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news you can trust I ** tuesDAY 23 june 2020 I vol. 19, no 590

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DisCos face bleak future over N930bn debt in unpaid invoices owed NBET E A

Clark, Fasoranti, Nwodo, 13 others sue Buhari over lopsided appointments, demand N50bn

ISAAC ANYAOGU

grim picture of the finances of Nigeria’s electricity distribution companies (DisCos) is emerging after a reconciliation of the invoices and payments between them and the Nigerian Bulk Electricity Trader (NBET) showed that the 11 DisCos owe a combined sum of N622.4 billion plus N308.2 billion in interest charged. It takes the cumulative debt of the DisCos to a staggering N930.6 billion, according to an industry document seen by Continues on page 27

Dispute interest sum of N308.2bn

… It’s a welcome development – Analysts FELIX OMOHOMHION, ANTHONY AILEMEN (Abuja) & INIOBONG IWOK (Lagos) minent elders and leaders of socio-cultural groups from Southern and Middle-Belt regions of Nigeria have dragged President Muhammadu Buhari before a Federal High Continues on page 27

Inside

ECOWAS endorses Okonjo-Iweala for WTO director-general, rallies P. 26 more support

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MACN gets Siemens AG’s support to expand collective action initiative in Nigeria AMAKA ANAGOR-EWUZIE

aritime Anti-Corruption Network (MACN), a global business network of over 130 companies working together to tackle corruption in the maritime industry, says it is expanding its collective action initiative in Nigeria with the support of the Siemens Integrity Initiative. The expansion project will be implemented by MACN and the Convention on Business Integrity (CBi) and run from 2020 up to January 2023. It builds on, and will be integrated into MACN and CBi’s ongoing work in Nigeria that is sponsored by the Ministry of Foreign Affairs of Denmark. As a result of the Siemens’ support, MACN will expand its work into multiple agencies and port users, enabling greater public-private sector dialogue on integrity issues, equipping local players with proven Collective Action methodologies to drive change, and supporting maritime industry Collective

Action initiatives. “Through the generous support from Siemens AG and CBi, MACN will be able to contribute to a stronger government and port authority compliance environment and encourage public-private oversight of compliance in ports and terminals. We believe this will lead to more effective seaports and terminals services, and improved corruption prevention practices that, ultimately, will benefit any business using seaports or terminals in Nigeria,” says Soji Apampa, executive director and co-founder of the Convention on Business Integrity. The Siemens Integrity Initiative promotes projects that seek to combat corruption through collective action. The selection process is highly competitive and favours projects that have a direct impact on the private sector and also strengthens compliance standards and legal systems. Cecilia Müller Torbrand, executive director of MACN, says Siemens Integrity Initiative

is a very competitive funding call that, over the years, has supported some of the leading anticorruption initiatives globally. “For MACN, CBi, and our local stakeholders, the support from Siemens is fantastic recognition of our collective action work, and the impact we had in the Nigerian port and maritime sector. We are grateful for the support and excited to add Siemens to the list of donors supporting MACN,” says Torbrand. On her part, Onyeche Tifase, CEO of Siemens Energy Nigeria, notes that the initiative will boosts Siemens efforts to support the establishment of higher integrity standards and fairer market conditions in Nigeria, assuring that they would make the project a joint success. Over the coming three years, MACN and CBi will enable port users to demand, track, and ensure greater compliance in Nigerian ports, help strengthen government capability to establish compliance systems and collaboration between business, government and civil society.

More hurdles for developers as Lagos introduces ‘Green Sticker’ in building construction JOSHUA BASSEY

roperty developers now have more hurdles to battle as the Lagos State government has introduced what it termed “Green Sticker,” which represents a certificate of clearance before mobilisation to building construction site. Asides the Green Sticker, the government would be issuing a log book to property owners and developers, after they must have met all conditions spelt out by the law, and this would be supervised by the Lagos State Building Control Agency (LASBCA). According to the government, issuance of a planning permit as known in the past, may no longer be enough documentation to start building in Lagos, and this is aimed

at reducing or possibly eliminating building collapse as a result of sub-standard material materials and unprofessional handling of building construction. The state commissioner for physical planning and urban development, Idris Salako, at the launch of the Green Sticker on Sunday, stated that going forward, property owners and developers must obtain authorisation from LASBCA to build and also ensure that they work with the agency at all stage of the development so as check substandard jobs and eradicate quackery. According to Salako, Green Sticker and site log books would be issued to owners and developers who have satisfied all requirements ranging from obtaining necessary

permits to building in conformity with plans as specified by the state’s 2010 Building Control Laws. The commissioner urged officials of LASBCA to ensure the full implementation of the new initiative, noting that the government could no longer watch helplessly as lives and billions are lost in building collapse. The general manager of LASBCA, Abiola Kosegbe, explained that the introduction of the Green Sticker was a proof that a property owner or developer had met building construction conditions as set by the government and that the site log book would serve as where records of construction stages’ activities on site are recorded and kept for the agency’s supervision.

2020 scholarship schemes: MTN Foundation calls for application

ith over 3,829 young Nigerians having benefited from the MTN Foundation scholarship scheme in the last 10 years, the Foundation has called for application for the 2020 edition of the scheme in the Science and Technology Scholarship Scheme (STSS) and Scholarship Scheme for Blind Students (SSBS). The call for application, announced recently, is open to students in accredited public tertiary institutions (universities, colleges of technology and polytechnics) across Nigeria. Application for STSS is open to all 300 level Science & Technology students with a minimum CGPA of 3.5 (Second Class Upper/or its equivalent). The SSBS is for visually impaired students in 200 and 300 level, with a minimum CGPA of 2.5 or its equivalent. Odunayo Sanya, the acting executive secretary, MTN Foundation, says the scheme has awarded scholarships to 3,829 students in the last 10 years, noting, “We understand the importance of education and technology in the development of our nation and this under-

scores our various interventions in the educational sector.” According to Sanya, the Foundation understands that Nigerian youth are the future, hence fulfilling their dreams is key to the set objectives of the scheme. “We look forward to engaging with the newest recipients of the scholarship

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schemes once the process is completed. I encourage every eligible student to please apply,” Sanya states. The sum of N200,000.00 will be awarded annually to cover each awardee’s tuition, book allowance and stipend, till graduation as long as they maintain the required grades.

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news S&P Global affirms AfDB’s AAA rating, with stable outlook HOPE MOSES-ASHIKE & Cynthia Egboboh

atings agency, S&P Global, last Friday affirmed its ‘AAA/A-1+’ long- and short-term issuer credit assessment of the African Development Bank (AfDB) with a stable outlook. The rating agency positively assessed the bank’s very strong financial risk profile, very strong capital adequacy, strong funding and liquidity, extraordinary shareholder support and adequacy of its governance and management. “We are therefore affirming our ‘AAA’ long-term issuer credit rating on the AfDB,” S&P Global stated. The rating agency noted the bank’s $115 billion capital increase, approved by shareholders in October 2019, and the replenishment to the African Development Fund, the bank’s concessional window, in December 2019. “The stable outlook reflects our expectation that, over the next two years, AfDB will prudently manage its capital while maintaining solid levels of highquality liquidity assets and robust funding,” S&P Global said in a statement.

S&P expects that “shareholders will remain supportive by providing timely capital payments”; the Bank “will continue benefiting from preferred creditor treatment (PCT); and “prudently manage growth in private-sector lending in a way that’s aligned with its mandate.” The rating agency’s report further noted that the “AfDB will play a key role supporting the region, particularly in the context of COVID-19. The institution approved an up to $10 billion relief package for 2020, of which $6.9 billion will be financed by AfDB and the remainder through its concessional lending window.” Akinwumi Adesina, president of the bank, said: “We are delighted with and welcome S&P Global’s decision to affirm the Bank’s AAA/A-1+ rating. It reflects the Bank’s very strong financial position and risk management, as well as our sound governance. We will continue to maintain these standards, with the strong support of all our shareholders, as we deliver much needed financial, knowledge and policy support to our regional member countries during and after this period of the COVID-19 pandemic.”

Stakeholders kick against continued use of foreign airlines by FG for evacuation IFEOMA OKEKE

takeholders in the Nigerian aviation industry have kicked against the continuous use of foreign airlines by the Federal Government of Nigeria for the evacuation of its citizens despite available local capacity. Those who spoke with our correspondent said this was creating the wrong impression about Nigeria and the safety of its carriers. For instance, Airline Operators of Nigeria (AON), the umbrella body of indigenous carriers in the country, said the continued use of foreign airlines to evacuate Nigerians by the government was contrary to its own directive that only indigenous carriers should be used to do so. Nogie Meggison, the executive chairman of AON, in an interview with aviation correspondents on Monday at the

Lagos Airport, said, “The onus still lies on the government to do the right thing by protecting its own carriers, as COVID-19 fears forced the government to bring back stranded Nigerians abroad.” The airline operators stated that almost on a daily basis, Emirates evacuates Nigerians from Dubai, revealing that the Nigerian embassy was negotiating with and advertising the airline in the United Arab Emirates (UAE), thus defying the government’s directive that only Nigerian carriers should evacuate Nigerians as many other countries are doing. He insisted that Nigerian airlines have the capacity to successfully execute such an exercise. “I have worked in this industry for the past 35 years and we keep saying the same thing and that is why we are not moving forward. If the government did not give foreign carriers landing permits to evacuate Nigerians

from other countries and land in Nigeria, they won’t do that. If you can’t put your house in order who else will do that for you? We just make laws and policies but we don’t have the political will to carry out what we have said. “We see these flights coming in every day and we ask ourselves why? Can you fly into Ghana or other countries if you don’t have landing permits? So we need to first put our house in order for things to work the way we want. I keep wondering why our airports are still not open for operations. Aviation is a major propeller of the economy. I keep wondering what is delaying the opening of our airspace,” Meggison said. Also speaking on the issue, Sheri Kyari, a member of Aviation Round Table (ART), a think-tank group in the industry, said that the negation of government directive by a government agency shows lack of synergy in governance and also lack of respect

for the central authority. Kyari emphasised that such actions attract opprobrium to the country. “This is giving us a very bad image in the international community that our airlines are not safe, which is not true. This is a very wrong impression. Secondly, it’s like connivance against the country to make sure that economically, we are not standing; when what is supposed to be our own and people are ganging up to make sure that we don’t get it. It is a bad one. “The issue of ‘you do me I do you’ has come out to play, but we are weak in one particular area, which is alliances. This is one of those things that the mega carriers are using against us by denying us the facilities. Having said that, the major area is for the federal government to step in and put their feet down. Ensure that our carriers are protected,” Kyari said.

EU, UN deliver $22m essential medical supplies to Nigeria BUNMI BAILEY

he European Union (EU) and United Nations (UN) have delivered essential medical supplies to the Federal Government of Nigeria to help the fight against the COVID-19 pandemic in the country. The shipment, along with others coming soon, are procured through the One UN COVID-19 Basket Fund with a significant contribution from the EU - and will be valued at more than $22 million. The current shipment includes, among other items, 545 oxygen concentrators, more than 100,000 test kits, infrared digital no-touch thermometers, numerous personal protective equipment (PPEs), laboratory supplies and emergency health kits that will boost the Nigerian government’s efforts COVID-19 response and care for those affected by the coronavirus. The essential medical supplies will enhance efforts of the frontline responders providing care and treatmenttopeopleaffectedbythe virus, increase testing capacity and early detection of those affected by the virus, and support the hospitalisation and management of COVID-19 cases. The supplies were handed over to the government of Nigeria through the National Centre for Disease Control (NCDC) and the NPHCDA, and wasofficiallypresentedtothePresidential Task Force on COVID-19 at an event attended by high-level delegates from the EU, Ministry of Health and UN. The UN’s Resident Coordinator and Humanitarian Coordinator in Nigeria, Mr. Edward Kallon, said: “The arrival of the medical supplies will be a boost to the Government’s efforts to provide an efficient and effective health-

care response for those affected by the virus. These vital supplies co-funded by the EU will help us to both protect healthcare workers and ensure people are tested and treated as quickly as possible to save lives”. The European Union, has contributed EUR 50 million through the Nigeria One UN COVID-19 response, which serves as One COVID-19 Financing and Investment Platform, through which different stakeholders (including UN, other multilateral and bilateral donors, as well as private sector donors, foundations and philanthropists) can channel their financial support to the multi-sectoral efforts of the Presidential Task Force on COVID-19 Response. Head of the European Union Delegation to Nigeria and ECOWAS, Ambassador Ketil Karlsen, said: “Today, we take a vital step in the response to the pandemic. The alliance between Team Europe, the PTF and the UN has proven very strong. This is partnership in practice when it matters the most. Addressing the health crisis in Nigeria and getting the economic wheels turning again are key priorities for the EU, all while making sure that we protect the most vulnerable”. The growing COVID-19 crisis threatens to disproportionately impact communities not only as a health crisis in the short term but as a devastating social and economic crisis over the months and years to come. The One UN COVID-19 response is working closely with the Nigerian government in its pandemic response efforts through sharing crucial information with communities on how to protect themselves, infection prevention and control, epidemiology/surveillance and management of COVID-19 cases. www.businessday.ng

L-R: Ibukun Beecroft, partner, Risk Advisory; Seinde Olobayo, chief operations officer, Softcom; Babajide Sanwo-Olu, Lagos State governor; Yomi Adedeji, CEO, Softcom, and Lynda Saint Nwafor, chief enterprise business officer, MTN Nigeria, at the HelpNow launch in Lagos.

AXA, Western Union collaborate to provide inclusive insurance

XA has announced the launch of a collaboration with the Western Union Company, a leader in cross-border, cross-currency money movement and payments, to provide inclusive insurance products to Western Union’s customers using its westernunion.com service. By linking insurance to money transfer services, the two groups will help to better cover migrant workers and their families at home. An initial pilot, called ‘Transfer Protect’, launched this week in France with AXA Partners, offers Western Union’s customers sending money via westernunion.com the option to seamlessly sign up for a life and disability insurance solution. This will help provide peace of mind to the migrant population knowing that their designated family members or loved ones will receive a payment in case of an unfortunate life or disability event. This announcement is in line with AXA’s ambition to significantly contribute to financial inclusion through its AXA Emerging Customers division. This business aims to serve low income to mass market

populations by accelerating the development of adapted and relevant insurance and protection services. For Western Union, this is a new step in their customer centric strategy to enrich the value it provides to customers by integrating adjacent financial services seamlessly through its global omni-channel platform. “Our customers around the world trust Western Union with their most important and complex money transfers. They also want other value-add services to sustain their financial well-being and longterm financial goals. Providing value to the global populations we serve is a key focus for our global strategy. “This new partnership will provide a new way for us to facilitate value added products and services to the millions of immigrants and dual-belongers through westernunion.com. AXA is a worldwide leader whose financial inclusion strategy is well-aligned with ours, and we are excited about the opportunities that our collaboration presents,” comments Hikmet Ersek, president/CEO, Western Union.

