BusinessDay 23 Jul 2020

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news you can trust I ** thursDAY 23 july 2020 I vol. 19, no 612

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388.17 381.00

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3M -0.55 1.15

12m NGUS jun 30 2021 420.83

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36m NGUS jun 28 2023 494.13

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Cotonou now choice exit route for Nigerians travelling to Europe, US N N

60m NGUS jun 25 2025 580.20

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Nigeria’s inclusion in countries likely to face food crisis reiterates need for urgent action CALEB OJEWALE

igeria’s inclusion among 27 countries that are on the frontline of impending COVID-19-driven food crisis, in a joint report by the UN’s Food and Agriculture Organisation (FAO) and World Food Programme (WFP), has reiterated the need for more strategic approach and determination to minimise projected deficits in the

IFEOMA OKEKE

igerians now travel to Europe and the US through Cotonou, Benin Republic, as Nigerian airspace remains shut to international flights till further notice, BusinessDay findings show.

Checks show that travellers have been going out of the country, as scheduled commercial flights are simply dubbed evacuation. But the exorbitant fares charged for evacuation flights have forced some Nigerians to leave for Benin Republic, seeking affordable ticket prices.

Ethiopian Airlines and EmirContinues on page 30

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Inside

L-R: Funmi Babington-Ashaye, past president; Eddie Efekoha, immediate past president; Muftau Oyegunle, new president and his wife Elizabeth; Ladipo Ajayi, past president/administrator of Oath, and Bola Temowo, past president, at the investiture ceremony of Muftau Oyegunle as the 50th president of the Chartered Insurance Institute of Nigeria (CIIN) in Lagos.

BusinessDay’s digital dialogue on financial inclusion, future of payments holds today P. 2

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news BusinessDay’s digital dialogue on financial inclusion, future of payments holds today ENDURANCE OKAFOR

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ollowing the ‘new normal’ of contactless payment and the boost in online transactions amid the outbreak of COVID-19, BusinessDay, West Africa’s leading business news and intelligence provider, is having a virtual discourse on Nigeria’s financial inclusion and digitalisation for post-COVID-19 recovery.

Tagged ‘Future of Payment and Financial Inclusion: Financial Inclusion and Economic Digitalisation for Accelerated Recovery PostCOVID-19,’ the one-day digital dialogue scheduled for today, will host leaders in the private and public sectors to make sense of the country’s financial industry in response to the current realities and provide clear directions on the way forward post-pandemic.

While Nigeria has made progress in digital financial services and financial inclusion at 63.2 percent as of 2018, the country with the most population in Africa still has a financial services industry that is faced with infrastructure and policy challenges.

The recently introduced digital products by commercial banks were not sufficient to

serve Nigerians during the fiveweek COVID-19 lockdown in Lagos,OgunandtheFCT,aslong queues were reported at several banking halls and ATM stands.

According to industry analysts,theoutbreakofcoronavirus reveals that while Nigeria has made progress in on-boarding more of its population into the formalfinancialindustry,access and usage to digital financial services is still low.

With a financial exclusion rate of 36.8 percent, Nigeria’s unbanked population estimated at 45 million, adult population without any formal access to financial services (including loans or startup capital), operating almost exclusively with cash, represents a significant untapped opportunity both to boost the country’s declining GDP and to drive progress towards the country’s development goals.

Atthecurrentfinancialinclusion level, the Central Bank of Nigeria(CBN)is16.8percentage points away from its 2020 exclusion target of 20 percent.

Conversations at the digital dialogue will be led by luminaries such as Musa Jimoh, director, Payments System Management, CBN, the keynote speaker; Eb-

Nigerians may pay more for petrol in August as oil heads towards $45 per barrel DIPO OLADEHINDE

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f the Federal Government’s pricing template is anything to go by, Nigerians may have to brace for an increase in the pump price of fuel in August as Brent crude, the major determinant for petrol price adjustment, heads towards the $45 region.

On Wednesday, West Texas Intermediate crude contracts jumped as much as 3.3 percent to $42.16 per barrel.

Brent crude, oil’s international standard, rallied 3.4 percent to $44.75 at intraday highs.

For most market watchers, a gradual increase in the international oil price to $44 implied an increase in the landing cost which would mean a looming further increase in the price of petrol

for August.

“With the current pricing template, higher oil price and double currency devaluation are expected to force Nigerians to pay more for petrol next month,” Charles Akinbobola, energy analyst at Sofidam Capital, said.

For the second time in five months, the Central Bank of Nigeria (CBN) devalued the naira by some 5.8 percent to N381 per dollar following the crash in oil receipts, Nigeria’s major foreign exchange earner. The CBN first devalued the official rate in March when it moved from N306/$, where it had been for over two years, to N360/$.

Analysts at United Capital Research have raised concerns around policy back-flip as they fret about government backtracking on the market-

based price regime once oil prices start tracking higher and pressure on consumer wallets begins to mount.

“It is still impossible to tell if there is an end to the subsidy regime, as a return in the fortunes of the crude oil market would mean an increase in petrol prices, which would be met with stiff resistance by consumers,” analysts at CSL Stockbrokers Limited, Lagos (CSLS), a wholly-owned subsidiary of FCMB Group plc, said.

History does not inspire confidence. President Muhammadu Buhari already attempted to reform fuel subsidies back in 2016. At the time, it was supposed to be a permanent removal, yet subsidies were back in under two years. Indeed, since the 1970s, 11 out of 12 of Nigeria’s heads of state have attempted

to reform fuel subsidies, with no long-term success.

Beyond the issue of higher landing cost, the deregulation of the downstream oil sector remains an important free-market reform required to ease pressure on government finances as well as boost profitability of the operators in the downstream sector.

Most listed Nigerian downstream players have seen margins pressured over the years with the price of their biggest revenue source (sale of petrol) remaining largely fixed. This has forced them to explore other areas to invest while many other companies have either been acquired or liquidated. This has limited investment in the sector.

The Federal Govern-

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States explore debt instruments amid FG’s declining revenue

… as Oyo approves N100bn private bond for road, airport expansion REMI FEYISIPO, Ibadan, & Endurance Okafor

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igerian states are beginning to weigh other options like debt instrument in the wake of declining income stream as COVID-19 takes a toll on Federal Government’s revenue, according to analysts’ views.

The government of Oyo State is one of the few that has decided to look away from Federal Government’s bailout and leverage the low interest environment to access capital for infrastructure development.

In its bid to facilitate the execution of priority projects that will further drive economic development, the state executive council on Tuesday approved the issuance of a N100 billion private bond tagged “Oyo Prosperity Bond”.

The fund, according to the state government, would be raised in two tranches of N50 billion each for the construction of the 50-kilometre Iseyin-Ogbomoso Road, the Ibadan Circular Ring-Road and Ibadan Airport upgrade.

Wasiu Olatubosun, Ccmmissioner for information, culture and tourism, who

disclosed this after the state’s weekly Executive Council’s virtual meeting, said the state would construct and upgrade, with modern equipment, one government hospital in each of the three senatorial districts while also using the fund to cover the development of Ibadan Dry Port and rail corridor, the economic hubs of the state.

ThiscomesafterAprilfigures from state-funded statistical agency, the National Bureau of Statistics(NBS)revealedthatthe revenue shared to states from the federation account saw a drop by 5.13 percent to N181.49 billion in the fourth month of 2020 from the over N191.30 billion shared in January.

According to analysts, the drop in revenue allocation was fuelled by the impact of COVID-19 pandemic, which affected both the demand and prices of crude oil, Nigeria’s biggest dollar earner.

Meanwhile, President Muhammadu Buhari on July 10, 2020, signed Nigeria’s 2020 record budget of N10.81 trillion to boost Africa’s biggest economy hit by COVID-19 and collapsing global oil price.

The budget deficit for 2020 is estimated at more than N5 trillion www.businessday.ng

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

Shedding light on Nigeria’s puzzling and opaque power sector

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ne of the fundamental problems with the power sector in Nigeria is the destabilising technical and commercial misalignment.

Of these, the technical misalignment is mainly due to poor infrastructure. We generate more power than we can wheel through the transmission company (TCN), and ironically we wheel more power than we can distribute, as the DisCos regularly reject electricity for a number of reasons - a discussion for another day.

The purpose of the Presidential Power Initiative involving Siemens is to address this technical misalignment by rehabilitating and upgrading infrastructure along the generation, transmission and distribution value chains.

The commercial misalignment alluded to earlier is due to a lack of cost reflective tariffs and other fiscal considerations.

EXPLAINER The World Bank funded Power Sector Recovery Programme (PSRP) is designed to address this. The PSRP is a financing plan targeting performance for improvement – meaning that the loan to be advanced by World Bank can only be drawn down on following the satisfaction of certain conditions.

In a nutshell, the loan is to be disbursed in tranches linked to the satisfaction of conditions. If the loan is $750m, satisfy condition A and you get to draw $50m, satisfy condition B and you draw $30m.

Each condition or milestone has an amount attached to it. So even though the loan is for $750m, your ability to access the whole fund depends on your satisfaction of the conditions.

These conditions or milestone achievements or in lay-

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man’s terms, improvements in the sector are designed to address the commercial issues besetting the power sector so as to make the power sector commercially viable.

These conditions or disbursement linked indicators include amongst other things: – implementation of Performance Improvement Plans by Discos; and – implementation of a service reflective tariff (SRT), with the subsequent migration to a cost reflective tariff (CRT) in 2021.

SRT is an increased tariff but still not cost reflective and it will be based on improved service levels, which is having power for longer. So, the more power you have, the more expensive it gets.

A customer in a service band that is enjoying 20 hours of power a day for instance, will pay more per unit of energy than someone in the service band enjoying only 10 hours of power a day. So like tax, where the rich subsidise @Businessdayng

the poor, high energy users will provide cross subsidy for low energy users/the poor.

Back to the main discussion, the financing plan makes certain assumptions based on the achievement of the milestones/ improvements. So, in terms of tariff, implementation of SRT assumes that tariff shortfalls on a particular date will be x, therefore the amount available to draw down on the loan, should be sufficient to fund.

Problem is, if a milestone/ improvement is delayed, there are financial implications. So if SRT was to be implemented today and tariff shortfall today was supposed to be x, but if the increase has now been suspended, till say Q1 next year, then the tariff shortfall assumption is no longer accurate.

Therefore delaying the tariff increase means that where the shortfall to be x, it would be x + accrued tariff shortfall during the period of the delay, that is ‘today to Q1 2021‘

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Reps task WHO on fair trial of COVID-19 vaccine James Kwen, Abuja

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he House of Representatives has called on the World Health Organisation (WHO) to uphold the ethical requirement of fairness in the trial for the vaccine against the Covid-19 pandemic.

Chairman, house committee on healthcare services, Tanko Sununu made the call when the newly appointed WHO country representative, Walter Mulombo paid the chairmen a courtesy visit at the National Assembly complex, Abuja, on Wednesday.

Sununu, who acknowledged the role being played

by WHO in the containment of the pandemic, urged the global body to ensure that all countries of the world have unhindered access to the vaccine, adding that “this is the only way that the world will see WHO as fair in its fight against the virus”.

The lawmaker said: “I must also thank WHO on its role in leading the world in the fight towards the containment of Covid-19 in policy making and the overall fight towards the containment of the virus.

“However, we also going to call on WHO to always remember the principles of ethics, especially now that we are moving towards a multinational clinical trial to ensure the principle of justice in medical researches is attained.

“By justice it means all human beings are equal and the benefits of it must be extended to all. So, that there would be no segment of the world that would be used as a scapegoat in trying to achieve the goal.

This is the only way that one would see WHO as being fair in its fight against Covid 19.”

Sununu expressed appreciation to WHO for supporting the National Assembly over the years and pledged to cooperate with the organisation in the ratification of conventions to ensure universal health

coverage.

Earlier, Mulombo commended the National Assembly for the appropriation of monies for the basic healthcare provision fund and the on-going review of health laws such as the National Health Insurance, National Primary Healthcare Development Agency, national cancer, and national blood transfusion bills.

He noted that WHO in Nigeria under the GPW13 and CCS111, has prioritised actions that are aligned to the Economic Recovery and Growth Plan (ERGP), the National Health Act (NHAct 2014), and the 2nd National Strategic Health Development Plan (NSI-IDP II) to contribute towards achievement of our global triple billion goal.

“My colleagues and I will be working closely with you to identify new areas of work and to deepen already existing collaboration with WHO on Nigeria’s journey towards UHC.

Manufacturers raise concerns over economic impact of closure of Third Mainland Bridge KELECHI EWUZIE

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papa branch of the Manufacturers Association of Nigeria (MAN) has appealed to Federal Government and Governor Babajide SanwoOlu of Lagos State, to delay the commencement of repair works on the Third Mainland Bridge pending the completion of works on some of the alternative access routes.

Worried by the immediate economic impact the closure of the bridge scheduled to commence on Friday, July 24 would have on its members and the general public, the manufacturers argued that the timing of the repair was wrong, adding that the bridge; a major link between the mainland and the island, is one of the key life wires of the economy.

MAN Apapa branch consists

of industrial clusters stretching from Apapa from where it derives its name all the way to Epe and Badagry Expressway. It covers industrial areas in Isolo/ Mushin, Iganmu, Amuwo Odofin, Kirikiri, Lekki Free Trade Zone among others.

Frank Onyebu, chairman of the branch in a statement made available to BusinessDay, said that their concerns arose from the fact that some of the alternative access routes like Eko Bridge by Costain Roundabout, Ijora-Apapa Bridge are presently partially closed.

Onyebu also called on the Lagos State governor to urgently address the pitiable state of roads within the Amuwo-Odofin and the Kirikiri industrial areas.

These roads, according to him, which have deteriorated beyond imagination, have now been turned into illegal trailer

parks and dumpsite for empty shipping containers.

“We want to appeal to the government to see to the construction of the roads within the Amuwo Odofin industrial areas and indeed other industrial areas in Lagos Stat. This is because manufacturers not only contribute to the revenue of the government for but also contribute towards the employment generation goal of the government,” Onyebu said.

He, however, lauded Sanwo-Olu and his team for their strides in the area of infrastructural development, security provision, environmental protection and prudent financial management.

“We are well aware of the revenue shortfalls that resulted from the Covid-19 pandemic, which makes the effort of the government all the more commendable,” Onyebu said.

PILA, Lagos seek justice for victims of domesticviolence Modestus Anaesoronye

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omen in insurance under the umbrella body of Professional Insurance Ladies Association (PILA) have held a rally in Lagos to demand for justice for victims of rape and sexual harassment in the country.

The group in partnership with the Lagos state ministry of women affairs and poverty alleviation, echoed their voice to condemn the increasing cases of rape and sexual abuse against women.

Joyce Ojemudia, president of PILA told journalist during an interview on the sideline of the rally held at Ndubuisi Kanu

Park, Alausa Ikeja that the association is worried about the growing trend and has decided to partner with relevant agencies of government to move against this ugly development.

Ojemudia, therefore, called on the Lagos State government to rise up to its responsibility and protect vulnerable women in the state who are regularly dehumanised, traumatised through rape and sexual violence.

The rally witnessed by the commissioner for women affairs, permanent secretary of the ministry and Senior Special Assistant to the Governor on Women Matters, saw display of placards with inscription such as ‘Justice For Rape Victims’; www.businessday.ng

Leave Me Alone Means NO’; ‘We Say No To Sexual Violence’; among others.

The commissioner for women affairs and poverty alleviation, Bolaji Dada in her response thanked PILA for coming to partner with the state government to create awareness and for advocacy against rape in the state.

CHANGE OF NAME

I, formerly known and addressed as Miss Adaobi Diana Alaneme now wish to be known and addressed as Mrs. Adaobi Diana Awe. All former documents remain valid.

General public please take note. https://www.facebook.com/businessdayng

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Reps direct NCDC to test MultiChoice CEO for COVID-19 James Kwen, Abuja

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he House of Representatives on Wednesday directed the Nigerian Centre for Disease Control (NCDC) to test the Chief Executive Officer (CEO) of Multichoice Nigeria for Covid-19 and report back within four days.

The House ad hoc committee investigating the non-implementation of PayAs-You-GO tariff plan by broadcast satellite providers, took this decision sequel to the unanimous adoption of a motion moved by Julius Pondi (PDP, Delta) at the committee’s sitting.

The Multichoice CEO, John Ugbe who was to appear before the committee to explain reasons for the non-implementation of the Pay-As-YouGo and recent hike in DSTV/ GOTV tariff, wrote to the committee, intimating them of his ill health and inability to attend the investigative hearing.

The letter signed by the head of the regulatory affairs of Multichoice Nigeria, Gozie Onumonon on behalf of the CEO and dated July 22, 2020 read: “We regret to inform the committee that we would be unable to appear before it today due to a sudden illness of our CEO, after arriving in Abuja yesterday for this meeting.

“Because of the abundance of caution needed to be taken in line with the current pandemic, we be-

lieve it is necessary that the meeting be deferred until he has regained his health and is cleared by his medical doctor.

“In the meantime, we will submit written submissions to the committee to assist the committee in its investigations.

“We sincerely apologise for any inconvenience caused to the committee and please be assured of our best efforts at all times”.

Chairman of the ad-hoc committee, Unyime Idem (PDP, Akwa Ibom) who read the letter, said the organisation had requested the postponement of the meeting earlier scheduled for July 17, citing pre-scheduled engagements with its shareholders.

“We are here this morning pursuant to the resolution of the House of Representatives, mandating this committee on March 17, 2020, to investigate DSTV and other Cables TV in Nigeria on the non-implementation of the Pay-As-You-Go. “Again on June 2, 2020 the house passed another resolution, mandating this committee to invite DSTV (only) to explain why the recent hike in its tariff. Consequent upon this, the clerk of this committee after the unanimous decision of members of this committee, raised a letter inviting DSTV to appear before this committee to explain circumstances surrounding the recent hike and why PayAs-You-Go have not been implemented in Nigeria.

Apapa: NPA urges Lagos to provide truck parks to facilitate call-up system AMAKA ANAGOR-EWUZIE

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orried by the persistent congestion in Apapa, the Nigerian Ports Authority (NPA) has called on the Lagos State government to allocate larger land outside the port area that can be designated for trucks to wait to be called up before having access into the port.

Speaking at 14th annual business law e-conference held recently with the theme, ‘Business Unusual: Digital Acceleration for Growth in a New World,’ Hadiza Bala-Usman, managing director of the NPA, stated that there are about 36 mushroom truck locations in Apapa environment without equipment, which makes it difficult to sanitise Apapa.

“NPA is not responsible for providing truck parks because

they are local government issues. So, Lagos government must take ownership in providing dedicated truck terminals where there will be linkage and a call-up with terminal operators at ports,” Usman said.

Stating that having truck parks inside Apapa is already congested has been contributing to the congestion, Usman also urged the Lagos State government not to look at the land use issues when allocating land for trailer parks.

According to her, if Nigerian ports don’t have designated places for truck to wait and come to the port only when called up, truck drivers will just wake up and drive to the ports uncoordinated, and that would continue to heighten congestion.

Usman, who noted that the NPA has given up on Lilypond by cancelling its initial conces-

sion arrangement with APM Terminals and transforming it into a transit truck park, stated that the NPA is now in an advanced stage of discussing with the Lagos government to make available a larger trailer park such as the Ahmed Bola Tinubu trailer park at Orile.

“We are now discussing with Ogun State governor to have a truck park in Ogun, so that trucks that are coming to Lagos can now stay in Ogun State until they are called to move to Orile. Here, when the truck will be called up, it will now move to Lilypond where it will be allowed to get into the port.

Edeme Kelikume, managing director of Connect Maritime Services, blamed the congestion on lack of holding-bays for empty containers, which has had demurrage implications running into billions of

naira on businesses.

According to him, available holding bays and other infrastructure around the ports for dropping empty containers are not enough and there is need for more to be provided by shipping lines. He called on the NPA to compel shipping lines to provide more holding-bays.

Reacting, Usman stated that NPA had sanctioned shipping companies for non-availability of empty container holdingbays. She said the authority had given modality in which every shipping company are required to take out equivalent number of empty containers every month, which they bring in and non-compliance to that, would lead to sanction.

“We have actually refused to renew licenses of shipping company due to non -provision of empty container holding bays,” she said.

Naira stable against dollar as FX turnover declines by 59.12% Hope Moses-Ashike

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he pressure on foreign exchange liquidity continued on Wednesd ay a s n a i ra re m a i n e d stable against the dollar at the official window and black market.

At the Investors and Exporters (I&E) forex window, naira was stable as the dollar was quoted at N388.17k on Wednesday. The market opened with an indicative rate of N388.65k, which signalled N0.15k depreciation when compared with N388.59k opened with on Tuesday, data from FMDQ showed.

The foreign exchange daily turnover declined by 59.12 percent to $12.17 m i l l i o n o n We d n e s d a y from $29.77 million recorded the previous day.

Analysts at FSDH Research noted that the I&E FX market remained subdued due to tight liquidity conditions.

Naira remained stable at N388.17 per dollar. Most participants maintained bids between N380.00 and N390.00 per dollar.

The local currency was stable on the black market where the dollar traded at an average rate of N471.66k and N470 in some parts of Lagos State.

However, naira weak-

ened by N2.00k as the dollar was sold at N472 on Wednesday as against N470 traded since Friday last week at the retail Bureau.

At the money market, the Nigerian treasury bills closed on a flat note Wednesday, with average yield across the curve remaining unchanged at 1.75 percent.

In the OMO bills market, average yield across the curve declined by 26 bps to close at 4.85 percent, a report by FSDH research indicated.

The Overnight (O/N) rate declined by 0.30 percent to close at 2.50 percent. The Open Buy Back (OBB) rate also declined by 0.20 percent to close at

1.90 percent.

Money market rates are likely to remain at a subdued level; however, FX intervention by CBN could exert upward pressure on the money market rates by the end of the week.

The Debt Management Office (DMO) conducted its scheduled FGN bond auction for the reopening of the 10-year, 15-year, 30-year instruments and a new issue of a 25-year tenor bond. A total of N130 billion was offered across 10-year (N25 billion), 15year (N35 billion), 25-year (N35 billion) and 30-year (N35 billion) tenors. The bond settlement will take place on July 24, 2020.

Samsung, MTN donate communication gadgets to fight Coronavirus SEYI JOHN SALAU

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s part of the on-going effort at containing the spread of Covid-19, Samsung and MTN Nigeria have jointly donated some communication gadgets to aid health workers across the country.

Five hundred A2 Core phones from Samsung with SIM cards and 2GB data monthly for six months by MTN will be given to case managers in the isolation centres across the 36 states of the country and the Federal Capital Territory (FCT).

The donation is expected to ease the process of data capturing and case reporting in these centres, supporting the government’s strategic plan in dealing with the pandemic.

Caden Yu, managing director of Samsung said the initiative was to support the government in curbing

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the spread of the virus. “Our thoughts are with every Nigerian and this donation is a way of using our resources to fight this pandemic.

“The survival of the human race is hinged on our collaborative effort; together we will get through this,” said Yu said at the donation recently.

Tobechukwu Okigbo, the chief corporate services officer, MTN Nigeria said that in a bid to win the fight against the coronavirus, Nigeriansboth corporates and individuals must continue to collaborate the government.

“Everyone that calls Nigeria home must see this pandemic as an opportunity to unite in service to the country, for the greater good of us all. We are only good together.

“MTN will continue to look for ways to collaborate with other stakeholders to help the government flatten

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the curve,” said Okigbo.

Recall that MTN three months ago, as part of its Y’ello Hope package, donated over N500 million worth of airtime, data, and analytics, through the Nigerian Governors’ Forum

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(NGF) in support to state governments to facilitate communications during travel restrictions and, over N1.4 billion worth of airtime, data, and devices to connect medical personnel and health agencies.

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CBN’s import ban and Nigeria’s looming maize crisis Ikechukwu Kelikume

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igeria, like many other African countries that rely on the agricultural sector for their food sustenance and employment generation, is experiencing unfolding events in the country since the World Health Organization (WHO) declared the COVID-19 outbreak a global pandemic on February 28, 2020. Following the shutdown directive by the Federal Government and the restriction of movement across the states in the country, agricultural production, processing and distribution have been severely affected. One such area which has been adversely affected is the production and processing of maize.

Farmers across the maize value chain, especially those operating in the poultry segment, are experiencing a tough time in finding maize to buy.

Maize, which constitutes over 50 percent of poultry feed, is currently very scarce, and prices are rising every day. The scarcity of maize and the continuous rise in its cost has dire consequences on not only the poultry farmers but on all associated sectors that are linked directly or indirectly to the poultry value chain.

An earlier report published on June 29, 2020 in Agribusiness Newsletter narrated the plight of poultry farmers in Nigeria. According to the report, Alfred Mrakpor, the Delta State chairman of Poultry Association of Nigeria, summed up the plight of poultry farmers, stating emphatically: “The rising cost of maize is threatening the livelihood of small businesses in Nigeria. It is not only poultry farmers’ investment that is threatened

but also other players in the value chain, such as feed producers, chicken and egg vendors, processors, grain traders, veterinary doctors and other related sectors.”

The Central Bank of Nigeria on July 13, 2020 directed all authorised dealers to discontinue the processing of Form M for the importation of maize/corn with immediate effect. This directive, according to the apex bank, is done in continuation of its effort to increase local production in the country, stimulate rapid recovery, safeguard rural livelihood and grow jobs.

The implementation of the CBN directives of withdrawal of Form M for maize importation puts immediate and significant pressure on the sector already burdened with the scarcity of maize – a fall-out of the adverse effects of the COVID-19 pandemic.

