in Wisconsin, have spent the last several weeks dumping as much as 20,000 gallons of milk a day.

In California, Jack Vessey, a lettuce and leafy green farmer, has destroyed 350 acres of his crop by ploughing his tractor through unharvested fields.

The two farms are almost 2,000 miles apart but both have become examples of the damage done by the coronavirus outbreak to the complex supply chains that bring food from farms to tables in the US. As restaurants, hotels and schools have closed, farmers and ranchers who supplied them have lost customers. But redirecting their production to grocery stores has proved difficult because of the differing demands of commercial food operations and people cooking in their kitchens.

The result has been scenes out of the Great Depression: farmers destroying their products as Americans line up by the thou-

sands outside food banks. While officials maintain there is no immediate threat of food shortages, no one is sure how long it will take to re-engineer supply chains so more food can reach stores and farmers can earn their keep.

“We haven’t seen anything like this in our lifetime,” said Mr DiGangi, a seventh-generation dairy farmer. “It’s obviously uncharted territory for everyone.”

Shifting to sell to retail in grocery stores is really complicated.

It’s not about just flipping a switch and making it happen Michael Nepveux, American Farm Bureau Federation The US food bottlenecks have been exacerbated by the closing of several meat processing plants after workers were infected with coronavirus.

Smithfield, a leading US pork processor, has temporarily shut three plants, including one in Sioux Falls, South Dakota, where hundreds of employees tested positive. Tyson Foods, the largest US meat packer, reopened its pork plant in Columbus Junction, Iowa at a curtailed pace this week www.businessday.ng

closing it because almost 200 employees tested positive.

Then on Wednesday, Tyson halted production at its largest pork plant in Waterloo, Iowa, citing worker absences, Covid-19 cases and community concerns.

The Tyson plant can slaughter 19,500 head of hogs per day. Combined with closures at other pork plants, a quarter of the nation’s pork production capacity of more than 500,000 hogs a day stands idle, said Steve Meyer, an economist with Kerns and Associates.

“We’re definitely taking on water really fast right now,” said Jen Sorenson, incoming president of the National Pork Producers Council and a pork producer in Iowa. “The loss of packing capacity is terrifying to producers because there is no place to take market animals.”

Cattle have been less immediately affected by plant closures because they can be put out to pasture, said Colin Woodall, chief executive of the National Cattleman’s Beef Association. But he added: “If those plants don’t reopen, that’s a different story. We

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can manage about two weeks, but a month or more? That’s a different subject.”

Christine McCracken, a protein analyst at Rabobank, said that a build-up of livestock combined with the difficulty of shifting supply chains would cause financial problems. “That will eventually lead to bankruptcy in the industry and a correction in herd numbers,” Ms McCracken said.

Farmers are suffering even as supermarket demand for their products remains robust. But industry analysts say shifting production away from restaurants has been tricky because commercial and consumer products are prepared and packaged so differently.

In the case of eggs, for example, commercial kitchens take delivery of huge pallets of eggs, often preshelled, whereas supermarkets prefer smaller cartons. Restaurants will also often take delivery of uncut sides of bacon, rather than the thinly sliced, smaller portions sold in supermarkets.

“Shifting to sell to retail in gro@Businessdayng

cery stores is really complicated,” said Michael Nepveux, an economist with the American Farm Bureau Federation. “It’s not about just flipping a switch and making it happen.”

The shift in demand from restaurants to supermarkets has also caused pricing dislocations.

Ground beef, which is bought more frequently in supermarkets, has become more expensive, while high-end steaks sold in restaurants have been falling in price.

“The tenderloin, the most expensive cut, is heavily exposed to restaurants,” Mr Nepveux said.

“Not many consumers are buying a fillet mignon to put on the grill at home.”

Mr Woodall of the National Cattleman’s Beef Association estimated that “about half of our production goes to hotels and restaurants. It’s been a huge hit for the beef industry”.

A wholesale pork price index has surged by a third to 70 cents a pound in the past week as slaughterhouses are shut down by the coronavirus, according to the US Department of Agriculture.

Thursday 23 April 2020

BUSINESS DAY

FINANCIAL TIMES

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COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

World’s largest oil ETF revamps portfolio after market chaos USO scales back holdings of benchmark June futures contract that had become 24% of market Gregory Meyer and Derek Brower

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he world’s largest oil-backed exchangetraded fund has been forced to make farreaching changes to its portfolio, after below-zero crude prices raised the spectre of unlimited losses for investors and its holdings ballooned to almost a quarter of the benchmark US futures market.

The United States Oil Fund, an ETF with more than $4bn in assets, said it would shift money out of the West Texas Intermediate futures contract set to expire in June, in favour of later-dated contracts and possibly even other kinds of energy derivatives.

The shake-up comes after two days of chaotic trading in oil markets, in which it had taken in more than half a billion dollars in new money.

West Texas Intermediate crude futures registered negative prices for the first time in history on Monday. The low of minus $37.63 a barrel in the contract for May delivery raised the prospect that the June contract could follow suit as producers run out of tanks to store oil.

USO held 137m barrels equivalent of June WTI as of Monday, or 24 per cent of total June contracts outstanding on CME Group’s New York Mercantile Exchange.

The fund cited “extraordinary market conditions in the crude oil markets”, for its decision to

Two days of wild trading have left oil investors facing substantial losses © Getty Images

revamp its portfolio, and in particular the extraordinarily sharp discount for prices of crude for imminent delivery.

Because USO sells out of oil contracts well before they expire, there is no risk that it could be forced to take physical oil deliveries. However, traders said large positions of funds such as USO were having an impact on oil prices.

Oil ETFs’ “immense” June position “is part of what’s spooking the market right now”, said Ben Luckock, co-head of oil trading at Trafigura, a global commodities merchant.

On Tuesday USO exited some June futures, saying in a filing that it would now keep 55 per cent of

its holdings in July and another 5 per cent in August. The June contract nosedived in price, settling at $11.57, down 43 per cent on the day.

USO’s filing, late in the trading day on Tuesday, warned the fund could also make unannounced purchases of other types of contracts including off-exchange energy derivatives that could cause “significant tracking deviations” from its WTI benchmark.

USO has proven to be a poor investment for long-term holders. But below-zero oil prices now prompt a question unanswered in its prospectus: what happens if underlying futures fall below zero?

Its latest prospectus warned

potential investors of a “total loss” in light of oil markets’ notorious volatility, but did not mention the risk of negative oil prices.

“The right answer is we just don’t know who is on the hook.

We just never anticipated this,” said an adviser who worked on the fund’s launch in 2006.

Most futures traders place bets on margin, committing a minimum amount of collateral to cover daily losses. USO is 100 per cent collateralised, with nearly $5bn in cash and ultrasafe investments backing its futures positions, according to its website.

But May-delivery US oil futures fell more than 300 per cent on Monday.

“The concept of ‘fully collateralised’ just went out the window,” said Carl Gilmore, president of Integritas Financial Consulting, a derivatives markets consultancy.

USO manager United States Commodity Funds did not respond to requests for comment.

The pressure on USO was evident earlier on Tuesday when it disclosed it would not be able issue new shares until it received approval from the US Securities and Exchange Commission. The recent flood of cash from investors had overwhelmed USO’s inventory of shares to offer to the market.

The pause will prevent USO from becoming an even bigger part of the oil futures markets, said John Hyland, USO’s former chief investment officer, who is now an independent ETF consultant.