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AfDB, FAO advocate digitalisation of agric value chain to spur green revolution for Africa …say population growth, changing diet, others could drive African food market to $1trn by 2030 Cynthia Egboboh, Abuja

frica Development Bank (AfDB), in collaboration with the Food and Agriculture Organisations (FAO), has stressed on the need for Africa to seize the opportunity of the COVID-19 pandemic to deepen the digitalisation of agricultural value chains, transform the sector to spur green revolution for Africa. The AfDB at a webinar jointly hosted with the FAO Investment Centre identified potential investments for the digital transformation of African agriculture during and after COVID-19, ranging from digital profiling of value chain actors to mobile payments and e-commerce. Martin Fregene, director of Agriculture and Agro-Industries, AfDB, said countries must use the wave of interest to build digital platforms that facilitate linkages between value chain actors at much-reduced transaction costs. “The spread of COVID-19 @Businessdayng

has disrupted agri-food systems across Africa. Key supply chains have been interrupted, markets closed and movement restricted, resulting in agricultural labour shortages. Farmers are missing planting seasons, while agribusinesses are facing liquidity constraints. “Demand for catering has dwindled and consumer preferences have shifted away from highly perishable foods, like fruits and vegetables, meat and fish, to ones with longer shelf-lives”. Ed Mabaya, manager of the bank’s agri-business division, said population growth, coupled with the expanding middle class, youth bulge, and changing diets could drive the value of the African food market to $1 trillion by 2030. “The growth of digital, datadriven and tech-enabled solutions can trigger a new green revolution for Africa, addressing some of the challenges and constraints along the entire value chain, from input supply to the consumer end,” he noted.

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Nigeria’s public transport: Infrastructure development and improving passengers’ satisfaction

Festus Okotie

igeria’s public transportation system urgently needs total overhauling and upgrade because of the nation’s strategic role in Africa. The sector also helps in the reduction of private car-owners on our roads, which reduces the burden on our transport infrastructure. With over 80 million people using the sector daily in Nigeria, the sector is still suffering from neglect, low budget allocations especially in the development of infrastructures, poor regulations, lack of professionalism and other needed areas of development of the sector. It also lacks the required attention from government and this is partly responsible for its poor state. The cost of movement in Nigeria takes up approximately 40 to 50 percent of average workers earnings. This high cost makes the sector unattractive. These are some of the reasons why the sector urgently requires government’s attention for upgrade because the sector is very strategic to the overall growth of the economy and has huge potentials to create employment opportunities and better living conditions for Nigerians. Another reason for the call is the need for more customer-centric service. Passengers are poorly treated, price charged are random, vehicles are unavailable (if available are mostly in poor state), insecurity, poor health and safety standards, poor attitudes by bus

staff and poor operational standards which needs to change. Adopting customer-centric strategy will also help organisations to provide better services, grow their top line, be more innovative in producing successful products and also make the business process to be more efficient. This will enable transport organisations to close gaps that exist between them and their customers by building stronger communication bridges that enables them appraise their performance through the eyes of the passengers. There are however some identified challenges that can affect the sector such as, comfort of passengers inside the bus, convenience ,safety, accessibility, long wait times, traffic congestion, parking difficulties, air pollution, traffic accidents etc. Making passengers the centre of attraction will also help organisations improve customer satisfaction, ensure efficient service delivery. It will also make transport organisations to provide opportunities of giving passengers better satisfaction, because if this is not properly done passengers might be dissatisfied with their service, products strategy might fail, which can lead customers to seek patronage elsewhere. For example, Lagos State (population of over 21million people (2016) Nigeria’s commercial nerve centre has a poor public transportation system as a result of its combination and dependence on rickety commercial vehicles, tricycles (kekemarwa) and motorcycles (okada).These are responsible for traffic congestion experienced in the state due to regular break down of vehicles at the middle of roads during peak periods, this is also responsible for high pollution in the city which results in low-quality of life. The current management of LAMATA must be commended for doing a great job despite the overwhelming challenge they face daily when compared to other states in Nigeria. Some of the anomalies can be described as

unregulated, unmonitored, inefficient and ineffective, chaotic, unnecessarily expensive, poor quality, dangerous and a big risk to life in terms of road traffic accidents, kidnapping, raping, robbery and other forms of personal safety The need for government to restructure National Union of Road Transport Workers (NURTW) is very expedient because of the challenges facing the sector. There is also perception that the union has been hijacked by some politicians for their selfish interests to intimidate Nigerians who they believe are threat to their ambitions. Generally, the union is perceived by most Nigerians as an organisation used to intimidate and extort monies from vehicles operators, passengers and also to further their costly political ambitions. Nigeria is currently the largest economy in Africa and deserves a better public transportation system. With a gross domestic product (GDP) of $446.543 billion in 2019, the transport sector increased its GDP from $642.927 to $720.241 million and it is believed that more investments in public transport development can help attract both local and international investments. Clear evidence of degeneration and setbacks in the sector coupled with huge population growth (over 200 million people) are responsible for passengers experiencing challenges in the sector for over two decades. Complex cities challenges demands collaborative strategies to help strengthen Public Private partnerships strategy that will make the sector more efficient and productive as obtained in major cities around the world e.g. Sydney, Melbourne, London, Paris, Tokyo ,Ontario, California, New York etc. Public transportation system is the most attractive means of travelling across cities and therefore needs to be very efficient and with intermodal connections e.g. connecting rail, buses, taxis, trams, cars to improve passengers satisfaction, it also needs to be well coordinated with cities pedestrian networks for passengers to be able to live comfortable without thinking of going out with their

‘

Nigeria is currently the largest economy in Africa and deserves a better public transportation system. With a gross domestic product (GDP) of $446.543 billion in 2019, the transport sector increased its GDP from $642.927 to $720.241 million and it is believed that more investments in public transport development can help attract both local and international investments

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

COVID-19: How Nigerians used media during the lock down

t took less than two weeks of lock down for major newspapers in Nigeria to reduce the number of pages they publish daily from 48 to 32. Our research at Caritas Communications had indicated that that would happen. In the first few days of lock down, we asked Nigerians through an online survey if they were still purchasing newspapers, 91 percent of respondents said no. Reasons adduced for the change ranged from the logistics challenges occasioned by the lock down, to the fear that newspapers could be carrying “more than news.” We note that these fears have largely been allayed as Nigeria gradually emerges from lock down. During the lock down, our research identified discernible patterns in media consumption. For media and public relations consultants, it is worthy to note that there was a systematic shift from print media consumption to digital/electronic media consumption. (Interestingly, television and radio were very critical in the media consumption mix during the period.) Not that this pattern is new, but the magnitude of the shift should suggest to media and public relations consultants that there is no going back on the contraction of revenue models built on print advertising. Drawn from across Nigeria, 98 percent of those we surveyed are between the 21-45 age brackets and though young, constitute a major part of the media consumption market

in the country. It is instructive to note that 84 percent of them relied on social media platforms (including Twitter, WhatsApp, Facebook and YouTube) for news and updates during the lock down. Interestingly, television was the major source of news and information for 61 percent of those surveyed, while newspapers (in print format) served only 11 percent. But 30 percent of them pointed to newspaper websites as their major source of news and updates. During the lock-down, two things drove respondents to particular media platforms: Ease of access and Brevity. Therefore, while a disproportionate number of respondents pointed to social media platforms like Twitter as source of news and information, what was revealed in the analysis is that the news which was consumed on Twitter and other social media platforms was provided by the same newspapers which millions of Nigerians had marooned. Sadly, Twitter and other social media platforms were being rewarded, even though they do not have newsrooms in Nigeria. Based on the research, radio and word-of-mouth were also deemed veritable sources of news and updates during the lock down, 28 percent of respondents, mostly older citizens were tenaciously inclined to radio. In the period, we observed that there was voracious consumption of television and YouTube. This is understandable. Social distancing

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EJIRO OBODO & ESTHER ABU

and a compulsory lock down did not mean that millions of Nigerians stopped craving entertainment, intimacy and fellowship. Forty-six percent of those survey indicated that they watched more television during the lock down than before. Twenty-nine percent spent an average of 2-3 hours watching television daily, while 26 percent spent between 3-6 hours watching television daily. Their content of choice ranged from News (74 percent), Foreign Movies (42 percent), Nigerian Movies (38 percent), Documentaries (28 percent), Religious programs, Telenovelas, accounted for less viewership and time. The media, advertisers and public relations consultants must take these changes to heart as many organisations have elected to continue their work-from-home regimes. Based on the foregoing, it is easy to conclude that there has been a shift in marketing budgets from Above-the-line, print and experiential, to public relations that are entrenched in electronic platforms. Smart marketers who are interested in meeting upper and middle class consumers quickly will track them online. However, because a large portion of Nigeria’s population is still not sited around the global-digital-camp-fire, radio and television will remain potent platforms to reach millions, especially the older generations. In the next few months, we expect that working from home will continue in various forms. And because of this, advertising spend

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personal vehicles. The sector is supposed to be a means of moving large proportions of urban dwellers for them to gain physical access to goods, services, and activities that are needed to sustain life and wellbeing and needs to be very efficient to drive growth in the sector because it can have a direct impact on the economy. Growing passengers’ expectations requires that the sector adapts to the use of modern technology systems in driving it because it would significantly change passengers’ perception, increase productivity, make our cities smarter and a more secure place to live in. Furthermore, it would also improve safety and security of passengers, reduction of pollution and road congestion, reduction of overall household expenses for passengers, increased social connection and inequality among citizens who cannot afford their own cars. It will also boost higher productivity of passengers. Last but not the least, the huge negative impacts of the current COVID-19 pandemic should wake up transport leaders on the need to ensure health and safety is top priority in public transportation systems in Nigeria. They also need to work together with private players to work out modalities of developing new a road map that can help reposition the sector and protect passengers (the most important stakeholders in the sector) because without them transport organisations cannot survive. Finally, developing a sustainable and globally competitive transport sector is a relevant step to diversifying the Nigerian economy. We must also give priority attention to development the of public transport infrastructure, ensure passengers are satisfied and continuously innovate new strategies of offering products, quality service and standards that can offer good value for money.

will gravitate more towards digital media. Therefore, digital skills will become more imperative for successful public relations consultants and marketers. Public relations consultancies will be compelled to develop competencies in digital marketing and content creation or risk the consequences of not innovating. We also expect smart newspapers to broaden their advertising horizons. It is time to broaden the advertising mix on the shelves to include adverts that are only on the PDF versions of newspapers. In other words, a newspaper can print 32 pages (including adverts), but have a PDF version of 36 pages. The extra pages should cater for adverts that are strictly on the PDF version. With the reality of COVID-19, the media remains a fluid environment. As changes continue to take place, newspapers and content creators should critically consider models that will enable them generate more revenues from their content. Otherwise, social media platforms will in a sense continue to reap bountifully from where they have not sown. Ejiro is manager, Communications Strategy & Research. Esther is Senior Executive, Client Services. Both work with PR Consultancy, Caritas Communications.

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The highest duty of citizens (1)

Civilised and prosperous societies are governed by rule of law, not rule by law STRATEGY & POLICY

MA JOHNSON

nyone who wants Nigeria to be regarded as a civilised and prosperous society would be concerned about the arbitrariness by which certain individuals or group of people have constituted themselves into the country’s laws. These individuals see themselves as the law; hence, they are above the law. That Nigeria remains poor and underdeveloped is largely due to the inability of a vast majority of its citizens to obey laws. Please, permit me to make an aside. An associate told me a story many years ago of something that happened at a seminary. A group of seminary students was given a task to reorder the Ten Commandments in order of priority. In fact, they were instructed to tackle the assignment with the most significant commandment and end with the one they consider to be the least important. As expected, pens began scratching away on sheets of paper as each student attacked the tasks with zeal. When the students were done, a master list was produced from their solutions. Most of the students concluded that the most important commandment is, “you shall not murder.” Next on the list was, “you shall not steal.” This was followed by “you shall not bear false witness,” and so on. More than fifty percent of the class felt that

the least important commandment was “you shall not commit adultery.” The Creator who is infinitely wise knows the heart of man. There is no question about which law is important to Him. All laws are important to the Creator. Yet no man is infallible. Years ago, a respected theologian of Princeton University, Charles Hodge was quoted as saying, that the duty to which we are directed by the Ten Commandments is the highest duty of man To the main point. The highest duty of citizens is to obey all laws of the land. You may say this is practically impossible. Odd at it may sound to say so, one of the most distinguishing things about humanity, one that is most beneficial to civilisation, and indeed, one that is possibly important for the safety, liberty and flourishing of human individual, is law. Law in this article is the “law of the land” as framed by legislatures and applied by judges, law as what organises and regulates interpersonal and relationships. Without obeying laws, what we have, drawing inspiration from a learned scholar, is “merely a state of nature, where might is right and we get what we can and suffer if we cannot.” We need laws to guide the conduct of people within a given society because natural power is not equally distributed among people. And the protection of the weak against the plunders of the high and mighty is a necessity if the weak is to survive. If the 1999 Constitution (As Amended), of the Federal Republic of Nigeria says, that there should be financial autonomy to the legislature and judiciary at the state level, why the controversy when President Buhari signs Executive Order 10? (Please, see “Executive Order 10: Why are governors Jittery?” BusinessDay June 7, 2020). The Constitution which political office holders took an oath to defend guarantees the autonomy of

the state legislature and judiciary and it is the responsibility of Mr President to make sure this is recognised, the Attorney General of the Federation (AGF) was quoted as saying. But “Some of the governors have fiercely criticized and opposed the Order. The Nigerian Governors’ Forum (NGF) recently, asked President Buhari to allow its members work out their own modalities on financial autonomy for the judiciary and legislature at state level.” Some critics say it is a violation of Nigeria’s constitution. “Where can they point to a section of the Constitution that allows the President to relate with the local government? Others say “It is a good step forward to promote separation of power.” While a former governor of the old Kaduna State, Balarabe Musa is of the view that “Buhari should go beyond just signing the Order.” According to the former governor, “as the President of the country, Buhari should make sure that the legislature and the judiciary do not steal the money given to them.” I salute the “wise man” from Kaduna. He knows we are in an age and country where anything can happen to money. This writer concurs with the view expressed by one Peter Ameh, a former Chairman Inter-party Advisory Committee IPAC, that: “We support the President in his attempt. The governors will continue to make our people suffer if we do not remove them from the caprices and the overpowering ruins of the governors because they are the ones who have made Nigeria not to move forward. We are running a feeding bottle federalism where we come to FAC every month and collect money and the governors cannot be accountable. They use that to control the judiciary and legislature. That is why you cannot see a governor who can be impeached, but a speaker can be impeached in three days.”