Maize is considered the second most consumed cereal in the country next only to cassava. The importance of maize can be seen directly in the total area currently under cultivation in Nigeria. According to FAOSTAT 2018 report, maize is the second most cultivated crop in Nigeria with an estimated harvested area of 4.8 million hectares, next only to cassava that has a total area cultivated of 6.7 million hectares.

Current concern for maize farmers, poultry operators and feed millers At the beginning of the farming season, maize sold for between N70,000 and N80,000 per ton. Its current selling price is between N165,000 and N175,000 per ton, which is now considered very high. The projection is that the price will rise further to about N200,000 per ton in the coming months. The current hike in the amount of maize is the result of its scarcity, due, on the one hand, to the border closure across the country and, on the other hand, to low maize/corn productivity in the country.

Added to the unknown factors that have created a shortfall in maize production are the unpredictable weather conditions and the adverse effect of the COVID-19 pandemic.

The disruption in production, distribution, transportation, marketing and

free movement of farmers and labour coincided with the maize planting season in both the northern and southern parts of Nigeria.

These notable changes imply that Nigeria cannot meet over 12 million metric tons of maize needed to supply the feed millers, the poultry farmers and to meet the household demand.

Figures from FAOSTAT (2018) put Nigeria’s maize yearly production in 2019 at 11 million metric tons while the annual maize consumption estimate is 11.4 million metric tons, creating a gap of over 400,000 metric tons of maize which is made up for by importation. The projected demand for 2020 is that the country will need an additional 100,000 metric tons of imported maize to augment local production. With the disruption of business activities and the restriction of movement across the country in the first quarter of 2020, maize cultivation, processing and distribution were adversely affected.

Short-term measure to curb maize shortages There is no doubt that the CBN policy of agric, small and medium enterprise scheme and the CBN Anchor Borrowers Programme (ABP) have been very successful in opening up the agricultural sector in the country. Both policies have worked effectively in closing the productivity gap in the farming sector.

But the current decision of the apex bank to discontinue the processing of Form M for the importation of maize/ corn will roll back the gains of the intervention in the sector. The current reality is that maize prices will continue to spike in the coming months, as evident in the data published by the National Bureau of Statistics (2020). The spike in the price of maize reflects its current scarcity, as corn grain reserves stored from last season have been fully depleted, leading to a shortage of the product.

The situation spells doom for poultry farmers across the country who are beginning to cut down on production because of the high cost of feed and imported medication for the birds. A

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As a matter of necessity, the CBN’s decision to discontinue the processing of Form M for the importation of maize/corn needs to be revisited. It is expedient at this time for the CBN to allow importers of maize to import it through the CBN foreign exchange window to close the gap in maize shortage while preparing for phased discontinuation of maize importation in the country

Dr Kelikume is the head, Department of Finance, Accounting and Economics at the Lagos Business School. He also is the programme director of LBS agribusiness programme.

Taking the lead in the second half of 2020

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common question I have asked all my coaching clients since the year began is: what do you desire in 2020? From all the responses, I can see the desire to live a fulfilled life in most of the respondents.

Some people want to get fulfilment from their job and career, some want a happy home and relationship with their partners while others wish the company they work for and the country they live in is better than it was in 2020. No doubt, the year 2020 started with a virus bug, and it has been a difficult year for everyone and in every environment.

Your desire to make the best out of the year 2020 is valid and can still be achieved if you don’t give up. realistically, it is better to achieve some percentage of your goals than using the coronavirus as an excuse to give up in the second half of the year. The second half of every game is crucial irrespective of what has happened in the first half.

There records of teams that have turned their losing fortunes around in the second half. The Nigeria football team came from 3-1 to defeat the Brazilian team in Atlanta 1996 and went ahead to win the Olympic gold medals. The Damman Miracle was another example when the Nigeria U-20 team came from a 4-0 deficit to defeat the USSR team in the quarter-final in Saudi 89.

I have always asked my clients and proteges to start the year with why. Why are you in 2020?

What will you do to make you deserve what you have desired for the year? In most cases, life will

give us what we deserved and not necessarily our desire. Desire is, however, the basis for the discipline to take action that will make you deserve your desire.

Looking for fulfilment is as old as the journey of life itself. People change career, partner, relationship, location and many more in finding fulfilment in life. Fulfilment is an inner desire supported by the sense of achievement or contentment for something. Fulfilment is key for you to consider this year one of the best years in all aspects of life. At old age, a memory devoid of fulfilment is an indicator of a life not lived to the fullest.

Personal fulfilment is key to community, organisational and national fulfilment. A country with high per capita income (PCI) can be said to be more fulfilled in general terms than those whose PCI is among the least in the world. Individual fulfilment is so important that the World Happiness Report is now a source of policy ideas for some countries where the fulfilment of people is seen as a national productive asset.

Nigeria ranked 91st out of 156 countries behind Libya, Algeria and Morocco in the 2015-2017 Ranking of Happiness.

And now that we have an unseen virus living with us, we have to be determined to be happy, never to give up and work twice as we would have done ordinarily to make the year 2020 counts. The focus is on individuals as nations do not necessarily give up. it is individuals that tend to give up surrendering to the situation or circumstances. Our circumstances are not

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as powerful as our resolve not to give up in life.

The individual must be happy before the family, society and the country can be ranked as happy. Individuals who want to be happy in 2010 and beyond must take the lead. To take the lead as noted in my book is do things that fulfil you aside from things that only give you income. I have used the lead as an acronym for live, energise, activate and develop the fulfilment centre in people.

The fulfilment centre is simply in activities that fulfil an individual and gives him a sense of satisfaction. The foundation of the activities that will make life meaningful to you is your talent.

Talent is not a big mountain no one can climb.

It is simply any activity you love to do repeatedly with a sense of satisfaction at the end of it. The situation we found ourselves where a virus has limited our movement is an opportunity for us to reflect and know life is short. There is no other time to do and live a fulfilled life than now.

An employee that found his fondness for two out of six of his deliverable activities at work has found gold. All he needs is to do more of such activities voluntarily for the workplace or at any opportunity. If perhaps, the activities that fulfil you are outside your required job functions, the activities are latent talents to you and must you use them to avoid dissatisfaction. The best way to avoid turning your talents into toxic assets is to use them voluntarily.

It is therefore in your best interest to volunteer your talents in the workplace whether you are being measured by them nor not. If

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negative spillover effect of the high cost of feed is the scarcity of eggs and a consequent rise in the price of eggs across the country. The implications of the current challenges in the maize value chain are that the gains of employing more people in the agricultural sector will be rolled back in the coming months.

As it stands, there is no alternative for the poultry farmers as the poultry sector will face a catastrophic shortage of feeds, a critical input in their business. This situation will render tens of thousands of them unemployed and undo all the gains made by this sector in the past five years.

Thousands of poultry businesses will shut down in the face of high operating costs, leaving business owners and their employees without a means of livelihood.

As a matter of necessity, the CBN’s decision to discontinue the processing of Form M for the importation of maize/ corn needs to be revisited. It is expedient at this time for the CBN to allow importers of maize to import it through the CBN foreign exchange window to close the gap in maize shortage while preparing for phased discontinuation of maize importation in the country.

The total shortfall is just around 100,000 metric tons, which translates to an import bill of less than $20 million.

This cost is a negligible import burden even in the current tight FX situation and a small price to pay to salvage the poultry sector.

The time to act is now. The government must put its mechanism in place to import maize into the country as a temporary measure to plug the pending scarcity that is imminent in the last quarter of the year 2020. Nigeria has a high production potential for maize.

Notwithstanding, the current challenge is that the production and supply bottlenecks in the sector have first to be checkmated for any meaningful import restriction measure to be effective.

Positive Growth with Babs Babs OlugbemI you do this more in the second half of 2020, you will move to operate in your strength zone at work, enjoy your daily routines and merge your responsibility with your desire to be free and fulfilled.

The research work of the Gallup group advanced the need for individual fulfilment and its relevance to organisations and nations. Marcus Buckingham and Donald Clifton identified four traces of talents in the book, Now Discover Your Strength. These indicators are spontaneous reaction, yearning, rapid learning and satisfaction.

I explained how to use these four indicators to maximise your efforts this year in the book, Take the lead with a subtitle, how to live, energise, activate and develop your strength zone. I’m sure the coronavirus cannot stop you despite its many limitations.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng 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 July 2020

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Insecurity: From Abaribe, to Northern groups to the BTE (Blame-Trading Exchange)

ik MUO

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B

ut you know, the virus is a very formidable foe here.

The only way we’re going to get our arms around it is by doing the things that we know work…avoiding physical contact, putting masks on, not going to crowds, closing the bars – that’s the answer... We can do it” (Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases.) On Monday, 20/7/20, I strolled into a neighbourhood store for sundry purchases and asked a young lady I met there (she appeared educated and enlightened) why she was not wearing a facemask.

She responded that she was in an inner street, not on the highway. I then asked her who said that Coro only circulated in the highways and she replied: ‘There is nothing like that (Coro); they are just deceiving us. I them reminded her that the Minister of External Affairs had just fallen victim and she responded: “it is for them there”. That is, the thing does not exist and even if it existed, it is for the big men up there. Sad indeed.

Meanwhile, the WHO has just (20/7/20) warned about the alarming increase in Coro cases in Africa as many countries now witness the rate of acceleration far more than that of South Africa. South Africa’s roughly 30 percent increase in COVID cases in the past week is dwarfed

by Zambia (57), Madagascar (50%) Namibia (69%), Botswana (66%) and Zimbabwe (51%). Those who have ears, let them hear! Now, to the menu for today Last week, we moved from the Abaribe declaration in January, the security situation in February and the consequential statements by the Northern Elders Forum and the Northern Youths.

We ended with the warning by Ohaneze that they would not stand by and fold

their hands and be finished in their own homes.

Things have continued to deteriorate. The DG of National Orientation Agency has reported that Nigerians in some parts of the country (Zamfara, Kastina, Kaduna) were more worried about insecurity than about coro. This tallies with the submissions of Hon Kazaure that banditry is more dangerous than coro based on the number murdered by bandits vis-à-vis those killed by coro. Between the 8th and 13th of June, 2020, 240 people were murdered in the North, the highest per day in recent times (Borno-114; Kastina-75; Adamawa,24, Kogi:9, Benue7).

The previous week, 1st to 7th June, 183 Nigerians were murdered, while between May 25-31, the death tally was 149! The US based Council on Foreign Relations, under its Nigerian Security Tracker had informed that 2771 Nigerians had been murdered in cold blood in the 5 months between February and May 2020.

Alarmed by these morbid figures, the Northern Elders Forum, in June 2020, revisited the security situation in the north in particular and scored the President and big, red “F” in security matters. They declared that, “The administration of President Muhammadu Buhari and governors have lost control over the imperatives of protecting people of the North…

The situation is getting worse literally by the day.” Bandits and insurgents appear to sense a huge vacuum in political will and capacity which they exploit with disastrous consequences on communities and individuals. It is no exaggeration to say that the people of the North have never experienced this level of exposure to criminals who attack, kill, maim, rape, kidnap, burn villages and rustle cattle, while President Buhari issues threats and promises that have no effect. … This is unacceptable. We are tired of excuses and verbal threats which criminals laugh at, and our fellow citizens see as a clear failure of leadership which they see as part of them. Enough is enough”.

The presidency replied immediately, describing the group as a mere “irritant and featherweight”, and their leader, Prof Ango Abdulahi, a general without troops, leading a quasi-organisation that boasts of no credible membership.

Was that an answer to their concerns

and how did that response address the issues?

While the elders, the mere irritants, were talking, about the insecurity, the youths decided to ACT. At first it was uncoordinated and impromptu. Some angry residents of Yantumaki town in Danmusa LGA took to the streets, ‘burnt down’ the President, the Governor and APC. (billboards containing pictures of the Governor, President and APC logo).

Eventually, it became more coordinated as a larger number, under the aegis of Coalition of Northern Groups, embarked on peaceful protests, passed a vote of no confidence on the Governor and the president, and asked PMB to resign over the worsening insecurity (thereby supporting the motion moved

by Senator Abaribe).

The governor was apologetic, saying “I don’t know what to tell them. I cannot look them in the face because we have failed to protect them, contrary to our pledge to ensure security of lives and property throughout the state.” However, the security forces arrested the demonstrators while the “presidency” told them to thank their stars that we are operating a truly democratic government Subsequently, the President (not the presidency) summoned the service chiefs and told them that their best was not good enough and that he was tired of their excuses after which a highpowered security fact-finding mission was dispatched to Kastina State. And this was followed by another closeddoor meeting between security chiefs and northern governors.

However, it is interesting to note that such fact-finding missions had been sent to Kastina in February 2020, May 2019 and August 2018. It is also interesting to note that while the “presidency” has been trivialising the various comments and protests about insecurity, the military itself has been given excuses and more excuses for the festering insecurity. In May 2019, the Nigerian Army accused some foreign powers of collaborating with some locals to complicate our security challenges.

Later, Lt Gen Buratai blamed defeated and disgruntled politicians for the heightened insecurity and in June 2019, he blamed the poor commitment of some soldiers. That may be why their

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We belong to a nation that would commit billions to buy foreign luxurious cars for its lawmakers at the expense of locally assembled vehicles, yet we turn around shamelessly to complain of the absence of jobs for the teeming unemployed youths

Commander in Chief asked them to do something rather than excuses. So, the presidency dismisses people with contrary spirits with a wave of hand, the military has been busy blame-trading.

How far can we go with these lame-duck strategies? Anyway, they established a Blame-Trading Exchange (BTE), where blames and excuses are traded at the market price. If you don’t know how it works, ask the Nigerian Stock Exchange).

There only problem is that there are many sellers of blames and exchanges but no buyers!

Meanwhile, the security crises got more complicated and complex with the Blame Trading Exchange becoming more active. There was mass-attack at Gubio village in which about 81 persons were killed and many kidnapped, and that was just after the Chief of Army Staff had finished briefing the president on his successes in the war against insurgency. At least 22 were killed in Zangon-Kataff by unknown gunmen in that area in an attack that lasted between 10-12 July 2020 and that was despite the dusk to dawn “coffee”; 6 were killed in a bomb blast at Yanmana village in katsina, where bandits also ambushed Nigerian soldiers, killing about 6 of them.

About 21 people were killed with many injured at a wedding party at Kukum Daji Village of Kaura LGA of Kaduna State and within 24 hours of this, about 11 people were murdered in another attack at Gora Gan village in the killing field of Zangom Kataf. There were other small incidents such as kidnappers abduct a student in Kano state while bandits abduct a police officer, daughter and 4 others in Kaduna. How do we know when it is a kidnapper, bandit, armed robber herdsmen or even BH? What is the difference. Things got so bad that PMBs brethren in Kastina now take refuge in Niger to escape the deadly bandits. They do businesses in Kastina State in the day time and return to Niger at Night for safety. So how do we separate Nigerians and Nigeriens? They even sound alike Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Mobilising the workforce, fast-tracking the future – businesses across Emerging Africa are taking on flexible working

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he year 2020 has seen tremendous shifts and changes in the way we work.

Technology and innovation are creating new opportunities as well as challenges.

For more than a decade, we’ve built a culture around the idea that work is outcomes based, not anchored to a specific place or time. While every industry and business are different, a segment of employees have shifted to remote work and businesses have had to rethink their operating models and organisational structures. Flexible working has jumped from being a pipeline goal to being part of our daily grind in a matter of a few months. As we all head to the dining table or study for yet another day ‘in the office’, remote working technologies are being put to the test in a serious way – and all businesses are impacted.

Working from home is not new. The connected office has long been a critical enabler of the modern era’s distributed workforce, bringing productivity and experience boosters. In fact, in many countries in Emerging Africa, like Nigeria, Kenya, Tanzania etc., ICT has played a big role in driving the economy forward through the rapid growth of IT investment. Remote working has been one of the partial solutions to address connectivity challenges, address the needs of millennial workers, as well as encouraging women to be part of the workforce while having flexible careers.

Today, the ability to work remotely is business critical and presents certain challenges for organisations of all sizes. But adapting to the new normal is a collaborative effort, calling for unity between the c-suite, IT departments and third-party technology experts.

The question is: are organisations ready to handle and prepare for a long-term stint of remote working across the entire workforce – and will they rise to evolving needs when it comes to keeping their business successful?

Empowering productivity: While challenging, this is also a massive opportunity for businesses to demonstrate their agility – and for those lacking agility, to prioritise it. There is no doubt that this seismic shift will test both security and infrastructure, but flexible working can boost productivity too. As the workforce settles into their home office, there are considerations that need to be made in terms of security – keeping applications safe in the data centre and protecting end-point data – supporting network traffic and enabling increased flexibility. While each business will experience these to varying degrees, every business should be carefully thinking through their value chain.

It’s therefore critical for organisations to support their employees with the right connectivity and tools that are essential to drive productivity and collaboration.

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Data must be protected from the end point to the data centre: By increasing the number of devices connected to the network, the challenge will be managing and processing the additional data. To completely overhaul existing current networks is unrealistic for most medium businesses, as this not only takes time but is a drain on resources. Instead, edge computing can help to process data while limiting the impact on the enterprise cloud by only sending selected data.

A recent study from the consulting firm, Deloitte, showed an alarming rise in the number of cyber and ransomware attacks against individuals and organisations and is only increasing, now that the home workforce is connecting remotely to their organisations systems. For any business, cyber-attacks can be devastating as the ability to recover is curbed by a lack of resources.

Seamless, scalable remote working solutions: Thanks to software defined workspaces, employees can access the tools and apps they need on any device. This keeps the day-to-day business rolling, ensuring the playing field is levelled in terms of accessibility and updates.

As businesses adjust to the all-in working from home demands, they may find that consumption and ‘as-a-service’ solutions on-premise will help – particularly with economics and the short turn-around they have been faced with. For example, “Virtual Desktop Infrastructure” (VDI)

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Habib Mahakian provides secure, high-performance access for critical users while the “Hybrid Cloud” can scale data center resources.

In conclusion, every organisation needs to adapt to the changing expectations of the workforce in order to thrive, and ten years out, businesses that successfully achieve digital workplace transformations will be at an advantage over businesses struggling with legacy systems, massive amounts of data and workforces unprepared for change. Ultimately, by empowering remote workforces, organisations can unlock creativity, productivity, increase job satisfaction and most importantly learn to collaborate in new and improved ways - bringing to fruition the next wave of human led, technology-underpinned progress.

Mahakian is the Vice-President, Emerging Africa, Dell Technologies

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Thursday 23 July 2020

BUSINESS DAY

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Nollywood movies and Nigerian excellence Remi Adekoya

I

have long been a fan of Nollywood movies. Wherever I have been in the world, once I found myself missing Nigeria, I could go to Youtube, more recently Netflix, and be instantly transported to Nigeriaverse.

What’s more, I could reconnect without having to experience the everyday challenges of actually physically being in Nigeria. A wonderfully convenient arrangement.

I’ve watched the industry grow over the years, from the loosely scripted, handheld-filmed Aki and Pawpaw movies of the early 2000s to the biggerbudget “New Nollywood” flicks of the last decade. While I find many New Nollywood movies overly pretentious, too prone to cringey affectations of foreign accents and Westernness in general, in short, less real than the older Nollywood movies, the technological developments in Nigerian filming are incredibly exciting. As are the huge strides in Nollywood scriptwriting. Last weekend, I watched two movies I absolutely loved: Isoken and Fifty.

As someone particularly interested in writing and storytelling, I quite enjoy poking holes in movie scripts, Nollywood or any other. My wife being

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similar to me in this respect, whenever we watch a movie scene, we find implausible, we will often complain that we can’t imagine character X saying Y in real life or that such and such aspect of the script didn’t quite tie together.

But Isoken and Fifty were both movies we simply enjoyed watching from beginning to end. Everything clicked, everyone was brilliant. While these were hardly the first New Nollywood movies I have really enjoyed, for some reason, they got me thinking a lot about Nigeria and the Nigerian potential for excellence.

It is commonplace to hear complaints about the “anyhow” manner in which many things are done in Nigeria.

It is often argued, especially by older generations, that today’s Nigeria lacks a culture of excellence and embraces mediocrity. While it is not too difficult to find evidence of this, those two movies reminded me of the incredible spirit of excellence that is still very much alive in the same society. They reminded me of the Nigerian capacity to get things just right.

In the first twenty years of this century, Nollywood movies have gone from being haphazard, often sub-quality affairs to repeated instances of beautifully orchestrated world-class products.

Meanwhile, Nigeria as a whole has failed to develop in this direction during the same period. Why? Perhaps one major reason is that Nollywood is one of the few Nigerian industries that has developed without government involvement.

Nollywood developed under staunchly free-market rules: if people liked your product, you succeeded, if not, you didn’t. No relationship to Minister X or Governor Y could force people

to watch your movies. Neither did your ethnicity matter. The fact Nollywood was originally powered by mostly Igbo producers, distributors and actors elicited no furious demands for a “more federal character” in the industry. People just want to watch movies they enjoy.

Wouldn’t it be great if Nigerians had the same attitude to governance they have to movies? We just want good ministers, governors and presidents, we don’t care what part of the country they’re from.

As Nollywood movies started making more money, a new capitalist subclass emerged: the Nigerian movie producer who could devote increasingly large budgets to increasingly large and sophisticated film projects the producer believed would bring increasingly large profits. Which is exactly the way all big movie industries developed, including Hollywood which also started out shooting low-budget films that paid scant attention to quality.

I’m not a free-market fundamentalist, but I definitely think the ubercapitalistic nature of Nollywood’s development pathway has helped the industry’s cream rise to the top, both in its entrepreneurial and artistic spheres.

Nollywood offers a glimpse into what a meritocracy could produce in Nigeria.

As does the country’s other major 21stcentury export success: Nigerian music.

This too started out with no-budget videos and sub-quality productions.

Today, there is homemade Nigerian music that can compete with the global best in terms of production and videos.

Add the stand-up comedy scene and you have a flourishing entertainment industry that has built itself out of virtually nothing in just two decades. I say “virtually nothing” because it is not like

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Wouldn’t it be great if Nigerians had the same attitude to governance they have to movies? We just want good ministers, governors and presidents, we don’t care what part of the country they’re from

there was no Nigerian entertainment industry prior to Genevieve, Wizkid and Basketmouth. Before them there was Olu Jacobs, there was Hubert Ogunde, there was Papi Luwe, there was Onyeka Onwenu, there was Oliver de Coque, there was Fela of course, and many others.

But what has happened in the past two decades is that Nigeria’s entertainment industry has, without state involvement, built itself into a collective force to be reckoned with on a global scale. Netflix doesn’t show so many Nigerian movies because its owners like Nigerians, but because they have noticed there is a sizable international market for this particular Nigerian product.

So perhaps one lesson to be learnt from the Nollywood story is that Nigeria needs more capitalism, not less. Not the crony kind which simply entrenches the domination of those who already have capital, but the truly free-market kind which rewards hard-work, creativity and a commitment to excellence. The kind which creates an environment in which an evolution from the Aki and Pawpaw films of the early-2000s (all respect due those legends) to the Isoken’s and Fifty’s of today, is possible. Because if in the next two decades of this century, Nigeria could develop the way Nollywood has in the first two, it would undoubtedly become a more successful, pleasant and pride-provoking place to live in than today.

Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs, Washington Post and Politico among others. He tweets @ RemiAdekoya1

Nigeria and the slave trade debate

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month after the British Broadcasting Corporation (BBC) did a story on Dillibe Onyeama’s experience of racism at Britain’s most prestigious boy’s school, Eton and his laughable decision to travel to the United Kingdom on the bill of Eton to accept a personal apology from the Headmaster of the school even while rationalising and excusing his grandfathers’ role in the abominable slave trade, little did we know that the writer of the story, Adaobi Tracia Nwaubani, fully shared his views. She has also decided, not for the first time though, to write about her great-grandfather’s role in the slave trade, not to apologise or show remorse, but to excuse and rationalise his actions. Nwaubani’s rationalisation reads almost exactly like Onyeama’s.

“Nwaubani Ogogo lived in a time when the fittest survived and the bravest excelled”, she wrote.” The concept of ‘all men are created equal’ was completely alien to traditional religion and law in his society”. “It would [therefore] be unfair to judge a 19th Century man by 21st Century principles”, she concluded.

But like I wrote two weeks ago in the case of Onyeama, this rationalisation is an often repeated lie. Like Basil Davidson, the celebrated scholar of African history opines, “the notion that Europe altogether imposed the slave trade on Africa is without any foundation in history.

Those Africans who were involved in the trade were seldom the helpless victims of a commerce they did not understand. On the contrary, they responded to its challenges. They exploited its opportunities.”

The Igbo society of the 19th Century was not an anarchic society like the rationalisers of the slave trade wanted us to believe. Rather, greedy individuals/slave traders, motivated purely by love for filthy lucre manipulated traditions and customs to ensure a constant supply of slaves.

Neither is the excuse that those sold into slavery were criminals or war captives doomed for

execution.

Igbo slave traders skilfully set the Chukwu Abia cave temple as the Supreme Court, from which all other shrines and temples sent cases on appeal. All those condemned at the shrine (mostly unjustly) were sold to slave merchants.

They also commissioned wars and expeditions, not for defensive or prestige purposes as was the tradition, but to ensure a steady supply of humans to be sold into slavery. Of course, the fact that many free people of conscience during that period would not partake in the slave trade because is conveniently left out of the discourse.

I’m not surprised though by Nwanbani’s despicable rationalisation of her great-grandfather’s role in the slave trade and the denial of his agency. That is the classical African or Nigerian approach to uncomfortable topics. They were very comfortable with blaming Europeans/ Americans for the evils of the slave trade but now that the roles of African actors are being assessed, the escape route is to deny African agency altogether.