“They can’t increase their number of contracts any more because they can’t issue new shares,” he said.

Mr Hyland said that CME historically had a “soft limit” on USO’s holdings of 25 per cent of any WTI futures contract. Exchange officials would start talking to the fund’s managers “every week” once its holdings rose to about 20 per cent of contracts outstanding.

“They don’t have to tell you to stop at 25, but they will certainly want to have a discussion about [how we] manage this process,” Mr Hyland said.

French markets regulator fines hedge fund Elliott €20m Levy against US activist marks one of the largest in AMF’s history David Keohane

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he French markets regulator has levied one of the largest fines in its history against activist hedge fund Elliott Management, imposing a €20m penalty for obstructing an investigation into a takeover bid and not adequately disclosing its positions.

The Autorité des Marchés Financiers said on Wednesday that it had fined Elliott over “inaccurate and late reports” filed in connection with a tender offer in 2015 by XPO logistics for Norbert Dentressangle, a French logistics group.

It also said that Elliot’s UK arm “had obstructed the AMF’s investigation.”

The investigation centred on El-

liott’s then investment in Norbert Dentressangle, which was in the process of being taken over by US rival XPO. Elliott took a position in the target company in the hope of winning a higher price from the buyer.

The AMF focused on whether Elliott correctly disclosed the size and nature of its positions to the regulator. This is required in France when an investor holds a significant amount of shares in a company subject to a takeover offer.

The AMF found that Elliott failed to accurately report the kind of instruments through which it held the shares, declaring they were one type when they were another. This harmed other minority shareholders by depriving them of information, the www.businessday.ng

regulator said, and impeded the proper functioning of the market.

In “reporting that the transactions at stake involved cashsettled CFDs [contracts for difference] when they actually involved equity swaps, the respondents had filed inaccurate reports on the nature of the financial instruments acquired as part of this investment,” said the AMF statement.

It also found that Elliott had “declared belatedly . . . its intention not to tender the Norbert Dentressangle securities to the offer.”

The AMF said that the size of the fine against Elliott reflected “the fact that the inaccurate reportings and the delay in submitting a declaration of intent to the AMF were intended to conceal

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from the market, for as long as possible, the strategy of blocking the squeeze-out offer in order to negotiate a reassessment of XPO’s offer price”.

A “squeeze out” involves the compulsory sale of the shares of minority shareholders when a certain threshold of ownership in a company has been reached.

The regulator added that Elliott had also “already been fined €8m by the Committee in 2014 in an insider trading case”.

The only other fines of a similar size levied by the AMF to date were against Natixis Asset Management and Morgan Stanley in separate cases. The US bank received a €20m fine in December while two years ago Natixis AM was fined a record €35m, later reduced to €20m. @Businessdayng

AMF has said the decision may be appealed. Elliott declined to comment. People familiar with the fund’s thinking said it is reviewing the decision, seeking to understand its reasoning and will review options with its lawyers.

The fine comes amid an uptick in investor activism in France and elsewhere in continental Europe, driving politicians, companies and regulators to wrestle with how to respond to the increase in activity.

Elliott is currently involved in a campaign at French spirits group Pernod Ricard, while another US hedge fund, Dan Loeb’s Third Point, has taken a stake in eyewear group EssilorLuxottica.

Amber Capital, a London-based activist, is pushing for changes at media group Lagardère and waste and water utility Suez.

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Thursday 23 April 2020

BUSINESS DAY

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Thursday 23 April 2020

BUSINESS DAY

29

news

South Africa considers flexible restrictions after lockdown

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outh Africa is considering introducing flexible restrictions on economic activity after it phases out a nationwide lockdown, according to a draft government presentation seen by Reuters on Wednesday.

An “alert system” comprising five levels would identify which sectors are allowed to operate under different risk scenarios and enable the government to alter restrictions swiftly for different parts of the country.

Africa’s most advanced economy last month imposed some of the world’s strictest measures to contain the COVID-19 pandemic. The initial 21-day lockdown has already been extended by two weeks and is now due to expire on April 30.

The draft presentation, which was put together by the presidency and health ministry, said evidence indicated the lockdown had successfully limited the disease’s spread.

“However, there are serious risks associated with lifting lockdown restrictions too soon, or in an unsystematic and disorderly manner,” it stated.

Sit-in restaurants, hotels, bars, conference centres, cinemas, sporting events and religious gatherings will remain shut after the lockdown ends, regardless of the risk level, the document said. And no gatherings of more than 10 people

outside of a workplace will be permitted.

In a speech on Tuesday, President Cyril Ramaphosa said the government would adopt a phased approach to easing lockdown measures, which currently require people to remain in their homes and allow only essential services to operate.

Ramaphosa’s spokeswoman confirmed the document was authentic but said it did not represent the government’s final plan, which Ramaphosa is expected to offer during an address to the nation on Thursday.

“There have been various iterations and various consultations since this version. The president will announce the risk-adjusted strategy to easing the lockdown when he speaks tomorrow,” Khusela Diko said.

Data embedded in the document show it was last modified on Sunday by the office of health ministry Director General Anban Pillay. When contacted by Reuters, Pillay declined to comment until after Ramaphosa’s speech.

The presentation proposes tighter restrictions on economic activity in response to the virus’s spreading faster and the health system in a low state of readiness, and looser restrictions if the spread of the virus is slower and the health system’s readiness is higher.

Rather than nationwide measures, the system would allow the

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alert level to vary from province to province based on local conditions.

In determining which sectors can be reopened, the government will weigh the risk of transmission within each industry, the expected impact of a continued lockdown as well as its value to the economy.

Citing a survey of industries, the document showed that the tourism sector would be the sector hardest hit by a continued lockdown, with only 5% of payroll likely to be paid at the end of May and potential layoffs of 55% of the workforce. Commercial aviation could also shed 45% of jobs.

“Sectors with a high risk of transmission should not be allowed to resume activity until this risk is reduced, regardless of the potential impact on their sector or their value to the economy,” the presentation said.

Industries with the highest risk of transmission included aviation, hotels and restaurants, and cultural and sporting events.

Some of the first industries allowed to re-open under the alert system would be agriculture, forestry, financial services, postal and telecommunications services and, with some restrictions, mining.

Construction would be among the last sectors permitted to reopen, according to the document.

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Thursday 23 April 2020

BUSINESS DAY

news A crisis not to be wasted Continued from page 1

Seyi Makinde (m), governor, Oyo State; Chikwe Ihekweazu (r), director-general, Nigeria Centre for Disease Control (NCDC), and others during the visit of NCDC team to the governor in Ibadan.

Wapic offers auto insurance policy...

Continued from page 1

reduced motor insurance claims during this period onto its existing policy holders.

The refund will automatically be credited to customers with active policies at the end of the lockdown period.

Wapic Insurance plc is

engaged in the business of underwriting life and non-life insurance risks, and also issues a portfolio of investment contracts products.

The company is engaged in the provision of various classes of insurance services, such as general accident, fire, motor, engineering, ma-

COVID-19 collaborative fight shows...

Continued from page 1

both Nigeria and abroad, was moderated by Pamela Ajayi, chief executive officer of Synlab Health Care and anchor of a famous radio programme, ‘Doctors on air’.