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The highest duty of citizens is to obey all laws of the land. You may say this is practically impossible. Odd at it may sound to say so, one of the most distinguishing things about humanity, one that is most beneficial to civilisation … is law

Welcome to Nigeria. Nigeria is a nation where most institutions of the state lack the regulatory capacity to enforce rules and regulations or bring defaulters to book without fear or favour. Nigeria, with a population of over 200 million people is a country where those who make the rules are above the law. In a perfect world, one would expect all citizens to follow and abide by the laws of the country. While many people are law abiding citizens, there are some who break the law on a regular basis and sometimes, do so with evil intent. Powerful men and women in authority rule by law. They have even acquired the power to create and execute laws as convenient for them, despite its negative consequences on the larger society. This leads me to the case of the controversial musician- Naira Marley. His real name according to newspaper reports is Azeez Fashola. How Azeez Fashola became Babatunde Fashola suddenly in a period when there is ban on interstate travel and flight restrictions in Nigeria is yet to be known. The young musician boarded a private jet using the name Babatunde Fashola, former Lagos State Governor, with his cohorts from Lagos to Abuja to organise a concert during this era of COVID-19. Truth is Naira Marley did not operate alone. He understands the weakness of his country – gross disregard to rules and a pathological level of impunity even at the highest level of government. So, who approved Naira Marley’s concert? In other climes, public officers are held to higher standards by society. So, amid acute lawlessness in our country, is Naira Marley now a metaphor? (To continue) Johnson is an author and a retired naval engineer who has passion for African development and good governance

Meeting compliance obligations in unusual times (2)

he first part of this article highlighted some guidelines and concessions rolled out by Regulatory bodies to enable. Some other guidelines and concessions by Regulatory bodies regarding compliance for this period are as highlighted below; The National Information Technology Development Agency (NITDA) extended the deadline for all Data Controllers and Processors to conduct independent Data Protection Audit of various organizations and file the Audit report in line with the Nigerian Data Protection Policy Regulation (NDPR), from 15 March 2020 to 30 June 2020. The Central Bank of Nigeria (CBN) rolled out the following measures to enable individuals and organisations meet up with their loan obligations: i. A 1 year extension of a moratorium on principal repayments for CBN intervention facilities; ii. The reduction of the interest rate on intervention loans from 9 percent to 5 percent;

iii. Granting regulatory forbearance to banks to restructure terms of facilities in affected sectors; The Federal Competition and Consumer Protection Council (FCCPC) in its Guidance Notes released on 28th April 2020 stated that the Commission prioritises Merger reviews, advisories or investigations where they are related to COVID 19. It further stated that for Merger Review, the Commission will accept remote filing/electronic notifications: Where there is possibility or imminent failure of the business of a merging party unless the combination is urgently considered. Where there is a host jurisdiction other than Nigeria, where there are time limitations but requiring notification and determination by the FCCPC prior to conclusion of the underlying transaction, Other time sensitive situations such as where other regulatory or similar approvals may expire or lapse, or such approvals where conditioned upon presenting a notification to the FCCPC within a specific period. www.businessday.ng

The FCCPC Guidance notes further stated In the above- mentioned instances, the notifying party should label the notification as “Extenuating circumstantial Notification” noting which of the circumstances above is applicable with an explanation and evidence to support it. The Standards Organisation of Nigeria (SON) is supporting the manufacturing and importation of essential materials to combat the challenges of COVID-19 through the deployment of 28 relevant international Standards from the International Organisation for Standardisation (ISO) and one from the African Organisation for Standardisation (ARSO) on Alcohol based Hand Sanitizers. The Standards are being provided at no cost to local manufacturers to guide them and provide a benchmark for adjudging all imported products in the category during the pandemic. The highlighted measures are quite commendable and should go a long way to help businesses meet with some of their compli-

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ULOAKU EKWEGH

ance obligations. However, there is still room for more measures and concessions to be given to enable businesses stay compliant in these unusual times as the ripple effects of the current pandemic are likely to be felt for a long time. Ekwegh is a private legal practitioner with over 15 years legal experience in law firms and as in-house counsel. She is also a fellow of the Institute of Management Consultants. Email: uloekwegh@yahoo.com

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Tuesday 23 June 2020

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In conversation – Janine Dow, Head of Francophone African Banks at Fitch Ratings and ratings of firms and sovereigns have been downgraded owing to COVID-19 effects. Some of the points Fitch’s Dow raised in the conversation are still relevant, though.

Rafiq Raji

y column this week is an interview with Janine Dow, head of francophone African banks at Fitch Ratings in mid-January on the outlook for the Angolan banking sector and implications of the West African currency ECO for WAEMU banks. In its most recent report at the time, Fitch had a stable outlook for the Angolan banking sector and a negative outlook for the Angolan sovereign. Amongst other things, I wanted know the reasons for the divergent outlook. With the onset of COVID-19 and consequent restrictions around the continent and the world, however, many things have since changed. Almost all forecasts

The Angolan sovereign-banking sector divergence in your recent report is curious; kindly explain. Operating conditions for banks are tough in Angola, but have not necessarily deteriorated following the revision to Negative of Angola’s sovereign rating. Angola’s sovereign rating was affirmed at ‘B’ in July 2019 but the Outlook was revised to Negative from Stable. This reflects worsening debt metrics, a continued fall in external reserves and delayed economic recovery. Fundamentally, operating conditions for banks have not changed since the Outlook revision. Opportunities for new lending are meagre, the process of tightening banking regulation is on-going, corporate taxes are rising and high inflation puts pressure on overheads. This is not new. The outlook for the banking sector is Stable as banks are still able to generate substantial profits because yields on government bonds are very high. Our assessment is that Angola’s operating environment for banks would be in the ‘b’ range (we do not publish a public score). A downgrade

of Angola’s sovereign rating would not necessarily trigger a downgrade of the operating environment for banks as domestic systemically important banks would still likely continue to do business and report profits. Consolidation of the Angolan banking sector – to be triggered by tougher minimum paid-in capital requirements and results of the Central Bank’s (Banco Nacional de Angola) asset quality review (AQR) concluded in December 2019 – could ease competitive pressures for banks and bring some mild opportunities for banks to better price their business. This would be somewhat positive for the sector. A solution may well also be found about how to resolve capital shortfalls at the sector’s systemically important and troubled bank – stateowned Banco de Poupanca e Credito – now that the AQR is completed. This, too, would be positive for the sector because the bank’s financial metrics weigh heavily on overall sector metrics. This is especially true for asset quality metrics and capital adequacy. The BNA’s data for August 2019 shows impaired sector loans as a percentage of gross sector loans reaching 29.4 percent. We understand that BPC is responsible for a large portion of impairments in the

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A solution may well also be found about how to resolve capital shortfalls at the sector’s systemically important and troubled bank – stateowned Banco de Poupanca e Credito – now that the AQR is completed. This, too, would be positive for the sector because the bank’s financial metrics weigh heavily on overall sector metrics

From the blogs

What really happened in Kano? In late April, images of freshly dug graves in Kano began circulating on Twitter. However, there was confusion regarding

the exact number of deaths. A chilling news report by Nigeria’s national TV channel shared on April 21 by activist Badero Olusola, on the Concerned Nigerians Facebook page, garnered 13,000 views, 127 likes and over 300 comments. The report showed that in just three days, April 17 to 19, over 150 people had been buried in Kano. Gravediggers had a hard time keeping up with the fatalities, with as many as 40 people reportedly buried daily in a cemetery in Kano metropolis. However, an investigation by Zainab Mahmoud, a Kano youth activist, put the number at over 100, as shared on Twitter on April 25. That same day, the Nation, a Nigerian daily, tweeted a report containing a list of about 20 prominent people who had died in Kano. Premium Times, a Nigerian online newspaper, also reported about the death of seven professors in Kano. The Kano casualties were no longer faceless individuals. Unpacking the cause of deaths in Kano Media narrative surrounding the Kano deaths revealed that the Kano State government (KNSG) tried to suppress the news, denied the existence of a political rivalry in Kano that may have interfered with a prompt COVID-19 response and failed to account for the absence of proper documentation about the deaths. On April 26, KNSG stated that the deaths were “caused by complications from hypertension, diabetes, meningitis and acute malaria and not the COVID-19 pandemic,” reported Reuters. Governor Abdullahi Umar Ganduje of Kano debunked a report by Nigeria’s Daily Trust newspaper as “fake news.” However, not everyone accepted the state

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How do you see the West African currency ECO affecting banks in that region? Our assessment is that there will be no immediate increase in market risk in the WAEMU region’s banking sector as a result. WAEMU banks operate mainly in local currency (now the ECO). As long as there is no risk of talk of removing the euro/ECO peg, our assessment is that reform of the currency will not alter this practice. As long as exchange rate confidence is maintained, we do not see heightened risk of deposit flight. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Nwachukwu Egbunike

The Kano COVID-19 deaths: Stories untold (I)

or months, confusion and conjecture surrounded the story of mass deaths in Kano State, north-western Nigeria, which occurred in April during the COVID-19 pandemic. After several weeks of speculation and official denial, on June 8, Nigeria’s Health Minister Osagie Ehanire confirmed that a surge of mysterious deaths recorded in Kano State was “triggered by or due to COVID-19.” Ehanire stated that Kano witnessed 979 deaths “at a rate of 43 deaths per day” in April. The deaths, within eight local government areas of Kano State, affected people 65 and over with pre-existing conditions. This official validation ended the conjecture regarding the cause of this death spike in Kano. Ehanire, on May 5, stated that there was “no evidence” linking the Kano deaths to the coronavirus. This claim came a day after the head of the presidential COVID-19 task force said that the deaths were indeed caused by the virus. Social media narratives, as well as investigations and documentation by both citizen media and journalists, may aid in understanding the full scope of this story. With the Global Voices’ Civic Media Observatory on COVID-19, I conducted qualitative, ethnographic monitoring of Nigeria’s social media space that revealed several dominant narratives about the Kano deaths on social media, including denial and suppression of news about the deaths, disinformation, ethnically and religiously divisive messages, political rivalry and the outbreak of similar mysterious deaths in neighbouring states.

sector. Similarly, BPC’s weak capital position weighs on sector equity/ assets data which is 11 percent at end-September 2019 (according to preliminary BNA figures). Angola is over-banked. There are 26 banks in operation, serving a population of 30 million, 60 percent of which is under 15 years old. The pool of bankable customers is small as many Angolans are employed in the ‘informal’ segments of the economy (notably agriculture). IMF-inspired banking sector reform could also be positive for governance aspects in the sector.

government’s position. Usman Yusuf, a professor of hematologyoncology, in an op-ed by BusinessDay newspaper, stated that “KNSG lacks the will, capacity, compassion, transparency, or the trust” to mitigate the crisis. Yusuf further asserted that the government was “in denial and doing all in its power to hide these deaths.” Nigerian investigative journalist Fisayo Soyombo in a Facebook post attributed the deaths and sluggish COVID-19 response in Kano to the “collapse” of three agencies after their personnel tested positive to coronavirus, including the testing laboratory, the team responsible for retrieving patients and the state committee on COVID-19. Soyombo wrote that the situation was further aggravated because “the state government played needless politics” by initially declining the offer by the Federal Ministry of Health to take over the COVID-19 response. The KNSG also rejected a donation of a hospital as an isolation centre due to political rivalry. Former Kano State Governor Rabiu Kwankwaso had on April 20 donated the 60-bed Amana Hospital in Kano, owned by his foundation, to the state government as a coronavirus isolation centre, but the government denied receiving any such donation. There has been a political war of attrition between former governor Kwankwaso and his erstwhile then-deputy Ganduje (now governor) since 2015. Improper death documentation and certification Kano is predominantly Muslim, with existing tensions between science and religion that can sometimes affect the government’s handling of burials and death certification. Conducting autopsies is a sensitive issue in Kano because “a lot of things in science and

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medicine are not accepted by all,” said Sanusi Bala in an interview with Punch newspaper. Bala, head of Kano State chapter of the Nigerian Medical Association, said that autopsies could not be carried out without express consent from relatives of the deceased. Mubarak Bala, a self-proclaimed atheist and activist from Kano, also observed in a Facebook post that the lack of birth and death certifications and the inability of health officials to conduct autopsies also had an impact on mass deaths in Kano State. Instead, KNSG conducted a “verbal autopsy” on April 28 to investigate the cause of the deaths. A verbal autopsy is an epidemiological method that uses techniques developed by the World Health Organization to examine the cause of death in populations lacking proper documentation systems. The result of the verbal autopsy conducted by three doctors in Kano, Maryam Nasir, Zainab Mahmoud and Khadija Rufai, was frightening. Within 48 hours, the researchers discovered “183 deaths in Kano metropolis that occurred between 18th and 25th of April 2020.” The symptoms, “a trend of febrile and respiratory illness that progresses to death within one to two weeks,” were consistent with COVID-19. Osagie Ehanire’s admission in June — linking the Kano deaths with the coronavirus — finally confirmed information that had already been circulating in Nigeria’s digital public square since April. This story is the first part of an investigation on the COVID-19 “mysterious” deaths in Kano State, Nigeria.

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Tuesday 23 June 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun

Nigeria COVID-19 daily count not league table Trust deficit, under-testing ridicule reality of spread

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

he consistent daily surge in Nigeria’s COVID-19 patients is very worrisome and should provoke proactive measures to contain the spread of the deadly virus. These numbers should not be treated like a “league table” with the Nigerian states competing with Lagos, the hotspot of the contagion. The pandemic is a public health and socioeconomic crisis, a threatening situation which needs urgent solutions. How individuals and governments interpret and act upon the numbers reported daily by the Nigeria Centre for Disease Control (NCDC) will not only help us stay safe but will ultimately be necessary to end the coronavirus pandemic. The coronavirus numbers being reported are not reflective of the facts on ground – but they are the best we’ve got. We believe these numbers do not reflect the Nigerian reality given our very low testing capacity. As at the 20th of June, the NCDC had conducted only 113,575 sample tests which ac-

count for a meagre 0.05 percent of a population estimated at 200 million. Meanwhile, Nigeria reported 661 patients with Lagos accounting for 35 percent. Total confirmed patients is 19,808 of which 12,584 are receiving care, 6,718 have been discharged and 506 have died. Just like much about the disease remains unknown, it’s striking that the proportion of patients whose exposure to it is unknown (76%), as against contacts (22%) and travel history (2%). This shows community transmission of the disease is full blown and there could be more as lockdown measures are eased gradually by the federal and state governments. The NCDC is behind its 3000 daily testing targets. Meanwhile, the Nigerian federal government has set a target of testing two million people in the next three months. To achieve this, the NCDC must conduct at least 22,000 tests daily. With daily increase in COVID-19 cases, Lagos – the hotspot of the contagion – is contemplating another round of lockdown to curb the spread. This is after reversing its decision to allow worship centres reopen.

Nigeria lags peers like South Africa which has now tested over 178,000 people, according to Worldometer, a website which tracks real-time statistics. Meanwhile states like Kogi and Cross River have refused to conduct tests, while others are being clever with the extent of the spread of the disease. Besides, people can be infected with the disease without showing any symptoms, the so-called asymptomatic. In some cases, those who show symptoms refuse to get tested out of the fear of being stigmatised. Nigerians believe these figures are exaggerated. Some also say, the virus is non-existent but a ploy by the government to squander funds. Either way, Nigerians do not trust the government. If there was ever a time when we needed clear and reliable data, it’s now. Although no single dataset exactly represents the reality on the ground. Every day, thousands of healthcare workers, government agencies and researchers are collecting, processing and sharing what they know about the virus. The goal is to gather the most reliable data that can help people understand

the outbreak as it evolves. At current testing capacity, Nigeria is nowhere close to the COVID-19 reality and may hinder adequate and proactive planning to curb its spread. The federal government must be committed to improve investment in boosting the testing capacity of the NCDC. Viruses, including COVID-19, tend to spread at an exponential rate, which means they multiply really quickly. On March 6, the world had 100,000 confirmed cases, one month later there were one million confirmed cases. Given the lackadaisical attitude of most Nigerians to stay protected and the poor state of the Nigerian healthcare system, only improved testing capacity will reveal the true extent of the spread and inform preventive measures. According to the World Health Organisation, African countries risk prolonged years of battling the COVID-19 pandemic due to poor healthcare systems. Nigeria’s daily coronavirus counts will become meaningless and treated like a league table if the healthcare system, starting with testing capacity, isn’t improved.