Going by Nwaubani’s logic, neither should the Europeans and Americans involved in the slave trade be blamed. Until the 18th Century, very few Europeans had any moral reservations about slavery, which did not contradict any important social or religious value for most people around the world. Virtually all anthropological and pseudo scientific studies that existed at the time were unanimous that Africans were lesser humans. In fact, in the United States, blacks were seen as three-fifths of a person.

Even the church and the Holy Books, to which most European/American merchants subscribed to, permitted or even justified slavery. What’s more, the Supreme Court of the United States recognised the rights of slaveholders to keep slaves. So, why should those people, who were born into the practice of slave trade and who just went along with the only life they knew be blamed for the evils of the slave trade?

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Why should the Headmaster of Eton, in 2020, apologise for the actions of students in the 1960s who knew no better and were only taking a cue from their parents and the society?

Are we really surprised Africa has been missing in the current global conversation on slavery, justice, equity and the dignity of the black person? Are we surprised that black Americans, black Europeans and blacks in the Americas view Africans with barely concealed contempt?

Their overwhelming emotion towards Africa is captured by the words of Zora Neale Hurston: “...white people held my people in slavery here in America. They had bought us, it is true, and exploited us. But the inescapable fact that stuck in my craw was: My people had sold me...My own people had exterminated whole nations and torn families apart for a profit before the strangers got their chance at a cut. It was a sobering thought. It impressed upon me the universal nature of greed.” Africa also never featured in the fight to end the slave trade. In fact, when Britain tried to enforce the ban on slavery, African slave traders resisted and continued dealing with other European and slave merchants from the Americas. The need to end the capture of slaves at the source was one of the reasons Europeans ventured into the hinterlands of Africa, which led to its eventual colonisation.

Yet, even in the 21th Century, those people and their descendants won’t admit they did anything wrong and won’t apologise for the evils of their ancestors. But that is not so with all Africans. President Mathieu Kerekou of Benin in 2000 offered a wholehearted apology for his country’s role in selling fellow Africans to white merchants. According to Cyrukke Iguin, Benin’s ambassador to the United States at the time: “We share in the responsibility for this terrible human tragedy.” In 2001, Senegal’s Abdoulaye Wade – a descended of generations of slave traders himself - urged Europeans, Americans, and Africans to “acknowledge publicly and teach

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CHRISTOPHER AKOR openly about their shared responsibility for the Atlantic slave trade.

But what about Nigeria, one of the notorious slave trading country in Africa? Its only contribution to the slavery debate was in 1990 when its president called on Western nations to pay compensation to Africa for the damages caused by the slave trade. In fact, M.K.O Abiola, who was to later contest for and win the Nigerian presidential election, had made a name for himself campaigning for reparations to African countries for the damages they suffered through slave trade.

Beyond the denial of African agency however, it appears Nwaubani’s chief concern is about her great-grandfather’s place in history.

“Assessing the people of Africa’s past by today’s standards would compel us to cast the majority of our heroes as villains, denying us the right to fully celebrate anyone who was not influenced by Western ideology,” she argued.

Apparently, having accumulated riches from their trade in their fellow human beings (Nwaubani wouldn’t even call her greatgrandfather a slave trader but a businessman), Nwaubani Ogogo transitioned to trading in other commodities when the slave trade was banned. With his wealth and influence, he was appointed warrant chief and was instrumental in the establishment of Christian missions in his locality. It is this dubious and despicable legacy Nwaubani is desperate to protect.

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

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BUSINESS DAY

Thursday 23 July 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun

Nigeria risks increased dependency ratio as remittances dry up Ensure efficient cash transfer mechanism, embrace digital technology

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

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he discourse on the need to protect Nigerian households from negative impacts of the COVID-19 pandemic can never be over-emphasised. This is because the well-being of a people within a country mirrors the development of the country’s economy.

Beyond the direct effects of the pandemic on domestic businesses, jobs, lives and livelihoods, it is important for Nigeria’s policy makers to look into indirect impacts of the virus on Nigerians.

Countries have had their fair share of the ravaging impact of the pandemic on economic activities. There have been job losses and pay-cuts and all come back to hurt lower and middle income countries like Nigeria as diaspora remittances dry up.

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 of people in Diaspora to send money home. This may linger if advanced economies are not able to shorten recovery time.

In Nigeria, remittances have become an important source

of revenue both for government through tax and fees and for households. At household levels, it helps increase income and consumption smoothing.

Nigeria is the largest recipient of remittances, accounting for over a third of migrant remittance flows to Sub-Saharan Africa. It received $25 billion in direct Diaspora remittances between January and December 2019, as compiled by Nigerians in Diaspora Commission (NIDCOM).

This represents about 6 percent of Nigeria’s GDP. A World Bank study shows 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 affect families’ ability to spend on these areas as more of their finances will be directed to solving food shortages and immediate needs.

It is pertinent to note that total direct remittances inflow into Nigeria declined significantly by 50 percent to $1.01 billion in February 2020. According to the World Bank, remittance flows are expected to continue declining as flows to low and mid-income countries in SubSaharan Africa have been estimated

to fall by 23.1 percent.

For Nigeria, the consequence seems grave. Our fear is that the country may risk dependency. This is because, in our view, a decline in remittances will worsen the country’s poverty rate and further widen the existing inequality gap.

The National Bureau of Statistics (NBS) revealed in its Nigeria living standards survey for 2018/2019 that about 83.9 percent of Nigerians depend on cash remittances for consumption, 8.4 percent for school fees, 4.0 percent for hospital bills, 1.6 percent for Agricultural inputs, while others account for 2.2 percent.

With declining remittances, we see a switch in dependency to domestic households, hence, increasing domestic dependency ratio which, according to the NBS, is 0.97 percent of households, indicating more financial stress on the working class.

The dependency ratio indicator gives insight into the number of people of non-working age, compared with the number of those of working age. It is also used to understand the relative economic burden of the workforce, and has ramifications for taxation.

We suggest that, in order to mitigate the impact on vulnerable households, the government must

provide additional social safety nets for the poor while ensuring an efficient and effective cash transfer mechanism.

Also, for those abroad, who can still afford to support family and friends, Nigeria must intensify its digital operations in lieu of traditional channels. The NBS survey revealed that the most common medium of cash remittances in Nigeria was through relatives which accounted for 65.3 percent of remittances received for 2019/2019.

There could be a better channel.

Given the temporary ban on international travels across countries and the fear that people could get infected with coronavirus through banknotes without observing proper hygiene, we therefore encourage payments via digital money transfers.

Protecting households must remain the priority of Nigeria authorities and policy makers, especially at a time like this when the battle against the deadly virus isn’t ending soon.

Given the importance of Diaspora remittances on Nigeria’s GDP, the federal government must seek to achieve two major things: Help to keep a low dependency ratio and ensure uninterrupted flow in remittances by embracing digital technology.

HEAD, HUMAN RESOURCES Adeola Obisesan

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

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Thursday 23 July 2020

BUSINESS DAY

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COMPANIES&MARKETS Nigerian stocks held back by rising inflation SEGUN ADAMS

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igerian stocks h av e b a re l y delivered double-digits real returns so far this year as record inflation consumer price levels erode price appreciation of the best-performing stocks in the market already beaten down by the coronavirus pandemic.

As of Tuesday, 30 stocks have delivered a year-todate in the positive region, an average of which stood at 23% (41% on an annualized basis). In real terms, the advancers have risen less than 1% (and 2% annualized) due to the country’s high inflation rate.

Although investors rarely bet on one stock, the analysis

which doesn’t factor in dividend payments, underscore the challenge of creating wealth amid the country’s unfavourable macro-conditions.

On a year-to-date basis N348 billion have been shaved off the market capitalization on the back of weaker sentiments of investors due to COVID-19 pandemic and weaker oil prices – both global events with severe consequences for Nigeria.

Recent naira devaluations and rising inflation rates have also added to the headaches of investors who must earn higher returns to have greater value for the risk they take.

Stocks like Neimeth and Law Union have on nominal terms risen over 100% since

the start of the year. Adjusting for annual inflation of 12.56% in June, capital gains are roughly 8% and 7% for each.

BusinessDay’s analysis included May & Baker (44.04% YTD vs 79% annualized), Ekocorp (41.18% YTD vs 74% annualized), Okomu Oil (26.8% YTD vs 48% annualized), Consolidated Hallmark (25.64% YTD vs 46% annualized), and AIICO (25% YTD vs 45% annualized ) which make up the seven best-performing stocks as at Tuesday, from a capital gains perspective.

Their respective annualized returns are all less than 5% after discounting for inflation.

Nigeria’s inflation rose for the 10th straight month to 12.56% in June, its highest in more than two years,

as prices of medical-related services and products, and transport rose the most on the non-food index.

Food inflation in the month rose by 15.08 percent in the period compared to the 15.04 recorded in the previous month while core inflation, which captures all items other than food, rose slightly by 10.13 percent from 10.12 in May, the NBS said.

Faced with a low-interestrate environment, investors are having difficulties growing their investments. Still, an aversion for equities has kept most of the huge liquidity in the fixed income market.

Despite challenges, analysts say in the second half of the year the healthcare sector and technology stocks will likely prove resilient as investors look to beat the market

L-R: Yetunde Arobieke, commissioner, Wealth Creation and Employment, Lagos State; Babajide Sanwo-Olu, governor, Lagos State; Bola Adesola, chairman, Board of Trustees, Lagos State Employment Trust Fund (LSETF); Teju Abisoye, eExecutive secretary, LSETF; Segun Ojelade, member, BoT, LSETF, and Tatiana Moussalli-Nouri, member, BoT, LSETF, during the swearing-in ceremony of the new members of the Board of Trustees (BoT), LSETF at the Governor’s Office in Alausa, Ikeja, Lagos.

COMPANY RELEASE

Bridge Leadership Foundation holds virtual 10th edition of Career Day

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he Bridge L eadership Foundation is set for the 10th edition of its Career Day themed – “The Global Economy: Adapting to the New Normal” holds virtually this year thanks to the COVID-19 pandemic.

Scheduled for July 25 (Saturday) at 11 am West African Time, the conference usually gathers over 6,000 young people from across Nigeria in Calabar, Cross River State for a transforming experience.

In the last 9 editions, the Career Day has hosted an array of over 61 speakers from across Africa who have spoken to over 31,300 people in physical gatherings on different themes that are all geared towards improving the lives of young people and transforming the African continent.

The event would feature other thematic discussions on “New Decade, New Economy, New Solutions”, and “Leading in Uncertainty: Finding Courage, Building Resilience”.

In attendance will be Ndidi Okonkwo Nwuneli, founder, LEAP Africa and managing partner, Sahel Consulting; Fela Durotoye, CEO, GEMSTONE Group; Hamzat Lawal, co-founder, Connected Development (CODE); Yomi Williams, founder, Gartner Callaway Group of Companies and Naadiya Moosajee, cofounder/CEO, WomEng (Women in Engineering).

Other speakers include Peter Obi, former governor, Anambra State; Mitchell Elegbe, founder & group managing director, Interswitch ; Tonye Cole, cofounder, Sahara Group; Atu-

nyota Alleluya (Alibaba), CEO, Alibaba Hiccupuray 3rd Ltd; Ubong King, CEO, Protection Plus Services LTD and Thelma Ekiyor, managing partner, SME.NG. Babajide Ipaye, founder, KEEXS; Saudat Salami, CEO, Easyshop Easycook Services will also be in attendance.

Moderating the event are Arit Okpo, creative director, Menoword Media and J.J. Omojuwa, founder & chief strategist, The Alpha Reach.

A new decade has dawned upon Africa revealing a lot of progress but bearing lots of challenging peculiarities that may be better imagined than lived. The outbreak of the novel coronavirus disease (COVID-19) has disrupted the world, affecting millions regardless of geographical location, age, race, gender, or differences.

Although the pandemic is primarily a health issue that has claimed a lot of lives and still counting, there is a need to address the immediate implications for business, socioeconomic growth, economic development, fiscal, and monetary policy which are yet to be fully quantified or understood.

The event will feature keynote presentations, panel discussion, thematic presentations and thought leader opinions. The event which will host leaders and stakeholders from across the world is open to all. Information on how to participate can be found here.

The 10th Career Day is supported by NorthWest Petroleum and Gas Company, Lilleker and Stanbic IBTC. Media partners include Hit 95.9 FM Calabar, BusinessDay Nigeria and Inspiration 92.3 FM Lagos.

BANKING

FirstBank honours 28 successful graduands at maiden management programme MICHAEL ANI

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irst bank, one of Nigeria’s biggest lenders has completed its first ever ma na g e m e nt p ro g ra m, celebrating 28 successful candidates.

Known as the FirstBank Management Associates Programme (FMAP), the program is part of the banks way of showing its commitment towards promoting human capital development by training and retraining staff to deliver customer-centric services that will position the firm on the path of higher growth.

Speaking at the graduation ceremony which happened virtually, Adesola

Adeduntan, CEO of the bank, said the programme was born out of the bank’s quest to groom young Nigerians, hungry for knowledge, that will take on the bank’s succession plan.

For him, the programme was intended to consciously integrate leadership into the bank ’s culture and build a pipeline of highly resourceful and talented individuals.

“As an institution, we have a lot of things undone and the only way for us to achieve that is to continue to do things two to three times better than our competitors,” he said.

According to him, the FMAP is part of the Bank’s strategic objectives of in-

fusing and developing leadership at requisite levels across its staff hierarchy, aimed at building the next generation of leaders who will be groomed to drive the Bank’s vision of being Africa’s Bank of first choice.”

He urged the graduands to invest in relationship as well as work harder and smarter than their competitors by employing a combination of Intelligent Quotient (IQ), Emotional Quotient (EQ), Physical Quotient (PQ), and Social Quotient (SQ) skills that were learnt in the cause of the program.

Adeduntan also charged them on the need to uphold integrity at all times, saying

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that banking was all about trust and confidentiality. “ In whatever you do, always strive to leave a positive footprint that will stand as a legacy for others to follow,” he said.

This maiden edition of the FMAP program commenced in 2018 and had about 42 persons enrolled in the program but only 28 finishing strong.

Graduands of the programme were trained on both soft, hard and digital skills inline with the bank’s core value.

Ini Ebong, Group Executive, Treasury & International Banking, First Bank of Nigeria Limited, and Chairman, First Academy Governing Council said

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one of the core pillars of the bank is to continue reinvesting in its people as that is only what can put the bank in the standard it requires as it begins its journey of another 125 years.

“We expect them to reciprocate to the bank the reinvestment we have given them,” Ebong said.

Successful graduates of the programme were all Nigerians who applied from various parts of the country, and were selected across different disciplines.

T h e y i n c l u d e Ab b o t Izuka, Babajide Olusesi, Blessing Ogokeh, Bojaji Adepoju, Bridget Imokhai, Chibuzor Nwani, Chidi Achara, Dolapo Conteh, @Businessdayng

Caius Odumodu, Gbekeleoluwa Akinyele, Henry Abadua, Idris Shekoni, Ignatus Munonye and Kayode Sowande.

Others include Kehinde Olubamise, Mofoluwasho Nasiru, Nike Oyelola, Olalekan Olajide, Olatunde Adeyemi, Oluwadamilola Oke, Omolola Akinbisola, Osita Onyema, Princejoe Nnaji, Rapuluchukwu Ajekwu, Ridwan Giwa, Sherif Audu, Toluwalase Alalade and Tsegbemi Ayoronmi.

The graduates who were already staff of the bank, will be meant to work in various roles without them having to sign any bond whatsoever as to the number of years they must work for the bank.

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Thursday 23 July 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Oyegunle CIIN president promises to reinforce professionalism, ethic in insurance industry MODESTUS ANAESORONYE

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he President of the Chartered Insurance Institute of Nigeria (CIIN), Muftau Oyegunle has said that the focus of his tenure will be reinforcement of Professionalism and Ethics in the insurance industry, even as COVID-19 forces a new work culture Oyegunle who made the disclosure during his investiture as the 50th President of the CIIN held via virtual said the theme of his tenure will be ‘Reinforcing Professionalism and Ethics in the New Order’.

Oyegunle who set a Sixpoint agenda gave the theme of his administration as “Reinforcing Professionalism and Ethics in the New Order,” noting that the choice of the theme is borne out of the need to establish a rolling plan which will guarantee that even in the face of current global uncertainties, the Institute will continue to meet the needs of members.

The Six-point agenda of his administration, according to him include Digital Transformation of the Institute; Reinforcement of the Rel-

evance of Professionalism; Re-energizing the Institute’s Administrative Structure; Insurance Awareness and Youth Mentorship Initiatives; Infrastructural Development and Advocacy and Collaboration with various Associations in the Private Sector.

On his action plan aimed at actualizing the Digital Transformation of the Institute, he said his tenure will ensure completion of the Institute’s computerization projects; Continuation of the E-library project and Commencement of E-Examinations.

To ensure reinforcement of the relevance of professionalism in the industry, he said his administration will conduct survey aimed at bridging the gap of the Technical Skills of insurance professionals; harness the Knowledge of Insurance senior professionals as well as commence technical research for the Insurance Industry.

In order to re-energize the Institute’s administrative structure, he said his administration will ensure collation of the regulations and procedures of the Governing Council; realignment of the

Committees of the Council and their functions; manpower review and training and set new service delivery benchmarks..

Other plans of his tenure, according to him include, upscaling distribution of Insurance Textbooks to Secondary Schools; donation of Insurance Course books to Insurance Department in Tertiary Institutions as well as consolidate youths empowerment and Mentorship Initiatives in order to actualize insurance awareness and Youths Mentorship Initiatives of the Institute.

On infrastructural development, Oyegunle said his administration will work assiduously for the completion of the College of Insurance and Financial Management’s auditorium and move the Victoria Island project to habitable stage.

He said he will raise the bar of advocacy and collaboration with various Associations in the Private Sector.

The CIIN boss said the institute will continue to strive even in the face of Covid-19, adding that developments in the world today call for collaborative efforts to reinforce professionalism.

L - R: Winston Nkanor, head of HR and CSR at Samsung; Osagie Ehanire; minister for health; Adetunji Taiwo, head of Mobile at Samsung, and Anas Galadima, Senior Manager, Public Affairs, MTN Nigeria at the donation of 500 smartphones with SIM and data for 6 months to Case Managers in Isolation Centres across Nigeria.

L-R: Bola Olowu, chairman, director, public private partnership and diaspora, federal ministry of health; Abike Dabiri-Erewa, chairman , Nigerians in Diaspora Commission, Chikwe Ihekweazu, director-general, Nigeria Centre for Disease Control (NCDC), and Ali Onoja, representing , president of the Nigerian Association of Pharmacists and Pharmaceutical Scientists in the Americas (NAPPSA), during NAPPSA’s donation of COVID-19 diagnostic and other medical equipment to NCDC in Abuja.

Elumelu acquires new 62.63m UBA shares

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nited Bank for Africa’s chairman and billionaire busin e s s m a n , To n y Elumelu has purchased additional shares in the tier-1 bank.

In a notice sent to the exchange by the bank, Elumelu purchased an additional 64.64million units of ordinary shares at an average price of N6.20.

Sp e c i f i ca l l y , 4 0 0 , 0 0 0 shares were bought at N6:15; 2million shares at N6.20; while 60.24 million shares were bought at N6.25.

As at 31st December, the billionaire businessman has 190 million direct holdings and 2.14billion indirect holding in UBA. Further breakdown of the indirect holdings show that HH Capital has 140.84milliom shares; Heirs

Holdings Limited 1.74million shares; Heirs Alliance Limited 231 million shares.

The bank recently announce the appointments of Ayoku Liadi and Oliver Alawuba as Deputy Managing Directors in charge of UBA’s Nigeria and Africa businesses, respectively.

UBA shares traded at N6.15, Tuesday on the floor of the Nigerian Stock Exchange, and is down 13.99percent year to date.

In its first quarter result for the period ended 31march, the bank’s Net Interest income up by 13% YoY from N58.08 billion to N65.42 billion in Q1 2020 . Loan Loss Charges was up by 54% YoY from N1.71 billion in Q1 2019 to N2.74 billion. Net Fees and Commission Income up by 12% YoY from N16.76 bil-

lion to N18.70 billion. Other Operating Income down by 12% YoY from N83.71 billion to N93.94 billion in Q1 2020.

Staff Cost was up by 22% YoY from N18.09 billion to N21.98 billion in Q1 2020.

Other Operating Expenses up by 8% YoY from N30.1 billion to N32.5 billion in Q1 2020.

Profit Before Tax up by 9% YoY from N30.16 billion to N32.73 billion in Q1 2020. Total Assets grew 13% from N5.6 trillion in December 2019 to N6.35 trillion in March 2020. Customer Loans and Advances also grew by 10 % from N2.1 trillion to N2.3 trillion. Customer Deposits grew by 10% from N3.83 trillion to N4.27 trillion, while Total Equity also grew by 2% from N598 billion in December 2019 to N613 billion in Q1 2020.

Commuters at BRT bus stop displaying their Amber Energy Drink as a ticket to board the bus to Ikorodu, Lagos

Inlaks pushes growth of African tech ecosystem with coding academy JUMOKE AKIYODE-LAWANSON

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hehatch, innovation lab of Inlaks, a leading IT solutions provider, has commenced its 3-months software programming training for graduates under the auspices of thehatch Code Academy.

Although initially scheduled to begin in April, the training was postponed due to the

global pandemic situation.

Now, 15 shortlisted participants have begun thehatch coding boot camp online.

The academy aims to equip students with new programming skills through flexible online courses, peerbased tutoring and project assessment. During the training, participants will be exposed to an immersive curriculum www.businessday.ng

using proven facilitator-led and hands-on software development training. Apart from available networking opportunities with highprofile software developers and mentors, top program graduates of the academy stand a chance of gaining a start of their career as software engineers with Inlaks’ software development unit.

L-R: Kelly Danjuma Usman, Banker and Financial Analyst, Prof Jimoh Habibat Isah, Federal Commissioner representing Kogi State, National Population Commission, Mrs Catherine Obalola, Office of Secretary to the State Government, Lokoja, Lawal Itopa Lamidi, The Author , CMS Solutions Management Technique Book, at a public lecture, titled “ State of the Nation: The need for CMS Solutions held at NUJ Conference Hall, Lokoja, Kogi State.

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Thursday 23 July 2020

Innovation

BUSINESS DAY

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

15

TECHTALK

Broadband Infrastructure

Bank IT Security

How smartphone camera growth drives consumer adoption for Canon in Africa FRANK ELEANYA

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s of May 2020, the number of telephone connections in Nigeria was slightly above 192 million and mostly dominated by feature phones. However, it is the smartphone segment of the market which controls about 30 percent of the entire phone market in Nigeria that nearly had Canon questioning its camera business recently.

Smartphone cameras are getting better, smarter, and crispier with every new device release from Samsung or Apple. They are also getting cheaper as Chinese manufacturer Transsion which range of devices (Tecno, iTel, and Infinix) dominate the market share in both Nigeria and Africa, release new devices every other month. To fight off competition from more powerful Chinese brands like Huawei and OPPO which are also building outposts in the continent, Transsion has demonstrated the capacity to do everything including upgrading its phone cameras to global standards.

Somesh Adukia, managing director of Canon, Central, and North Africa told BusinessDay that while Africans want affordable devices, they also prioritise quality.

Canon’s camera business lost 6 percent in 2019 and while it regained some grounds at the beginning of the year, the outbreak of the COVID-19 pandemic has put a question mark on its financial expectations in 2020. The losses hit particularly hard in April when

many of the countries in Africa, including Nigeria enforced lockdowns as a measure to contain the virus.

Canon’s wobbly beginning Canon, the brand, arrived on the African continent 50 years ago. However, it took many more years for Canon, the office, to make its physical entry and get a coherent strategy together.

As an entry approach, the company had set up the Canon Middle East and Africa office that catered for selected countries in Africa and in the Middle East.

Adukia calls it “a fragmented approach” for the continent. While the approach had the rest of Africa as an objective, it however prioritised mostly markets in the Middle Eastern countries and South Africa. The company soon realised the approach was not working. It then opted for a more direct strategy with the creation of the Canon Central and North Africa.

“Our first learning was that if you want to develop a business or your brand in Africa then you have to be in Africa.

You cannot manage from a distance, you have to be in Africa and you have to give power and authority to African locals who understand the market.” Adukia said.

As part of the new strategy, Canon opened up six new local offices, including one in Nigeria. The six locations now employ more than 60 people who are managing Canon’s business in various countries. The company also has representatives and channel partners for effective

distribution.

Canon’s new approach seems to be working as the continent now contributes about 20 percent of its total market revenue and has also opened more product service centres. But Adukia says the 20 percent share is more than what the potential of the continent can give if properly planned. Hence, at the beginning of 2020, Canon formed its Project Africa 500. The objective of the project is to in the next three years take Canon’s turnover from the whole of Africa from the current 300 million euros to 500 million euros.

Before the lockdown was declared the project team was studying the journey of any Canon product right from a Canon factory to the hands of the consumer; what challenges does the Canon product go through; how can

the company build up an effective logistics system? How can it offer the correct pricing to the customer? How can it offer a world-class offering to a customer in Africa? It also wanted to come up with dedicated products for the continent.

Project Africa was supposed to be concluded in 2022 but has now been moved by one year, to 2023.

Africa’s event market and budding Nollywood interest In studying Africa, one of the things that stood out for Adukia and the Canon team is Africa’s love for colourful events. The list of events is extensive and varying in degree.

There is the day of the wedding, wedding anniversaries, birthdays, child naming ceremonies, thanksgivings, matriculations, graduation, and burial ceremonies, each of them needing to be captured

on a good camera.

While smartphone cameras usually show up at these events, the organisers still prefer a professional cameraman to be present.

This is where Adukia sees endless opportunities for Canon’s cameras. According to him, smartphone cameras have only helped amplify the need for people to use professional cameras.