“The coronavirus pandemic has shown to us is that Nigeria can mobilise the needed capital to finance its health care system when it realises the importance,” Uche Orji, CEO, Nigerian Sovereign Investment Authority.

Orji said the pandemic showed that Nigeria was never prepared in terms of strategy to deal with communicable diseases, hence more investments have to be channelled in that area.

He revealed that the $1 billion spent by Nigerians annually on medical tourism was spent on four main diseases, including cardiovascular diseases, cancer and surgery.

The novel coronavirus, which has infected more than 2.6 million people and caused over 181,000 deaths worldwide, started in Wuhan, China late last year and entered Nigeria after an index case flew into the country from Milan

sometime in February.

The virus, which has infected over 782 persons and led to 25 deaths in Nigeria as at 6:00pm on Wednesday, has also exposed the country’s failed health care system. It also laid bare the country’s neglect for both its manufacturing and pharmaceutical sectors due to the high appetite for foreign products.

There is also evidence of a weak pharmaceutical supply chain, though not just in Nigeria but globally, Orji said, as there was too much dependence on China and India, and this affected drug supplies to major countries of the world as the source countries enacted a lockdown of economic activities.

With the outbreak of the virus in the country, private sector players swept into action after it became glaring that both the federal and state governments were handicapped in terms of the financial power to wage the impending health and economic war that the country was going into due to the spread of the virus.

From donation of billions of cash to building of hundreds of isolation centres across the country, www.businessday.ng

rine insurances and life assurance businesses for the risk management of businesses and individuals.

Wapic also transacts insurance business for aviation, oil and gas, and other special risks. Its segments include general business and life business.

Wapic’s general business segment includes Wapic Insurance plc and Wapic

Insurance Ghana Limited.

The company’s life business segment includes Wapic Life Assurance Limited.

Wapic Insurance plc and Wapic Insurance Ghana Limited include general business insurance transactions with individual and corporate customers.

Wapic Life Assurance Limited includes life insurance policies with individual and corporate customers.

and provision of various testing and medical kits, the private sector threw its weight behind the government in working to curb the spread of the virus, in a way and manner that has never been seen before, prompting stakeholders to say such collaborative nature between the private and public should be welcomed. “ The collaboration that has so far been seen between the private and public sector in propelling the growth of the health sector must be a continuous and sustainable one, and should not be based on emergency,” said Tope Adeniyi, CEO, Axa Mansard Health Insurance.

Adeniyi said a better way to achieve universal health coverage was by having a working health insurance scheme.

According to him, adoption of the health insurance scheme must be built on trust which must be the benchmark for everyone in the value chain, both operators and regulators. “ Re g u l at o r s o f t h e health insurance scheme must strengthen the framework backed with technology, to ensure that players (HMOs) are held accountable and responsible as that would ensure there is

trust in the system,” he said.

While responding to questions on whether the Cuban health care system can effectively work in Nigeria, Adeniyi said the Cuban model was successful because there was accountability in the process with operators, regulators and players setting key performance indicators that they must achieve.

Nasir Sambo, executive secretary, NHIS, explained his office was working to improve the quality of health care services through the health insurance scheme.

According to him, there are three basic ways in which a country can attract health care financing.

These include resource mobilisation, resource pooling, and resource allocation and tracking. He also said the financing can come from public and/or private sector, and can be by funding from tax revenues, deficit financing, donor financing, and social health insurance schemes.

He noted that the social health insurance scheme is the most equitable and most profitable of them all as it allows the rich in a country to subsidise health-care services for the poor by pooling risk and

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education) infrastructure.

BusinessDay recognises that Nigeria’s infrastructure growth is challenged by the stifling grip held by the Federal Government over every infrastructure asset or opportunity, and not by access to project finance. Ports, pipelines, railways and electricity transmission lines are owned by and cannot be built or operated without negotiating exemptions from some federal MDA or the other. Existing assets, almost all poorly maintained and inadequate, cannot be devolved to the private sector except via a procurement process, run by the ICRC, so tortuous and prolonged that it defeats the purpose of starting the transaction in the first place.

The federal and state public sectors must come up with a mechanism for developing viable projects around these brownfield infrastructures and finance them with domestic capital. Only then will foreign investment materialise.

This is the most effective and fastest route to Nigeria’s economic revival.

Fortuitously, the National Economic Council, comprising state governors, the minister of finance, the CBN governor, and chaired

by Vice-President Yemi Osinbajo, has spent the last six months working on two major initiatives that could, if properly and firmly implemented, take Nigeria out of the woods and into a new era of sustained socioeconomic development.

The first, on leveraging pension and other domestic funds into infrastructure investments, is focused on working out the fastest means for getting assets into corporate project vehicles.

These would be developed quickly into viable investment opportunities with private sector partners. The second initiative is a comprehensive inquiry into the electricity sector that emerged with three key recommendations – first, the need to get the electricity sector back to abiding by contractual and regulatory rules that ensure the steady supply of energy to the DisCos in exchange for cash; second, undertake a mechanism for recapitalising the DisCos, by devolution of equity to the states and to the private sector; third, reinforce governance, especially in the DisCos at board level and in public sector policy-making and regulation.

These two initiatives are prescient. Nigerian pension funds manage N10 trillionplus and accrue N110bn @Businessdayng

monthly in capital contributions. If implemented urgently and immediately with monetary and fiscal stimulus initiatives by the CBN and Federal Ministry of Finance, both initiatives will create opportunities for pension and other private investment desperately needed in the infrastructure space. In turn, further opportunities in education, healthcare, manufacturing, ICT and services will be created, saving Nigeria and Nigerians an avoidable economic depression.

Furthermore, the imminent massive cut in the flow of free money from the monthly FAAC ritual in Abuja compels the 36 governments to earn revenues from productive taxable activity, again by the private sector. With very few states having invested consistently in education and healthcare or acted to encourage largescale private sector activity in manufacturing, mining and agriculture – three areas in which all the states can do very well – this will be a difficult journey. At this point, they and the Federal Government must work together to hand over assets to capable private-sector players as quickly as possible and work to safeguard the investments that will follow.

It is unbelievable that by 2008, Nigeria had over $20bn in its Excess Crude Account, monies which if transferred to and invested by the Nigeria Sovereign Investment Authority would have been available to launch our recovery from the massive shocks the country is now going through. Conventional economic wisdom says that countries need to spend 10 percent of GDP over at least 12 months consistently to survive COVID-19. Ironically, with a GDP of $410 billion today, Nigeria would have easily generated the $40bn now required, if only we had listened to wise counsel and invested rather than fritter away our Excess Crude Account. Once again, regrettably, we have no choice but to borrow and plead for debt relief to create fiscal space for social welfare and investment initiatives.

This is the time for President Buhari, Vice-President Osinbajo and their team to galvanise a whole-nation approach and bring together Nigeria’s deep technocratic and private-sector resources in the national interest, without regard to politics or parochialism.

There is not a moment to lose.

Thursday 23 April 2020

BUSINESS DAY

feature Akinwumi Adesina: A deserving second term for Africa’s bold reformer OLUFIKAYO OWOEYE

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he first five-year term of the president African Development Bank (AfDB) Akinwumi Adesina, the first Nigerian to occupy such position, is expected to end this month, and as the pan African Bank is set to re-elect the distinguished development economist in May, there is, however, disquiet in certain quarters led by some non-African shareholders who are opposed to the re-election bid, despite his internationally acknowledged outstanding performance in the last five years.