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Tuesday 23 June 2020

BUSINESS DAY

property&lifestyle LASG boosts real estate with commencement of construction on Lekki Regional Road … market survey shows significant value appreciation in island community CHUKA UROKO

hough Covid-19 has dislocated economies and development projects across the globe, it appears that with grit and vision, some governments and projects will buck the trend of downward spiral. The proactive decision by Governor Babajide SanwoOlu of Lagos State to launch the commencement of the construction of the 8.5km Lekki Regional Road on May 30, starting from Victoria Garden City (VGC) in Ajah and ending at the foot of Freedom Way in Lekki Phase 1, is one of such positive moves. The road, to be constructed on a 45 metre wide Right of Way (RoW) will have, at least, 3 bridges and 15 culverts. Contract for the project has been awarded to the well known infrastructure construction company, Hi-Tech. Construction is projected to be completed within two years. The interesting thing is that the announcement of the construction of the regional road is already impacting posi-

tively on real estate in the Ajah and Elegushi areas, and more specifically, on major new city projects happening on the new Lekki Central Zone and the new Lagoon District, both located within the Lagoon water body to the north of Lekki-Epe Expressway. According to the Special Adviser to Governor Sanwo-Olu on Works, Aramide Adeyoye, a major beneficiary of this project is Gracefield Island in Lekki Central. Another gainer is Orange Island and Ostia, also located within the Lagoon District. A recent independent market survey is already showing a 25-percent increase in value on Gracefield Island within Lekki Central where, on completion, the Lekki Regional Road brings commuters within 10 minutes from Ikoyi and 5 minutes from Lekki Phase 1, on a road that will be devoid of social distractions. It is expected that, with the commencement of the Lekki Regional Road, the premium real estate sector now has a bigger and more viable terrain to explore potential across the span of the upcoming road.

Governor Babajide Sanwo-Olu flags off the construction of Lekki Regional Road.

The Lagos State Commissioner for Physical Planning and Urban Development, Idris Salako, while on enforcement duty in Banana Island on June 10, warned developers to keep away from the RoW of the proposed Lagoon Highway. This is a major road infrastructure that will run from the Free Trade Zone across Badore Road, on the Lagoon, behind VGC , to the south of Gracefield Island, behind Pinnock Beach, to link up with both the regional road and the

Here’s real estate investors guide for devts in flood-prone, low-lying areas CHUKA UROKO

erhaps, unknown to many, Lagos State government has a well documented guide for investors wishing to do real estate developments in parts of the state identified as floodprone or low-lying areas. The state, according to its authorities, has an idea of everywhere that is prone to flooding. The state has a master plan that speaks to what it calls flood mapping which has identified every area that is prone to flooding and the necessary solutions to the problem. “What we expect every investor who wants to invest in an area that has been identified as a flood prone area to do is to apply to the Office

of the Drainage Service and Water Resources for what we call a drainage clearance,” said Lekan Shodeinde, the permanent secretary at Office of the Drainage Service. Shodeinde who spoke at a Webinar on the impact of the predicted 240 days of rainfall on real estate hosted by Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos Branch, explained that the aim of the application was to tell the investor that if he must invest in that location, these were things he needed to do. The permanent secretary added that the investor would also be required to disclose the kind of drainage infrastructure he needed to put in place along with the kind of set-back he would provide if there were existing channels

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there. “If it is a low-lying area, we will advise you on your minimum height of reinforcement and all kinds of engineering intervention that you need; so when you do your environmental impact assessment (EIA) in addition to the remaining clearance, that is the look of how you are going to protect the ecosystem as it were,” he explained further According to him, these are the things the law expects an investor to do as they affect drainage and flooding, adding that the investor is supposed to have a drainage clearance issued by the government. Shodeinde noted that the seasonal flooding incidents that occur in Lagos, destroying properties and submerging roads and whole communities, are products of a combination of factors including water bodies rising above sea level, irregular and unapproved developments, and climate change effect. But Osato Osawaya, an estate surveyor and valuer, pointed out that these are the challenges of having a mega city in a coastal area, explaining that every city that is an island like Lagos deals with water. “You must plan for water in your built environment; when you are making your building plan and projections , you must bear in mind that you are going to have flooding,” he said.

Third Mainland Bridge. Jaco Van Heeyl, an Engineer and Construction Manager of Gracefield Island, had earlier said the development would benefit greatly from both the proposed Lagoon Highway and the Lekki Regional Road but, in his view, the Regional Road was of immediate importance. Just like Salako emphasised, Van Heeyl urged developers within Lekki Central and Lagoon District to respect the RoW of the proposed

Lagoon Highway, as it would happen, at some point in the near future, to ensure the enduring viability of the new Lagoon District. With the emphasis of Governor Sanwo-Olu himself on orderly development of municipal Lagos and outlying areas, it appears Lagos State is on the path of ridding out the negative impact of Covid-19 to a significant extent, with regard to prime real estate, which should have a multiplier effect on the sector in

general terms. But a note of caution is necessary here. Even as Lagos State government is creating new Island communities on the Lagoon, it must do so with adequate regard to possible negative environmental impact. Therefore, both Lagos and Federal Governments must insist on comprehensive environmental impact studies for these expansions. Lagos State government must also pay due attention to Traffic Impact Assessment. It should not build new roads and, in turn, crowd them with unintended estates that do not feature on its masterplan. Some proposed new island projects are hanging at the moment, due to poor or non-existent access. To protect comfortable mobility of Lagosians, on both land and water, the state government must empower its Ministry of Physical Planning and Urban Development to protect the masterplan and cooperate with the Federal Government in ensuring that jetties, harbours and waterways are not impaired by indiscriminate reclamation.

Reasons stakeholders don’t want FG involved directly in housing construction CHUKA UROKO

or reasons bordering on lack of expertise, poor locations, inability to deliver in time and on budget, and shady deals, stakeholders in Nigeria’s housing sector say they do not want the federal government to be involved directly in housing construction and delivery in the country. The stakeholders who spoke at a Webinar hosted by Housing Development Advocacy Network (HDAN) in Abuja added that government’s not getting involved directly in housing development will also prevent political contractors from holding it to ransom. They explained that apart from developing houses in locations where they are inaccessible and uninhabitable, government, because of shady deals by political contractors, generally deliver housing at costs that make them unaffordable, thereby defeating the purpose of building for low income earners. “To hasten the delivery of mass and affordable housing for millions of home-seeking Nigerians, the federal ministry of works and housing should reimagine its current approach to housing, engage more with professionals who have experience and expertise,” Festus Adebayo, HDAN President, advised.

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Works and Housing Minister, Babatunde Fashola, had at a media programme monitored in Lagos stated that the government delivered housing through the ministry and relevant agencies, notably the federal mortgage bank of Nigeria (FMBBN) and the Federal Housing Authority (FHA). This, according to the HDAN president, is a wrong approach because it seemed as though the government was in competition with private sector players . “The ministry should be playing its constitutional role of being an enabler of housing development and championing relevant policies as contained in the national housing policy,” Adebayo advised further. Speakers at the Webinar with the theme ‘Works and Housing: Future Prospects for Delivery of Affordable Housing Post-Covid-19’ were Ugochukwu Chime, GMD, Copen Group; Gbenga Nubi of the University of Lagos; and Nya-Etok Ezekiel, Chairman, Forum of Advocates for Social Housing. Others were Harmony Kunu, CEO, East Africa Regional Project Director, Workers Affordable Properties (WAP) Limited Rwanda; Chukwuma Katchy, PPP Expert; Efty Garba, Chicagobased housing expert; Onwuemele Francis, Canada@Businessdayng

based mortgage expert. President Muhammadu Buhari disclosed in his nationwide broadcast to mark this year’s Democracy Day that his government had delivered about 2100 houses. This, according to the speakers, was a far cry from what was expected to scale up housing supply in Nigeria. “This means that if the government must deliver its targeted 300,000 housing units per annum, it must collaborate with private sector professionals whose experience and technical know-how will be of help,” Adebayo argued, noting that the president’s revelation was a strong proof that there was a huge housing demandsupply gap. The stakeholders canvassed the adoption of a unique PPP model where, Nubi explained, private sector players come to the table with their experience, technology, governance and finance while the government supports with incentives, land, regulatory framework and an enabling environment. The University don explained further that with this, government did not need to strain its lean purse to fund the targeted 300,000 housing units, but could instead use the resources for interventions in other areas, especially education and health.

Tuesday 23 June 2020

BUSINESS DAY

COMPANIES&MARKETS Research shows slowdown in public relations-media relationship on COVID-19 impact OLUFIKAYO OWOEYE

here was a noticeable drop in the volume of public relations content pushed to the media as a result of decrease in corporate activities on the back of COVID-19 pandemic. According to a new research conducted by BrandImpact Consulting, a media and public relations measurement and research consultancy firm, showing the impact of COVID-19 pandemic on public relations and media platforms revealed that the decline in the level of corporate engagements with stakeholders adversely affected the volume of newspapers in terms of number of pages. The research which was conducted on a 95percent confidence level and a 2percent margin of error, cumulative average number of newspapers’ pages decreased by 33.3percent in April. The two-month study analysed 624 editions of 12 publications in March and April 2020. Newspapers used in the research include BusinessDay, Daily Independent, Daily

Sun, Daily Trust, Leadership, New Telegraph, Nigerian Tribune, The Guardian, The Nation, The Punch, ThisDay and Vanguard. Typically, public relations and media houses have a symbiotic relationship. While the media serve as a platform for public relations to reach its audiences, PR provides

Big and Bold celebrates 5th anniversary, hosts brand management colloquium

ig and Bold Communications Limited, one of the fastest growing marketing communication agencies in Nigeria, has celebrated its 5th year anniversary in grand style as it played host to top practitioners in the industry to discuss the future of brands in the pre and post-COVID era. Practitioners who spoke at the brand management colloquium held on Thursday, June 9, 2020 to celebrate the anniversary advocated the need for brand owners, agencies to approach the pre and post-COVID era with a new mindset provided they want to remain relevant to their clients and customers. At the session, several speakers took turn to offer their views on what businesses, brands owners and agencies must embrace if they hope to survive as entities amidst COVID-19 pandemic. The chief transformation officer, MTN Nigeria, Bayo Adekanmbi who delivered the keynote address titled ‘Pivoting Your Brand in Crisis’ noted that it has become imperative for agencies or brands to reposition by finding new path of survival in the midst of current crisis which has affected businesses generally. Listing five critical elements that are pivotal for businesses, brands to survive

at this time, Adekanmbi explained that agencies as well as businesses must be seen to demonstrate responsibility, reinforce its sense of reputation, show relevance to customers/consumers at a time when they are emotionally depressed, develop careful thought through retention strategy and have a good sense of recovery. In her remarks, brand content lead, Nextford University, Anna Johnston noted that brand cannot afford to be silent at this period noting that engaging customers/ consumers the more would strengthen its presence in the marketplace. Also speaking, the Chief Executive Officer of Lasiko, a promotional product company, Damilare Ogunleye stressed the need for brands to have digital mind set if they desire to play big in the post-COVID era. Speaking, the last speaker, Consulting Partner, Verdant Zeal Group, Kola Omisore said it is important for brands to pivot in crisis through creative storytelling and that brands need to embrace change and be culturally relevant or risk being forgotten. He concluded that people do not buy just goods and services, they buy relations, stories and magic”

media platforms with content to build readership and drive engagement. The relationship was visibly affected in April by the COVID-19-induced holiday. Speaking on the findings, lead analyst, BrandImpact Consulting, Austin Ayaosi, noted that even though inhouse PR teams and agen-

cies were working remotely, a significant part of what they did in April was deploying content in the media to inform stakeholders of what their brands and clients were doing to support in the fight against COVID-19 pandemic. “Corporate engagement in April was majorly around corporate social responsibil-

ity which led to an increase in CSR-oriented content in the media. In the Banking sector, for instance, CSR-led content accounted for 55.8% of banks’ content in print media as against 12.9% CSR content in March”., he said. H o w e v e r, t h e s t u d y showed that some tier-2 newspapers may not rely on

PR-driven content to sustain their volume of pages as much as some tier-1 publications. It also revealed the scramble by PR professionals to connect with educated, enlightened, and wellinformed high net worth audiences through tier-1 publications. Ayaosi also noted that some media houses may actually need a bailout as large portions of their publications were dedicated to COVID-19 news coverage. “Volume of corporate and other ads declined. Corporate engagement was limited, ‘society big wings’ were on holiday, burial ceremonies and social gatherings were restricted; all of which negatively impacted the revenues of media houses. The impact was so severe that some publications could not even publish a single edition in April during the lockdown”. BrandImpact Consulting is a media and public relations measurement and research consultancy that provides brands with data-driven insights to help public relations and communication managers design smarter strategies to achieve better results.

Cititrust Group Nigeria Operations launches culture transformation journey in Lagos IFEOMA OKEKE

ititrust Group Nigeria, a leading financial services group in Nigeria, has launched her culture transformation journey aimed at delivering excellent service and world class customer experience. The ceremony, which took place at Cititrust Nigeria Operations’ Country office in Lagos on Friday, June 19, attracted notable figures in the nation’s

banking and financial service industry. Speaking at the ceremony, Ikechukwu Peter, country Chief Executive of Cititrust Nigeria operations’, said the company as a global brand is “committed to promoting the culture of excellent service delivery to its teeming customers across its seven subsidiaries within Nigeria.” He listed the Group’s subsidiaries to include, Core Capital Limited, First Option Microfinance Bank

Limited, Omoluabi Mortgage Bank Plc, Bermuda Forex BDC Ltd, First Guaranty Healthcare Ltd, CDP Insurance Brokers Ltd and Atlas Portfolio Ltd. According to him, those who have had dealings with any of the subsidiaries would readily attest to their unfailing commitment to excellent service delivery. “Our desire is to take these values of excellent service delivery and world class customer experience

Cititrust is known for to a whole new level, by transforming it from just being a business practice into a way of life,” Ikechukwu said. He added that one of the ideologies in Cititrust is that the customer is the live wire of any business and that Nigerian customers deserve the best and must always demand the best from their ser vice providers, not only in the finance sector but across all other sectors of the economy”.

HP boosts remote working with innovative laptops, desktops DANIEL OBI

P Incorporate has introduced new additions to its Personal Systems portfolio designed to help people stay productive – whether they continue working from home or prepare to return to the office. “As we experience a new normal that blurs reality between life and work, it’s clear that the PC is essential – allowing us to work, live, learn, collaborate, and create regardless of distance,” said Alex Cho, president, Personal Systems, HP Inc. in

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a statement. “Today’s line-up of innovative products, our largest commercial product launch ever, including the next generation of Elite PCs and desktops, the world’s first ergonomic monitors with always-on low blue-light, and the world’s brightest 14-inch mobile workstation, along with dedicated services to improve remote employee experiences, reinforces HP’s commitment to equipping workers with the right tools, power, and performance for the ultimate work from home experience.” Some of the new prod-

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ucts include the HP EliteBook x360 1030 G7 and HP EliteBook x360 1040 G7 (available in Nigeria from end of July 2020), HP EliteBook 835 G7, HP EliteBook 845 G7, and HP EliteBook 855 G7 (available in Nigeria from end of August 2020), HP EliteBook 830 G7, HP EliteBook 840 G7, and HP EliteBook 850 G7 (available in Nigeria from end of June 2020), and HP EliteBook x360 830 G7 (available in Nigeria from end of June 2020). The latest HP EliteBooks are designed for superb connection and collaboration for powerful business resil@Businessdayng

iency. 5G or Gigabit Class 4G LTE makes it easy to get connected and get work done. The wide-angle camera with an 88-degree field of view combined with AI-based audio that minimises background noises and makes video conference experiences sharper and clearer. Tapered edges make the devices easier to open, the redesigned keyboard with rubber dome keys provides an extremely quiet typing experience, and the integrated webcam privacy shutters physically block the camera for immediate and worryfree privacy.