“I prefer using a professional camera instead of a smartphone,” Esther Anko Bassey, a Lagos-based professional photographer who also uses a Canon camera for event coverage, told BusinessDay. Using a professional camera, for her, is a matter of quality of the photographs which her clients insist on. The quality of the photographs usually drops for nearly all smartphones when the pictures are to be transferred from the phones to the laptops.

But it is Nigeria’s movie industry popularly known as Nollywood that holds the most fascination for Canon. Recently, the company signed a deal with Kunle Afolayan, a prolific producer and director with blockbuster movies like ‘The Figurine’, ‘October 1’, and ‘Phone Swap’.

Nollywood is the biggest industry not only in Africa but across the world it is number three movie-making industry. With the increased presence of Netflix in the country, the need for better cameras and other gadgets is even more pronounced.

Afolayan who shot his first movie with a Canon camera now has a bigger offer to

shoot his upcoming movie project ‘Citation’ with a range of Canon camera C500 mark 2. Canon is already exploring other partnerships with some other big names in the industry.

Apart from growth in voice calls, MTN also said in May that it sent over 1 billion SMS within the first four weeks of introducing its free SMS package as a result of the COVID-19. The offer allows the telco’s subscribers across the country to send 10 free SMSs daily for 30 days to all networks. Airtel also offered its subscribers the same package with a caveat that “a Fair Usage policy applies to prevent network congestion at this time when network stability is paramount.”

Most subscribers say 9Mobile is yet to show it wants to compete for their attention given their plans have largely remained unchanged.

Since May 2016, 9Mobile has seen an unbreakable run of data subscriber exits. Within the period, the telco has lost more than 8 million data subscribers bringing its total to 7.2 million as of May 2020 from over 16 April million in 2016.

Aside from expensive data packages, some subscribers say the network has gone from best to worse after the exit of Etisalat.

“9Mobile used to be the (best) in the era of Etisalat although they were pretty expensive and throttled their data a lot, they had legendary speeds,” said Maurice Mynor, a subscriber. “Now the Nigerian entity is slowly wrecking what is left of the company.”

COVID-19 is not all blues for Canon Like every industry player, Canon has its share of negative news from the COVID-19 pandemic. April numbers, in particular, was not flattering.

But Adukia says the company is starting to recover from May and June 2020.

But while the pandemic pulverized revenue from the camera and products like its multi-functional printers, it has paved the way for other products like the inkjet printers to thrive. The portability of the printers makes them ideal for the needs of people working from home during the lockdown. Similarly, schools are not functioning.

Most of the schools in every country are operating online learning and there is a lot of homework, assignments for students and teachers which require a good printer at home.

“So progressively we are doing well and we hope that African markets and African people are known for their resilience. They have fought many pandemics and many challenging times in the past and come out very successful. We as a company are girded up to support the African markets and nationals with this resilience and we are always ready with our products and services to enable this in a better manner,” Adukia said.

April relief over, 9Mobile voice subscriber loss mounts ...data subscribers still leaving in thousands FRANK ELEANYA

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igeria’s fourth-largest mobile network operator, 9Mobile’s recovery in April is proving to be short-lived following the loss of 342,410 subscribers in the month of May, according to data from the Nigerian Communications Commission (NCC).

For the umpteenth time in a row, the Nigerian telco was the worst performer among the top four operators like MTN, Airtel and Glo all swelled their subscriber numbers in May. In April, 9Mobile added 444,903 voice subscribers breaking a one-year losing

streak. Experts had alluded the growth to the increased efforts the management was making to turn the company’s dwindling fortunes around.

In February 2020, 9Mobile announced it was investing over $220 million to expand its 4G network in Lagos and other states. The company said it was targeting 100 percent coverage of the entire country with 4G over the next five years.

In May, it announced the appointment of a new chief executive officer, Alan Sinfield who promised to roll out new strategies that would attract subscribers.

However, some experts say the April’s growth may

have had more to do with the enforcement of a lockdown across the country instead of the reform efforts at 9Mobile.

According to them, while the total number of voice subscribers grew by about 2 million, operators like Airtel were unable to keep up with the number of new subscribers. As the quality of service dropped in Airtel, subscribers went for an alternative, 9Mobile. Airtel lost 40,496 subscribers in April while 9Mobile gained. But whatever Airtel lost in April, it regained more than twice in May where it added 237,874 voice subscribers.

Many network operators around the world reported a spike in voice calls as people

started staying home to avoid the COVID-19. AT&T, a USbased network provider saw a 28 percent growth in voice calls in April. In the United Kingdom, the spike in voice calls was so much that they clogged up the systems that connect providers, leading to downtime. Traditional voice calls (as opposed to third-party apps like WhatsApp or FaceTime) are typically handled by proprietary systems within the carriers, which guarantee their low latency and quality of service. Those systems can clog up even if the network as a whole is not overloaded. Airtel users had at some point in May complained the network was experiencing downtimes.

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

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16

Thursday 23 July 2020

BUSINESS DAY

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

In association with briu@businessday.ng

08098710024

Nigeria Living Standards Survey—what has changed?

ADEMOLA ASUNLOYE

Average household size, dependency ratio and share of female headed households

N

igeria’s population is dominated by young people, majority of whom are younger than 20 years of age.

A report on Nigeria Living Standards Survey (NLSS) revealed that out of the total male population in Nigeria, not lesser than 54 per cent of them are below 20 years; whereas, not lesser than 51 per cent of the female population is dominated by the same age.

In Nigeria and across all the states but Enugu, there are more females than male in the total population estimate from the sampled enumeration areas. Females accounted for 50.8 per cent of the total population, while males, the remaining 49.2 per cent. The ratio of males to female in Enugu State is 0.82, that is, 55 per cent more males than females (45 per cent).

The average household size in Nigeria is 5.06 persons per family.

This means that there are about 5 persons in every family. The household size is larger in rural areas than urban areas: while there are about 5.42 persons in a single family in the rural areas, there are 4.50 persons in the urban settlements.

Jigawa State with 8.15 persons recorded the highest number of persons per household, while the lowest is in Ekiti state where on average the household is composed of 3.50 family members.

To understand the relative economic burden of the workforce, the total dependency (youth) ratio per working-age person in Nigeria was analysed and estimated at 0.97. This means that for every 100 working-age individuals, about 97 persons are dependents.

Across the states, Jigawa has the highest dependency ratio of 1.40 (140 persons dependent on every 100 working-age individu-

Source: NBS

als), while the lowest is in Lagos with 0.63 of dependents per 1 working age person.

Even though by marital status or obligation, males are expected to head their homes, statistics shows that the responsibility has been shifting to the females.

About 18.8 per cent of the total households in Nigeria are headed by females. This is a reflection of closing the gender gap in Nigeria.

This figure is higher (21.4 per cent) in the urban areas than the rural areas (17.1 per cent), as more and more females are taking up managerial and executive positions in organisations and even in politics among others.

On a state level, the lowest share of female headed households in Nigeria is in Niger state at 1.9 per cent, whereas it is highest in Ebonyi State which recorded 36 per cent.

The share of females, among

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those older than 12 years of age, in a monogamous marriage is 41.9 per cent. This is higher when compared to males (36.7 per cent) of the same age range in a monogamous marriage. Unlike the ratio of males and females in monogamous marriages, the share of males and females in polygamous marriages is roughly equal at about 9.9 to 9.6 per cent respectively.

Polygamous marriages are more prevalent in Jigawa state where 15.1 per cent of males and 32.8 per cent of females were reported to be in a polygamous marriage. On the contrary, data from Akwa-Ibom showed that the state has the lowest rate of polygamous marriages with less than a per cent of males and females alike getting into polygamous marriages.

The population distribution by age-group and sex across the country showed that more males

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than females at 44 per cent of all males and 41.2 per cent of all females respectively in the country are less than 15 years of age; hence, should not get employed for personal income. Similarly, 5.1 and 5.0 per cent of all males and females respectively are considered to be of normal retirement age and are not necessarily expected to be part of the workforce—they are more than 64 years of age.

This implies that the total number of dependent males represents 49.1 per cent of the male population in Nigeria, while dependent females represents 46.2 per cent of the total female population.

Of the total male and female population in Nigeria, 50.9 per cent and 53.8 per cent respectively is or is expected to be part of the workforce, as they are not less than 15 years and not more than 64 years of age.

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The population distribution by age-group and sex across settlements (urban and rural) in Nigeria showed that there are generally more females than males: 50.7 per cent and 49.3 per cent respectively in urban settlements, while there are 50.8 per cent and 49.2 per cent respectively in the rural settlements.

Of the total 49.3 per cent male constituents in urban settlements, 27.4 per cent are in the average working-age population, while of the females, 29.1 per cent are in the average working-age population.

From the same proportion in the rural settlements, 23.9 per cent males and 26.3 per cent females make up the total workforce in Nigeria, as they are between the ages of 15 and 64 years.

Findings from the marital status by gender above 12 years of age showed that 49.9 per cent and 34.1 per cent of males and females respectively were never married; 36.7 and 41.9 per cent respectively are married (monogamous); 9.9 and 9.6 per cent respectively are in a polygamous marriage; 0.7 and 1.0 per cent respectively are in informal union; 1.4 and 2.6 per cent respectively are divorced/separated while 1.3 and 10 per cent respectively are widowed.

Comparing the same for urban settlements (that is, males and females in percentages), 50.7 and 38.6 were never married; 39.3 and 42.0 are married in monogamous; 6.6 and 5.3 are in polygamous marriage; 0.4 and 0.6 are in informal union; 1.5 and 3.3 are separated while 1.5 and 10.2 are widowed.

Similarly, in rural settlements, 49.4 and 31.5 are unmarried; 35.2 and 41.9 are in monogamous marriage, 11.9 and 12.2 are in polygamous marriage; 0.8 and 1.3 are in informal union; 1.3 and 2.2 are separated; while 1.2 and 10.9 are widowed.

Thursday 23 July 2020

BUSINESS DAY

17

INTERVIEW How marginal field bidders should structure deals and deploy capital to succeed - Mama Many of the fields on offer in the ongoing marginal field bid rounds includes those unable to be developed many years ago. Some are still lying fallow after successful bids largely due to the inability of operators arrange suitable deals to develop them. Chijioke Mama, an energy transaction advisor and Doctoral Researcher in Business Management, tells BusinessDay’s ISAAC ANYAOGU the strategies prospective marginal field bidders can adopt to structure deals and deploy capital to bring their fields to development.

H

Chijioke Mama

in a JV, should stress-test the vehicle early enough.

How then should capital deployment in marginal fields be optimized?

Unarguably, these are tough times in the global petroleum industry and that might cause funding apathy for Nigerian marginal fields.

However, legacy financiers may rely on the historical, commodity price boom-bust cycle to appraise opportunities.

Thus, field development capital can be deployed using a variety of deal structures and strategies. Some common practices include Financial and Technical Service Agreements (FTSA), Equity Joint Ventures, Reserves-based lending and Risk Service Contracts.

The Suitability of any of these or other models will depend on the strength and primary motive of the collaborating parties. Each deal structure has its own risk profile and benefits but most will involve the assignment of some working interest or economic interest to the capital provider, recoverable as a percentage of distributable proceeds.

Some of these strategies involve providing capital to develop an asset on nonrecourse terms and without any collateral except petroleum production, which precipitates a unique transaction risk profile for the investor – in this case an appropriately structured collaboration will be the www.businessday.ng

first mitigation mechanism.

Furthermore, recent advances in geophysical technology means capital providers now have means to pursue more reliable estimates of the resources in place by implementing additional scrutiny. Thus in addition to optimizing deal structure, financing decisions should be made on geophysical data that are complete, rational, consistent and reasonable as attested to, by a third party or unbiased entity.

What are the common pitfalls in marginal field deal structuring?

That will depend on the dealing parties and the kind of interest they have. Capital providers in particular must avoid yielding to a tunnel vision of the transaction. For instance, an entity providing finance and technical service in exchange for working or economic interest; will pay keen attention to the agreed payout formula, which can add greater risks to the recovery of invested funds.

Simply put, the mechanism and timeline for triggering reversionary interest and the scale of the premium to be received on their investment have to be objectively and carefully determined.

Given the uncertainties around field development work programs and unanticipated delays in receiving statutory consents and approvals, four years can easily become eight years, which can erode the financier’s profit.

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For the asset-owning E&P Company or consortium, carefully managing the scope of farmor’s rights and influence in some issues is imperative along with optimizing the nature of any agreed obligation/ duty to the farmor.

For instance, Farmor will usually ask that operator’s assignment of further interest in a field should not be made without their consent, which is the right to determine if any potential assignee is sufficiently qualified to participate in the asset.

Sometimes there are stringent restrictions regarding the assignment of lien to the farm out area, which may partially or fully limit access to innovative financing mechanisms such as reserves-based lending or revenue based finance. Through ignorance or negligence, the farmee may fail to negotiate for conditions that provide easy channels for third party participation in developing the field.

Seemingly harmless requirements such as farmor’s consent for all press releases regarding the field could pose subtle limitations. In one case, a marginal field operator reported difficulty in arranging a meeting with an IOC for over 6 months on a matter which was very exigent.

Other matters to be carefully negotiated include, default mechanism [for consortiums] whether it

‘

In an era of heightened environmental awareness in the Niger Delta and given that farmor will normally provide the asset on “as is where is” basis; the need for conducting a baseline environmental study on the farmout area, prior to entry is very critical

‘

What is the ambience in the petroleum sector regarding the 2020 Nigeria marginal field bid round? aving waited for almost 20 years; the reported rush for these assets is not surprising. But available data show that acquiring an asset is cosmetic; the real hurdle lies in profitably developing the asset, which has proven to be an arduous, often underestimated task. The outlook is made worst by the current commercial clime for oil in the global market, as well as, some failed efforts in the 2003 licensing round.

Given that the Niger Delta is a mature basin, I have empirical evidence from a 7 year critical study and analysis to support the postulation that the successful operation of a marginal field has less to do with the asset and more to do with the promoting structure and capital deployment strategies. The general understanding, however, is the reverse.

If it’s less about the asset what collaboration and capital deployment strategies are then required?

Collaboration strategies for marginal field development vary widely; whether they are for capital deployment or technical service provision.

By collaboration, I am referring to the sometimes precarious Joint Ventures and partnerships commonly used by E & P companies.

These Deal structures - being more sensitive factors than technical skills or asset quality - must be diligently approached. On the one hand there is the need to optimize the participating structure, where there are several E&P companies working as a consortium. On the other hand you have the equally sensitive Farmor-Farmee relationship that requires proper structuring and management.

In all cases, the necessity for a carefully and diligently negotiated structure is evident. While there is a long list of common and legitimate considerations, some are indisputably more sensitive. Yet it’s common to see, negotiators, drafters and deal parties using a common approach or template to transact. Loosely & hastily structured Joint ventures or partnership for upstream capital deployment is one of the most underlying causes of crises or poor performance in marginal field development. Therefore it becomes very imperative that parties collaborating or intending to collaborate under the various permissible deal structures

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is “carry”, proportionate forfeiture of equity or total buy-out; Field Abandonment Security and the nature and extent of farmor’s required approval for annual work programs.

In an era of heightened environmental awareness in the Niger Delta and given that farmor will normally provide the asset on “as is where is” basis; the need for conducting a baseline environmental study on the farmout area, prior to entry is very critical.

In addition, since there is no uniform approach to the operational, legal and administrative design of any given collaboration, it cannot be overemphasis that the most sensitive issues must be cautiously approached and negotiated at the earliest possible instance. The need to have a rounded perspective on the commercial and operational aspects of any agreement cannot be overemphasized as well.

Can you compare the viability of the marginal field investment opportunity in 2020 with 2003?

I consider Nigerian marginal fields to be more attractive in this era than 2003. Some of the conditions that contributed to the marginal status of these assets have positively evolved in most cases.

For instance, previously stranded natural gas resources, in the Western Niger Delta region that was marginal due to the lack of export infrastructure or processing facility now has several alternatives within actual and planned natural gas pipeline infrastructure in the region, including ELPS 2, OB3 Pipeline and AKK. This is further enhanced by the launching of the Nigerian Gas Transportation Network Code [NGTNC] which provides third party access to certain gas transmission and distribution infrastructure under streamlined operational & fiscal regimes.

Furthermore, if you consider that there are about three modular refineries nearing completion onshore Nigeria, then you see that onshore productions could have a faster and cheaper route to market.

The last 20 years have also provided opportunities to acquire and perfect [in country] several innovative capital deployments solution such as reserves-based lending and other variants of financial and technical services partnerships. For promoters who will operate with the right setting and surmount the external industry-wide challenges, the outlook definitely looks better now than in 2003.

18

Thursday 23 July 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Market capitalisation

NSE Premium Index

The NSE-Main Board

N12.680 trillion

2,118.36

N12.670 trillion

2,115.89

NSE All Share Index

Week open (10-07–20)

24,306.36

Week close 17 07–20)

24,287.66

Percentage change (WoW)

-0.08

Percentage change (YTD)

-9.52

-0.12 -0.02

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

1,022.11

741.05

125.69

413.75

194.89

1,792.75

1,094.31

937.78

1,021.70

1,042.02 1,032.74

283.19

741.05

272.10

123.33

405.78

191.12

1,809.60

1,099.97

915.73

-3.92

-1.88

-0.04 -0.02

0.00 0.00

-0.89 -0.02

-23.75

-1.98

-1.93 -31.55

NSE Lotus II

-1.93

0.94

-31.55

-31.55

NSE Ind. Goods Index

-1.93 2.27

NSE Pension Index

-2.35 -13.12

Consumer goods, oil & gas, banking stocks worst hit by Covid-19

to capture the performance of the oil and gas sector has decreased by this year by -27.20 percent.

The index comprises the most capitalised and liquid companies in oil and gas marketing which include stocks like Ardova (-30.7percent), Conoil (-8.6percent), Eterna (-43.6percent), Japaul (+10percent), Mobil Oil (+17.2percent), MRS (-18.6percent), Oando (-42.1percent), Seplat (-41.3percent), and Total (-12.1percent).

The Guy Czartoryski-led team of research analysts at Coronation Merchant Bank said, “Nigerian equities have not been an inspiring story, and it is easy to show how poorly they have underperformed other equity indices around the world. All the same, it is worth digging into why this is so. Clearly, there must be a benchmark, in terms of profitability, which listed Nigerian companies fail to match.”

According to the analysts, “Strong stock price performances have been like hen’s teeth over the long term.

While in each year there are usually a few strong performances driven by corporate finance activity (takeovers, recapitalisations and the like), over the long term – and we chose the 10 years from 2010 to 2019 inclusive – stock performance has been hard to find. And there is something sinister going on”.

“We would expect a consistent 20.53percent per annum return-onequity (RoE) to be rewarded with roughly commensurate 20.53percent stock price appreciation. But many companies with high shareholder returns have failed to deliver stock price returns of the same order. This is because the market has been derating these stocks, over time paying lower and lower multiples for their earnings. We cite several bank stocks as examples”, research analysts at Coronation Merchant Bank said.

The NSE Banking Index which provides an investable benchmark to capture the performance of the banking sector has decreased this year by -23.75percent. The index comprises the most capitalised and liquid companies in banking like Access Bank which has decreased by -38percent, ETI (-33.1percent), FBN Holdings (-18.7percent), FCMB (+2.7percent), Fidelity Bank (-14.1percent) and GTBank (-27.6percent).

“The year 2020 has been a struggle. A global pandemic is in full swing and is poised to upend lives and livelihoods, obliterating any optimism for growth. In addition to disruption to social interaction, the outbreak is saddled with economic consequences in both the short and long run,” said Luke Ofojebe–led

team of equity research analysts at Lagos-based Vetiva in their June 30 note.

“Despite the early optimism of the first month of 2020, a steep decline in crude prices caused by the spread of the coronavirus led to a generally bearish first-half (H1). The selloffs from international and local investors dragged the bourse to a low of -23percent on April 7, before bargain hunting from mainly local investors pushed the All Share Index (ASI) to single-digit losses by May”, the analysts added.

Vetiva analysts further said: “While we expected a more attractive market for investors in 2020, the poor macro environment, currency devaluation and general uncertainty over crude prices have dampened investors’ view of the Nigerian market.

“In the second half of the year, we expect the recovery in equity prices seen in second-quarter (Q2) to continue -albeit at a slower pace with local investors continuing to drive majority of the activity on the bourse. We expect the market to close the year in mildly negative territory (-5percent), driven by the current economic outlook.”

Others and their returns this year are: Jaiz Bank (-9.7percent), Stanbic IBTC Holdings (-29.3percent), Sterling Bank (-37.2percent), UBA (-14percent), Union Bank (-10percent), Unity Bank (-29.7percent), Wema Bank (-31.1percent) and Zenith Bank (-15.3percent).

The Nigerian Stock Exchange (NSE) All Share Index (ASI) hit record lows of 24,287.66 points and N12.670 trillion as at Friday July 17 when compared to a high of 26,968.79 points and N13.019 trillion as at January 3, 2020.

Last week, the equities market maintained its bearish performance amidst weak investors confidence and persistent uncertainties in the global and domestic space. Stock investors booked about N11billion loss in the remote trading week ended Friday July 17 after sessions of bargain hunting and profit taking in notable counters.

“In the absence of any positive market catalyst, we expect the market to remain pressured in the near term, though the attractiveness of a number of fundamentally sound stocks may spur some buying interest”, said research analysts at Vetiva Securities.

All NSE sectoral indices closed

last trading week in red except that of NSE Industrial Goods which increased by +0.52 percent. This month alone, the stock market has decreased by -0.78 percent while this year’s negative return stood at - 9.52 percent.

Twenty-six (26) equities had appreciated in price last week, higher than 25 equities in the preceding week. Thirty-six (36) equities depreciated in price, higher than 33 equities in the preceding week, while 101 equities remained unchanged, lower than 105 equities recorded in the preceding trading week.

The Nigerian Stock Exchange

(NSE) All-Share Index and Market Capitalisation depreciated by 0.08 percent to close the review trading week at 24,287.66 points and N12.669trillion respectively as against week open high of 24,306.36 points and N12.680 trillion.

The market recorded total turnover of 1.016 billion shares worth N7.436 billion exchanged in 18,092 deals in contrast to a total of 901.542 million shares valued at N13.453 billion that exchanged hands the preceding week in 18,676 deals. The Financial Services industry (measured by volume) led the activity chart with 784.322 million shares valued at N3.305 billion traded in 10,592 deals

Storeis by Iheanyi Nwachukwu

T

he continued spread of Covid-19 and its negative impact on equities have been a source of worry to investors, making BusinessDay to focus on stocks the pandemic impacts most.

Except stocks of Telecoms, Healthcare and Agr iculture companies, the story of other equities have not been impressive to tell ranging from Banking to Industrial Good; Consumer Good to Oil & Gas; Conglomerates to Insurance; Construction/Real Estate to ICT; and Natural Resources to Services.

These sectors’ performances yearto-date (ytd) show they have truly not preserved capital for the shareholders who became worse off when the market reversed the gains recorded in the wake of the year.

The Consumer Good Index designed to provide an investable benchmark to capture the performance of the consumer goods sectors is the worst performing index on the Bourse decreasing by -31.55percent this year. The index comprises the most capitalized and liquid companies in food, beverage and tobacco.

While Vitafoam shares have yielded positive returns of +21.1percent this year, companies in this sector that have led the bear race to the red region and their return as at July 17 are: International Breweries (-60percent), Guinness Nigeria (-53.7percent), Nigerian Breweries (-49.2percent), and Unilever (-41.6percent).

Others are: Cadbury (-31.3percent), Nascon (-25.9percent), Nestle Nigeria

(-20.1percent), PZ (-23percent), Dangote Sugar (-11.8percent), Flourmills (-13.7percent), and Honeywell (-3percent).

“The performance of equity markets across the world was a tale of two quarters in H1-2020. This was as the outbreak of the COVID-19 pandemic in first-quarter (Q1) 2020 spurred a broad-based risk-off sentiment while the synchronised injections of fiscal and monetary stimulus spurred a risk-on sentiment later in Q2-2020”, Lagos-based United Capital research analysts said in their July 10 note.

According to the analysts, “Despite the recovery in Q2-2020, major equity indices in the global, emerging and frontier markets remain below the water, still wheezing from the negative impact of COVID-19-induced selloffs.”

The NSE Oil & Gas Index designed to provide an investable benchmark

Mixed sentiments trail equities

W

hile most research analysts foresee pressured Nigerian equities market in the near term due to the absence of positive catalysts that could drive a rally, others believe that the attractiveness of a number of fundamentally sound stocks trading at their new lows may trigger some buying interest.

“In our opinion, risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria and weak economic conditions. Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only

fundamentally justified stocks”, said research analysts at Cordros Capital.

The continue d spread of COVID-19 has left a negative imprint on the revenue profile of oil producing countries like Nigeria.

Likewise, the pandemic-induced lockdown in second quarter (Q2) helps in dampening investors’ expectations of increased earnings of listed companies that are expected to be released in the market soon.

“We expect the continued release of half-year (H1) results to spur reactions in the equity market, as investors strive to take profitable positions”, said United Capital research analysts. www.businessday.ng

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Thursday 23 July 2020

BUSINESS DAY

19

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Energy companies’ combined market capitalisation in first-quarter dip by $1 trillion olusola Bello

F

inancial Review of the global oil and natural gas industry for the first-quarter of 2020 has revealed that Brent crude oil daily average prices were 20 percent lower than in first quarter 2019 and averaged $51 per barrel.

This is even as the energy companies’ combined market capitalization in first-quarter 2020 decreased by more than $1 trillion year-over-year.