Who’s afraid of Akinwumi Adesina?

At the heart of this unnecessary distraction is Steven Dowd, an American businessman who currently serves as the United States Director of the African Development Bank. Whose interest is Steven Dowd serving? The answer may not be far-fetched.

The answer may be found in close proximity to Daniel Runde, a very active Republican, close friend to World Bank President, David Malpass and also close w i t h D o n a l d T r u m p. B o t h staunch supporters of “America first” are very critical of China and the AfDB relationship.

Despite his unprecedented track record, for almost a year Akinwumi Adesina has been the target of attacks. Specifically, on 10 June 2019, a column published on the American political information site The Hill already questioned the transparency of the institution and the patronage of its president. He is even accused of organizing his annual meeting a few days later in Malabo, Equatorial Guinea.

Akinwumi Adesina on his part has never hidden his ann oyan c e at A m e r i ca n c omments on China. “Do not dwell too much on the presence of China. Instead, from a business point of view, be much more concerned about America’s absence from Africa.’ he repeatedly told American interlocutors, including Steven Dowd. Let us also remember the disturbing words of Malpass, upon his arrival at the World Bank: “How is Red China doing?”

“There is an ideological conflict, and multilateral institutions have become a battleground, but the Bank has no problems with the United States” said an assistant to the President of the AfDB. He claims that “it was no secret that Steven Dowd was looking for a candidate to face Adesina” Adesina’s bold reforms in the last five years Since his assumption of office, Adesina has embarked on reforms, under his watch, the Bank has been substantially repositioned globally, and he has driven highly

Adesina

impactful programs that are accelerating the development of the continent.

The Bank has maintained its AAA rating by all the four major global rating agencies, four years in a row, a reflection of the Bank’s sound financial and risk management, excellent liquidity and strong shareholder support.

The Bank’s income has seen a significant increase, with loan income of the Bank surging from $563 million in 2015, when he took over, to $803 million in 2017, an increase of 42.6%. The net operating income increased from $492 million in 2015 to $781 million by the end of 2017. The highest allocation from net income to reserves ever in the history of the Bank was reached in 2017, for an amount of $190.35 million.

In 2018, the Bank recorded an unprecedented first, when it was ranked Number 1 by the Multilateral Organization Performance Assessment Network (MOPAN), a position jointly shared with the World Bank. “Publish What You Fund” ranked the Bank in 2018, as the 4th most Transparent Institution among 45 global institutions.

Adesina’s reforms, undertaken as President of the Bank, are showing excellent results. The Bank has been effectively decentralized to get closer to its member countries and clients. It has opened 5 regional Development and Business Delivery offices in North Africa (Tunis), Southern Africa (Pretoria), Central Africa (Yaounde), East Africa (Nairobi), and West Africa (Abidjan); with five Director Generals appointed www.businessday.ng

to run these offices.

An increasingly larger share of the Bank’s operations is run from these regional offices. The share of the Bank’s operations staff based outside of the Bank’s headquarters in Abidjan rose from 29% in 2011 to 59% by 2018. Similarly, the share of Bank operations managed from the regional and country offices rose from 30% in 2011 to 76% by 2018.

The Bank was ranked 4th among the top 100 African employers that people want to work for in 2018; a huge jump from the Bank’s ranking of 82nd position in 2015. It has also efficiently managed and has the lowest administrative cost per adjusted common equity among all the multilateral development banks, globally, at just 2%. While the cost to income ratio of the Bank is 41%, the comparable figure for the World Bank is 113%, meaning the African Development Bank is 3 times more efficient on its administrative costs compared to the World Bank.

The Bank has continued to strengthen its human capacity. In 2018 alone, the Bank recruited 680 staff to deepen its human capacity, the highest ever recruitment in the history of the Bank. The Bank’s reputation and standing among global financial institutions has never been stronger. The Bank is now seen as a global financial institution that provides huge leverage for Africa. President Adesina is widely recognized globally and this has helped to lift the image and reputation of the institution while opening up unprecedented global partnership platforms for

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the Bank.

Today, the Bank is at the forefront of helping Africa achieve accelerated development. The Bank’s High 5 strategic priorities: Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the quality of life of the people of Africa, have been acclaimed globally as the key for achieving the Sustainable Development Goals in Africa and the Agenda 2063 of the African Union. Independent analysis by the UNDP shows that achieving the High 5s will help Africa to achieve 90% of the SDG targets and 90% of the Agenda 2063 goals.

The African Development Bank launched on March 26, 2020, a $3 billion “Fight COVID-19 social bond on the international capital market. It was so successful, raising $3 billion in just few hours at the interest rate of 0.75%. It is the largest US dollar denominated social bond in the history of the world, and the largest by the Bank since its establishment in 1964.

The bond is now listed on the London Stock Exchange.

Adesina went further and led the design and development of the Bank’s COVID19 rapid response financial package. Against onslaughts and roadblocks by nonregional members of the Board of Directors, he was tenacious, patient and bold in his defence of the need to protect and support Africa, to the maximum possible.

The Board of Directors finally agreed and approved the $10 Billion Covid19 response facility of the Bank, which was announced on April 8. This is a bold and unparalleled support for Africa.

This is the man that is called the “Africa’s Optimist in Chief”, who ceaselessly fights for Africa, speaks for Africa everywhere globally, while accelerating the development of the continent.

Second term bid receives backing Adesina at the bank’s annual meeting in Equatorial Guinea, announced his intention to contest for a second term in office. ” I will run again to continue the work we started,” he said at the end of the bank’s 54th annual meetings in Equatorial Guinea adding, “I am driven by Africa so as president of the bank, I can tell you this is no chore for me; it is a labour of love and I feel truly confident when I see the trust the governors have placed in us.”

His candidacy has been endorsed by President Muhammadu Buhari, the Economic Community of West African States (ECOWAS).

According to the ECOWAS, “In recognition of the sterling performance of Dr. Akinwumi Adesina during his first term of office as President of the African Development Bank, the Authority endorses his candidacy for a second term as the President of the bank,” ECOWAS said in a communique issued after the meeting. @Businessdayng

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The ECOWAS summit included a progress report on the region’s economic performance. It noted the role of the African Development Bank in the continent’s transformation and called for greater cooperation in order to fund projects in West Africa.

While the decision by ECOWAS to back Adesina’s second tenure was announced at the end of the 56th ordinary session of the Authority of Heads of State and Government of ECOWAS, held recently in Abuja, the Executive Council of African Union proclaimed its support during the 36th Ordinary Session of the AU Executive Council, held during the AU Summit in Addis Ababa, Ethiopia, 6-7 February 2020. The African Union Executive Council comprises 55 ministers of foreign affairs representing the member states of the African Union.

Attempt to discredit Adesina amid second term plans One is however not surprised by the number of unfounded allegations aimed at discrediting the candidacy of Adesina for a second term.

Hiding the umbrella of a whistleblower group in the African Development, they alleged one of the allegations levelled against Adesina is that he has attempted to Nigerianise the bank by giving preferential treatment for Nigeria and Nigerians in appointments and recruitment.

The petition also questioned the awards received by Adesina in 2017 and 2019 of $250 000 and $500 000 from groups in the US and South Korea.