Tuesday 23 June 2020

BUSINESS DAY

COMPANIES&MARKETS Unitrust Insurance sees recapitalisation boosting its long-term strategic goals MODESTUS ANAESORONYE

nderwriting firm, Unitrust Insurance Company Limited said the ongoing recapitalisation of the insurance industry is a welcome development, and one that will enable it achieve its long term strategic goals of value addition to owners and other stakeholders. The company is positive that, not only will it be there post recapitalisation, but it will emerge a mega firm following its plan for business combination with like fellows. Unitrust, a general business underwriter already has over N6 billion paid up share capital that has enable it scale through the December 2020, benchmark of 50 percent compliance. John Ijerheime, managing director/CEO, Unitrust Insurance made the disclosure during a Webinar interactive session with the press in Lagos. He said the purpose of the recapitalisation exercise is to have fewer companies that are financially strong and viable that can easily meet obligations. “Stronger companies are

expected to emerge and that will increase their capacities to take more businesses thereby reduce the incidents of capital flight especially of insurance premium and business from our country to other developed countries as being experienced currently. Also, monies that will be available to companies after the exercise will be used to improve on IT and other needed growth infrastructures.” Ijerheime said “for at Unitrust, it’s a welcome development and we are fully prepared to be part of the new and stronger companies that will emerge post recapitalization. We have the support of all stakeholders towards achieving this goal.” According to him, the recapitalization exercise will help boost the Company boost its long-term strategic goals of value addition to our owners and other stakeholders. “The exercise will see Unitrust Insurance as a big player in the insurance industry taking bigger risk while playing in the global market. Our strategy is to progressively grow our market share and become a market leader by continually identifying, meet-

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ing and exceeding customer’s expectation through operational efficiencies and rendering excellent customer service.” We will remain true to our vision which is to create value to our stakeholders by ethically delivering diffenciated products and partnering with clients to proactively manage their risk, he said. “Also, we will continue to work at delivering continuous growth using our people and leveraging on technology. Our business model will be driven by structural analysis of our strengths, weaknesses, opportunity, and Threats (SWOT) for responsive bonding. We will pursue the corporate Business, High-Net worth individuals as well as Retail segments of the market, the MD said. According to him, the company will adopt the following strategies to increase its premium income going forward market expansion, retention of clients, improve customer service, develop alternative channels, retail penetration and direct business, as well as leverage on technology and insure tech and products development.

West Blue Consulting delivers COVID-19 response platform in Ekiti State AMAKA ANAGOR-EWUZIE

est Blue Consulting, an awardwinning ICT firm known for delivering innovative tech-based solutions to public and private sector entities across Africa, has roll-out an Epidemic Response Hub on behalf of the Government of Ekiti State, Nigeria. The Epidemic Response Hub is a public health surveillance tool that monitors disease outbreak and disseminates geospatial information to both policy makers and the general public, with the aim of curbing the spread of diseases. Sponsored by the Government of Ekiti State in Nigeria to combat the spread of COVID-19, the platform enables real time capture, storage and analysis of public health data such as the location and current occupancy rates of medical facilities, interactive maps showing exactly where outbreaks have occurred, as well as real-time contact tracing. BusinessDay understands that it was launched by Governor of Ekiti State, at the height of the outbreak, and it enabled public health officials in the State to successfully monitor

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…Platform to help curb spread of diseases in West Africa

and manage the spread of the coronavirus in Ekiti State and environs, while enabling the citizens and residents to access critical healthcare information. Valentina Mintah, founder of West Blue Consulting, said that serving the public good has been a core value of West Blue Consulting since its inception in 2012 and the firm is proud to support Ekiti State Government in its fight against COVID-19. “West Africa, like other regions of the world, faces extreme public health challenges caused by the coronavirus, West Blue has harnessed its unique IT expertise to develop a bespoke and highly

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customised digital platform that aims to help curb the spread of the disease within the populace,” said Mintah. According to Mintah, the Epidemic Response Hub includes a social mobilisation tool that allows members of the public to donate funds and goods to entities distributing aid and resources to those in need. “It is a one-stop-platform that enables State officials and the public to work closely to prevent the spread of the disease, and protect the most vulnerable in the society. The hub also enables traders and retailers to apply for official permits to re-open stores selling essential goods. Applicants are then provided with a code that can be verified by authorised persons when conducting safety checks,” she said. On his part, Mark Addo, CEO of West Blue Consulting said the Epidemic Response Hub is the first-of-its-kind in West Africa, which was developed to support the response to highly contagious diseases such as Lassa fever, cholera, measles, Ebola and the novel covid-19 disease.

Tuesday 23 June 2020

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

Smartphone review: An inside look at the new Samsung Galaxy Z Flip Jumoke Akiyode Lawanson

amsung continues to mark significant milestones in technology and the Galaxy Zflip is an evidence of this feat. The revolutionary hideaway hinge of the device gives users an entirely new kind of smartphone experience. The invention Samsung has overcome many challenges of the hinge technology with two new ground breaking innovation: the Dual CAM mechanism and Sweeper technology. The dual CAM mechanism The ridge-shaped CAM mechanism of the Galaxy Zflip can open, close and stand the device on its own at different angles. It offers many degrees of control such as ending a call by flipping the device close or even taking a selfie with the device closed. This mechanism presents a new camera experience for hands free selfies and Vlogging, tripodless night camera, quick and easy multitasking. The sweeper technology The sweeper mechanism sits inside

the gap between hideaway hinge made of long lasting nylon fibres of vacuum cleaner brushes. Now that should remind you of sucking out dust and that’s exactly what it does; keeps the dust away from hinges and screen. The engineering of this technology also meets three specific conditions: Elasticity (to account for shifts in the gap size); long-lasting flexibility (the hinge is tested to withstand 200,000 folds, and slimness (to keep the device’s sleek form factor).

Fashion meets technology What is beauty without brains? It is clear that the Zflip has got an impressive brain with its HDR camera function that blocks out excessive light while taking a shot in sun light and its hinge technology among others features; It is also a beauty to behold. The Galaxy Zflip makes an undeniable fashion statement as it comes in a stylish glass material of black and purple. It folds small enough to fit into a small purse for any occasion, the palm of your

hands or even your pocket. The Zflip opens to a 6.7” screen that allows you enjoy smooth movie viewing and has a 256GB storage capacity and 8 GB RAM. The Samsung Galaxy Zflip has been reported sold out in a matter of days after being launched in many countries and has recently been awarded five stars by The Guardian 2020 for reinventing the flip phone for 2020. The Zflip was launched in Nigeria on the 15th of June is available in Samsung Experience stores na-

tionwide. Full specifications Rear camera - 12 megapixel (f/1.8, 1.4 -micron) + 12 megapixel (f/2.2, 1.12-micron) Rear autofocus - Yes Rear flash - Dual LED Front camera - 10 megapixel (f/2.4, 1.22-micron) Display - 2.70 inches Processor - Qualcomm Snapdragon 855+ Battery capacity - 3300 mAh OS- Android 10

Softcom develops transparent crowdfunding initiative for COVID-19 palliatives distribution Jumoke Akiyode Lawanson

oftcom, a leading technology solutions company has partnered with Deloitte, MTN, Ernst &Young, Banwo & Ighodalo, GTBank, Future Africa, Providus Bank, John Ashley Foundation, Wildreams, Lagos State Government and other corporate organisations to develop and launch a new initiative – HelpNow, to support vulnerable Lagos residents by cushioning the impact of the COVID-19 pandemic through the platform that helps to pair donors with beneficiaries in need. HelpNow, an initiative of Softcom, is a private sector led collaboration in response to the debilitating

effects the COVID-19 pandemic has had on the income and livelihood of millions of Nigerians. The objective is to provide support to at least 2 million vulnerable people in Lagos through a crowdfunding model that rallies the support of well-meaning individuals and corporates. Speaking at the launch, Lagos State Governor, Babajide Sanwo-Olu noted that “That the role of technology in addressing the socio-economic challenges of the modern world is not only important, but also incontrovertible. This consciousness is the reason why technology is a critical component of the THEMES Agenda of our government”. “We are determined to leverage technology and its associated inno-

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vations to make governance easier and transform our State. However, like the experience in other megacities in the world, COVID-19 outbreak has shown the fragility of our societies and the need to seek innovative ways for addressing some of our immediate challenges has become more important”. “With the launch of HelpNow today, we now have a platform that aggregates support for government’s efforts at alleviating the sufferings of the poor and vulnerable in our society. Government alone cannot address the socio-economic problems of any society. It needs the support of well-meaning individuals and corporate organisations to cater for the needy amongst us”.

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Before now, Lagos State had no such innovative platform to allow effortless intervention from anywhere and anonymously. Sanwo-Olu therefore commended the company for this innovation, saying that although the current pandemic affects everyone, there is need to cater to the most affected who are having a tough time taking care of themselves and their families. According to Yomi Adedeji, CEO, Softcom Limited and convener, HelpNow initiative; “Softcom is working with the Bank of Industry, Telco’s, and LASG to organise the records of vulnerable Nigerians covering people with disabilities, the poorest households and the aged, for this purpose. These re-

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cords reduce guesses or duplication of efforts. It ensures that more people are reached, and no individual or family benefits more than once.” Also, to ensure the credibility and transparency of the initiative, Deloitte and Ernst &Young will provide audit, governance and operational risk support, ensuring every Naira donated gets to a beneficiary as promised. Adedeji encouraged corporates and private individuals in Nigeria and worldwide to support the initiative by visiting the Helpnow.ng website to donate, saying no amount is too small to help those in need. He said donors will be able to view the impact of their giving on the website coupled with testimonials of the beneficiaries.

Tuesday 23 June 2020

BUSINESS DAY

INSIGHT Floyd – A turning point for the world Henrietta Onwuegbuzie

he despicable killing of George Floyd left me stunned, horrified, and then infuriated. I couldn’t believe someone could do that to another human being in broad daylight! I couldn’t believe that in spite of knowing he was being recorded, neither he nor his fellow officers were deterred, but brazenly allowed such an act to continue. It showed me just how bad racial injustice had become! Because I have always found myself in mixed-race schools, I have never given much attention to racial issues, especially as I was always able to tell off anyone who dared to be condescending or insinuate superiority. I was always quick to remind them that colonialism, which set back Nigeria and all affected countries was the biggest form of roguery and plundering ever, followed by slave trade! Being born in Nigeria to a middle-class family with highly educated parents provided me with enough confidence to either not notice racist slurs or to deal with them summarily when obvious enough. It never occurred to me that things were so bad. Yes, I’d heard about the killings, but I thought it was just a few bad cops, giving a bad name to the wonderful Americans and Britons I knew and kept as friends. I shamefully did not understand the plight of African-Americans, whom I thought always felt aggrieved for one reason or the other. Now, I apologise with all my heart for those thoughts. As the scales fall off my eyes and my emotions begin to settle, I realise that from this ugly, Floyd incident and many other racially induced killings before it, positive outcomes that may indeed lead to a better world going forward, may emerge. To start with, the rallies around the world, which comprise of protesters in over 50 countries of every continent (except Antarctica), and of every colour, shape and form, show that for once, all races are uniting to fight against racial discrimination, and indeed all other forms of injustice! Tearing down statues of slave masters that symbolise the evil of unjust subjugation, is in my opinion symbolic of tearing down global systems that ensure some countries and people remain economically deprived, while others thrive at their expense. These unethical and unjust systems haven’t really done

the world much good, but remain shortsightedly sustained. History has shown that tyranny and unfairness, never end well. Examples abound; Hitler, Idi Amin, Saddam Hussein, Gaddafi, to mention a few. They all ended badly, so I can’t understand why some people still believe they can get away with it or that unfair domination is sustainable? I however wish to turn the flashlight to what I hope the impact of the Floyd incident will be in my continent, Africa, and in my country, Nigeria. I would like to reflect on what knees need to be taken off necks or which statues need to be brought down, and more importantly, those statues that need to be erected. I can’t help calling out those African rulers (can they be called leaders?), who seem more obsessed with accumulating personal wealth than the emancipation of their people. Africa is rich in every sense. It is the birthplace of world civilisation, yet many of our rulers have fed fat, while leaving their people to live in penury. They let the continent be seen as no more than a donor destination (I cringe as I think of how they have allowed such a loss of dignity). They allow African countries to be a place where foreigners continue to pillage as long as the right people have been bribed. The result is that the best of us leave to seek a more enabling environment as other races have done in the past when they were under similar conditions or faced natural disasters.

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George Floyd

But there are more knees on the neck of Africans in Africa. For instance, when xenophobia is practiced among Africans, who wrongly channel their frustrations resulting from injustices suffered to other vulnerable Africans, who are struggling to survive just like them. No one will ever condone crime, and there are established legal ways to deal with offending criminals, but when we attack ourselves, we put knees on our necks and stall our progress.

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When human trafficking flourishes between North Africa and Sub-saharan Africa, and North Africans treat captured Sub-Saharan Africans as sex slaves and in other atrocious ways, we have knees on our necks. Further, the whole world looks on, as France continues to have an unhealthy, parasitic relationship with Francophone African countries. Not even the UN seems to be interested in intervening to correct the aberration stemming from the fact that France compels these countries to send 85% of their national revenues to the French Central bank, and compromises any leader that tries to stop this. It is my hope, that as consciences of countries, institutions and organisations around the world, are now being stirred, France will rethink this unhealthy relationship, by removing its knee from the neck of Francophone African countries, to allow them to breathe. I believe more can be gained from a mutually beneficial relationship. Within my beloved country Nigeria, which has produced geniuses around the world (though a few bad eggs tend to mar our reputation), we also have knees on necks among ourselves. We indeed have knees on necks when funds meant for road construction, and other infrastructure, are embezzled by elected public officials who are almost never held accountable. We have knees on necks when public schools and hospitals are left dilapidated, while and teach@Businessdayng

ers and health workers are poorly paid because elected officials pay themselves handsomely enough to afford foreign school fees for their children and travel out for medical treatment. We have knees on our necks when smart young people who qualify, cannot get into schools of their choice because of an unfair quota system that favours weaker students from certain states, is in place. We have knees on necks when meritocracy is lacking in public service, and tribalism reigns supreme, such that incompetence is found in all spheres and positioned at all levels. The result? The worst of us appear to be in control of the rest of us, making a country with some of the brightest minds in the world, underperform even among African peers, because the brilliant minds that could have made it a real giant of Africa, have been stifled. Finally, we can never breathe when terrorism is condoned while punishing victims that try to defend themselves, and only lip service is paid to the fight against corruption, which neutralises progress. Just like the statue of the slave master, Edward Colston, was brought down in the UK, time has come to bring down all the wrong statues of tribalism, nepotism and corruption. And to erect the right statues in the form of policies and institutions that allow justice, accountability, meritocracy and shared prosperity for all. We should also, each begin to reflect, even on a personal level, if we may have our knee on anyone’s neck – children, wards, spouses, office colleagues, etc., so that we can take it off immediately before they die, and let them breathe. In conclusion, the Floyd incident, which has come to symbolize not just racial inequality but also all forms of injustice, provides an opportunity to reset our actions and take steps to create a better world, a better continent and a better country. As consciences of world leaders and institutions begin to openly acknowledge guilt, and commit to taking steps to correct acknowledged injustices, it is my hope that African leaders will begin to reflect on ways to remove the several knees on our necks, so we can breathe and thrive and our people can happily come back home, to make us great again. We are stronger together and we must let love reign! Dr Henrietta Onwuegbuzie is a Certified Management Consultant, and heads the Entrepreneurship unit at Lagos Business School.