The analysis of the 102 companies contained in the financial review also showed that they increased their combined liquids production 3.7 percent in firstquarter 2020 from firstquarter 2019, while their natural gas production decreased 0.1 percent during the same period.

It was also noted that

the companies increased short-term and long-term borrowing in the first quarter, increasing debt by $55 billion in the quarter.

According to the financial analysis which was carried out by U.S. Energy Information Administra-

tion, the companies wrote down $92 billion worth of assets during the quarter, the most since the fourth quarter of 2015.

The geographical spread of the headquarters of the distribution of global oil and natural gas company

Nigeria’s LNG makes wave as demand for its product surges olusola Bello

A

bout 950,000 metric tons of liquefied natural gas (LNG) belonging to Nigeria LNG limited and valued at N354 billion carried by over 16 vessels have left in the last few months to various destinations.

Majority of the cargoes headed to the Sines Port in Portugal which has taken delivery of 141,000 cubic meters of the product.

According to Marine and Petroleum Nigeria, It is the first batch of the 2020 exports

by Nigeria as gas demand is on the increase in the ports of Spain, China, Portugal and Turkey. The country is also the fourth largest producer of LNG in the world.

To further boost export of the cargo this year, the Nigeria Liquefied Natural Gas Limited (NLNG) has appointed one of Japan’s leading banks and the core Olusola Bello, Team lead,

unit of Sumitomo Mitsui Financial Group – Sumitomo Mitsui Banking Corporation (SMBC) and Guaranty Trust Bank Plc, as financial advisers, for Train 7 project estimated at between $10 billion and $12 billion.

It was learnt that the Train 7 project would be financed partly from NLNG balance sheet and through third party corporate loans from export credit agencies and some key International and local banks.

The company also stated that the cost of the Train 7 project was estimation, saying that the actual cost would be established after the Engineering, Procurement and Construction (EPC) contracts signings were completed.

On completion, it would increase the company’s production capacity at its plant on Bonny Island, Finima, Rivers State from 22 million metric tons to 30 million metric tons per year.

Graphics: Joel Samson.

The companies however increased debt by $55 billion in first-quarter 2020, the most for any quarter in the 2015–20 period.

Upstream capital expenditures on a per-barrel basis have averaged about $13.50 per barrel of oil equivalent since 2017 but Upstream capital expenditures per barrel of oil equivalent were 19 percent of crude oil prices in first-quarter 2020 Crude oil price declines in the second quarter of 2020 indicate further declines in cash from operations and capital expenditures.

The long-term debt-toequity ratio for energy companies was 50 percent as of first-quarter 2020 and was 65 per cent for U.S. manufacturing companies.

The $92 billion in asset impairments were nearly 10 percent of the companies’ net present value of their proved reserves.

Agbami parties donate Science Laboratory to school Train 7 is expected to create over 12,000 jobs at construction and on completion will generate more revenue to the government in dividends, taxes and feed gas purchases and will further reduce the level of gas flaring in the country Sines Port had already taken delivery of 315,900 cubic meters of liquefied natural gas from Onne Port in the last six months.

Other vessels, according to the Nigerian Port Authority (NPA’s) shipping data, berthed in China, Spain and United States include LNG Lokoja in the last few months with, 66,000 tons; Maran Gas Olympias, 70,000tons; LNG Cross River, 63tons; LNG Borno, 66,000 tons; LNG Bayelsa, 63,000 tonnes; Castillo De Caldelas, 70000tons; Valencia Knutsen, 70,000tons; LNG Bonny II, 72,000tos; Catalunya Spirit, 65,000 tons; LNG Finima II, 72,000 tons and LNG River Niger, 63,000 tons.

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is across United States of America, Europe, Canada and such other countries like Argentina, Brazil, Chile, China, Colombia, and Russia. But with no mention of any country in Africa.

Liquids and natural gas production was 39 million

barrels per day and 21 million barrels of oil equivalent per day, respectively, in first-quarter 2020.

In first-quarter 2020, global liquids production increased 3.7 percent year over-year and natural gas production decreased 0.1 percent according to the report. Crude oil prices during that period were 20 percent lower than in first-quarter 2019, and natural gas prices decreased 35percent during the same period.

Cash from operations in during the period under review was $67 billion, 25 per cent lower than in firstquarter 2019, while capital expenditure was $67 billion, which was 9 percent lower than in first-quarter 2019 Nearly 50 percent of companies had positive free cash flow, and 46 percent of them reported positive upstream earnings in firstquarter 2020.

T

h e A kw a I b o m State Governor, Udom Gabriel Emmanuel has applauded stakeholders in Agbami project for their donation of a science laboratory complex to Senior Science College, Ndon Eyo, in Onna Local Government Area of the State. He made the commendation during the handover of the educational facility to the State government and assured that the donation will be put to good use.

The Governor, who was represented by the Deputy Governor, Moses Frank Ekpo, thanked the Agbami parties for the gesture and emphasized that the facility will contribute to the development of education in the State.

Commenting on the donation, Esimaje Brikinn, general manager, Policy, Government and Public Affairs Chevron Nigeria Limited, explained that the facility, consisting of a wellequipped Physics, Chemistry and Biology laboratories,

is designed to improve the study and learning of science subjects in Akwa-Ibom state.

He highlighted that the Agbami parties have built, equipped and donated 39 Science Laboratory Complexes across the country in addition to eight conventional and hybrid libraries plus the Agbami Medical and Engineering Professionals Scholarship (AMEPS) to boost education development in Nigeria.

“Since inception of the AMEPS in 2009, over 16,547 students from all the states of Nigeria have benefitted from the scholarship programme, out of which 715 students have graduated with first class degrees,” he noted. He added that about 1,489 students from AkwaIbom State have benefited from the Agbami scholarship programme.

Esimaje further stated that beyond the education sector, the Agbami parties have also made substantial investments in health infrastructure, especially in the management of tu-

Email: energyreport@businessdayonline.com, Tel: +234-8023020011

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berculosis disease through the building of 28 standard chest clinics with consulting rooms; fully equipped laboratories with mobile X-ray units and gene expert machines, in health institutions across the country. “The parties have also donated nine mother and childcare centers and one medical diagnostics laboratory in some States in Nigeria”, he stated.

Other dignitaries from the State included Dr. Dominic Ukpong, the Commissioner for Health, Prof.

Nse Udo Essien, the Commissioner for Education, Charles Udoh, the Commissioner for Information & Strategy.

The Agbami parties includes, Star Deepwater Petroleum Limited (a Chevron company and operator of the Agbami unit) and its parties in the Agbami field, Famfa Oil Limited, Nigerian National Petroleum Corporation (NNPC), Equinor Nigeria Energy Company Limited, and Prime 127 Nigeria Limited.

20

Thursday 23 July 2020

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

NBA Elections 2020: Aspirants express concern over potential election manipulation

NTERVIEW with SAMAA HARIDI and NATHAN SEARLE As lawyers, we have also had to innovate to navigate the “new normal” - Samaa Haridi

…Olumide Akpata Writes Electoral Committee …Engages IT Security Expert to Conduct vulnerability assessment of NBA Portal LB CORRESPONDENTS s the national elections of the Nigerian Bar Association (NBA) draw close, some candidates in the elections, have openly expressed their concern over the administrative and technical handling of the voters’ register and the e-voting platforms respectively, which according them may result in the disenfranchisement of voters and the possible manipulation of the forthcoming elections.

In a letter dated July 20, 2020 to the Electoral Committee of the Nigerian Bar Association (ECNBA) frontline candidate for the office of the President of the association, Olumide Akpata highlighted critical issues identified by users of the portal, as well as an IT security firm, whose services Akpata had engaged to carry out investigations into the integrity of the portal. Some of these issues experienced by members include, a voter’s list flawed with anomalies, including duplicity of names and the inclusion of nonpersons, among other things.

The letter read in part: “Even more distressing is the fact that the NBA portal on which the verification exercise is being conducted appears not to be secure and can be easily manipulated.

A couple of days ago, I got a particularly alarming complaint from a supporter: “… they have been messing my portal up, today my branch will change and the next, my date of birth or my state of origin. Someone has access to the back end to mess up…

You don’t get email when it is touched from the back end.” Since then, I have read similar complaints on various social media platforms”.

Akpata stated that, refusing to take the complaints of several lawyers at face value, he engaged the services of an IT security firm to carry out investigation into the integrity of the portal. He enclosed the report in his letter, which showed, amongst other things, that the portal is porous and has several vulnerabilities which mischief makers can exploit for or against a candidate.

He drew the attention of the ECNBA to the fact that the final voter’s list “was

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T Olumide Akpata

Samaa Haridi: Although the COVID-19 pandemic has had varying degrees of effect depending on the region, one commonality with regards to dispute resolution globally is that because of the restrictions on movement and physical distancing rules, parties and decision facilitators and makers (mediators, arbitrators and judges) have had to consider holding virtual hearings. Virtual hearings are not a novelty, and prior to the pandemic, courts and arbitral tribunals were to some extent familiar with virtual measures, including electronic filling, virtual taking of evidence, and virtual hearings, although they were not common place.

Prior to the pandemic, these virtual measures were adopted based on convenience and efficiency as opposed to necessity which is the current situation.

Dele Adesina, SAN, Aspirant

Tawo Tawo SAN, Chairman, ECNBA

flawed with anomalies, including duplicity of names, inclusion of non-persons, such as the infamous “Opening Balance” and failure to include names of people who had paid their Bar Practicing Fees and Branch dues as at March 31 2020. The letter read in part “It also raises the question of why and how such obvious duplications were even possible. There is even the now notorious and likely non-existent “Opening Balance” whose year of call is, unsurprisingly, not indicated. One wonders how that entry got into the voters’ list if, indeed, the list exclusively contains names of members who paid their Bar Practising Fees (BPF) and Branch Dues no later than 31 March 2020” Akpata further opined the opaque nature of disclosure by the ECNBA of the technology and modalities for the elections.

He said, “We have not seen any demonstration or test-run of the proposed technology and are therefore not

To be continued next week

INSIDE NBA Section on Business Law Conference Raises the Bar

he global spread of COVID-19 is impacting all industries in all directions. In your opinion, how has the legal system been affected by this pandemic?

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Samaa Haridi

Nathan Searle

they do business. How is the legal industry responding to this unforeseen situation?

offer a way for the wheels of justice to keep turning whilst safeguarding the health of each stakeholder. As the only option available to parties, counsel, arbitrators, and witnesses on lockdown, virtual hearings have allowed for arbitrations to proceed, where appropriate. Not every dispute can effectively be heard in a virtual setting, and it is important to balance the principle of due process with that of equality between the parties to carefully balance the exigencies at hand to decide the best way to proceed with every given dispute.

Nathan Searle: More generally, virtual hearings present the advantage of reducing global travel and the associated time and costs.

Given the very nature of international arbitration – with parties, counsel, witnesses, and tribunals often spread around the world – the use of technology to conduct entirely on-line virtual hearings can result in tremendous savings and efficiencies.

Virtual hearings also lead to greener arbitrations as they decrease carbon emissions and use of paper, which have positive impacts on the environment.

Nathan Searle: The pandemic has indeed caused great disruptions, and businesses have had to adapt to the new reality. Law firms are no exception to that.

As lawyers, we have also had to innovate to navigate the “new normal” and to continue supporting and advising our clients during what has been an unprecedented crisis.

Nathan Searle: The legal industry continues to innovate and respond as this unprecedented crisis has continued to unfold. Given the restrictions on travel and movements, law firms have had to find ways to stay connected to their clients, and keep them informed of the quickly changing legal environment we all operate in. The numerous platforms allowing virtual meetings and webinars have been tremendous in keeping us close to our colleagues and clients.

Samaa Haridi: Events and meetings going virtual has allowed us the opportunity to connect even more as one global international arbitration team. During this pandemic, the Hogan Lovells International Arbitration team has stayed connected and collaborated extensively. We have managed to turn this unprecedented crisis into an opportunity to work together as one seamless team from every corner of the globe while still being in the comfort of our own homes.

The COVID-19 pandemic has prompted all stakeholders (including businesses and institutions) to innovate and make significant changes to the ways

In your opinion, what are the advantages of virtual hearings?

Samaa Haridi: The main advantage of virtual hearings in the current situation we find ourselves in is that they

Employment and Labour Law practitioners evaluate businesses compliance to ILO’s Decent Work Agenda

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What steps have various legal communities taken to support participants in dealing with this new reality?

Samaa Haridi: With re-

gards to virtual hearings, the Hogan Lovells’ International Arbitration team put together a Protocol for the use of technology in virtual international arbitration hearings (HL Protocol). The HL Protocol was designed as a general guidance on possible best practices in conducting virtual hearings to help ensure a smooth arbitral process with minimal technical issues. The HL Protocol is highly relevant to the current times we live in, and may be used after we return to some expected level of normalcy when virtual hearings are not the only option available to the parties. The Africa Arbitration Academy also issued a Protocol on virtual hearings in Africa. I was a member of the technical committee who reviewed the Africa Protocol, which is contextspecific and takes into account the specific challenges and circumstances that may arise in relation to virtual hearings within Africa.

Nathan Searle: In the UK, there has been issuance of practice directions to provide guidance as to the conduct of remote hearings.

Whilst most court buildings remain open, the objective is to undertake as many hearings as possible remotely.

Physical hearings are to only take place if a remote hearing is not possible and suitable arrangements can be made to ensure safety.

There has also been an improvement in the court’s technological infrastructure to support virtual hearings.

However, there is recognition that there are some types of case in which the interests of justice require an in-person hearing such that these must be delayed until such a hearing can take place safely. Regarding arbitration, the London Court of International Arbitration

Continues on page 23

Photos from the 14th Annual Business Law e-Conference

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Thursday 23 July 2020

BUSINESS DAY

INDUSTRYFILE

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Highlights of the 14Th Annual Business Law Conference

NBA Section on Business Law Conference Raises the Bar

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he 14th annual conference and 1st e-conference of the Nigerian Bar Association, Section on Business Law (NBA-SBL) themed ‘Business Unusual: Digital Acceleration for Growth in a New World’ met with ecstatic commendations from participants. The 2-day conference which began on 16th July 2020 opened with remarks by the Conference Planning Committee (CPC) Chairman – Ozofu ‘Latunde Ogiemudia and was declared opened by the Hon. Chief Justice of Nigeria.

Remarks were also given by Seni Adio, SAN, Chairman NBASBL; Paul Usoro, SAN President, NBA with goodwill messages by H.E Babajide Sanwo-Olu, H.E Seyi Makinde and keynote address by Senator William “Mo” Cowan, President, Global Government Affairs and Policy GAP) and Developed Markets for GE. The conference had a total of 16 sessions characterised by three plenary sessions, seven breakout sessions, a wellness session, an update on the NBA-SBL initiatives, a fireside chat, debate, speed networking sessions as well as an award segment all led by consummate thought-leaders and professionals.

Below are highlights of the conference sessions: The first plenary session, Disrupting the Status Quo: Charting the Path for an Alliance, session involved a thorough discussion between entrepreneurs and policy makers on forging a new alliance under which Nigerian businesses can flourish considering the global economic crisis presented by COVID-19 pandemic. It was noted that the government cannot do everything; public-private partnership must be tapped into, thus there’s need for clearly outlined development and dissemination plan. Nigeria has to create enabling environment to attract investment and be able to favorably complete with Egypt, Ghana and Ethiopia.

During the second session, themed, “Business Unusual: Continuity in times of Crisis lawyers were advised to proactively provide services during this crisis even if it’s less profitable, as they and their firms would benefit in the long run; help corporate organisations by embracing literal thinking including putting flexibility into legal documentations; deepen partnerships with international allies to bring home the needed competencies; and should help government reform policies and regulations on wrongful trading to help the citizens.

Fireside Chat The fireside chat themed, Changes on the Horizon: The Future of Company Law in Nigeria addressed changes in company law practice in Nigeria following changing made by the Corporate Affairs Commission (CAC). It was noted that Vendors have been invited by the commission long time ago, to put in place a system and structure to ease a better way of registration and the CAC has

Seni Adio, SAN Chairman, Babajide Sanwo-Olu Lagos NBA Section on Business State Governor giving his Law, giving the opening goodwill message. remarks.

taken steps to harmonize the ease of doing business through, as the bill has been circulated to relevant agencies for input. Once adopted this will result in new, beneficial legal arrangements and frame works.

Banking through the crisis The Session, ‘Banking through the crisis’ explored the how the banking sector and fintech solutions can navigate through the unprecedented times. It also accessed how banks manage to service their customers in the pandemic as well as outlook of things post covid-19. It noted that the fintech industry experienced a deep in May, and recovery in June and is presently stable, thus the industry is taking a positive view.

In Fossilized: End of the Oil and Gas Industry as we know it?, panelists observed that the geopolitical play of energy will change, social inclusiveness & sustainability must be present going forward.

AFCFTA: Dead or Alive?

In the session, themed, AFCFTA: Dead or Alive?, it was noted that trade cannot go on when the instrument that facilitates trade has been disrupted. It would have been illogical to kick start trade in July, 2020 when the mechanisms that facilitate trade process have been paralyzed.

The pandemic has provided African nations with some time to think around trade, workability of institutions and regulations, to ensure readiness. Priority areas to look in

Seni Adio, SAN, Chairman NBA-SBL fielding questions from journalists at the controlled site of the conference.

for trade were business and professional services; communication, transport and finance.

Dr. Adeoye Adefulu showcased some of the NBA-SBL’s initiatives & accomplishments since the last conference held. He expounded on the section’s flagship initiatives - the “Business Law Competency Framework” and the “Smarter Regulation Framework.”

The Competency framework was commissioned by the past chair of the SBL, Olumide Akpata and Launched by current chair – Seni Adio, is concerned with the general and technical competencies of lawyers, particularly their behaviour, skills and knowledge required for lawyers to be successful in their www.businessday.ng

Ozofu ‘Latunde Ogiemudia, Chairperson, 2020 Conference Planning Committee

areas of specialization, while the Regulations framework addresses 11 questions on hown to make regulations better in Nigeria including “Are the measures transparent and objective?”, “Are the Penalties commensurate with offence?” and “Is it Consistent with other regulations issued by other regulatory bodies?”

Zooming Ahead Zooming Ahead: The Legal Industry post COVID-19, focused on digital transformation for the legal industry necessary to produce a swift, comprehensive, top-to-bottom re-imagination of legal services including, for instance, how lawyers commence court actions and close transactions. This panelist stated that to secure a level playing field for all employers in legal industries, auditing must be carried out to know the challenges the workers are facing as this will help the legal practitioners to work effectively and not to be left behind, and also inform the basis for hiring workers.

There might be downsizing of legal staff strength through the emergence of artificial intelligence and technology improvement, but human interaction and intervention will always be required. This pandemic might lead to saving more on the cost of infrastructure and said savings would help to pay workers more and also spend to train them.

Technology companies need to do more to ensure absolute privacy during court hearing.

In The Price of a Cure: Patent Mechanics in a Crisis, panelists acknowledged pharmaceutical companies’ race to develop a vaccine and potentially secure a patent for it. This session addressed concerns about affordable and universal access to vaccines if they become available and whether or not the existing legal framework in Nigeria is adequate as well as what changes may be required.

They noted that the government needs to gather data to ensure that any developed vaccine is efficacious for the treatment of the people; Nigeria needs to find a way to participate in the ongoing activities in the world, in the development of; at least provide opportunity for clinical trials; legal framework must be reviewed, as it currently takes four (4) years to compulsory licensing in Nigeria. Laws should be adapted properly; and things must be put in place to ensure when the vaccine is ready, it will be available to Nigerians at relatively low cost. e-Medicine: The Future of Technology in Healthcare The seventh breakout session, on eMedicine: The Future of Technology in Healthcare, considered questions such as could digital solutions help relieve pressure from the public health system? What innovations are likely to be implemented in the wake of COVID-19? How do we address issues of cybersecurity in healthcare data? How do we handle an overburdened health system?

Panellists noted that issues surrounding telemedicine hinge on trust and confidentiality of data because of quacks in the hospitals and the lack of regulated technology data policy in Nigeria. There is still dearth in policies and clear action in place, especially in EMR and telemedicine, as a result, companies have issues with cross borders data transfer. Stakeholders and regulatory bodies should assist with the gaps in data protection policy in Nigeria especially, in healthcare technology.

During the wellbeing session, Every Mind Matters: Emotional Wellbeing during a Crisis it was noted that a 2017 statistics showed

Dr Adeoye Adefulu, Secretary, NBASBL speaking about SBL initiatives and accomplishments in the last two years.

In Sunk Costs: COVID-19 and the Maritime Industry, the panelists explored the challenges faced by the shipping industry. Despite being at the forefront of international trade, the industry is facing large scale disruptions - the scale of which has not been seen in decades. The FG declared the port and shipping services as essential duties. Hence, the ports were not shutdown during the lockdown. The port terminals were faced with huge sunk costs – 700 million which was spent on health and housing of workers to make sure they were available to work. It was noted that automation needs to be incorporated into the value chain.

The Price of a Cure

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Chief Justice of Nigeria, Ibrahim Tanko Muhammad CFR, flanked by Gov. Babajide Sanwo-Olu, Keynote Speaker, US Senator William “Mo” Cowan, and Paul Usoro, SAN, President of the Nigerian Bar Association

that 1 in 5 Nigerians suffer from depression and during the current pandemic, it has increased to 2 out of 5. Most law firms do not have provision for mental health, an enabling environment should be created for people to discuss the issue. It was recommended that organisations should start looking at the EAP, sign up for it and take @Businessdayng

care of their employees’ general wellbeing.

During the debate featuring young lawyers of the NBA-SBL, the debaters dissected four major topics relevant to the present times: Is digital technology an aid or inhibitor of legal practice?; Are 9-5 work patterns still relevant?; Are Nigerian-trained lawyers well-equipped for practice in the Digital Age?; Pay cuts in a COVID-era: a necessary sacrifice by all, or an unfair burden on already under-paid lawyers?

TARE YERI STAR AWARD The Tare Yeri Star Award for Selfless Service to the Nigerian Bar Association Section on Business Law (NBASBL) went to a deserving young lawyer, Nnenna Udoye, who according to the Chairman, Seni Adio, SAN has served the Section tirelessy and

The Chairman of the NBA-SBL, Seni Adio, SAN (L) and Ozofu Ogiemudia, 2020 Conference Chair; (R) presenting the Tari Yare Star Award to the 2020 recipient, Nnenna Udoye.

diligently as a Programmes Officer.

The award which was launched in 2017 in honour of Late Ms Tare Yeri, a vibrant, selfless and dedicated member of the Conference Planning Committee, who passed away on Saturday, 22nd April 2017 (a time when she was deeply involved in the planning of the 2017 Conference).

Tare, who was a long-standing and extremely committed member of the NBA-SBL, played very critical roles in the planning of all ten editions of the NBA-SBL Annual Business Law Conference. She also served in various capacities, under every Council of the Section since its inception, and contributed immensely to its growth and development of the section annual conferences.

The Award which comes with a prize of N500,000.00, celebrates members of the Annual Business Law Conference Planning Committee that go above and beyond in advancing NBA-SBL’s capacity to raise the level of business law practice in Nigeria. Previous recipients are Yetunde Okojie, Theodora KioLawson and Osose Aziba.

CLOSING The Vote of Thanks was delivered by the CPC Chair, Ozofu ‘Latunde Ogiemudia, and participants were invited to stay on for the afterparty!

Comments from participants on the e-platform used included “Best NBA-SBL Conference ever!” with even aspiring wigs noting that the conference has strengthened their desires to be members of the bar and raised in the future eminence of the Nigerian Bar!

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Thursday 23 July 2020

BUSINESS DAY

PHOTO File

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LegalBusiness

Photos from the 14th Annual Business Law e-Conference

L-R: Ozofu Ogiemudia, 2020 Conference Chair, Theodora Kio-Lawson, Chair, Media & Publicity; Adeola Ajayi, Secretary, CPC, Christine Sijuwade, Chair, Venue & Accommodation.

Christine Sijuwade, Chair, Ozofu Ogiemudia, Chair, Venue & Accommodation. 2020 Conference Planning Committee (CPC).

L-R, Olubukola Olabiyi, Immediate past Chair of the NBASBL Young Lawyers’ Forum, Oludamola Adewumi, Adeola Ajayi, Christine Sijuwade; Seni Adio, SAN, Chairman, NBASBL; Ozofu Ogiemudia, Damilola Wright and Tosin Ajayi, both Conference Coordinators.

Moderators of the debate session, Damilola Wright (L) and Tosin Ajayi.

Onyinye Ukegbu, Conference Volunteer.

Media Coverage of the Live event

Adeola Ajayi, Secretary, CPC

Theodora Kio-Lawson, Chair, Dr Adeoye Adefulu (L), Secretary, NBA-SBL and Endurance Uhumuavbi, Administrative Media & Publicity.

Officer, NBA-SBL

INDUSTRY File

Employment and Labour Law practitioners evaluate businesses compliance to ILO’s Decent Work Agenda STEPHEN ONYEKWELU

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articipants at the BD Legal Business and Nigerian Bar Association Section on Business Law (NBA-SBL) Employment, Labour and Industrial Relations (ELIR) Digital Conversations, Monday evaluated how businesses in Nigeria are complying with the International Labour Organisation’s Decent Work Agenda in a webinar hosted by BusinessDay. Decent work is a broad term that captures equal employment opportunity, working conditions, social security, social dialogue and economic indicators meant to enhance the wellbeing of employees. According to the International Labour Organisation, Decent Work is central to sustainable poverty reduction and is a means for achieving equitable, inclusive and sustainable development.

The ILO Declaration on Social Justice for a Fair Globalisation recommends the establishment of appropriate indicators to monitor the progress made in the implementation of the ILO Decent Work Agenda.