“In 2017 and 2019, Mr. Adesina received two major awards: the World Food Prize (USD 250,000) and the Sunhak Peace Prize (USD 500,000). Other less significant prizes were also awarded. It is not clear if he received these awards as the President of the AfDB or as a private citizen. Dozens of people, Bank staff, executive Directors, former Head of State, entertainers or family members attended the award ceremonies at the Bank’s costs (one in Des Moines, Iowa, the other in Seoul, Korea). If these awards were private, why did the Bank support associated costs? If they were awarded to the President of the Group of the Bank were the awards returned to the Bank?” the petitioners alleged.

Reacting to barrage of allegations, Adesina vowed never to be distracted noting that the Bank has a high reputation for good governance.

“The ethics committee of the board of directors is following its internal review systems and should be allowed to complete its review and work without interference from anyone or the media.

I am 100percent confident that due process and transparency, based on facts and evidence, will indicate that these are all nothing more than spurious and unfounded allegations,” he said.

32

Thursday 23 April 2020

BUSINESS DAY

Garden City Business Digest

Manufacturers support RSG fight against COVID-19 with essential items Ignatius Chukwu & Sam Esogwa

T

he Manufacturers Association of Nigeria (MAN), Rivers/Bayelsa chapter, has presented some essential items donated by its members to the Rivers State Government to support its fight against the dreaded corona virus pandemic. This was same day the governor, Nyesom Wike, encouraged companies doing business in the state to endeavour to help in the fight so as to be seen by his administration as allies at a time such as this.

The items which include a 500 KVA transformer donated

by Danelec Limited, a truckload of bottled water and soft drinks donated by Nigeria Bottling Company (NBC), face masks and safety aprons donated by Showers Limited and liquid soap donated by Praymerc Nigeria Limited, were officially presented to the Rivers State Commissioner of Health, the professor, Prince-

will Chike, by the chairman of MAN, Adawari McPepple, a senator, on Friday at the Rivers State Secretariat, Port Harcourt.

In his brief speech while making the presentation, McPepple said the deadly coronavirus was affecting the whole world and that Rivers State and Nigeria were not spared.

While commending Gov Wike for the effective steps he has taken so far to prevent the spread of the ravaging virus, the MAN Rivers/Bayelsa chairman said his association decided to support the state government in the fight against COVID-19 by donating the items.

“We have decided to throw our weight behind the Rivers State Government. We are aware that the state has a testing and treatment centre.

The 500 KVA transformer was donated by Danelec Ltd for uninterrupted light at the centre, hand washing liquid was donated by Praymerc Nigeria Limited, bottled water and soft drinks were donated

by NBC (Nigeria Bottling Company), while Showers

Adawari McPepple, MAN chapter chairman

Ltd donated face masks and safety aprons, all for the isolation centre.”

Responding, Chike thanked MAN for the good gesture and expressed delight

that the state’s fight against the virus championed by the governor was yielding positive result.

Chike added: “The issue of COVID-19 pandemic is obvious to everybody. We must commend His Excellency our Executive Governor, Chief Barr Nyesom Wike, for the proactive war he’s waging against the disease.

“Rivers State has recorded just two cases since it started.

The first case was a 19-year old lady. She was treated and discharged. The second case was a 62-year old man. As at last night he tested negative and was discharged this morning.

“For now we have no case of COVID-19 in Rivers State but we are still alert. So our 30bed capacity treatment centre is empty now. All facilities are still intact there.”

The Rivers State health commissioner further explained that testing was still ongoing both at the international and domestic fronts, adding that the last two cases were those tested at the international fronts.

He promised that his min-

istry would make good use of the items donated by MAN and advised people to stay home until the menace is over.

Also speaking, Rivers State Commissioner for Commerce, Ifeoma Nwankpa, commended MAN for the donation. She said COVID-19 has reawakened the consciousness of human beings towards helping one another. She regretted that many residents of Rivers State still do not believe that coronavirus is real.

Speaking with BusinessDay shortly after the presentation of the items, chairman of MAN Rivers/Bayelsa chapter (McPepple), said the donation of the items was to support the effort of the Rivers State Government on the fight against covid-19.

He said the fact that the items presented were manufactured in Rivers State by the companies that donated them meant that the local industries could supply the state with most of her needs if they are supported. He did not explain why many notable manufacturers in the state did not show presence with items.

Why Rivers, FG must close ranks for peace and economic stability Port Harcourt

by Boat

IGNATIUS CHUKWU

W

hen a state seems to be at war with the centre, state officials fear to get close to federal officials to avoid being seen as spies or saboteurs.

Thus, whenever two elephants fight, grass will surely suffer. In that case, the worst fate that can befall any state is for the state government (governor) and the presidency to be at loggerheads.

This seems to be the case this moment between the Rivers State government and the centre.

This was not the case many years ago when then governor, Peter Odili, worked the state into the hearts of the presidency and the FG. Odili so ingratiated Rivers State into the national psyche and scheme of affairs that Rivers appeared to become the number one state to escort the presidency on any foreign tour. If any foreign delegation was coming to Abuja, Rivers governor was one of the few governors to sit with the president. If any foreign team was touring states, Rivers was number one to host them, and first to collect any goodies from them. Any national programme to be done in phases, Rivers was always in the pilot or first phase.

It began with the presidency but soon spread to almost all the ministries and parastatal agen-

cies whose chief executives found Rivers as home. The then governor so much supported them that they emptied their bags of favour to his state. Another contact point for influence was the trade unions most of who controlled the workforce and strength of their agencies.

Gov Odili so touched them in so many ways (hosting their national executive council meetings, congresses, donation of vehicles, gift of one bus to each of the 29 industrial unions in Rivers State, contracts, support to set up zonal offices in PH, inclusion in Christmas handout yearly, and trips to Israel and Mecca, etc).

The influence of Rivers State went so high that the then national vice chairman of the ruling PDP, A.K Dikibo, now late, once told newsmen that Rivers State was so important that any decision taken at her back would be repeated (agbawo dike izu….).

Problem came when Odili saw an opening to climb on this popularity and influence into Aro Rock as president. He nearly succeeded but a slip caused a great downfall. Rivers began to suffer blacklisting till Chibuike Rotimi Amaechi entered and full blown war between the state and Abuja began. He later rebuilt it under Goodluck Jonathan and both parties began to rapport once again while he was chairman of governors’ forum (NGF). This however broke up when the 2012 political crisis erupted through actions ignited by the then first lady and other underlining matters such as suspicion that Amaechi was eyeing power outside the Goodluck stable.

From this moment, it appeared as if the only objective of the presidency was to ruin Rivers State in order to get at Amaechi. Many evil things happened which is not the subject of this piece, but to say that Rivers began to be a full opposition state to the presidency, a pariah

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state. Nothing good would get to the state again.

Note that in such situations, as it is now, many indigenes would applaud the punitive actions of the presidency, so long as these actions made the state Chief Executive, who actually is their opponent, uncomfortable.

When Nyesom Wike gunned for the governorship seat in 2015, the calculation was that the virus (governor) would be eliminated and a new app installed that would work harmoniously with the presidency. Yes, a new app was installed but the presidency changed hands from the familiar PDP to a new party, the APC. The former virulent situation returned; Presidency versus Brick House.

We must state here that there are many opposition states but the relationship between a state and the presidency would be due to the style and personality of the person in charge at the state, not necessarily the party. Evidence to this assertion abounds. There is much a state loses when it is seen to be antagonistic to the centre, even if it’s the centre that is antagonistic to it. Most federal agencies would naturally be cold to that state, and thus, many programmes and projects would elude that state. Lobbying is still the key way of attracting things to a state. If both levels do not talk and have rapport, many things would pass by.