Tuesday 23 June 2020

BUSINESS DAY

INSIGHT

The oil countries suffering most from the oil price crash up its dividends.

Julianne Geiger

Oman with its Handout Analysts may be overstating Oman’s role as a mediator in a volatile region, but make no mistake--Oman is in trouble, financially speaking. Oman’s struggles are not surprising, giving the country’s extreme sensitivity to oil price shocks. In fact, Oman is one of the most vulnerable when it comes to oil prices. In fact, Oman’s fiscal breakeven for oil is $82Brent, according to Fitch Ratings--this is the minimum oil price that Oman needs to balance its budget. There is no balancing going on with Brent at just half that. These oil revenues were supposed to account for nearly two-thirds of Oman’s overall 2020 budget, according to PwC, which was based on Brent $58. At nearly one million barrels of oil produced daily, it exports almost all of it. To help it stay afloat in these troubling times, Oman is putting feelers out concerning some financial assistance from other Gulf countries. It is likely to get it if its situation becomes critical enough--from either Qatar or the UAE, or even Saudi Arabia. Angola As Africa’s second-largest oil

Iraq Similar to Venezuela, Iraq was in trouble well before the most recent oil price crash. Political unrest, no 2020 budget, the coronavirus, and a massive $20 billion deficit is just a jumping-off point. Iraq is unable to pay billions in public salaries for June and July, and it must contend with OPEC breathing down its neck to cut production to fall in line with its production quota. Meanwhile, its oil production has slipped from 4.57 million bpd in March to 4.165 bpd in May, while trying to make ends meet with a $60 fiscal breakeven.

producer, Angola relies on oil revenues, which contributes 90% of the country’s total export revenue. The value of its oil exports fell by nearly half in May, from April levels, netting Angola about $380 million in cash from its crude oil sales for the month, as both oil prices and Angola’s production levels fell from 1.402 million barrels per day in March, to 1.313 million bpd in April, and then to 1.280 million bpd in May, according to OPEC’s MOMR. Nigeria, a Complete and Utter Disaster Africa’s largest oil producer is facing a crisis of independent oil producers dubbed a “complete and utter disaster,” by Nigeria’s third-largest independent oil company, Shoreline Group. In Nigeria, independent oil producers make up about a fifth of Nigeria’s oil production or 400,000 barrels per day. Nigeria’s debt-laden independent producers have fared particularly bad because most of those companies purchased their assets about six years ago when oil was trading around $100 per barrel. For state-run NNPC, things are not much better, as demonstrated by it telling all its partners and suppliers to bring down their costs by a whopping 30% and 40% as the pain now spreads from oil to the support industry. NNPC’s goal was to trim another $10 per barrel of its production costs by the end of 2021. That figure seems woefully insufficient given Nigeria’s $144 per barrel www.businessday.ng

breakeven cost for crude oil--the highest in the world thanks to the country’s refining costs and high level of government corruption. Venezuela What with all the corruption, it is hard to say just how much the oil price crash has contributed to Venezuela’s woes, but there is no doubt it has played a significant role. The country sitting atop the world’s largest oil reserves has been reduced to a single oil rig, leaving billions of barrels untouched, while the country has plunged into chaos and financial ruin. In addition to stifling U.S. sanc-

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Africa’s largest oil producer is facing a crisis of independent oil producers dubbed a “complete and utter disaster,” by Nigeria’s third-largest independent oil company

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n addition to the apparent financial crunch that many in the oil industry are feeling today, oil traders, national oil companies, shippers, oil giants, pipeline companies, or small oil companies in the shale patch are weathering a variety of oil market storms, including a shifting geopolitical power landscape, fierce and costly market share battles, and impossible future planning. Much ado has been made about the dire situation that some of the powerhouses in the market now face, such as Saudi Aramco (who, in the midst of the war for market share in April exported an additional 3 million barrels per day in April in a rather nice balance sheet addition) and the recent job cuts, and the pickle of having to keep up their dividends while cash strapped. But here is a look at some of the other oil market players that are finding themselves on equally dangerous footing.

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tions on its oil exports, Venezuela’s oil production has slumped to just 570,000 barrels per day. Bahrain Bahrain’s addition to the list of countries in peril due to the oil price crash is debatable. Surely its Saudi-puppet status would earn it a bailout from the Saudis if they were truly in trouble, but Bahrain’s crude oil breakeven price is $96 per barrel--the second highest in the world only after Nigeria. Saudi Arabia may also feel more duty-bound in assisting Bahrain since it helped to create the oil-price crash. Oil accounts for 85% of Bahrain’s budget. Despite its precarious finances due to its high breakeven cost, Bahrain seems to be pushing ahead with even more exploration. BP, in the Blink of an Eye Earlier this month, BP shocked the market when it announced it was slashing 10,000 jobs--or 15% of its total workforce--thanks to the current climate. While some other smaller oil companies had announced multiple job cuts spread across multiple tranches over the last couple of months, BP held off during the height of the pandemic--but even BP had to pay the piper eventually. But the bad news for the global oil giant doesn’t stop there. In addition to the job losses, it announced this week it would writedown its oil and gas assets by $17.5 billion, leaving analysts to wonder whether the oil giant could keep @Businessdayng

Vitol For the world’s largest oil trader, the situation is bleak. Its first-quarter net profit fell 70% to just $180 million. Part of Vitol’s problem is that it held a large amount of inventory heading into 2020, hoping that global demand would improve--but we all know how that assumption turned out. Qatar’s LNG Aspirations at Stake Qatar may not be an oil powerhouse, but it certainly is a major LNG producer. And while oil prices have crashed, so have LNG prices, with the IEA saying that the LNG market would see the “largest demand shock on record” this year. And the rambunctious expansion of global LNG capacity heading into the year didn’t help matters. Qatar’s LNG trade accounts for 62% of its total export revenue. It’s 2020 budget assumed a $55/ barrel oil price. Qatar was planning to have the world’s largest LNG project come online in 2024, but has since been delayed. However, Qatar is insisting that its LNG projects will not be affected by the price volatility. For Every Loser While some are losing big and struggling to stay afloat, others are reveling in the crash. Goldman banked a cool billion-with-a-b during the oil price crash as it correctly anticipated that oil prices would slip into negative territory. Another frontrunner was the world’s second-largest oil and metals trader Trafigura, which banked a net income of more than half a billion, mostly supported by its oil trading division as the volatility paid off.

Tuesday 23 June 2020

BUSINESS DAY

FEATURE Imperatives of NNPC departing from opaqueness to transparency Recently, the Nigerian National Petroleum Corporation for the first in 43 years made public its Audited Financial Statement. In this write-up, Olusola Bello examines the implications of the action on the Nigerian oil and gas industry.

Mele Kyari, NNPC GMD

Performance and Excellence, which has become the operating guideline and a way of doing business in the corporation. He has therefore fulfilled this promise with this publication. The full disclosure of the corporation’s books involved those of 19 Strategic Business Units (SBUs) and a Corporate Services Unit (CSUs), even as the NNPC affirmed that its 2019 Audited Financial Statement was already being prepared and expected to be ready in a couple of months. For a company most maligned for opacity in recent past, the publication of NNPC’s books is a big deal. Any wonder that extractive industries watchdogs across the world have touted the feat as a glorious example worthy of emulation. Extractive Industries Transparency International’s (EITI) Executive Director, Mark Robinson, declared, no sooner than the NNPC AFS was made public, that the development came at a record time, commending the National Oil Company as setting a new standard of reporting. In Nigeria, NNPC’s disclosure of its books has not gone unnoticed as organisations and individuals have also commented. The Nigeria Extractive Industries Transparency Initiative (NEITI) has described as laudable,the decision to make public its audited accounts. NEITI acknowledges that the development fulfilled a pledge made by Mele Kyari, to the management of NEITI. NEITI Executive Secretary, Waziri Adio said the organisation welcomed the eventual fulfilment of the pledge www.businessday.ng

and obligation, saying given NNPC’s antecedents and its prominent role in the sector and in the country, the publication of its audited accounts was positive, signaling more openness for the oil and gas sector and for Nigeria. NEITI called on the corporation to go further by publishing its previous audited accounts and in open data formats so that the reports can be more accessible to citizens who are the shareholders of the corporation, saying NNPC should also strengthen and sustain its commitment to data mainstreaming and systemic dis-

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It is, nonetheless, reassuring that the corporation has commenced the process of a comprehensive diagnostic assessment of the refineries that would culminate into their thorough rehabilitation, starting with Port Harcourt and Warri Refineries

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he Nigerian National Petroleum Corporation (NNPC) did the unthinkable when on Thursday 11th June, 2020 it took a bold step to present its ‘2018 Audited Financial Statement’ to the Nigerian public. An exercise that is happening for the first time in 43 years of the corporation. The oil and gas industry that is being led by the NNPC has been dubbed opaque because of the lack of transparency that has characterised the operations of the industry. It is believed that nobody other than the corporation itself knows how much Nigeria is actual earning from crude oil and other associated business activities. Because of this, the general impression Nigerians have been having about the corporation is very negative to put it mildly. This is because the government has always been the reason why there has not been transparency in the corporation as it always breath down the throat of NNPC to finance projects that are outside the brief of the organisation. It is the government’s cash cow. Most often the corporation is asked to bring money to fund projects that was never budgeted for and it must obey. But with this development it does appear that the organization is now beginning to listen to the cacophony of demands there is need to be more open in its transactions so that it can engender enough confidence among international and local investors. To some of the operators in the industry this is a welcome development and they want the management of NNPC to be encouraged along this line so as to strengthen the confidence of stakeholders in the industry. The presentation of the audited financial statements remains indelible in the annals of the Nigerian National Petroleum Corporation (NNPC). It was a day, in all intents and purposes, the National Oil Company begin to erased doubts about its total commitment to transparency and accountability in its business transactions as it published, for the first time, its comprehensive Audited Financial Statements (AFS). Mele Kyari, the NNPC group managing director, in his maiden statement on assumption of office on 8 July, 2019, stated unequivocally that the corporation’s business dealings and governance, under his watch, would be accountable to the 200million Nigerians whom, he believes, are the true stakeholders of the company. Transparency, he explained then would be his watchword. He followed this pronouncement up by rolling out a programme known as TAPE – Transparency, Accountability,

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closure. Also reacting to this development, Governor of Kaduna Sate, Nasir El- Rufai, who lauded the initiative describing the NNP C boss as a “game changer” needed to move the corporation forward in terms of accountability and transparency. But the governor fears that the cabal would soon launch attacks on the boss. In a statement El- Rufai commended the boss’s effort and his numerous achievements within the short period he has been in office. While responding to a tweet of the Special Assistant to President Muhammad Buhari on new media, Bashir Ahmed, El-Rufai said: “Mele Kyari’s heart is in the right place! His tenure shall be the games changer that NNPC and Nigeria needs. He is competent, confident and rapidly plugging leakages, repositioning the Corporation towards greater transparency and accountability. The oil cabal will certainly attack him!” On his part, Senator Bassey Akpan, Chairman, Senate Committee, Upstream, said the recently published Audited Financial Statements of the NNPC underscored the readiness of the new Management of the National Oil Company to pursue transparency, good governance and accountability in the Petroleum Industry. In all, 19 entities of the corporation, registered under the Companies and Allied Matters Act (CAMA) as amended and the National Petroleum Investment Management Services (NAPIMS). The 2018 NNPC’s AFS posted positives in many of the National Oil Company’s Upstream going concerns. A perusal of the AFS for the year ended December 31, 2018 of the National Engineering and Technical Company (NETCO), an Upstream subsidiary of the corporation, indicated a profit after tax of over N4.5billion, a remarkable improvement from the previous year record of over N2.4billion. The AFS of the Nigerian Petroleum Development Company (NPDC) indicated a profit after tax of over N179.1billion which comes as significant improvement from the 2017 profit of over N157.4billion. During the period, NPDC posted a revenue of over N1.3trillion compared to the 2017 revenue of over N882.3billion. The AFS indicated that the NNPC’s flagship subsidiary has a total asset of over N5.3trillion within the period, compared to the N4.007trillion asset recorded in 2017. On its part, the Nigeria Gas Company (NGC) recorded a profit after tax of over N13.2billion with a comprehensive annual income of about N19.9billion. The AFS also valued the NGC total assets in 2018 at over N251.7billion compared to N196bil@Businessdayng

lion in 2017. In the Downstream Sector, the Petroleum Products Marketing Company (PPMC), for the first time, recorded gross profit of N24.3billion in the year under review, while NNPC Retail Limited posted profit after tax of over N2.2billion compared to the N1.8billion recorded in the preceding year. The National Petroleum Investment Management Services (NAPIMS) posted revenue of N5.04trillion in 2018 and profit of N1.01trillion, with total assets under the portfolio of the services unit valued at N18.6 trillion. NAPIMS, among others, manages the Joint Ventures contracts in the Upstream Sector on behalf of the government. Integrated Data Services Limited (IDSL), an NNPC Subsidiary in charge of acquisition and interpretation of seismic data, posted a total comprehensive income of about N3.2billion with profit of about N154million within the period. It is undeniable that the 2018 NNPC’s AFS revealed some challenges in the midstream subsidiaries of the corporation, most significantly, in the refineries located in Port Harcourt, Warri and Kaduna, where losses were recorded, unsurprisingly because of their long downtime. It is, nonetheless, reassuring that the corporation has commenced the process of a comprehensive diagnostic assessment of the refineries that would culminate into their thorough rehabilitation, starting with Port Harcourt and Warri Refineries. In addition, proposals to change the refineries’ business models to that similar to Nigeria Liquefied Natural Gas Limited’s (NLNG), which has been a success story over the years is also afoot. It should also be noted that there existed a seemingly wide gap between NAPIMS revenue and profit for the year as contained in the NNPC’s AFS. Noteworthy, again, is the fact that NNPC and its partners are already considering modalities to cap crude oil production cost per barrel at $10 by 2021 in order to ensure that Nigeria benefits more from the nation’s hydrocarbon resources. This is a position which the NNPC Group Managing Director, Kyari, has made clear at every avenue. The NNPC 2018 comprehensive AFS may not be a perfected report. There are not many perfect ones, Its being made available to the public, nonetheless, projects a significant progress in institutionalising transparency and accountability in NNPC, a bold move which, in many respects, is a worthy example for others to emulate, according to some industry stakeholders.