In Nigeria however, the descent work agenda is more of a dream for many. In a country

where the unemployment rate is conservatively placed at 23 percent by the National Bureau of Statistics but estimated to be well over 40 percent by human resource management experts, demand for decent work from employers is a tall order.

According to Nneka Idam, human resource partner, Africa and Emerging Markets at the Association of Chartered Certified Accountants modern slavery is happening and there is a perpetuation of the cycle of poverty.

“High unemployment rate has guaranteed indignities in www.businessday.ng

some work environment. Many employers are paying way below the minimum wage and children have to work to augment the family income. They will have no time to go to school and this perpetuates the cycle of poverty,” Idam said at the webinar. This hinders the promotion of ILO’s Decent Work Agenda in Nigeria.

Nigeria has the legislative structure for decent work said Seni Adio, a Senior Advocate of Nigeria and chairman of the NBA-SBL. Although he strongly suggested that requesting for marital status and age of applicants seeking to take up roles in

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any company was discriminatory.

Not many Nigerians have reported experiences of been discriminated against based on gender, age or ethnicity of at their work environments however, such experiences are not uncommon in some instances.

Chinwe Odigboegwu, Senior Commercial Legal Manager at Guinness Nigeria Plc (A Diageo Company), said she has never been unfairly treated.

“I have been treated fairly from personal experience but from a general point of view, there are different experiences.

Discriminations based on age, marital status and other characteristics abound,” she said.

Anthony Nwaochei, managing partner at the Law Crest LLP argued that the objective of the ILO Decent Work Agenda is none other than to deliver a guideline for distributing the fruits of progress in a business or work environment. He insisted employers need a shift in mindset. “Every worker should get a just share of commensurate to their effort in making a business or an organisation prosperous.

This can comes in the form of trust schemes or bonuses. Everybody is a stakeholder.”

This means that living wages, @Businessdayng

transport and housing allowances need to be provided. This is tied to the economic performance of countries. Nwaochei said the time has passed when seniors in the legal profession thought of juniors out of law schools, pupils joining law firms rather than stakeholders in the practice.

Many other imbalances lead to indecencies in a work environment. Positive discrimination and affirmation are some of the policies used in redressing these imbalances. Although these have their drawbacks too because affirmative action in South Africa after Apartheid favour urban blacks while rural blacks still suffered. Affirmative action sometimes also puts unseasoned people in positions of authority, which in turn negatively impacts organisational performance.

“An inclusive workplace should take disability access seriously. For instance, sign language in the courts and the translation of documents into braille are critical.

Women can be mothers and career people at the same time,” said Olumide Akpata, partner Mergers & Acquisitions, Immigration & Employment Corporate & Commercial at Templars, a Nigerian Law Firm.

Thursday 23 July 2020

BUSINESS DAY

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NTERVIEW with SAMAA HARIDI and NATHAN SEARLE As lawyers, we have also had to innovate to navigate the “new normal” Continued from page 21 (LCIA) rules allow hearings to take place by video or telephone, and LCIA issued a guidance stating that it might be appropriate for certain hearings to be held by telephone or video conference rather than in person. Similarly, in Nigeria, the National Judicial Council issued guidelines for court sittings and related matters during the pandemic. These guidelines encourage the courts to insist on virtual court sittings for matters that do not require the taking of evidence.

The Nigerian National Judicial Council guidelines further state that when a matter does require the taking of evidence that such matters should not be called up by the courts at this time, unless they are extremely urgent and time-bound.

There are also provisions related to electronic filling, the fee payments, social distancing, face masks, and temperature monitoring within the court premises.

How do we ensure procedural fairness in the context of a virtual hearing?

Nathan Searle: To ensure procedural fairness, we need to ensure that parties receive equal treatment.

This means considering the timezones and locations from which the various parties, witnesses and Tribunal are joining. For example, in some cases fairness may require shorter hearing times each day in order to have the hearing conducted during a time period that is reasonable for all stakeholders involved. It is also critical to allow adequate time to allow all parties to deal with and resolve technical issues. We are also finding that virtual hearings can become tiring quickly opposed to face to face hearing and it can be more difficult for members of the legal team and client to give instructions to the lead advocate.

Increasing the frequency and number of breaks is one way to address these potential challenges.

Samaa Haridi: Focusing specifically on the issue of witnesses and evidence, it is paramount that tribunals remind parties and counsel prior to commencing virtual hearings that witnesses should not confer with counsel or party representatives while giving evidence. We specifically address this in our HL Protocol. As outlined in the HL Protocol, tribunals should clarify and affirm in oath that only authorised persons are in the room, that witnesses are not receiving any assistance, and that the witness is not aware of what documents will be shown to them by opposing counsel.

Is there anything inherent in communicating virtually which would cause a due process concern in virtual hearings?

Nathan Searle: Where one party has repeated technical issues and

can offer their venues for conducting virtual hearings. The technological and connection services offered by arbitral institutions or centres are often reliable and can provide the necessary equipment, software, high-quality internet connection, and minimal chance of signal interruptions”.

Do you envision virtual hearings becoming the norm?

the other does not, it can break up the flow of submissions. Thus a transcript of the proceedings can be helpful to capture what is said and ensure there is comprehensive written record. Also, as the majority of our communication is through body language, it can be more difficult, depending on the quality of the virtual hearing platform being used, to pick up visual cues.

Samaa Haridi: Beyond due process, communicating virtually may also raise difficulties as maintaining eye contact and observing body language and assessing a witness’s credibility can be more difficult. There is something lost in translation in terms of advocacy when a hearing happens virtually, and there is no answer on how to recoup that.

What are the possible best practices in conducting virtual hearings to help ensure a smooth arbitral process with minimal technical issues?

Samaa Haridi: The HL Protocol outlines certain best practices that should be considered in virtual proceedings, including: Time zones: Where participants in the hearing are based in different time zones, preference should be given to individuals and witnesses with special circumstances such as health, family concerns, etc. No party should be expected to partake in a hearing at an unreasonable time based on their individual time zones, and the Tribunal will determine the proper timing and should allow at least, an eight-hour gap between the end of one session and the start of another.

Platform & Security: The chosen video-conferencing platform should be password-protected and all other security features of the platform should be utilized to ensure that the platform is secure.

Enforcement risk: Prior to the hearing, the parties should, to the extent possible, sign a joint agreement that videoconferencing constitutes an acceptable means of communication permitted by the applicable rules, the parties have www.businessday.ng

agreed to the use of videoconferencing as the means for conducting the arbitral hearing and no party will seek to resist the enforcement of any resultant arbitral award on the basis that the arbitral hearing was not held in person. This will not entirely protect against a risk of set aside, but it is a prudent measure to adopt in cases where all parties agree to proceed with a virtual hearing.

Witnesses: When providing witness testimony, counsel and the witness, the witness should be visible to counsel and counsel should be visible to the witness at all times during the examination.

The witness should not use a “virtual background” and the remote venue from which they are testifying should be visible.

Document sharing: The parties may agree to utilize a cloudbased storage service to host all documents introduced during the course of the proceedings. Any sensitive electronic documents should be password-protected. If third-party cloud storage is used to transfer documents, the parties should take adequate steps to ensure that such storage systems are password-protected and secure.

It is advisable to use a document sharing platform that can be managed by a technology consultant during the duration of the hearing, which permits all viewers to simultaneously view the document/ passage being discussed.

What challenges do you envision in the adoption of virtual hearings?

Nathan Searle: One challenge that may not seem obvious at first is creating the sense and feel of a courtroom with minimum distractions for all participants. This can be especially so where lockdown measures mean that are people are confined to their homes, so that an advocate or witness may be joining from their kitchen table or a sofa in their living room. If lockdown measures mean that schools are closed, those attending the virtual hearing may be doing so from a space shared with others and potentially with background noise from children and/or pets.

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Samaa Haridi: Regarding time zones, sometimes it is just impossible to find a convenient time for instance, when participants are located in two different continents such as Asia and America. However, prime consideration when determining hearing time should be given to the testifying witnesses because they have less familiarity with the proceedings.

Taking into account the specific challenges and circumstances that may arise in relation to remote hearings in Africa, including access to reliable technology, what recommendations do you propose?

Samaa Haridi: The Africa Arbitration Academy Protocol on Virtual Hearings covers some Africa-focused guidance that can be of assistance in carrying out virtual hearings in Africa. For instance, one major issue that is prevalent in Africa is access to high-end technology, software, and equipment, as well as strong internet connection. The African Arbitration Academy Protocol in response to this states that “where any of the parties do not have access to the technology, software, and equipment to be used for virtual hearings, parties may solicit arbitral institutions or other centres in Africa, suitable to the parties that

Samaa Haridi: There are various criteria to consider when deciding to adopt a virtual hearing, and one of the major considerations is how fact intensive the case is and how much fact evidence will be given during the hearing. The impact of evidence may differ in a physical hearing versus in front of the computer, particularly where a case is heavily reliant on testimony, and the credibility of a witness is key to the case. Thus while there will be an increased use of virtual hearings long after the pandemic because we are getting more used to and accustomed to these virtual platforms, I do not think it is the end of in-person hearings because sometimes there is just no substitute for in-person hearings.

Nathan Searle: As Samaa said, there would definitely be a greater use of full or partial virtual hearings even after COVID-19, however, in specific cases there are benefits to having the tribunal, counsel and key witnesses in the same room.

Times of crisis have historically also been opportunities for change. Are you optimistic that as we emerge from this, it could be a chance to create an even more efficient legal system?

Nathan Searle: The pandemic has definitely sped up the level of innovation, adaptation, and technological advancement in the legal sector, and I am positive that we will emerge from this pandemic with a more technologically advanced, innovative, and efficient legal system for resolving disputes.

PROFILES SAMAA HARIDI is a civil and common law-trained, trilingual lawyer who represents corporations and financial institutions from all over the world in international commercial and investment arbitration, under the rules of all major arbitral institutions. She also frequently sits as an arbitrator in international disputes. Samaa has been ranked by clients and peers in Chambers USA and Chambers Global for International Arbitration.

NATHAN SEARLE is a partner in Hogan Lovells’s international arbitration group, acting for large multinationals in complex and high-value international arbitrations and cross-border disputes. He has extensive experience in African related disputes and coordinates the firm’s disputes practice in the region. Nathan also has experience in other emerging markets including Asia, India, Russia and the CIS. He is currently appointed to the LCIA African Users Council as councillor, a co-chair of the LCIA’s Young International Arbitration Group (YIAG) and is a member of the Advisory Board for the Association of Young Arbitrators (AYA). @Businessdayng

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Thursday 23 July 2020

BUSINESS DAY

BUSINESS TRAVEL Traveller survey reveals COVID-19 concerns in aviation sector Stories by IFEOMA OKEKE

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he International Air Transport Association (IATA) released public opinion research showing the willingness to travel being tempered by concerns over the risks of catching COVID-19 during air travel. The industry’s re-start plans address passenger’s main concerns.

Concerns for travel during COVID-19 Travellers are taking precautions to protect themselves from COVID-19 with 77 percent saying that they are washing their hands more frequently, 71 percent avoiding large meetings and 67 percent having worn a facemask in public.

Some 58 percent of those surveyed said that they have avoided air travel, with 33 percent suggesting that they will avoid travel in future as a continued measure to reduce the risk of catching COVID-19.

Travellers identified their top three concerns as follows: At the Airport Being in a crowded bus/train on the way to the aircraft (59 percent) Queuing at check-in/security/ border control or boarding (42 percent) Using airport restrooms/toilet facilities (38 percent) On board aircraft Sitting next to someone who might be infected (65 percent) Using restrooms/toilet facilities (42 percent) Breathing the air on the plane (37 percent) When asked to rank the top three measures that would make them feel safer, 37 percent cited COVID-19 screening at departure airports, 34 percent agreed with mandatory wearing of facemasks and 33 percent noted social distancing measures on aircraft.

Passengers themselves displayed a willingness to play a role in keeping flying safe by:

Undergoing temperature checks (43 percent), wearing a mask during travel (42 percent), checking-in online to minimize interactions at the airport (40 percent), taking a COVID-19 test prior to travel (39 percent) and sanitizing their seating area (38 percent).

“People are clearly concerned about COVID-19 when traveling.

But they are also reassured by the practical measures being introduced by governments and the industry under the Take-off guidance developed by the International Civil Aviation Organization (ICAO).

“These include mask-wearing, the introduction of contactless technology in travel processes and screening measures. This tells us that we are on the right track to restoring confidence in travel. But it will take time. To have maximum effect, it is critical that governments deploy these measures globally,” Alexandre de Juniac, IATA’s Director General and CEO said.

The survey also pointed to some key issues in restoring confidence where the industry will need to communicate the facts more effectively. Travellers’ top on board concerns include: Cabin air quality: Travellers have not made up their minds about cabin air quality. While 57 percent of travellers believed that air quality is dangerous, 55 percent also responded that they under-

stood that it was as clean as the air in a hospital operating theatre.

The quality of air in modern aircraft is, in fact, far better than most other enclosed environments. It is exchanged with fresh air every 2-3 minutes, whereas the air in most office buildings is exchanged 2-3 times per hour. Moreover, High Efficiency Particulate Air (HEPA) filters capture well over 99.999 percent of germs, including the Coronavirus.

Social distancing: Governments advise to wear a mask (or face covering) when social distancing is not possible, as is the case with public transport. This aligns with the expert ICAO Take-off guidance.

Additionally, while passengers are sitting in close proximity on board, the cabin air flow is from ceiling to floor. This limits the potential spread of viruses or germs backwards or forwards in the cabin.

There are several other natural barriers to the transmission of the virus on board, including the forward orientation of passengers (limiting face-to-face interaction), seatbacks that limit transmission from row-torow, and the limited movement of passengers in the cabin.

There is no requirement for social distancing measures on board the aircraft from highly respected aviation authorities such as the US Federal Aviation Administration, the European Union Aviation Safety

Agency or ICAO. “It is no secret that passengers have concerns about the risk of transmission onboard. They should be reassured by the many built-in anti-virus features of the air flow system and forward-facing seating arrangements.

“On top of this, screening before flight and facial coverings are among the extra layers of protection that are being implemented by industry and governments on the advice of ICAO and the World Health Organization. No environment is risk free, but few environments are as controlled as the aircraft cabin. And we need to make sure that travellers understand that,” de Juniac said.

No quick solution While nearly half of those surveyed (45 percent) indicated that they would return to travel within a few months of the pandemic subsiding, this is a significant drop from the 61 percent recorded in the April survey. Overall, the survey results demonstrate that people have not lost their taste for travel, but there are blockers to returning to pre-crisis levels of travel: A majority of travellers surveyed plan to return to travel to see family and friends (57 percent), to vacation (56 percent) or to do business (55 percent) as soon as possible after the pandemic subsides.

But, 66 percent said that they would travel less for leisure and business in the post-pandemic world.

And 64 percent indicated that they would postpone travel until economic factors improved (personal and broader).

“This crisis could have a very long shadow. Passengers are telling us that it will take time before they return to their old travel habits.

Many airlines are not planning for demand to return to 2019 levels until 2023 or 2024.

“Numerous governments have responded with financial lifelines and other relief measures at the

height of the crisis. As some parts of the world are starting the long road to recovery, it is critical that governments stay engaged. Continued relief measures like alleviation from use-it-or-lose it slot rules, reduced taxes or cost reduction measures will be critical for some time to come,” de Juniac said.

One of the biggest blockers to industry recovery is quarantine.

Some 85 percent of travellers reported concern for being quarantined while traveling, a similar level of concern to those reporting general concern for catching the virus when traveling (84 percent).

And, among the measures that travellers were willing to take in adapting to travel during or after the pandemic, only 17 percent reported that they were willing to undergo quarantine.

“Quarantine is a demand killer.

Keeping borders closed prolongs the pain by causing economic hardship well beyond airlines. If governments want to re-start their tourism sectors, alternative riskbased measures are needed.

“Many are built into the ICAO Take-off guidelines, like health screening before departure to discourage symptomatic people from traveling. Airlines are helping this effort with flexible rebooking policies. In these last days we have seen the UK and the EU announce risk-based calculations for opening their borders. And other countries have chosen testing options. Where there is a will to open up, there are ways to do it responsibly,” said de Juniac.

The survey The 11-country survey, which was conducted during the first week of June 2020, assessed traveller concerns during the pandemic and the potential timelines for their return to travel. This is the third wave of the survey, with previous waves conducted at the end of February and the beginning of April. All those surveyed had taken at least one flight since July 2019.

Post-COVID-19: Green recovery must embrace sustainable aviation fuels - IATA

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he International Air Transport Association (IATA) emphasized the aviation industry’s commitment to its emissions reduction goals and called for the International Energy Agency (IEA) to prioritize investment in sustainable aviation fuel (SAF) to help power aviation’s contribution to the post-COVID-19 recovery.

IATA’s call comes on the eve of the IEA Clean Energy Transitions Summit which will meet virtually to debate moves toward a low-carbon future. The IEA is well placed to promote SAF production with its stakeholders both in government and in the fuel industry.

The world must “build back better” from the COVID-19 crisis with attention focused on investment in carbon reduction technologies and in SAF, which will create jobs at this critical time and boost aviation’s progress towards its goal to cut aviation emissions to half 2005 levels by 2050.

Current SAF production rates are too low for aviation to reach this goal despite SAF’s proven potential and airline efforts to date: SAF can cut CO2 lifecycle emissions up to 80 percent compared with conventional jet fuel; SAF uses sustainable fuel sources which do not compete with food or water, or damage biodiversity; due www.businessday.ng

to extensive testing and investment from airlines, SAF are certified as safe, sustainable, and ready-to-use and over 250,000 flights have already taken off with a blend of SAF. “The enormous amounts of money that governments are investing in the economic recovery from COVID-19 are an opportunity to create a legacy of energy transition for the aviation industry. To achieve this, governments, the finance community and the fuel producers both large and small must work together with the goal of rapidly increasing production of affordable sustainable aviation fuel,” Alexandre de Juniac, IATA’s Director General and CEO said.

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IATA estimates that current SAF production is 50 million litres annually. To reach a tipping point where the scale of production will see SAF costs drop to levels competitive with jet fuel, production needs to reach 7 billion litres or two percent of 2019 consumption.

“As much as airlines want to use SAF, production is well below the scale needed for prices to fall to competitive levels. Attaining the right price point is even more crucial as industry losses and debt levels rise.

“But if governments can use this unique time to combine a safe fiscal and regulatory framework supporting SAF production with @Businessdayng

the direct allocation of stimulus funds to SAF production, it is possible to reach the two percent tipping point in 2025. That would power greener flight, create jobs and fuel the economic recovery together,” de Juniac said.

IATA and the wider aviation community are ready to work with the IEA, governments and fuel companies to cut aviation’s emissions with SAF. “SAF is our biggest emissions reduction opportunity. The time is right to push it forward so that, together, we can achieve major carbon reductions on the way towards fossil fuel-free flight,” de Juniac said.

Thursday 23 July 2020

BUSINESS DAY

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US orders China to close its Houston consulate

Shares fall as Beijing threatens retaliation over move it says violates international law Ryan McMorrow and Katrina Manson

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he US has ordered China to shut its consulate in Houston over spying concerns, ratcheting up tensions between the world’s two most powerful nations as Beijing vowed to retaliate.

Beijing immediately condemned the move and warned it would retaliate unless the US rethought the decision, which it said gave a deadline of 72 hours until Friday to close.

Video footage showed flames coming from the Houston site and fire trucks parked outside, with local media reporting that consulate staff appeared to be burning documents in the courtyard.

“We have directed the closure of PRC Consulate General Houston in order to protect American intellectual property and Americans’ private information,” the US state department said.

Besides its embassy in Washington and the consulate in Houston, China also has four other US sites, in New York, Chicago, San Francisco and Los Angeles. The Houston consulate covers eight states, including Florida and Texas.

China’s Houston consulate is a massive spy centre, forcing it to close is long overdue Marco Rubio, acting chairman of the Senate select committee on intelligence The request to close the consulate was made after the US Department of Justice on Tuesday unsealed an indictment charging two Chinese hackers with targeting American companies conducting coronavirus research.

A state department spokesman said that China has “engaged for

A fire engine is seen outside the Chinese consulate in Houston © David J. Phillip/AP

years in massive illegal spying and influence operations throughout the United States against US government officials and American citizens.”

“These activities have increased markedly in scale and scope over the past few years,” said the person.

The person added that Trump administration officials and the FBI had made public concerns, in court actions and statements, that Chinese officials “have interfered in our domestic politics, stolen US intellectual property, coerced our business leaders, threatened families of Chinese Americans residing in China, and more”.

The sudden escalation in tensions knocked China’s currency.

The renminbi fell 0.4 per cent in mainland China trade and by almost 0.6 per cent offshore where it is allowed to fluctuate more freely.

Both the onshore and offshore rates climbed back above 7 per the US dollar, a key level closely watched by analysts.

Wang Wenbin, a spokesperson for China’s foreign ministry, said the decision to close the consulate “in a limited time is an unprecedented escalation”.

“It seriously violates international law and basic norms of international relations,” added Mr Wang, according to Chinese state media. US state department cited the Vienna Convention in its decision to close the consulate.

“The US asked China to close Consulate General in Houston in 72 hours,” wrote Hu Xijin, editor-in-chief of state-owned tabloid Global Times on Twitter. “This is a crazy move.”

Hong Kong’s Hang Seng index fell 2 per cent immediately following the news. China’s CSI 300 of Shanghai-

and Shenzhen-listed shares surrendered most of its gains after earlier rallying as much as 2.1 per cent.

Other global asset markets also came under modest selling pressure.

Europe’s equities benchmark the Stoxx 600 index was down 1 per cent in morning dealings, with futures tracking Wall Street’s S&P 500 down 0.6 per cent.

Beijing warned it would make “a timely and necessary response” if the US did not reconsider.Bonnie Glaser, China expert at the Center for Strategic and International Studies, said China would “almost certainly shut down the US consulate in Wuhan in retaliation”.

Daniel Hoffman, a former station chief with the CIA’s clandestine service, said the agency would have “gamed out” how China would likely respond and that the administration had decided it could stomach

the results.

“These are all the bellwethers of a 21st-century cold war,” he said of the new tensions and consulate closures.

The Trump administration has previously closed down a Russian consulate in Seattle and expelled dozens of its diplomats in 2018, citing spying concerns, but this is the first time it has directly targeted Chinese sites in the US. Beijing also alleged that the US had in recent months repeatedly opened its diplomatic pouches, which are used to send items confidentially between overseas missions and home countries without customs inspections. It said the US had also seized China’s official work items.

Marco Rubio, acting chairman of the Senate select committee on intelligence, tweeted on Wednesday: “China’s Houston consulate is a massive spy centre, forcing it to close is long overdue.”

He said it was the “central node of the Communist Party’s vast network of spies [and] influence operations in the United States”, adding China’s “spies” had 72 hours to leave “or face arrest”.

Chinese officials instead framed the action as an attempt to smear Beijing. “For a period of time, the US government has continuously shifted blame and responsibility, stigmatising China,” said Mr Wang.

Relations between Beijing and Washington have fallen to their lowest ebb in generations, with the two sides clashing over Hong Kong, the trade war and alleged human rights abuses in Xinjiang as well as over the origins, spread of and development of treatment for coronavirus, which Donald Trump has taken to calling “China virus” as relations have soured.

US spends $2bn to secure Covid-19 vaccine BioNTech and Pfizer announce deal for 100m doses of coronavirus inoculation candidate Joe Miller and Clive Cookson

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he Trump administration has committed to spend $1.95bn on 100m doses of a potential Covid-19 vaccine being developed

by Germany’s BioNTech and US pharma giant Pfizer, which will be distributed free of charge to American citizens.

B i o N Te c h a n n o u n c e d o n Wednesday that the supply agreement signed by the White House also includes the option for the US government to purchase a further 500m doses, subject to the vaccine being granted regulatory approval.

Several governments have signed agreements with some of the 24 groups currently testing a coronavirus vaccine on humans, including a promising candidate developed by Oxford university and AstraZeneca, but most other purchasers have refused to reveal the price paid per dose.

As BioNTech’s vaccine candidates will probably require at least two doses per person, the cost per

Several governments have signed agreements with groups currently testing a coronavirus vaccine on humans

immunisation is roughly $40.

Prices in advance purchase deals vary considerably according to what is in the agreement — and in particular on how much the government is committing to help the company carry out trials and scale up manufacturing.

The US government’s Operation Warp Speed aims to deliver 300m doses of a certified vaccine by January 2021. It has already spent more www.businessday.ng

than $2bn on investments in vaccines being developed by Moderna and Johnson & Johnson.

In May, the US secured 300m doses of Oxford university and AstraZeneca’s vaccine for $1bn.

Earlier this month, BioNTech and Pfizer released preliminary data from its clinical trial in the US. They found that two dozen patients injected with the vaccine candidate developed immune responses that

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were similar or better than those found in recovered coronavirus patients.

The companies hope to apply for approval from the Food and Drug Administration, a US regulator, as early as October, following a large scale trial with 30,000 participants.

They say they have capacity to manufacture 1.4bn doses by the end of 2021, including 100m this year.

“We made the early decision to begin clinical work and large-scale manufacturing at our own risk to ensure that product would be available immediately if our clinical trials prove successful,” said Pfizer chief executive Albert Bourla.

The US move comes after the UK government ordered 30m doses of BioNTech’s vaccine and 60m doses of another vaccine from Valneva of France, which is less advanced in clinical development. But it did not disclose financial details of the agreements.

Kate Bingham, head of UK government’s vaccines task force, said the country was aiming for a total of at least eight deals — two for each of the four main vaccine technolo@Businessdayng

gies (genetic vaccines, viral vectors, inactivated whole virus and proteinbased vaccines).