Each time Gov Wike speaks in recent times, you would think he is at war with the presidency, but if you go through his words carefully, and work it around his character, you would know there is no war. Some of his words and mannerisms may look aggressive but many may not care to get deep into his heart. That is why he often does U-Turn and attracts more insinuations. Many mistake it for fear; I don’t think so. For instance, he thinks federal support should be according to

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efforts put in by states to fight the virus, not on number of positive cases. He also thinks the value that a state brings to the revenue bucket of the nation should be a factor.

He thinks if a state has a right to order a lockdown, any movement should be done with consent of the state’s CEO instead of a unilateral action that makes a state CEO look like a lame duck. Most of these matters can easily be smoothened out without much fight. His method may look aggressive, but can the federal agencies look into the merits of his arguments? This will help. It could also be good for liaison officers and diplomats of the state to make underhand contacts ahead and help reduce tension so the governor does not continue to be first point of contact or first to talk. Other administration officials can talk, then governor can speak last and over rule previous statements, if need be. With seasoned diplomats like Desmond Akawor and experienced information managers like Paulinus Msirim, something can be worked out, except the governor does not want to give them a chance to manage him.

There is nothing the centre will gain by crushing Rivers State, the headquarters of the hydrocarbon industry and the melting pot of the expatriate community in Nigeria. There is also nothing the state can gain by being seen as a nogo state or centre of problem to the centre. This matter can he handled with diplomacy. After all, from the Carveton to Mobil conflicts, Wike has shown he can pull back. Officials can pursue this signal to achieve the desired objective. The problem is that officials sometimes think its an opportunity to show loyalty by charging their principals to war, and thus heat up the system.

When damage comes, its total and collateral.

Bet me!

@Businessdayng

Thursday 23 April 2020

BUSINESS DAY

33

Investing in Rivers State Gov Wike talks tough in PH, vows to plug leakages to protect the state from virus attacks • Updates the state on 22 ExxonMobil workers, plus Carveton issue • Seeks patience over leakages at boundaries through security operatives • No more positive case in Rivers camps as 214 out of 216 contacts exit • Announces more curfew areas who refused to obey lockdown orders Ignatius Chukwu

G

ov Nyesom Wike of Rivers State last week Friday announced that security agencies arrested 22 staff of Exxon Mobil who he said entered the State from Akwa Ibom in violation of the State Executive Order. He was to tone down and order their release without further antagonism. He had said if the prisons (a federal facility) would not make their cells available, he would turn warehouses into prisons. He actually used the Elekahia stadium to detain the latest prisoners.

Gov Wike also announced that Carveton Helicopters Limited apologised to the State over the conduct that led to the arrest of their pilots and passengers on same offence.

Gov Wike made these disclosures during a televised press briefing in Port Harcourt where he stated that the Exxon Mobil matter would be a test case in legal jurisprudence in the country. He had said: “Even though security agencies advised that they be allowed to go back to Akwa Ibom State, I insisted that the law must take its course. This is because nobody is above the law.

The governor regretted that Federal authorities were working dangerously to compromise the health protection system of Rivers State and thereby make them vulnerable to coronavirus. “Some people want the escalation of the virus in Rivers State. People were paid to canvass a negative narrative on Carveton Pilots.

“We are doing what we can within available resources to fight coronavirus. You can fly, but as you land, don’t enter our territory. People in Abuja may not be happy that we have low numbers, and I will not allow it. I was elected to protect Rivers people. Rivers State is not a pariah State.

“Nigerians shake when they hear oil companies they shake because they have compromised. Imagine an appointed minister issuing an order to an elected governor. They wanted

Governor Nyesom Wike

to rig us out but they lost. Recall that the former DG of DSS ordered his men to leave the INEC Collation Centre for the invasion of the Centre.

They lost.

“The right thing must be done.

We are talking about something that is killing people. They want coronavirus to escalate in Rivers State. The law must be tested. I urge my people to make sacrifices and let us contain the virus.”

Gove Wike said that Rivers State cannot be manipulated from any quarters. “Nobody will use Rivers State as a toy. This FG does not like us, but a government will come that likes Rivers State.”

Gov Wike stated that the State Government followed due process in its actions against Carveton Helicopters. He noted that the state government was focused on implementing extant laws aimed at protecting Rivers people. He said actions taken on Carveton were within the laws of the land. He noted that his administration established the right legal

framework to assist it effectively fight against the spread of coronavirus.

On control of the virus through the law, the governor said: “People selling akara are being charged to court in Lagos, but they want us to allow oil companies to flout the law.

If they want me to behave like a boy to anybody, then I better be a boy to Rivers people, not to anybody outside Rivers State.

Apparently referring to the minister of transportation who is leader of the APC in the state, Gov Wike said; “You have been fighting Rivers State since 2015. They challenged me in 2015, I defeated them. In 2019, I defeated them. There is no third term.”

The Governor praised the management of the NLNG for cooperating with the State government to fight the spread of coronavirus by obeying the established health protocol to check the spread of coronavirus. They have consistently liaised with the State Government in the movement of their staff on essential duties. This is what is expected of a responsible corporate

organization.”

The Governor expressed gratitude to individuals and corporate organizations that have strengthened the state’s capacity to fight coronavirus.

He said: “Our pragmatic leadership style has therefore earned our state individual and corporate support that have strengthened our prevention strategies.”

Governor Wike noted that his administration has developed a comprehensive palliatives scheme to support less-privileged Rivers people survive the sit-at-home directive of his administration.

He said: “I directed the Palliatives Committee to ensure that their activities must not be partisan, religious or ethnic based. Let me State here that following my directive, the committee adopted a community-based approach in the discharge of its assignment.

“The distribution of the foodstuffs is supervised at the ward level by a five-man committee made up of a clergy man, traditional ruler, Community Development Committee chairman, woman leader and youth leader, and they are going round.”

The governor, however, announced the suspension of the ongoing distribution of palliatives due to complaints by some members of the public, and to allow five slots each from the Nigeria Union of Journalists (NUJ) and the Civil Society Organisation (CSOs).

Gov Wike stated that the State Government established a Food Purchasing Committee with a directive to buy foodstuffs and fish from Rivers farmers. The committee, he said, has procured foodstuffs and set up food banks in the 23 Local Government Areas of Rivers State. This is to ensure that nobody complains of hunger during this period.

“So far, the Committee has purchased a large quantity of garri, yams, rice, palm oil and fish from local farmers and fishermen. The overall objective is to empower our farmers and fishermen while also providing enough foodstuffs for the less privi-

leged in the State.”

He urged companies doing business in the state to support the war effort against the virus, noting that failure to support was indicative of rejection of their corporate social responsibility. “I want to sincerely thank all individual and corporate donors who have supported us in this fight.

At the appropriate time, the Rivers State Government will publish their names in national dailies and local tabloids for posterity. These individuals and corporate organizations are indeed friends of the State,” he said.

He pointed out that Rivers State was the first State to close her borders to check the spread of coronavirus. He noted that this step was greeted by criticisms at the time, but several states have emulated this pragmatic approach. It is obvious that our containment strategies: closure of borders, closure of schools, closure of markets, closure of night clubs, closure of cinemas, as well as the ban of public worship, ban of public burials and weddings, have helped to check the spread of coronavirus.