Tuesday 23 June 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

COVID-19: Our campus is safe for reopening - says Salako, FUNAAB VC MARK MAYAH

midst the gradual easing of the lockdown due to the outbreak of COVID-19 pandemic, the federal University of Agriculture Abeokuta [FUNAAB], has further pledged its commitment to keeping the University safe by rendering quality health services, provision of additional infrastructural development to staff and students as required. The Vice Chancellor of the institution, Felix Kolawole Salako[Prof] made this disclosure when he spoke with Businessday in a telephone interview. He said, all necessary and standard required conditions billed to be met towards academic resump-

Felix Kolawole Salako, FUNAAB VC

tion are in top gear. According to him, as the University gradually resumes, same rules that were applied to staff will equally

be applied to students, when they finally resume towards meeting government’s required conditions. Based on the students’

Post Covid-19: Why Nigeria must push for competitive, sustainable education reforms KELECHI EWUZIE

resident of the Lagos Chamber of Commerce and Industry, Toki Mabogunje says to sustain the future of her productive population, Africa largest economy, Nigeria must implement education reforms that are progressive, competitive and sustainable. The key challenges in the education sector include inadequate funding from primary to the tertiary level, large number of unqualified and inexperienced teachers as well as infrastructure deficit to cater for needs of Science, Technology, Engineering and Mathematics (STEM) subjects; and also trade and entrepreneurship subjects. Speaking in Lagos at a seminar organised by the Education Group of LCCI, Mabogunje, said the future of a nation is determined by the quality of its education system because our schools produce leaders in all areas: government, business, innovation and invention. “This is actually what the Sustainable Development Goal Four. “Ensuring inclusive and equitable quality education and promote lifelong learning opportunities

for all” try to achieve”, Mabogunje said. She observes that the gaps between the tertiary programmes and the requirements of the local and international work environment have also found many Nigerian graduates lacking in competitive skills upon graduation. Mabogunje opines that despite several efforts by both federal and state governments through initiatives and interventions to reposition the Nigerian education system to meet global standards, such initiatives were poorly implemented, while some far-reaching decisions were abandoned resulting in current dilapidated state. “I wish to emphasis that while the regulatory framework at the government level is somewhat clear, there is

Adamu Adamu, education minister www.businessday.ng

little clarity regarding education goals and accountability for ensuring that desired outcomes are met”. Reforming education system presupposes public private partnership arrangement as education is both a public and a private concern with responsibilities and benefits for the entire nation,” Mabogunje said. Otto Orondaam, founder of Slum2School, one of the panellists at the recent BusinessDay national discourse on Nigeria’s COVID-19 response, stressed the need “to look at the roots of the problems in education and not the resultant effects”. Orondaam in his comments on the topic, ‘Nigeria’s education system in the era of virtual classrooms said Nigeria needs to refocus the conversation about developing this critical sector by focusing on having an identified national education vision that will drive processes and investment going forward. According to Orondaam, it is very imperative that as a nation, Nigeria’s education is tied to what is called a national vision. “Why are primary, secondary and universities going to school? And how will their education impact the economy or the vision of the nation?” he said.

number, Salako said, certain amendments have been put in place, oconcerning the lecture halls and hostels. “It cannot be business as usual. Even if COVID-19 lockdown is eased fully, we should be prepared, may be it will remain with us like other diseases at low rate”, he explained further. Salako, who debunked the insinuation lingering around that the institution may down size its students’ population, assured all the students of their places in the institution. Said he: “We are not going to turn back our students, as we are already decongesting existing lecture halls and student’s hostels. The vc equally said that the University is planning to have some classes held online on resumption as part of reducing crowd and

students clustering together for lecture, while there will be in between lecture break of 15 minutes to allow for disinfecting the lecture hall before the next lecture. He further noted that, upon the closure of academic programme last February, the institution immediately fumigated it’s environment including offices, hostels and lecture halls “ not because of the COVID-19 pandemic, but solely then for prevention of lassa fever,” Saloko stressed. The vc however, advised all staff and students to adhere to the precautionary rules against the virus such as keeping safe distance from people, constant washing of hands with soap and sanitizer, use of face mask and avoid crowded areas.e It would be recalled that the Minister of state for

Education, Chukwuemeka Nwajiuba, had on June 16, at the 2020 policy meeting on admissions to tertiary institutions in Nigeria, organised by Joint Admissions and Matriculations Board (JAMB), had announced government intention to reopen schools with conditions. The conditions to be met by schools, the minister enumerated to includes: Handwashing facilities, body temperature checks, body disinfectants at all entering points to their major facilities including gates, hostels, classes, offices, etc. The entire premises of each institution must be decontaminated and all efforts must be geared towards maintenance of the highest level of hygiene at ensuring social and physical distancing in classes and meeting spaces.

Offiong, Eight others jostle for Unical’s vice-chancellor position MIKE ABANG, Calabar

s the race for who becomes the next vice-chancellor of University of Calabar move up gear, a professor of organic Chemistry from the University of Calabar Offiong Efanga Offiong has formally declared his intention to take over from the incumbent Zana Akpagu as the Vice-Chancellor of the institution. Offiong who served as Commissioner for education during the Liyel Imoke Administration while addressing Journalists over his ambition to take over as the next ViceChancellor of the University of Calabar, said under his watch the citadel of learning will become a world-class University to be reckoned with in Nigeria

and the rest of the World. As the tenure of current Vice-Chancellor of the University of Calabar (UNICAL), Zana Akpagu expires December 1, 2020, not less than nine professors are jostling for the ivory towers’ plum job. The aspirants include Offiong Offiong of the Department of Chemistry: Joseph Asor (Biological Science); Ndiyo Ayara (Economics); Francis Bisong (Geography) and Florence Obi, (Education) and former Commissioner for Women Affairs, and former Deputy ViceChancellor Academics. Others are Patrick Asuquo (Education Administration); Eyong Ubana (English); Benedict Ita (Chemistry) and Anne Asuquo (Medical Microbiology). According to the former Commissioner for education, “I am interested in the office

as advertised by the governing Board of the University as the incumbent sized to be the Vice-Chancellor, I promised to move the University forward “ As a product of the University of Calabar, I am sure the University can bring development to our State, you know God has been preparing me for a position of leadership, God wants to use me will transform the University of Calabar within my tenure” “In my Administration, everybody will be happy, when a system is large, issues will come up, nobody will be left out because I will reintroduce strong committees system where everybody will play his or her part in our University” Offiong promises to institutionalized committee the system in the University of Calabar.

Nigeria likely to lose best brains in Post-COVID era in public varsities, UI don warns FG REMI FEYISIPO, Ibadan.

n Economist at the Department of Economics, University of Ibadan, Oluwatosin Adeniyi says Nigeria may lose some of its best brains to the Global North in a PostCOVID era if academic salaries and infrastructure to support teaching and research activities remain in comatose. This is because the conditions of service in Nigerian public varsities cannot attract any foreign scholar and has

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incapacitated teaching and research activities. Adeniyi who stated this in a webinar entitled “PhD Thesis writing in Economics or Finance”, stated that while there is huge deficit of available PhD holders that can supervise doctoral students in Nigerian Universities, the conditions of service of thousands of PhD holders already burdened with supervising and working to sustain teaching and research is not encouraging and killing. According to Adeniyi, Nigerian varsities have deficits in PhD holders in specialized dis@Businessdayng

ciplines such as Information sciences, Law, Architecture among others. The University don stated that the substantial gap between the proportions of Doctoral holders needed for certain courses accounted for why many universities face accreditation problems for their courses. The Economist maintained that the deficit in doctoral holders in Nigeria plus deficit in the number of women who hold PhD partly accounted for the low levels of social, economic and political development in Nigeria.

Tuesday 23 June 2020

BUSINESS DAY

HEC Paris tops 2020 masters in finance ranking Outstanding career progress and salary uplift give the French school the edge LEO CREMONEZI

hen the FT’s masters in finance ranking began, in 2011, Donald Trump was still presenting The Apprentice and coronaviruses were a niche interest among microbiologists. Much has changed since then — but the number-one spot in the ranking has not. This year, as in 2011, HEC Paris tops the table. More precisely, the French business school ranks first among providers of pre-experience masters in finance (MiF) courses — that is, for students with little or no relevant professional experience. The tables set out information on the best programmes worldwide in this area, as well as on the top three courses for people who have already worked in the finance sector. It is based on surveys of schools and of alumni who completed their masters in 2017. HEC Paris has come top every year apart from 2017, when Edhec edged it aside, and 2019, when the ranking did not run. Its success is explained by the financial uplift that its alumni enjoy: the highest weighted average salary, at $149,750 this year, and the highest salary percentage increase three

France for finance: French business schools, led by HEC Paris, top this year’s FT ranking of masters in finance programmes © Chirs Gloag

years after graduation. The school is also the best for career progress. Masters in Finance rankings 2020 Find out which schools are in our ranking of and postgraduate

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finance degrees. Find out how the tables were compiled. HEC’s salary performance is not typical of European schools. Analysis of the pre-experience programmes shows that alumni of Asian schools have higher salaries and raises three years after graduation, when adjusted for purchasing power parity between countries. Alumni from US and European schools, however, report greater success in achieving their overall aims in studying an MiF. Survey respondents say their main reasons for taking an MiF are better career opportunities and personal development, followed by improving earnings and acquiring specialised skills. While mainland Europe is a popular place to study, with alumni from its schools representing more than 50 per cent of the cohort surveyed, UK business schools have the highest proportion of overseas graduates: nine in 10. Whether such an international intake persists after the coronavirus pandemic is a matter for future editions of the ranking. The proportion of female students enrolled at ranked schools has grown over time but a gender pay gap remains. Male alumni from pre-experience programmes earn an average of $103,403, some 30 per cent more than their female contemporaries, whose average salary is $79,094. The

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gap rises to 34 per cent for postexperience courses. The average salary uplift is greater too: 60 per cent for men on pre-experience courses, compared with 48 per cent for women. ES CP Business School is ranked second and Skema rises one place to third. With Essec fourth and Edhec fifth, French schools have taken the top five places in two successive MiF rankings. Likely reasons for this include a long history of running MiF programmes, good connections with the finance sector and relatively low fees. Alumni rank ESCP first for its careers service and aims achieved. For the second year in a row, the school is also top for international course experience, a category that reflects students’ exposure to internships, classes and exchanges in other countries. Chinese University of Hong Kong Business School registered the best progression in the ranking, climbing 19 places to 30th. Among Chinese schools, CUHK was judged best in the career progress category, and scores highly for the proportion of female students represented. WHU — Otto Beisheim School of Management, in Germany, is this year’s highest new entrant, in 22nd place. Alumni praise its exchange programme, career events and networking opportunities. MIT: Sloan dropped one place @Businessdayng

to eighth and is the top school in the US. Its alumni earn $142,876 on average, the highest weighted salary among US institutions in the ranking. Surveyed graduates praised MIT: Sloan for providing a thorough immersion in the subject. Only a few schools took part in the ranking of post-experience finance courses. London Business School (LBS) remains top, ahead of the University of Cambridge: Judge and Singapore Management University: Lee Kong Chian. LBS alumni have the highest percentage salary increase and the school is ranked number one for career progress and international students. Cambridge: Judge scores highest for value for money, careers service and international mobility. Its alumni have the highest salary, at $136,080. Lee Kong Chian has the highest percentage of female students and is first for international course experience. This year we asked graduates to rate their overall satisfaction with the MiF course — the first time we have put this question, which does not feed into the ranking calculation. All the schools scored above eight out of 10 on average. The MiF ranking was suspended in 2019, owing to technical upgrades. This year’s calculations include data from 2018 where applicable.

Tuesday 23 June 2020

BUSINESS DAY

Belgrade’s fast-growing tech start-ups show Serbia’s ‘hunger for success’ Past decade of rapid growth propelled by ‘digital nomads’ and returnees from abroad VALERIE HOPKINS

ranko Milutinovic and two of his friends left fulfilling jobs with Microsoft 11 years ago in Denmark to return to Serbia. They invested their savings in founding Nordeus, which has become one of the western Balkan region’s biggest gaming companies. Coming back to Belgrade was a “no-brainer”, says Mr Milutinovic, 37, chief executive of Nordeus. It operates out of smart new offices in a tech hub in New Belgrade, the Serbian capital’s central business district. “We felt really confident about moving to Belgrade because of the solid tech talent in the country and the region,” he adds. Mr Milutinovic and his fellow Nordeus founders, Ivan Stojisavljevic and Milan Jovovic, own the company. Within a year, the game they built, Top Eleven, in which players act as football team manager, became the most played sports game on Facebook. A decade on — longevity rare in the online gaming world — it is available in 30 languages. José Mourinho, manager of English Premiership football team Tottenham Hotspur, is a brand ambassador. Many tech entrepreneurs have set up companies in Serbia in the past decade. Belgrade’s start-up scene — and nightlife — are often compared with Berlin’s. “It has evolved a lot,” says Mr Milutinovic of the Serbian capital. Especially so in the gaming industry, though there is a “wide diversity of sectors and business models”. The local market for tech talent, he adds, “resembles the global hunt for talent”. “Serbia is still in the early stages” of establishing itself in the start-up world but growing fast, says Zoja Kukic of Digital Serbia Initiative (DSI), a non-governmental organisation promoting the industry. The country’s tech sector employs about 75,000 people, according to Eurostat. Kosta Andric is managing director of ICT Hub Venture in Belgrade, founded two years ago as the first private investment fund focused on early-stage start-ups in south-east Europe. It is presently funding 15 start-ups in not only gaming, but fields as varied as human resources management and cyber security. Serbia’s recent history, with

Early stages: a Belgrade tech hub supports the fast growing sector © www.dejansubotic.com

the painful collapse of Yugoslavia in the 1990s and years of international sanctions, have made its people resilient, says Mr Andric. “We have a problem-solving mindset.” Investors have a choice of going to “compete somewhere that is already crowded”. Or opting for somewhere like Serbia, “where things are still untapped”. Microsoft opened a development centre in Serbia 15 years ago. Now it employs 300 people. In Belgrade, its developers built Azure, the cloud platform, as well as research and machine learning technologies. “It is starting to look like what we see in Seattle,” says Dragan Tomic, chief executive of Microsoft’s development centre in Belgrade. “It is not as big necessarily, but it is as well rounded.” One reason for that, he says, is Serbia’s decision to incorporate tech education into curricula from primary school and onwards. In 2017, coding became compulsory for all students from age 11. As well as having many socalled “repats” — those returning from overseas — Serbia’s tech workforce is one quarter “digital nomads” from abroad. Last year, the UN Development Programme launched UNDP Accelerator Lab in Belgrade (see www.businessday.ng

a lab workshop pictured below) among the first tasks of which is to map what determines whether Serbian tech employees stay, leave or return home, and what attracts digital nomads to the country. “Serbia has one of the fastestshrinking populations in the world,” says Kristina Jazinka Nikolic (see below) the lab’s head of experimentation, who also cofounded a start-up making smart furniture that harnesses solar energy. “We need to understand what kind of knowledge we are losing,” she adds, and what can be done to keep it. Many Serbs moved abroad in recent decades to make a living and there are hopes that a good number of the hundreds of thousands who returned home, as the Covid-19 pandemic took hold in March, will remain. Serbia’s President Aleksandar Vucic has appealed for them to do so. Tech experts say Serbia offers employees and investors more stability than other technology centres. “Culturally, there is more hunger for success in this part of the world than in some others,” says Mr Milutinovic. “This contributes to a high sense of belonging,” with employees staying in jobs longer compared with other start-up

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hubs. “Serbia is a good place for people and investors interested in a long-term perspective,” agrees Mr Tomic. Serbia’s tech sector is starting to look like what we see in Seattle. Not as big, but as well rounded Dragan Tomic Igor Bogicevic is co-founder of Seven Bridges, a biotech company with offices in, among other locations, Belgrade and Boston, Massachusetts, and Orgnostic, a human capital analytics platform in Belgrade. The latter location, he notes, offers the higher prospects of retaining top talent in spite of the brain drain. The Boston area of the US may be one of the world’s biggest hubs for biomedical start-ups, he notes, but the decision to have a base in Serbia enables advantages not only in terms of “the cost of talent”, but also availability. He also points to the case of companies in Silicon Valley, where “the usual tenure of people” is nine months. Given that “you need three to six months to fully onboard an employee, this pace is not sustainable for a company like ours”, he says. He adds that Belgrade is still missing core talent on the business development side. But “the @Businessdayng

advantage of working in Serbia is that we can hire good technical talents here and mix it with business development talent from abroad”. The advantage is that we can hire good technical talents here and mix it with business development talent from abroad Igor Bogicevic Serbian law needs to catch up with the borderless world of tech entrepreneurship. Some regulations make it complicated for start-ups to operate as they do elsewhere. Restrictive foreign exchange rules, for example, are referred to by Ms Kukic as “the Berlin Wall of the digital ecosystem”. However, some regulation has been easing. The Digital Serbia Initiative has successfully lobbied for curbs on start-ups giving employees stock options to be lifted. Mr Tomic argues that the development of the tech scene in Serbia has led to an improved image for his country. In turn, that will benefit the industry itself. “The PR for Serbia in the past 30 years has been horrible,” he concedes. “But we are well on our way to rehabilitating our image. Once that happens we will make a great quantum leap in the tech sector.”