“We initially talked to the government about going up to 12 vaccines but it’s more likely to around eight, at least initially,” said Ms Bingham.

“That would give us a broad and diverse portfolio.”

Ugur Sahin, co-founder and chief executive of BioNTech, said: “We are also in advanced discussions with multiple other government bodies and we hope to announce additional supply agreements soon.”

BioNTech said it had also expressed an interest in supplying the COVAX programme, which aims to enable equitable access to a vaccine.

It is run by Gavi, the Coalition for Epidemic Preparedness Innovations (Cepi), and the World Health Organization.

The Mainz-based company is one of several using messenger RNA (mRNA) technology to develop a Covid-19 vaccine — a process that is faster than traditional methods.

However, there is as yet no certified mRNA product on the market.

Thursday 23 July 2020

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Baker Hughes prepares for more oil and gas ructions

US oilfield services group targets further cost-cutting to shore up defences against pandemic crisis Myles McCormick

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aker Hughes is bracing itself for an extended period of depressed activity as the threat of a coronavirus resurgence hangs over the US oilfield services industry.

The group — whose revenues slid by a fifth in the second quarter — said that while the worst of the economic blow from Covid-19 had probably passed, it would continue slashing costs in anticipation of a second wave of cases that could prompt further lockdowns and sap demand for its services.

“Although the majority of lockdowns have been easing globally and economic activity likely troughed during the second quarter, visibility on the economic outlook remains extremely limited,” said Lorenzo Simonelli, chief executive and chairman.

“We are preparing for potential future volatility, while also focusing on . . . structurally reducing our cost base.”

His comments came as Baker Hughes reported bleak secondquarter results, the latest oilfield

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

Baker Hughes reported revenues of $4.7bn for the three months to the end of June, down 21% on last year © BLOOMBERG NEWS

services group to lay bare the extent of the impact of the oil price crash.

The company reported revenues of $4.7bn for the three months to the end of June, down 21 per cent on the same period last year, and a net loss of $201m against a $9m loss last time.

Free cash flow and adjusted operating income — non-GAAP

measures closely watched by the sector — were down 82 per cent and 71 per cent respectively.

Oilfield services groups, which do everything from drilling wells to installing pipes for producers, have been the worst hit by the dive in oil prices, accounting for the majority of the lay-offs in the sector as demand

evaporates for the assistance they provide.

Rival Halliburton reported a net loss of $2.1bn on Monday as it took a heavy writedown even as it aggressively cut expenditure. Baker Hughes said it would cut costs by $700m on an annualised basis by the end of the year.

US oil prices plunged into

negative territory in April, causing activity in the sector to seize up. They have since bounced back but, at about $40 a barrel, they remain too low for most companies to return to drilling.

The US rig count — a proxy for activity in the sector — has fallen 73 per cent since this time last year and while analysts reckon it is close to bottoming out, there is little expectation of a swift rebound.

Mr Simonelli said he expected drilling and completion spending by US producers to be down more than half this year.

He expects a drop of up to 20 per cent internationally, double the company’s previous estimate.

Bill Herbert, an analyst at Simmons, said “there really isn’t a whole lot of daylight, or visibility for any meaningful improvement in the near term”.

He added that resource holders “continue to be very defensive with regard to their reinvestment plans”.

A total of 18 North American oilfield services companies filed for bankruptcy protection in the first six months of the year, according to Haynes & Boone, a Texas law firm.

EU plans flurry of rule changes to boost market recovery Tweaks to financial regulations, to be announced soon, follow €750bn relief package Philip Stafford

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russels is set to unveil a series of quick fixes to its financial market rules, including measures to ease trading in small-cap stocks and energy derivatives, in an attempt to boost the region’s recovery from the Covid-19 pandemic.

The planned measures, due to be announced in the coming days, include changes to the Europe-wide Mifid II regulatory regime, tweaks to standards for company prospectuses and exemptions to “formal [regulatory] burdens where they are not strictly necessary”, according to draft papers seen by the Financial Times.

The aim is to free up more capital and time for investors to deal with the consequences of coronavirus, the papers said.

The European Commission also wants to adjust its regulations to allow EU companies to access foreign exchange benchmarks that are widely used overseas.

The targeted proposals are set to be published just days after

European politicians agreed a landmark coronavirus recovery package that will change the face of the region’s capital markets, by making the EU one of the region’s top borrowers. The amendments come via so-called delegated acts, which give European authorities the powers to make changes more quickly than through the regular legislative process.

The commission did not provide an immediate comment.

The proposals include tweaks to controversial Mifid rules, www.businessday.ng

which came into effect in 2018, that require fund managers to make a clean division between payments for trading and those for research. As asset managers now pay only for the research they want, cost-conscious banks have stopped providing coverage of smaller companies that are likely to provide fewer ancillary revenue streams.

Under the new plans, companies with a market capitalisation of less than €1bn will be exempt from these rules on “unbundling”, to encourage greater ana-

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lyst coverage and thus trading in the stock. There will also be an exemption for fixed-income research, the documents said.

Brussels is also planning to boost liquidity in energy derivatives markets by revamping position limits, or the amount of trading that can be done in one particular security. Regulators are considering an exemption for investors whose open positions total less than 300,000 lots — a measure of contract size — over a year.

Agricultural commodities will not be included in that review, the documents said.

The EU also plans to amend regulations on financial market benchmarks, eyeing changes to come into effect from the end of 2021. Some of the rules will give regulators more powers to ensure a smooth transition from the tainted Libor lending benchmark by the end of next year.

Brussels is also keen to reduce its dependence on oil benchmarks priced in dollars, while boosting euro-denominated alternatives like natural gas. The @Businessdayng

world’s biggest gas benchmark is based in the Netherlands.

Policymakers are planning an exemption to allow companies in the bloc to use overseas benchmarks for foreign exchange derivatives, the documents said. Rules currently stipulate that contracts such as swaps and non-deliverable forwards must be traded on EUrecognised venues or markets.

Without the exemption, EU institutions face being shut out of benchmarks like WM/R, one of the world’s most widely used benchmarks for foreign exchange rates, because it is administered outside of the bloc, in London.

Other planned changes include exemptions on costs and charges disclosures for wholesale clients like asset managers, and a requirement that banks and asset managers demonstrate they have tried to get the best price for their share deals will also be suspended. A formal Mifid II review in 2021 will decide whether to tweak or scrap these “best execution” reports.

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Senate calls for review of power purchase agreement with Azura Power Plant

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enate on Wednesday called for a review of the Share Purchase Agreement (SPA) between the Federal Government and Azura Power Plant, saying the agreement was a drain on the nation’s resources.

The Senate passed the resolution as additional prayer by deputy Senate president, Ovie Omo-Agege, while adopting the recommendations of the Senate Committee on Power on “Addressing Nigeria’s Power Problems”.

The recommendations were presented by chairman of the Committee, Gabriel Suswam during plenary.

Presenting the report, Suswam who said that the agreement between the Federal Government and Azura power plant was signed between 2016 and 2017, noted that government ordinarily shouldn’t have signed those agreements.

“This is because what it means is that for instance Azura is a power plant that is supposed to generate 450 megawatts. What we signed is that we signed that even if we are unable to take that 450 megawatts we still pay full price for 450MW. You call those agreements take or pay,” Suswam said.

Other recommendations Suswam said include the need to revisit tariffs that had been set in the 2016 to 2018

Minor Review of the Multi Year Tarrif order (MYTO) 2015 and Minimum Remittance Order for the year 2019.

This, he said was to clearly determine if N600 billion Payment Assurance Guarantee (PAG) being processed for disbursement would be sufficient to cover the tariff shortfalls that would arise if retail tariffs did not rise as envisaged.

“The gap between reality of Distribution Companies (Discos) and National Electricity Regulatory Commission (NERC) projections needed to be streamlined.

“This is on account of the fact that Ministries, Departments and Agencies (MDAs) including Federal, State and Local governments had not paid their legacy debts (20152018) or the current bills going forward in 2019.

“There should be an immediate removal of the increased custom duties of 35 per cent to allow Metre Asset Provider (MAP) clear meters stuck at the port.”

In his remarks, president of the Senate, Ahmad Lawan said the report by the committee was so important.

“The power sector is the way for Nigeria to industrialise; in fact even to reduce the level of insecurity in the country by providing opportunities for wealth creation and jobs.

AIG partners FG, states to establish systems platform against COVID-19 Gbemi Faminu

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frica Initiative for Governance (AIG) in its drive to contain the spread of the coronavirus pandemic in Nigeria has partnered with the Nigerian Economic Summit Group (NESG), Nigeria Governors’ Forum (NGF) and the Federal Government to fund the establishment of a Covid-19 Incidence and Resource Tracker, Dashboard and Predictive Analytic Platform (Systems Platform) towards containing the pandemic in Nigeria.

In Nigeria, Covid-19 cases have been on the rise with no sign of the curve flattening soon. Total confirmed cases rose to 37,801, after 567 cases were confirmed on Tuesday, July 21, with discharged patients accounting for 41.4 percent of total confirmed cases leaving 58 percent still hoping to get well.

Earlier in May, the Presidential Task Force (PTF) on Covid-19 endorsed the partnership between Africa Initiative for Governance and the NESG for the development of the systems platform.

The systems platform solution is expected to provide a robust, updated record of federal and sub-national resource and availability requirements for the Covid-19 response, based on the World Health Organisation (WHO) recommended resource specifications on packages for Covid-19.

Speaking on the partnership, Laoye Jaiyeola, CEO of NESG said: “The systems plat-

form will provide a national and sub-national inventory management system that gives national visibility of what is procured, in-stock and out-ofstock across the federal and state testing, treatment and isolation centres, The real-time data will enable the government, the private sector, international organisations and other donors to respond swiftly in providing the critical human and material resources needed to support the country’s response to the pandemic” Jaiyeola added.

The systems platform is expected to improve the national and state health information management system by adding the platform’s capabilities seamlessly to the country’s existing data ecosystem and also help in galvanising efforts at efficiently plugging nationwide resource gaps across the three priority areas of testing, treatment and isolation and contact tracing and tracking in the context of Covid-19.

Ofovwe Aig-Imoukhuede, director, AIG said “beyond improving the transparency, accountability and governance of national resources co-sourced from public, private and development sectors towards the Covid-19 response, the predictive analytic model embedded in the platform will enable the Presidential Task Force on Covid-19, and the Nigeria Centre for Disease Control (NCDC) predict and project the rate of infections, deaths and consequent resource requirements, this is key for the future of Nigeria’s COVID-19 response” She added. www.businessday.ng

L-R: Folashade Yemi-Esan, head of civil service of the federation; Ibrahim Gambari, chief of staff to the President; Boss Mustapha, secretary to the government of the federation; Vice President Yemi Osinbajo, and President Muhammadu Buhari, during the virtual meeting of the Federal Executive Council at the Presidential Villa in Abuja, yesterday.

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Shippers’ Council bans service providers from placing charges on transfers not initiated by consignees AMAKA ANAGOR-EWUZIE

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he Nigerian Shippers’ Council (NSC) has banned service providers, including shipping companies/ agencies, terminal operators and off-dock terminals from collecting charges from consignees for cargo transfers that were not initiated by the shipper.

According to a statement

by Rakiya Zubairu, head, public relations unit of NSC, the council has been inundated with complaints against service providers on the arbitrary levy of container demurrage, storage and transfer charges on consignees, for transpor-

tation of cargoes to off-dock terminals unilaterally initiated by terminals without the consignees’ consent.

“It should be noted that based on international standard and recognised practice, freight paid at origin covers movement of cargo to final port of delivery at destination. It follows, therefore, that cargoes earmarked for transfer to off-dock terminals, at the request of the shipping company, seaport terminal operator or offdock terminal, without the consent of the consignees or their authorised representatives, should not attract charge against the consignees,” Zubairu said.

According to her, the

Group urges artisans to partake in Dangote Cement promo

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lock makers and artisans who are major users of cement have endorsed the on-going Dangote Cement ‘Bag of Goodies’ season 2 promo.

The building sector professionals drawn from different parts of Nigeria agreed that the promo which is expected to produce 1000 millionaires was a welcome palliative this Covid-19 period.

President of Block Makers Association of Nigeria, Rashidi Adebowale, endorsing the promo said his members were looking forward to benefiting from the consumer promo.

Speaking in Lagos, Adebowale disclosed that the association would be sending out circulars to members to notify them of the promo and the need to check every cement bag they purchase during the promo period.

According to him, many members of the association benefited from the season one promo, but lamented that it was more beneficial to the artisans employed by the block makers to work for them. “This time around, we are going to ensure close monitoring of every Dangote Cement bag

that we purchase throughout the promo period. This will enable our members to feel the impact of the promo”, he said.

He commended the Dangote Cement’s management for investing on its consumers through consumer promotion. He said that the company has proved to be truly Nigerian company for always having the interest of the block makers at heart.

Akim Akpan, who operates a block making factory in Eket, Akwa Ibom State, lauded Dangote Cement for coming out with the promo after the success of season one. He said it was a good development that Dangote Cement was giving back to consumers of cement products which is an incentive to maintain brand loyalty and buying of more products.

Akpan in a phone interview noted that in the last promo, a star prize winner emerged from the state, just as he described it as a win-win situation.

A block maker in Ihiala, Anambra State, Emeka Okike, described the promo as a way of allowing consumers of cement gain from the company while working on their projects.

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council considers such as unethical and unwholesome, and has resolved that all service providers must deliver import cargoes to the nominated port of destination as stated in the Bill of Lading.

“Where the operational convenience of the seaport terminals or some other prevailing circumstances necessitated the transfer of cargoes from the seaport terminals to off-dock terminals, the concerned consignees or their authorised agents must be notified in good time, and must not be charged the cost associated with such transfer, including barging cost,” she added.

C o n t i n u i n g , Zu b a i r u stated that storage and de-

murrage charges on cargoes earmarked for transfer from seaport terminals to off-dock terminals, without the consent of the consignee, should take effect only after arriving at the designated off-dock terminals.

Zubairu however directed that all transfer charges collected from consignees of cargoes transferred from seaport terminals to off-dock terminals, from June 1, 2020 to date, without the consignees requesting for such transfer, must be refunded immediately.

“Failure to refund such charges will lead to the Council invoking its regulatory powers to enforce compliance,” she further stated.

OVH Energy concludes first phase of coronavirus intervention in Nigeria BUNMI BAILEY

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VH Energy Marketing, a licensee of the Oando retail brand, has wrapped up the first phase of its support for the Federal Government’s efforts at combating Covid-19 in Nigeria.

The company’s intervention includes various donations such as N50 million towards NNPC’s collective intervention funds made through Major Oil Marketers Association of Nigeria (MOMAN), supply of test kits and the sum of N200 million as part of its corporate social responsibility (CSR) efforts for the treatment of Covid-19 patients, donation of palliatives to host communities in Apapa, Onne, Ogu and Kaduna to help cushion the negative effects of Covid-19.

As part of the contributions, the company has heightened safety and hygiene standards in all its facilities to ensure protection for clients, neighbours, customers and staff on essential duty.

The organisation has also distributed protective masks and OVH Energy produced hand sanitisers – ‘OVH Energy hand sanitiser to all OVH Energy marketing staff at its operational facilities and retail @Businessdayng

outlets nationwide, initiating its DIY (Do it Yourself) protocols.

Speaking on this initiative, Huub Stokman, the CEO, said, “We each have our role to play in ensuring the safe health and well-being of everyone during these unprecedented times. Our donations underscore our support for nation-wide relief efforts and we appreciate the government’s interventions so far and are proud to collaborate to ensure that critical stakeholders such as front line staff are protected during this crisis, and to enable more tests to be carried out in order to help save lives and ultimately defeat the pandemic.”

He said, “the spread of the coronavirus in Nigeria meant that we immediately triggered our BCP (BusinessContinuityPlan)andinitiated efforts to minimise the spread as much as we could. In times like this, personal hygiene measures cannot be overemphasised.

“We have shared with our employees measures which they should take in order to protect themselves and families. We have also urged them to follow directives provided by health authorities.

We will continue to monitor latest developments on the situation to take appropriate measures.”

Thursday 23 July 2020

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CBN directs banks to migrate to new standards for electronic messaging by November 2022 Hope Moses-Ashike

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he Central Bank of Nigeria (CBN) on Tuesday directed all financial institutions to migrate to a new standard for exchanging electronic messages known as ISO20022 on or before November 2022.

This was contained in a circular titled ‘ISO20022 SWIFT UPDATED TIMELINES FOR MIGRATION’ and signed by Sam C. Okojere, director, banking service department of the CBN. The ISO20022 Standard (International Organisation for Standardisation 20022) is an increasingly established global language for payments messaging, currently in use in cross-border payments in over 70 countries.

ISO20022 will create a common language and model for payments data, improve significantly the quality of data across the payment’s ecosystem, richer, structured to build client confidence while improving compliance and efficiency.

In the years ahead, ISO20022 will be the de facto standard for high-value payment system in reserve currencies, supporting 80 percent of global volume and 87 percent of value of transactions worldwide.

In view of this and the Co-

vid-19 pandemic, SWIFT has set new timelines of November 2022 for the various activities leading to ISO20022 migration as follows: In 2020, there would be building of awareness about the change through the various resources SWIFT makes available and assessing the impacts in collaboration with vendors.

Throughout year 2020 and 2021 would be to implement the defined solution for adopting the change, testing it internally and preparing for further testing on the “real” network.

Throughout 2020 and 2022 there would be testing on the network with and without selected correspondents and preparing for go-live.

“Therefore, all the financial institutions in Nigeria are to comply with the above timelines. The ISO20022 for FI to FI payments and reporting will be live on SWIFT as at end of November 2022. For the avoidance of doubt, after a 3-year period of coexistence, the corresponding legacy SWIFT MT messages will be decommissioned on the SWIFT platform

by November 2025, the circular reads,” the CBN said.

“To this end, the Central Bank of Nigeria hereby directs all Financial Institutions in Nigeria to activate the process leading to migration to ISO20022 Standard, on or before the deadline of November 2022,” it said.

FG appeals for understanding as repair work continues on Marine Beach Bridge, others …assures motorists of stress-free driving experience on 3rd Mainland Bridge CHUKA UROKO

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he Federal Government of has appealed to motorists to show understanding as repair work continues on some bridges in Lagos with partial closure of those bridges, making access to them difficult and stressful in some cases.

When maintenance work commences on Third Mainland Bridge from midnight of Friday, July 24 as scheduled, there will be three major bridges in Lagos that will be either totally or partially closed to motorists. The other two are the Alaka end of Eko Bridge and Marine Beach Bridge (Ijora inward Apapa).

Already, contractors have mobilised to sites on both Alaka and Marine Beach Bridges. At the Marine Beach Bridge project site on Wednesday, where the construction workers were seen changing creaiungs and expansion joints on the bridge, Kayode Popoola, Federal Controller of Works, Lagos, explained to journalists that

government was committed to completing the project ahead of schedule.

“The contractor is working ahead of schedule. By the programme of work, he is supposed to have changed 36 bearings, but as at today, he has done 60. By August, he will start laying asphalt on the bridge. The plan is to complete the work ahead of schedule,” he assured.

“We are working on the Apapa-bound lane of the bridge and when that is completed, we will take on the second lane. We are working section by section. The first section we are working on now is 200 metres. This is why you have partial closure,” he explained further, appealing to the motoring public to cooperate with the contractor to do his work.

He noted that government was doing its best to ensure that the road infrastructure are put in proper condition for public use.

According to him, the contract duration for the repair of the bridge is 18 months from October 2019.

“But we hope to finish the project

by March next year,” he said.

On the Alaka end of Eko Bridge, which has been closed since March this year, Popoola said the contractor was already working there. He hoped that work on the bridge would be completed in the next three months, meaning that the bridge will re-open for use

by October this year.

“By Friday this week, repair work will start on Third Mainland Bridge and that will necessitate partial closure of the bridge,” Popoola informed, advising motorists to take alternative routes.

It is estimated that 132,406 motorists who use that bridge on daily basis will be affected by the partial closure of that 11.8-kilometre bridge. The repair work will last for six months—July 24, 2020 to January 24, 2021.

Babatunde Fashola, minister of works and housing, had at a media briefing in Abuja on Tuesday, explained that the repair work on the bridge was about prioritising safety of Nigerians who commute on the bridge on daily.

Expectation is that there will be unpleasant driving experience with prolonged travel time due to the never-ending traffic congestion that defines Lagos as a mega city.

But Popoola assured that efforts were being made to ensure that motorists don’t sleep on the road. “We are working on alternative routes to make them motorable and to ensure stressfree driving experience. Work is on-going on Ikorodu road and the contractor handling the project is China Civil Engineering and Construction Company (CCECC), he said.

He added that palliative work on other alternative routes was being handled by Lagos State public works department.

Fashola also assured that a combined selected team from the Federal Roads Safety Corps (FRSC) would continuously guide driving on the partially closed Third Mainland Bridge and also brief people on the alternative routes to follow as long as the maintenance work lasts.

WAEC exams: Put machinery in place for reopening of schools, parents tell S/West governors …say school closure not justifiable anymore MARK MAYAH

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arents have called on the Southwest governors to put machinery in motion towards the reopening of public and private schools across the region.

They made the call when BusinessDay went to the streets of Ekiti, Lagos, Ogun, Ondo, Osun and Oyo States to seek audience with parents and guardians on their position on the continuous closure of schools nationwide.

In a unanimous voice, the parents called for the constitution of a special task force that would ensure safe reopening of schools in the region.

Toyin Ayinla, a mother of three and resident of OkemesiAkure, Ondo State, who condemned the continued closure of schools as a result of Covid-19 said: “If the government is sincere, there is no basis to keep our children at home perpetually.”

Akindayo Johnson, a civil servant in Oyo State, in his submission said the stewardship of public office holders had failed the nation. He urged governors of the Southwest states to rise up and protect the future of children and youths of the region, saying the current pandemic must not be an excuse for continued stay at home of the school children.

Omotayo Baderu, a staff of

Julius Berger in Lagos, tasked the governors to put adequate measures in place, including provision of hand sanitisers, water, and personal protective equipment (PPEs), to enable students to write the forthcoming West African School Certificate (WASSCE).

He, therefore, faulted the continued closure of schools on the pretext of coronavirus, wondering why primary elections and gubernatorial elections were being allowed despite the scourge of the deadly disease.

“Primary elections are going on in Edo and Ondo States under the same scourge. So, I see our stewardship as not taking education as priority.

Our stewardship has failed this great nation.

“However, I give kudos to the Southwest governors for the good move, proposing to reopen schools for WAEC exams in August. But the question is how prepared are we? A man who is prepared has his battle half fought.

“The situation of our schools even before the pandemic is not in order. Now, the schools have been closed down over three months. I will like our Southwest governors to constitute a task force to go to the drawing board and check the state of our schools. Some schools have no toilet and other facilities and all these must be restored before the reopening of schools,” Baderu stressed. www.businessday.ng

L-R: Kalesanwo Oluyemi, permanent secretary; Lagos State Ministry of Women Affairs & Poverty Alleviation; Olufemi Ogun, past president Professional Insurance Ladies Association (PILA); Bolaji Dada, Commissioner for Women Affairs & Poverty Alleviation; Oluseyi Ifaturoti, past president, PILA; Joyce Ojemudia, president, PILA; Olive Don-Okafor, asst. general secretary, PILA; Margaret Moore, deputy president, PILA; Mfon Akpan, general secretary, PILA and Abimbola Onakomaiya, vice president, PILA during a rally organized PILA in partnership with the Ministry to demand for justice for victims of rape and sexual violence held in Lagos

Global economy post COVID-19 to see greater focus on resilience, sustainability - WEF founder MIKE OCHONMA

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ignificant changes are expected in the world economy post Covid-19 in order to improve its resilience and sustainability, with much more pronounced focus on environmental, societal and good governance metrics in public and private projects to help businesses, economies and societies transition to new ways of working.

This was the view of the authors of the book ‘Covid-19: The Great Reset’ written by World Economic Forum (WEF) founder and executive chairperson, Klaus Schwab, a professor and co-authored by monthly barometer managing partner, Thierry Malleret.

It offers a conceptual framework for the WEF annual meeting 2021 that will be devoted to answering the questions the book raises.

As part of the book launch, Saadia Zahidi, managing director of WEF, provided an insight into

the WEF’s initiatives and projects in support of the anticipated changes, including the establishment of regional action groups to promote cooperation and support industries to help them develop new business models, as well as its Fourth Industrial Revolution (4IR) solution platform that helps countries to harness and disseminate the technologies that can provide positive societal outcomes.

Key priorities in realising these goals include changes to the social contract and a focus on decarbonisation and creating green economies, which will provide significant proportions of new jobs, as well as the accelerated move to 4IR and digital economies, and the change from shareholder capitalism to stakeholder capitalism.

Focusing only on the question of the social contract- one of five priority areas detailed by Schwab Zahidi said there have been signals that the global economy needed a rethink for some time and that the sources of future growth had to be considered.

“We need to look at not just the

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speed of growth, but the quality of that growth and the direction of that growth. We can no longer afford to look only at [gross domestic product], but also at what type of growth and whether it is sustainable and inclusive,” she said.

All the 4IR technologies (typically involving automation and digitalisation of work) have been accelerated by the pandemic.

Everything that can be digitalised will be digitalised, said Schwab.

“How we use technology to address challenges require that we create the necessary ethical human-oriented principles around technology.”

Schwab, explaining the rise of stakeholder capitalism, said the role of business in the post Covid-19 era is moving from short term to long term. He highlighted that the companies that had invested most into the vitality of their businesses instead of short-term profits have performed much better during the current ‘acute’ pandemic phase.