“This is in addition to the conduct of our healthcare professionals who have demonstrated a high level of patriotism and sacrifice in contact tracing and case management,” he said.

The Rivers State governor warned that those allegedly plotting to disrupt the distribution of palliatives would be sanctioned. He pointed out that some persons only criticise for the sake of political mileage and not to add value.

He informed that the Rivers State Security Council would lockdown some parts of Port Harcourt where some people continued to disregard government directive of social distancing. He carried out the threat the next day.

On unions using strike to pressure the administration on certain actions, the governor said that nobody can threaten Rivers State with strike. He said the state is ready to tackle anyone trying to compromise the health of the State.

Customs Area 1 PH distributes virus prevention kits to officers Sam Esogwa

A

s the deadly corona virus continues to devastate the world and send jitters down the spines of humans, the Nigeria Customs Area 1 Command, Port Harcourt, in line with the directives of medical experts, the World Health Or-

ganization, the Federal Ministry of Health and the Rivers State Government, says it has adopted proactive measures to combat the disease.

In a telephone chat with BusinessDay, the Command’s Public Relations Officer, Oscar Ivara, said they started by organizing an awareness parade of officers, during which they were sensitized by their medical officers and authorities on how www.businessday.ng

to avoid contracting and spreading the deadly virus.

He said the Command, under the new Comptroller, Awwal B. Mohammed, then followed this up by distributing preventive kits that include hand gloves, nose masks and sanitizers to its officers, both those in the offices and those in the frontline.

“We also positioned water basins and soap at our entry points

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for people to wash their hands. As a matter of fact, before anybody is allowed entry, he must wash his hands with the water and soap. We provided test facilities to our officers on the frontline,” he said.

On how the Command ascertains that ships coming into the ports were not contaminated, the PRO said before ships leave from their locations, they are certified by the international body responsible @Businessdayng

for that.

Ivara further explained that the Command is collaborating with the management of the Nigerian Ports Authority (NPA), Port Harcourt, to ensure compliance with the preventive measures.

According to him, they have suspended all courtesy visits to the NPA and Area 1 Customs for now as a way of limiting the movement of persons around the Ports.

34

Thursday 23 April 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 22 April 2020

Top Gainers/Losers as at Wednesday 22 April 2020 LOSERS

GAINERS Opening

Closing

Change

Company

Opening

Closing

Change

WAPCO

N10.35

N11.35

1

GUINNESS

N20.3

N19

-1.3

ZENITHBANK

N13.05

N13.75

0.7

SKYAVN

N1.96

N1.8

-0.16

CAVERTON

N2.35

N2.25

-0.1

BUACEMENT

N34.55

N34.85

0.3

UNIONDAC

N0.31

N0.29

-0.02

ASOSAVINGS

N0.5

N0.5

0

Company

GUARANTY

N18.35

N18.6

0.25

N4

N4.25

0.25

PZ

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

22,780.30 3,446.00 186,229,966.00 1.852

Global market indicators FTSE 100 Index 5,770.63GBP +129.60+2.30%

Nikkei 225 19,137.95JPY -142.83-0.74%

S&P 500 Index 2,792.84USD +56.28+2.06%

Deutsche Boerse AG German Stock Index DAX 10,415.03EUR +165.18+1.61%

Generic 1st ‘DM’ Future 23,345.00USD +416.00+1.81%

11.872

Nigeria’s Bourse recovers part of previous day’s loss Stories by Iheanyi Nwachukwu

N

igeria stock market on Wednesday April 22 recovered part of the losses seen the preceding trading day.

Thanks to bargain hunting on equities like Lafarge Africa, Zenith Bank, BUA Cement GTBank and PZ Cussons that contributed majorly to about N80billion gain in market cap.

The stock market of Africa’s largest economy was able to book the gain despite that the effect of Coronavirus pandemic and the declining crude oil price continue to pose threat to other global markets.

Lafarge Africa Plc recorded the highest gains on the Bourse after its share price moved from day open low of N10.35 to N11.35, adding N1 or 9.66percent.

Zenith Bank Plc also increased from N13.05 to

Oscar N. Onyema, chief executive officer, Nigerian Stock Exchange, performing a single person closing gong ceremony to celebrate listed companies that have contributed funds to the fight against COVID-19 in Nigeria .

N13.75, adding 70kobo or 5.36 percent while BUA Cement Plc increased from N34.55 to N34.85, adding 30kobo or 0.87percent.

Given that most fundamentally sound stocks are currently trading below their fair value, analysts ex-

pect investors to continue to take advantage of low pricing.

Guinness Nigeria Plc dipped most from N20.3 to N19 losing N1.3 or 6.40percent. In 3,446 deals, equity dealers exchanged 186,229,966 units valued at N1.852billion. Zenith

Bank, FBN Holdings, GTBank, and UBA were actively traded stocks on Wednesday April 22.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.66percent to 22,780.30 points from 22,629.92 points, while

the value of listed stocks increased by N80billion to N11.872trillion, from N11.793trillion the preceding trading day.

The market year to date negative return decreased to -15.13percent. Month to date positive return stood at +6.95percent.

NSE amplifies social distancing with Tuface Idibia

T

he Nigerian Stock Exchange (NSE) has lent its voice to the promotion of social distancing as a necessary step in flattening the COVID-19 curve in Nigeria.

This advice was shared in a recently released video voiced by ace musician Tuface Idibia who is NSE’s Good Cause Ambassador.

It would be recalled that NSE activated its Business Continuity Plan (BCP) as early as January 18, 2020,

with thermal testing of staff and visitors, provision of hand sanitizers and increased frequency of cleaning at its offices even before the index case was recorded in Nigeria on February 25, 2020. Through the BCP, NSE directed employees to work remotely from 24 March, while remote trading by brokers commenced on 25 March 2020.

In the released video, NSE emphasized its ability to sustain its full operations rewww.businessday.ng

motely, citing its investment in cutting edge technology and digital assets including cloud computing and artificial intelligence as enablers of its remote trading and working capabilities. These investments have brought about notable innovations in The Exchange’s trading and operations. Leveraging platforms like the X-GEN, NSE has been able to deliver improved market order flow, increased number of trades, direct market access, remote

trading through FIX, VPN and X-Net, and the advent of mobile trading technologies to retail and institutional investors.

Furthermore, the NSE has once again provided reassurance to Dealing Member Firms, Issuers and other capital market stakeholders that it is committed to operating business as usual and ensuring zero disruptions to its activities. During this lockdown, The Exchange has continued to play its

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role in deepening capital market activity through listings and capacity building activities, as well creating an enabling business environment through regulatory guidance.

The highlight of the video is in The Exchange’s emphatic message on the importance of social distancing at this time and encourages Nigerians to continue to stay home and stay safe by observing all the precautions provided by relevant institutions. @Businessdayng

Shanghai Stock Exchange Composite Index 2,843.98CNY +16.97+0.60%

United Capital Daily Insights

COVID-19 and the Oil market: Can the recovery be sooner than later?

S

o far in 2020, the outbreak of COVID-19 has completely altered the dynamics of the global crude oil market.

This was expected, as the effect of global economies halting economic activities, facilitating restrictions and lockdowns, decreased the demand for oil.

Also, the oil price war, which prompted major oil producers to flood the market at the start of Apr-2020, added fuel to the fire.

Fast forward to what is occurring today, major oil producers, within the OPEC+ and G20, agreed to reduce supply by about 13mb/d, starting from May-2020.

However, the economic destruction caused by the COVID-19 pandemic has wiped about 20mb/d -30mb/d worth of demand, off the market, suggesting the cuts are not enough. Additionally, the physical market for crude oil is currently suffering from overstorage, which has left the likes of Nigeria with several unsold cargoes on the high sea.

Notably, for the first time in history, prices of contracts on America’s benchmark crude oil (WTI), for which delivery of the underlying barrels of oil were scheduled for May-2020, turned negative, as there was no demand for oil, causing oil traders to pay buyers to take up physical delivery of crude oil.

Going forward, the recovery in the global crude oil market is entirely hinged on one major factor, containing the COVID-19 outbreak globally and easing economic lockdowns over the world.

While the OPEC+ cuts starting in May-2020 will reduce future supply, fast declining storage capacity and a broadly melancholic outlook for oil demand implies that recovery may be later than sooner.

However, with economies in Europe, such as Germany and Italy gradually easing lockdown pressures, hope exists in the medium to longterm for a full recovery in oil demand.

Thursday 23 April 2020

BUSINESS DAY

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35

industry Insight

BUSINESS DAY Thursday 23 April 2020 www.businessday.ng

Patronising made-in-Nigeria products: Two sides of a coin Michael ani

N

igeria’s manufacturing sector has a huge potential to grow and compete with many of its counterparts in most emerging and advanced economies.

The sector is made up of 77 various sub sectors/ industries from automobile to food, down to plastics. These are ordinarily expected to boost economic growth by harnessing the country’s vast array of land and mineral resources.

But despite being exposed to a market with a population of over 200 million people, the biggest in the continent, the Nigerian manufacturing sector is yet to reap the benefit of a large market, and it’s growing only at an average of two percent annually.

Players in the industry are faced with high cost of production and a harsh operating environment, but also the high appetite by Nigerians for foreign-made products.

Recently, it was reported that the Nigerian lawmakers ordered 400 exotic Toyota Camry cars worth billions of naira, after rejecting brands from its own domestic vehicle assembly company, Innoson.

The report put the cost of each of the 2020 models of the imported Toyota Camry cars at an estimated amount as high as N12.6 million.

That’s aside the amount it will cost to get these cars imported into the country.

Using the estimate of N12.6 million, the total amount that will go into the purchase of the 400 cars would be over N5 billion.

That could have gone a long way into boosting capacity of the local car assembler.

And it is not only in exotic goods such as cars, Africa’s largest economy depends virtually on foreign made goods from food items to textile, down to a low as toothpick, leaving its local manufacturers with nothing to cheer.

Whatever the reason might be, while no country in this world can be self-sufficient and not engage in traded (import and export) with other countries, too much dependence on foreign-made products could be detrimental to not just infant industries, but also hurt balance of payments and the economy at large.

Nigeria, for example, spent as much as $1.9 billion on an annual basis on food import bill alone, according to a statement by Godwin Emefiele, CBN governor.

That is not to talk of the huge amount of money spent on the importation of other goods into the country.

Of course, spending huge amounts of money on the importation of products comes with an alternative foregone which is the constant depletion of the country’s foreign reserves that are susceptible to the volatility of oil prices, the country’s biggest earner.

Foreign reserves have dropped

to around $34 billion, driven by a fall in both oil prices and production.

Continuous depletion of the reserves to foot the country’s increasing import bill can also limit the CBN’s firepower to keep the naira stable, as importers demand for more dollars.

This could have an even more devastating effect by leading to a sharp devaluation of the currency and push up inflation.

To this effect, the Central Bank has restricted about 45 items from accessing dollars for import from its official window. This was done to limit the amount of pressure on the country’s reserve, and encourage local production.

But restricting items without providing the necessary prerequisite for aiding local production does not hold much water, analysts have said.

To encourage local producers and boost domestic productions, various structural issues limiting the productivity of manufacturers would have to be addressed.

Such structural issues include the provision of power, good roads

and bridging infrastructure gap that would improve the flow and movement of goods and services in the manufacturing value chain.

The need to give maximum attention to the manufacturing sector has come to spotlight once again after the Coronavirus pandemic has crippled economic activities across the globe especially in China, the world’s most populous nation, which has been known to be the hub of major import for Nigeria.

Following the closure of businesses in major countries including China, Africa’s largest economy is looking to its local manufacturing sector as the messiah that would help in covering for the production and supplies of goods and services.

Several economic palliatives and funding facilities have been channeled to the sector that would aid in the production of various goods, from food items and medical care products to pharmaceutical products and many others.

The automobile industry has also been urged to produce ventilators locally in order to meet

‘‘

Several economic palliatives and funding facilities have been channeled to the sector that would aid in the production of various goods, from food items and medical care products to pharmaceutical products and many others

the increasing number of persons who have been tested to have been carriers of the virus.

But for the restriction of entry into most advanced countries and the closure of factories in many countries, these items could have been abroad while the domestic factories would have been ignored.

However, consumers do not necessarily look at who manufactures what before buying. This is why it defies logic to argue that patronage of locally manufactured products should be a matter of patriotism. Consumers all over the world are seeking value at affordable prices, which some of the locally-made products lack.

In a survey carried out by an online medium platform, consumers said they prefer foreign made products over those products made locally owing to standards, affordability and perception.

Some argued that a few of the locally-made products have lower standards. They noted that Nigerians who secure contracts from the government for the supply of manufacturing output are often asked to lower the quality in order for the contractors to make some profit. But this argument holds little water. Yes, some locally-made products are low quality, but Nigeria is also blessed with companies such as Nestlé, FrieslandCampina WAMCO, Promasidor, PZ, Lafarge and many other multinationals with high quality products and zero tolerance for corruption.

Respondents also spoke about perception or discrimination as another reason for rejecting some made-in-Nigeria products.

Most people perceive goods made-in-Nigeria goods as inferior and not up to standards compared to foreign. Frank Jacobs, former president of the Manufacturers As-

sociation of Nigeria (MAN),once said that foreign products were of inferior quality and not locally made goods. He cited an example with Nigerian cables which were widely known for quality across Africa as against cables from China or other Asian countries.

Another reason cited was poor advertisement/awareness by consumers. Respondents said most Nigerians are not aware there are goods produced in Nigeria that can satisfy their needs. This, again, is a fallacy of hasty generalisation because Peak, Milo, Bournvita and many other brands are wellknown in Nigeria. This point may be true of small brands and firms but not with big brands.

More so, poor after-sales services were also cited as an issue.

But to say that this is peculiar to local manufacturers is unfair.

The argument is that patronage must first of all start with manufacturers. Are the products sellable?

Can they compete in both local and international markets qualityand price-wise? Consumers are not interested in patriotism but the maximisation of their utility.

Even if patronage is patriotism, why do governments at various levels fail to buy local? The executive bill on this has been flouted many times by government agencies and departments, according to manufacturers, yet no sanctions have been meted to erring officials. Also, the perception or impression that made-in-Nigeria products is inferior is inferior itself. Who produces noodles in Nigeria today if not Dufil, Flour Mills and co? Who produces cement if not Dangote, Lafarge and co? Who makes dairy products if not FrieslandCampina, Nestle, Promasidor and co? This makes the argument about quality onesided.

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