The move from shareholder @Businessdayng

capitalism to stakeholder capitalism reflects broader changes in focus from material improvements of life to more generalised concept of wellbeing. This is translated at a corporate level into environmental, social and good governance (ESG) criteria upon which companies will increasingly be measured, as the expectations of their investors and stakeholders change.

The WEF is also working on developing a more unified measurement system to allow the evaluation of companies according to these metrics and how they perform beyond only short-term financial returns.

When considering the macroeconomic effects of the pandemic, and without elaborating, Malleret said the extent to which societal and environmental risks have dramatically accelerated ESG strategies is obvious and that the stakeholder economy will progressively replace the shareholder economy. The book is available from Amazon in digital and paperback formats.

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Thursday 23 July 2020

BUSINESS DAY

news Nigeria’s inclusion in countries likely to face...

Continued from page 1

country’s food production.

The report last week identified countries where the pandemic’s “knock-on effects aggravate pre-existing drivers of hunger”.With Nigeria on the list are - Afghanistan,Haiti,Venezuela, Iraq, Lebanon, Sudan, Syria, Burkina Faso, Cameroon, Liberia, Mali, Niger Republic, and Zimbabwe to mention a few.

The joint analysis by both organisations warns that these “hotspot countries” are at high risk of - and in some cases are already seeing - significant food security deteriorations in the coming months, including rising numbers of people pushed into acute hunger.

“It is essential that this next planting season works. I don’t have words for my concern, if we don’t get the inputs in time into the hands of the farmers, dealing with rain-fed agricultural crops,” said Andrew Nevin, chief economist at PWC West Africa during a webinar session last month.

“There is nothing worse for this country than if we have a food crisis or famine after the next harvest,” he said.

Stakeholders across the agricultural value chain have echoed Nevin’s views, and the warning by both FAO and WFP is reinforcing the need for the country to fix systemic issues that predated COVID-19, and worsening food security in the country following the pandemic.

Qu Dongyu, FAO directorgeneral, had noted that Nigeria, along with the other countries were already grappling with high levels of food insecurity and acute hunger even before COVID-19, due to pre-existing shocks and stressors such as economic crises, instability and insecurity, climate extremes, and, plant pests and animal diseases.

“Now they are on the frontline and bearing the brunt of COVID-19’s disruptive effects on food systems, which are fuelling a hunger crisis within a health crisis,” he said, adding: “We must not think of this as a risk that will emerge sometime down the line. We cannot treat this as tomorrow’s problem. We need to do more to safeguard both food systems and our most vulnerable populations - right now.”

Samuel Ogallah, senior climate specialist for Africa, Solidaridad, had suggested “there is an urgent need for institutional review of policies and realignment.”

According to Ogallah, in the wake of COVID-19, it has exposed how Nigeria’s policies are not aligned at the Federal down through the State level to the Local Government level.

“Some of the policies are made at the federal level, but where are the farmers based?

The farmers are based in the grassroots at the local governmentlevel;so,thetricklingdown

of those policies has become a challenge. There is urgent need, in the wake of Covid-19, for policy realignment,” he said.

The FAO-WFP report also notes four ways COVID-19 is pushing up acute food insecurity. The first is a drop in employment and wages, which imply people have less money to spend on household food. At the same time, food prices are up in many hotspot countries, posing a barrier to food access.

The second pertains to a range of disruptions associated with necessary pandemic and healthcountermeasures,which are also having significant - and increasing - impacts on food production and supply.

The third is that plummeting government revenues mean that critical safety nets such as social protection and school feeding programmes are underfunded and unable to respond to growing needs.

Lastly, the FAO and WFP’s analysis suggests the pandemic may contribute to political instability as well as fuelling conflict, for example between communities over natural resources like water or grazing land or migration routes, which further disrupts agricultural production and markets.

Responding to the challenges requires scaled-up urgent action, according to FAO. Critical agricultural seasons, livestock movements for pasture and water, food harvesting, processing and storage are not activities that can be put on hold.

“If we act now and at scale, we can keep as many people as possible producing food, safeguard their livelihoods and reduce their need for humanitarian food assistance, while laying the foundations for a resilient recovery,” said FAO’s Dongyu, adding: “It is not too late to prevent the worst hunger crisis in generations.”

Bayelsa State governor, Douye Diri (l), and the Assistant InspectorGeneral (AIG) of Police in charge of newly created Zone 16, Yenagoa, Austin Agbonlahor, during the AIG’s visit to Government House, Yenagoa on Wednesday.

Cotonou now choice exit route for Nigerians...

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ates appear to be the greatest beneficiaries of commercial-evacuation flights with several evacuation flights carried out through these airlines with the permission of the Federal Government.

The government had since March shut down the country’s airspace to international flights in a bid to contain the spread of COVID-19, but had made exceptions for special and diplomatic flights, which include evacuation flights.

“I’m in Cotonou staying at my uncle’s hotel. All the guests are travellers to Europe from Nigeria. Apparently, we have opened a new revenue channel for Benin Republic.

“The Airport in Cotonou is open. If you are flying out, no need for quarantine. Most Nigerians are going that route now,” according to a passenger who craves anonymity.

Further checks show that a return ticket for a LagosLondon or Lagos-Istanbul commercial flight goes for as low as £600. With the current conversion rate of N4927 to a pound, passengers are paying N295,200.

BusinessDay’s digital dialogue on financial...

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ehijie Momoh, senior vice president, general manager, West Africa, Mastercard; Elsa Muzzolini, General Manager, Commercial, Mobile Financial Services, MTN Nigeria; Jacqueline Jumah, head, Digital Financial Services at EFInA; Esigie Aguele, CEO / co-founder, VerifyMe Nigeria; Niyi Toluwalope, CEO, e-Tranzact International plc; Meghan Curran, West Africa director, Acumen; and Emeka Mordi, COO, Carbon.

Like other financial inclusion conferences that have been organised by Business-

Day, this year’s edition, though virtual, has two-panel sessions that will be addressing issues on how stakeholders in Nigeria’s financial industry will collaborate for broader financial inclusion boost while exploring the opportunities in the digital financial services.

According to industry analysts, the importance of digital financial services for a country like Nigeria which runs a cash-based economy cannot be overemphasised, especially at this time when online transactions have become the order of the day.

Before the pandemic, a survey by BusinessDay re-

Nigerians may pay more for petrol in August...

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ment said in March that it had bowed to long-standing pressure to restructure the downstream oil sector and www.businessday.ng

had therefore removed oil subsidy after the country was hit by lower oil prices which placed more pressure on its foreign exchange reserves.

On the other hand, passengers are paying as much as $2,000 for evacuation flights, which are one-way tickets.

With the current official exchange rate of N386 to a dollar, passengers have had to pay N772,000 for a one-way evacuation flight.

All that is currently needed to travel through Cotonou airport is just a COVID-19 certificate.

Bankole Bernard, former president, National Association of Nigeria Travel Agencies (NANTA), confirms to BusinessDay airlines are taking advantage of evacuation flights to do commercial flights, adding that travellers are just tired of sitting down at home without means of travelling.

Ikechi Uko, a travel expert who also confirms the development, says the choice of Cotonou for air travellers is the price and the closure of Nigerian airspace to international flights.

“People need to travel and therefore they have to find a way to travel. It is a good thing for people that they are travelling. Nigerians are stranded in different parts of the world and they can’t afford evacuation

flights because they are too expensive, so people have to go to neighbouring countries to travel out,” Uko explains.

He notes that several African countries have opened their airspace while some will be openinginafewweeks.Someofthese countriesincludeBeninRepublic, Tanzania, Kenya, Equatorial Guinea, Cameroon, Rwanda, among others, he states.

Industry experts say Cameroon airport seems to be the closest that Nigerians can travel to by road, so they are taking advantage of this to travel.

Before the airport closure, 22 foreign carriers operated in Nigeria with nothing less than 40 international flights departing the country on a daily basis.

Experts say Cotonou airport may currently be processing half of the passenger traffic on international routes that could have been carried out in Nigeria.

John Ojikutu, member of aviation industry think tank group Aviation Round Table (ART) and chief executive of Centurion Securities, says when an airline collects fares or charges fares from passengers including medical evacuation, it is nothing other

vealed that Nigerian businesses operating in the country’s formal economy had recorded growth with the emergence of new digitallydriven business models, particularly in financial services, e-commerce and logistics sectors, to mention a few.

Industry analysts believe that, to a large extent, the growth in digitalisation helped to equip businesses to adjust during the lockdown in Lagos, Nigeria’s commercial hub, Ogun and FCT. However, the large informal sector in Africa’s largest economy was more adversely impacted economically due to the inability of SMEs and individuals, who are outside

the formal financial sector, to conduct transactions on digital platforms.

According to the World Bank, SMEs play a huge role in facilitating economic development due to their flexibility and affinity to development, even more so in emerging economies with a high contribution from the informal sector.

Estimated at 37 million, Nigerian SMEs were said to have a finance gap of $158.13 billion (2017 SMEs report by the World Bank and Finance Forum). Their inability to access to formal financial services remain a threat to growth as poor credit history hinders chances of small businesses to access loans for expansion.

The Buhari administration had removed the petrol price peg of N145/litre to N125 in March 2020, the first time the price would be adjusted since it was reviewed from N86 per litre to N145 in 2016.

With no new template for the month of May, the PPPRA had stated that the cost of petrol would be reviewed monthly in accordance with the fluctuation of crude oil price in the international market.

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@Businessdayng

than commercial.

“The questions we should be asking the government services operators, Nigeria Airspace Management Agency (NAMA) and Federal Airports Authority of Nigeria (FAAN), is; are the services free?

“For the Nigerian Civil Aviation Authority (NCAA), the airlines not paying the mandatory 5 percent charges on the passengers fares? Nigerians relocating to Cotonou to board foreign airlines should not surprise anyone who was around when Abacha banished British Airways to Cotonou; even generals travel to Cotonou to board British Airways,” Ojikutu states.

Charlie Robertson, global chief economist, Renaissance Capital, tweeted, stating, “Unclear when Nigeria airports reopen but the closure saves a lot of money. Nigerians were spending about $750 million a month travelling abroad from 2016 to mid-2019, according to the balance of payments. Even taking visitors into account, Nigeria is saving one billion dollars every two months now.”

However, several Nigerians have taken to their twitter handles responding to his tweet with many disagreeing with his opinion.

According to @Kaineneomeli, “Why don’t the USA or England shut its airports because citizens spend that much on travelling. Do you know how much businesses lose from this closure? Do you know the development opportunities affected? Focus on your country! @i_amOD_SIT states, “Do you consider it a money saving measure if you’re locked down from going out for businesses because you don’t use your cars or public transport?”

Another tweet from @ IamtheOGee states, “Only in Nigeria does the government promote the idea that it ‘saves’ when people don’t travel.

EU/UK are creating safety corridors so that people can travel on holidays but poverty capital people must farm.”

For @DualOctane he stated “You can’t come to this conclusion without considering money lost in the process by business persons that just have to travel to get business done.”

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POLITICS & POLICY

Mali crises: Buhari, ECOWAS leaders meet today to broker peace State House in company of President of ECOWAS Commission, Jean-Claude Kassi Brou, on Tuesday to brief President Buhari on the unfolding situation in Mali, necessitating the visit of ECOWAS leaders to consolidate on the agreements reached by various parties.

“We will ask the President of Niger, who is the Chairman of ECOWAS to brief us as a group, and we will then know the way forward,” President Buhari had said.

He thanked Jonathan for his comprehensive brief on the situation in Mali, “which you had been abreast with since when you were the sitting Nigerian President.”

The former President had briefed President Buhari on his activities as Special Envoy to restore amity to Mali, rocked by protests against President Keita, who has spent two out of the five years second term in office.

A resistance group, M5, is insisting that the Constitutional Court must be dissolved, and the President resign, before peace can return to the country.

Crisis had erupted after the court nullified results of 31 parliamentary seats in the polls held recently, awarding victory to some other contenders, which the resistance group said was at the instigation of President Keita.

Riots on July 10 had led to the killing of some protesters by security agents, causing the crisis to spiral out of control, hence the intervention by ECOWAS.

Tony Ailemen, Abuja

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resident Muhammadu Buhari is expected to join other leaders of the Economic Community of West African States, ECOWAS on Thursday (today) in Bamako, Republic of Mali, as part of ECOWAS intervention to broker peace in the troubled country Buhari will participate in the one-day talks in furtherance to the briefing earlier held by the ECOWAS Special Envoy to the country, former Nigeria President, Goodluck Jonathan.

The Nigerian President and some ECOWAS leaders led by the Chairman of the Authority of Heads of State and Government of the sub-regional organisation, President Issoufou Mahamadou of Niger Republic, agreed to meet in Mali to engage in further consultations towards finding a political solution to the crisis in the country.

Host President, Ibrahim Boubacar Keita and Presidents Machy Sall of Senegal, Nana Akufo-Addo of Ghana and Alassane Ouattara of Cote d’Ivoire are expected to participate in the Bamako meeting, according to a statement on Wednesday by Presidential Spokesman, Femi Adesina Former President Jonathan was at the

President Buhari

PDP chieftain seeks FG intervention in aviation sector Iniobong Iwok

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egun Adewale, a chieftain of the People’s Democratic Party (PDP), has urged the Federal Government to open up airports in the country for international flight after the resumption of local flight last week.

In a statement to journalists in Lagos State on Wednesday, Adewale called for the intervention of the federal government in the aviation sector to save it from collapse due to the effect of the Covid-19 pandemic which resulted in suspension of air travel for several weeks.

He said since the lockdown started in March due to the Covid-19, the travel and tours industry which has over 20,000 direct members and employees running into hundreds of thousands has not had it good.

The former governorship candidate in Ekiti State stressed that it was good that the government worked very hard to contain Covid-19 pandemic which is a global phenomenon, but while the airspace was locked down, it did not inhibit private jets and chartered aircraft from moving in and

out of Nigeria, which negates the need for lockdown of our airspace in the first instance.

Adewale stated further that, most of the countries, that were severely hit by Covid-19, are now opening their economy, calling on the federal government to consider a quick opening of the airports for international flight.

According to him, “A lot of families that depend on their daily bread, working in our industry, have been going through severe pains, as the promise of federal government’s loan/palliative, through the designated Micro Finance bank, aimed at cushioning the effect of the lockdown was not accessible by employees of our industry.

“A lot of families that depends on their daily bread, working in our industry, have been going through severe pains, as the promise of Federal government’s loan/palliative, through the designated Micro Finance bank, aimed at cushioning the effect of the lockdown was not accessible by employees of our industry.”

“The reality is that, we cannot lockdown forever, and we must not also allow our economy to collapse, but must manage to strike a balance,” he said.

Edo guber: Resetting Edo is a task that must be fulfilled - Dan Orbih Idris Umar Momoh & Churchill Okoro, Benin

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he Chairman of Edo State governorship campaign council of the People’s Democratic Party (PDP) Dan Orbih, Tuesday says the party is ready to fulfill the task of resetting Edo for sustainable development and growth.

Orbih, who is the acting South-South vice chairman of the party, gave the assurance at the inauguration of the party’s governorship campaign committee and subcommittee in Benin City.

The immediate past Edo State chairman of the party, said members of the party have resolved to stop those who plan to take the state backward.

“Edo people must be informed that Government business is serious business. It is not a simple agenda! Edo people rejected the simple agenda in 2016 and will do so again in 2020.

“From today we are going to take our

campaigns to the people. Let the people decides. In God we trust, and with the support of the people Governor Godwin Obaseki will win again,” he said.

He however, urged the people of Edo state to support and reelect Governor Godwin Obaseki for second term based on his administration’s achievements.

He listed some of the governor’s achievements to include institutional reforms, social welfare enhancement, agricultural support and development, and innovation to tax collections in the state.

According to him, no doubt we have the best candidates for this election. They have given a good account of themselves and they surely deserve a second term to continue the great work.

“They have elicited uncommon leadership qualities in charting a road map for the development of our state. I must say that I admire you more, now that I am privy to more facts about where you started,” he added.

Kwara govt’s effort to recover looted funds on course - Abdulrazaq SIKIRAT SHEHU, Ilorin

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overnor Abdulrahman Abdulrazaq on Tuesday said efforts to recover public patrimonies that were unlawfully taken away remain on course, reiterating that his administration would at all time prioritise people’s welfare.

According to a statement by Rafiu Ajakaye, Chief Press Secretary to the Governor, Abdulrazaq, stated this in an address to the newly inaugurated members of the Judicial Service

Commission (JSC) in Ilorin, the state capital.

“Our administration is pursuing a developmental agenda that is centred around the people. We are determined to give our people a new lease of life. This would be made easier in an atmosphere of peace and tranquility.

“But, peace is not sustainable without justice and fairness. For too long, our people have had their patrimony taken away in the most brazen and fraudulent circumstances.

“We have a historic duty to restore sanity and return to the people what belonged to them.

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That recovery process, while long drawn, has since begun in the most lawful manner.”

Members of the JSC are Titus Olasupo Ashaolu (SAN); Lawal Victor Jimoh; Saliu Ajibola Ajia; and Monde Aliyu Umar.

The governor urged the appointees to justify the trust reposed in them, saying “My congratulations to you is borne out of the fact that your choice is a manifestation of what you have stood for over the years. You have all distinguished yourself as senior citizens with track records of integrity and selfless service

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to our people,” he said.

“I therefore, urge you to always consider this record in everything that you do as members of this statutory commission.”

Barrister Titus Ashaolu, who spoke on behalf of the JSC members, thanked the governor for the appointment.

He says: “We express our sincere appreciation for finding us worthy of this appointment.

We promise to do our best as members of the JSC not to disappoint you in your efforts to uplift the state and the progress of the judiciary.”

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industry Insight

BUSINESS DAY Thursday 23 July 2020 www.businessday.ng

4 issues dragging Nigeria’s industrial prosperity Odinaka Anudu

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he Nigerian manufacturing sector has experienced growth in recent times. Real contribution to GDP in the first quarter of 2020 was 9.65 percent, higher than 8.74 percent recorded in the fourth quarter of 2019 but lower than 9.79 percent reported in first quarter of 2019, according to data from the National Bureau of Statistics (NBS).

Capacity utilisation in the sector, which measures the rate at which factories make use of their capacities, was 56.8 percent in 2019 as against 49.32 percent in 2015, according to the Manufacturers Association of Nigeria (MAN)’s data.

The Manufacturing Purchasing Managers’ Index (PMI) stood at 60.8 percent in December 2019 from 59.3 percent in November 2019, according to the Central Bank of Nigeria (CBN) data. The number has dipped to 41 percent in June 2020, but that is down to COVID-19 which is wreaking havoc on the global economy.

A reading above 50 shows that the manufacturing sector is expanding, while a reading below 50 suggests the sector is contracting.

The numbers have been relatively good in recent times, showing that a lot of progress has been recorded in the last 10 to 15 years. However, some of the data do not really reflect the realities in the sector.

Firms have continued to shut down due to policy-, tax- and infrastructure-related issues. The closure of P&G factory at Agbara, Ogun State, and the exit of Grif, Federated Steel and Universal Steel, among others, in the last three years are still fresh in the memories of many Nigerians.

The simple reason for such exits and shut-downs in the sector is that age-old problems die hard, and they are hurting the sector badly.

Hence there are four key issues that have dragged the progress of the manufacturing sector and require government urgent intervention.

First is that the country’s infrastructure is getting worse. Clearly, rains are increasingly exposing the poor state of roads in Ogun and Lagos—two industrial hubs in the country. From Agbara industrial cluster in Ogun to Apapa in Lagos, roads are bad or inaccessible. Access road to Apapa and Tin Can ports has continued to be nightmares for manufacturers and exporters. Between October 2019 and March 2020, cost of moving goods in a 40-foot container from Apapa to Ikeja (ordinarily 40-minute drive) rose from N350,000 to N450,000 to N650,000 to N700,000.

Similarly, goods stay for weeks on bridges before being exported.

Perishable goods get spoilt, in addition to frustrations by the port authorities at times.

In the first quarter of 2020, MAN undertook a CEO survey to determine what constituted challenges

for them. At the end of the survey, 94 percent of the CEOs interviewed agreed that congestion at the ports significantly affected their productivity negatively.

“Most worrisome are the issues of deliberate delay in cargo clearing time, raising of technical barriers, rejection of relevant documents by officers of the agency that approved import documents, multiple agencies with duplicated functions and other rent-seeking activities of vested interests at the port that excessively fleece operators,” the CEOs said.

It is impossible to talk about infrastructure without discussing power. Though the cost of alternative sources of energy by manufacturers dropped from N82.6 billion in 2018 to N67.38 billion in 2019, signifying an 18.4 percent decrease over the period, the cost of energy is still high. Most manufacturers have long ditched DisCos because of irregular supply of power, which raises their production costs significantly and forecloses their chances of competing with international peers. Local products are often more expensive than imported Chinese products because production costs in the country are significantly higher than China’s, especially when key issues such as taxes and regulations are factored in.

Apart from infrastructure, regu-

lation is a major issue hurting the sector. In Nigeria, Africa’s most populous country, agencies of the government work at cross-purposes.

For instance, the Standards Organisation of Nigeria (SON) does not accept tests done by the National Agency for Food and Drug Administration and Control (NAFDAC) and vice versa. Worse still, their responsibilities overlap. Similarly, local or state governments do not accept agreements by the Federal Government, particularly when it has to do with money or taxes.

In the CEO survey mentioned earlier, 94 percent agreed that multiple/over-regulation by agencies of government hurt productivity in the manufacturing sector.

“Quite often, agencies of the federal, state and local authorities regulate the same manufacturing process resulting in man-hour loses, supervisory duplication using similar checklist and multiple regulatory charges which ultimately translates to increased cost of production for manufacturers,” MAN said.

Another critical issue bedeviling the industrial sector is funding.

Nigeria is cash-strapped due to falling oil prices. This is hurting the country’s capacity to fund projects and critical sectors. However, pool of funds from the CBN and development finance institutions is stashed

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Quite often, agencies of the federal, state and local authorities regulate the same manufacturing process resulting in man-hour loses, supervisory duplication using similar checklist and multiple regulatory charges which ultimately translates to increased cost of production for manufacturers

in banks which are sometimes unwilling to lend to businesses due to what they call ‘high-risk level’ of lending to businesses in Nigeria.

Consequently, several manufacturers have complained that they are unable to access most funds advertised by the government.

Manufacturing needs funding, especially long-term, single-digit funds, to compete. In 2019, China set up a $21 billion fund to further develop its advanced manufacturing sector. India has billions of dollars for funding start-up manufacturing firms. In the face of foreign exchange scarcity, which is stalling manufacturers’ capacity to import inputs, firms are pumping billions to source raw materials locally and beat the FX crunch.

FrieslandCampina WAMCO, for example, has set up 16 milk collection centres in Oyo State and is constructing 10 new ones for the collection of raw milk from local herdsmen as input. PZ Wilmar, a subsidiary of PZ Cussons, has 26,500 hectares of palm oil plantations in Cross River State.

Flour Mills of Nigeria (FMN), on its part, is pumping N50 billion in Sunti Golden Sugar Estates, Niger State, featuring 17, 000 hectares of irrigable farmland and a sugar mill processing 4,500 metric tons (MT) of sugarcane per day.

Guinness Nigeria is supporting over 30,000 smallholder farmers, who supply them with sorghum, to enable them move from basic to more efficient and productive yields.

Many medium firms are also setting up projects to source inputs locally. All these ongoing projects require large chunk of funds to continue.

While some manufacturers have accessed the CBN, Bank of Industry and other forms of funding, the feeling in the sector is that funds are not easily accessible to all players in the sector.

Next to this is policy inconsistency. There is no guarantee that some of the current CBN policiesas protectionist as they are- may

survive in the next dispensation.

Similar ones have happened in the past and, as usual, died natural deaths. Take the Export Expansion Grant (EEG) as an example. It was targeted at raising the competitiveness of Nigerian products at the global market. But by 2009, it had been suspended five times. In 2013, it was suspended again, putting a lot of firms who borrowed from banks in jeopardy. Firms had borrowed from banks to process their exports with the hope that the government would, as promised, give them incentives. But the government in 2013 suddenly suspended it. Up till now, it is yet to be reinstated, though a lot of processes have been undergone by exporters, including approval by both houses of the National Assembly.

The level of policy failures in recent times has been worrisome.

Think about the cassava bread policy, which has now died a natural death. The Goodluck Jonathan administration, which promoted it, did not follow it through and those who invested money into cassava production with an eye on that policy might have lost a lot of money.

Consider the Automotive Policy, which was sincerely meant to enable Nigeria make its own cars at cheaper rates. No one knows where the policy is at the moment.

More so, the country is battered by multiple taxation and low level of skills among its largely youthful population.

Perhaps, Nigeria can learn one or two things from Bangladesh. At independence in 1971, the SouthEast Asian country had 82 percent of its citizens below the poverty line. But by early to mid-2000s, the country had lifted 33 million citizens (23-26 percent of the population then) out of poverty. Two of the reasons adduced by analysts for this miraculous jump out of poverty pit were industrial policies and market reforms.

Bangladesh’s garment industry is partly responsible for rising prosperity witnessed in the country, according to Brookings Institute.

“Bangladesh offered a better environment for manufacturing firms to achieve economies of scale and create a large number of jobs,” Kaushik Basu, an economic analyst, said.

The country offered low and organised tax system, cheap funding, and empowered its manpower, skilling its youths to fit into the new industrial vision. “ And though Bangladesh still needs much stronger regulation to protect workers from occupational hazards, the absence of a law that explicitly curtails labor-market flexibility has been a boon for job creation and manufacturing success.”

Bangladesh earned $33 billion from exporting garments in 2018— 10 times what Nigeria earned from exporting 25 products the same year. Nigeria today is world’s poverty capital with nearly half of its population in extreme poverty.

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