Tuesday 23 June 2020

BUSINESS DAY

Media business Hope brightens on bailout fund for media BD Brand Talk industry as Minister promises to intervene Daniel Obi

inister of Information, Lai Mohammed is said to have promised to intervene in securing about N10 billion stabilization bailout fund for the Nigerian media as requested by Nigerian Union of Journalists, NUJ. This consideration, according to Chris Isiguzo, President of Nigerian Union of Journalists, was the outcome of a meeting between the minister and the executive members of NUJ recently. Isiguzo told BusinessDay

that the media is further asking that the fund when released, perhaps through Central Bank of Nigeria, CBN be at free interest rate or minimal interest. He believed that the fund, when made available to the

media at very low interest rate would substantially cushion the economic challenges faced by the industry, a situation worsened by the Covid-19 pandemic. It would be recalled that NUJ had in mid of May, 2020

written a letter to President Buhari asking for bailout fund for the media industry where some operators are already downsizing due to the harsh effects of the economy. Certainly, many of the media organisations in Nigeria are experiencing hard times, high operational cost with many months of unpaid salaries occasioned by difficult economic environment, exacerbated by Covid-19. In the letter addressed directly to President, Muhammadu Buhari, the union requested for urgent intervention of Federal Government to arrest the unfortunate trend considering the role of the media in nation building.

VerifyMe boss advocates trust as new currency for business recovery

usiness leaders have been urged to build trust-based processes across their systems in order to thrive in the post-COVID-19 economy. Esigie Aguele, Co-founder and Chief Executive Officer, VerifyMe Nigeria, an identity verification and KYC technology company, according to a statement, gave this advice against the background of instability and risks confronting businesses as they adapt to the realities of a pandemic driven environment. According to Aguele: “Trust is the new currency of business in the post-COVID-19 era and it has become increasingly clear that it is a major economic driver that enables faster and more cost-effective transactions.

This makes it imperative for businesses to consciously invest in processes and systems that establishe trust in every action, relationship and transaction.” While adding that trust will enable businesses attract the right kind of partners in order to achieve their goals, he stressed that it will be a grave mistake for organisations to continue to view trust from the lens of a token social virtue. “In the past few weeks, Nigeria has seen most businesses adapt their processes to work remotely in response to the repeated lockdowns. As this becomes the new normal, identity authentication and fraud solutions must become the competitive differentiator for organisations if users are

to put their faith and money in them,” he said. “In financial service industries such as banking, insurance and credit-lending institutions, businesses have statutory and reputational-risk mandates to ensure that new customers are adequately vetted during onboarding. They need to verify that customers match who they claim to be, even without physical interaction. Establishing a digital identity and KYC infrastructure will help organisations within the sector protect their ecosystems as they grapple with the expected increase in demand for their services, particularly with approving customers for loans and other forms of credit,” he added. Explaining how organi-

sations can balance customer needs while reducing risks and maintaining regulatory standards, Aguele said: “Most customers are frustrated by lengthy and cumbersome onboarding processes which affect their trust in a company even before the relationship has started. However, businesses are also concerned about fraud prevention and regulatory compliance. For most organisations, digital identity verification offers a solution to this problem.” Digital ID solutions offered by VerifyMe Nigeria allow businesses to create simple and streamlined onboarding experiences for trusted KnowYour-Customer (KYC) data via API for corporates and via an online portal for individuals.

Energy Drink: Consumers get more options as Amber enters Nigerian market

mber Drinks Ltd has introduced energy drink product into the competitive Nigerian energy drinks market. The introduction of the product is said to have excited target consumers. “Amber energy drink is enhanced with potent herbal blend of Guara, Amino acids and Vitamins”, a statement said. Guarana is natural Caffeine used in beverages. It was said to have been added to Amber to ensure that along-side all the vitamins and nutrients packed in the can, consumer stays alert, energized and healthy. The new energy drink, according to the statement is formulated to provide an incredible energy boost for those who lead active and exhausting life styles, top of which is sports, entertainment and games. Speaking on the launch

of Amber into the market, General Manager of Amber Drinks Ltd, Lola Adedeji in the statement said her company introduced the new product with a view to offering Nigerian consumers an additional quality option in their energy drinks list and scale of prefer-

ence. Specifically, the Amber Drinks boss said “the new product has been formulated with the best energy-giving ingredients and unrivalled quality consideration in line with global best standards of products formulation for dis-

Product Lunch: L-R: Korede Omole, assisistant head of sales, Amber Drinks Ltd.; Lola Adedeji, general manger of the company with Temitope Adetiba, head of sales during the launch of Amber at a Trade Parley in Lagos. www.businessday.ng

cerning Nigerian energy drinks consumers”. Her words ”We are introducing Amber energy drink into the Nigerian energy drinks segment with the best of intentions to give Nigerians another quality option in their energy drinks choice list” “Ámber is scientifically formulated to provide an incredible energy boost for those who lead active and exhausting lifestyles ranging from sports to entertainment” she said “Amber is a non-discriminatory unisex energy drink, the first of its kind” she added. Adedeji disclosed that Amber energy drink “provides a healthy way to stay active and energized all through the day”, pointing out that consumers would surely enjoy the nourishing and fulfilling taste of the slim, sleek and admirable trendy look of the brand in attractive package and affordable price.

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Welcome to the year of sachet Mike Umogun

y Kenyan colleague at the now defunct marketing research firm Research International once joked about how everything in Nigeria comes big. According to Joseph Ogeto now Chief Operating Officer at Research Path in Nairobi everything in Nigeria is big. According to him our freeway are massive, same for our universities, gated estates, buildings and sarcastically he is fond of adding corruption in Nigeria is also massive. The tendency to have things big is a product of the power of the economy. Nigeria’s huge population coupled with its being the largest economy in the continent is its biggest selling point to consumer good players. However, the double whammy of weak consumer wallets and the high poverty rate has made this less compelling. The situation is further worsened by the arrival of the corona virus a pandemic that caught the peoples and governments in Nigeria pants down. Apart from the state of Lagos, most of the country is not in a position to survive this type of health shock. Therefore with the Brent crude and by extension Nigeria’s Bonny light selling at $35 per barrel as against $60 per barrel anticipated by government, economic experts are rightly predicting a recession in the horizon. Many state governments are revising their budget down ward for the year. The power to do things big has suddenly diminished and salvation may lie in doing small things smart until we are out of this pandemic Therefore the interest of todays’ Brand Talk is the appropriate or advised response by brands to the anticipated reduced spending that would usually follow such an economy slow down. Since Nigeria’s emergence from economic contraction in second quarter in 2017, the disposable @Businessdayng

income of consumers have continued to tank in real terms, largely due to double- digit inflation rate, worsened by sluggish economic growth. The way forward for brand custodian beyond showing empathy and offering promotional discount is to effectively use the power of numbers in favour of the brand. As it’s usual in period of uncertainties consumers would spend less either because of the unknown or because they simply don’t have the money to spend. Playing around our packaging (SKU) could be the miracle strategy in these uncertain times Sachet can be beneficial to the business and consumers in several ways. First, sachet requires minimum packaging materials, less storage, low shipping and transportation cost and most importantly it is pocket friendly to the end users. Where disposable income is low brand custodians must look the way of sachet. This is not limited to tangible products only. Services can also come in sachet too we just need to think hard and smart about it. Sachet could save us as much as 40% of the cost of traditional packaging. Second, Sachet enables us to customise our products to the various segments in the market place ensuring there is an affordable size for everybody in the society. Where properly executed this would enable a brand to get a competitive edge. Third, sachets are environment friendly and take less space and can help preserve quality. In a country where power is not steady Many women have told us in focus groups that the biggest attraction for them about sachet is saving them the stress of storage. In summary consumers love to invest on small sachet packages due to their compact size, affordable price , quality of the product and most importantly the luxury of use the products as you buy. Michael Umogun is a Director at Ayisire Consulting

Tuesday 23 June 2020

BUSINESS DAY

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Tuesday 23 June 2020

BUSINESS DAY

news ECOWAS endorses Okonjo-Iweala for WTO director-general, rallies more support Innocent Odoh, Abuja

he Economic Community of West African States (ECOWAS) has endorsed Ngozi Okonjo-Iweala, Nigeria’s former minister of finance, for the position of director-general of the World Trade Organisation (WTO) for the period 2021-2025. Nigeria’s Ministry of Foreign Affairs made this known on Monday in a statement issued by its spokesman, Ferdinand Nwonye, stressing that the ECOWAS Authority

of Heads of State and Government, which endorsed Okonjo-Iweala, has also called on other African countries as well as non-African countries to endorse her candidature. The apex body noted that since the creation of the WTO on 1 January 1995 as a successor to the General Agreement on Tariffs and Trade (GATT) established on 1 January 1948, no African has assumed the position of director-general of the organisation. The ECOWAS leaders said Okonjo-Iweala’s “long years of managerial experience at the

top echelons of multilateral institutions, her established reputation as a fearless reformer, her excellent negotiating and political skills” qualify her for the position. The West African leaders also lauded her experience of over 30 years as a development economist with a longstanding interest in trade, her excellent academic qualifications, her positions as managing director, World Bank, and currently as Board chair of Gavi, and AU Special Envoy to Mobilise Financial Resources for the fight against Covid19.

President Muhammadu Buhari had earlier nominated Okonjo-Iweala as the nation’s candidate for the position of the director-general of the renowned organisatrion. Brazilian Director-General Roberto Azevedo in May said he plans to step down from the 25-year-old WTO at the end of August, a year before his term ends, saying it’s the best way to avoid more chaos at the alliance, which has already been hobbled by attacks from President Donald Trump and the start of a global recession.

L-R: Martin Brack, financial director, Julius Berger Nigeria plc; Cecilia E. Madueke, company secretary; Mutiu Sunmonu, chairman; Lars Richter, managing director, and Zubairu Bayi, executive director, administration, at the company’s virtual Annual General Meeting anchored from Abuja.

Nigeria competes with Egypt as investment destination for planned hotel chain developments … actualisation rate may drop to 40% on COVID-19 STEPHEN ONYEKWELU

gypt is attracting the most investment dollars from international hotel chains and leads on the African continent with the largest number of rooms in the pipeline, more than twice the number in second-place Nigeria. Accor, an international hotel chain and owner of Ibis Hotel, has continued to be extremely busy in North Africa. Of the total of 4,227 rooms that were signed in Egypt in 2019, some 78 percent (3,278 rooms) were signed by Accor. It now has 20 deals with 8,774 hotels in Egypt, according to the latest African Hotel Chain Development Pipeline for 2020 by W Hospitality Group, one of the industry’s most authoritative sources. On the contrary, the pipeline in Nigeria has decreased by 2 percent from last year, with signings running at only eight deals and 1,071 rooms in 2019. Four of these were by newcomer Continent World-

wide Hotels, and two by Hyatt, who also signed deals in Uganda and Kenya last year. Growth of the international chains’ presence in Africa has been a positive story since 2009, according to W Hospitality Group, citing the numbers of the chains, the developers, the investors. This shows opportunities that Africa presents in the hotel and tourism industry. “However, our industry has been devastated by the impact of COVID-19, possibly more so than most other economic sectors, mainly because of the almost total shutdown of borders and the aviation sector – no flights means no guests,” Trevor Ward, managing director, W Hospitality Group, said in a note sighted by BusinessDay. Trevor said according to the Group’s latest data, there are 90 hotels with 17,000 rooms scheduled to open in 2020, but it is projected that at least half of these will be delayed, bringing the actualisation rate down to no more www.businessday.ng

than 40 percent. Cairo and Addis Ababa have by far the largest pipelines, followed by Lagos and Nairobi. Cairo accounts for 19.22 percent of planned hotel chain rooms in Africa for 2020 with 6,257 rooms. Addis Ababa comes in second with 4,865 rooms, which represents 14.94 percent of planned hotel chain rooms development pipelines in Africa. Lagos has 3,690 rooms planned and Nairobi 3,298 rooms, representing 11.34 percent and 10.13 percent, respectively. The hospitality data crunching Group anticipates that it is going to be a fact in the “new norm” of postCOVID-19 that all markets globally will be oversupplied. This means there will be insufficient demand to go around. They also see development activity slowing down considerably for a while, because of the supply-demand scenario, and also because of a greater scarcity of funding. More hotels are likely to be pushed out into the “to be confirmed”

(TBC) opening date category. This year’s African Hotel Chain Development Pipeline survey covers 35 international and regional hotel contributors across the 54 countries in North and sub-Saharan Africa and the Indian Ocean islands. It shows a 3.60 percent increase on the 2019 pipeline. A record 68 chain hotels were opened last year, fully 75 percent of those which were scheduled to open, with 11,000 rooms. That performance was substantially up from the 39 percent of those scheduled to open in 2018 doing so. Accor performed particularly well, according to the report. It opened 18 hotels last year with almost 3,500 rooms in its various brands, ranging from Ibis to Fairmont. However, Hilton topped the list of brands ranked by the number of rooms. These are only hotels branded as Hilton and do not include other brands in the Hilton chain such as Hilton Garden Inn, which is shown separately.

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Edo 2020: Obaseki inches closer to clinching PDP ticket as aspirant steps down

… Ize-Iyamu emerges APC candidate IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

do State governor, Godwin Obaseki, is closer to emerging as the candidate of the People’s Democratic Party (PDP) for the forthcoming governorship election in the state as Gideon Ikhine, one of the governorship aspirants on the PDP platform, stepped down for Obaseki. Making his decision known at his campaign secretariat in Benin City, the state capital, on Monday in the midst of his teeming supporters, Ikhine described Obaseki as the new face of PDP in the state, urging all his delegates to cast their votes for the governor during the party’s governorship primary election fixed for June 25. “We are going to queue behind you sir, in the next Thursday governorship primary election of our party. We have kept the faith in the last one decade but today we are happy to be part of history that PDP is back to Government House,” Ikhine said. While announcing his decision, Ikhine said that there was no progress without a sacrifice, adding that the governor joining the party was God’s great answer to the party and his aspiration.

He noted that two persons could have the same vision but the means of approaching them will be different, stressing that he was not stepping down but stepping behind the man who would lead the party to glory come September 19. “Though it is a painful decision to step down from the race, it is important that the vision for a better tomorrow had been achieved. There is no progress without a sacrifice. That the governor joined the party was God’s great answer to the party and his aspiration,” Ikhine said. He promised to ensure that the party defeated the candidate of the All Progressives Congress (APC) in the governorship election with over a margin of 600,000 votes. Governor Obaseki, while commending Ikhine and his supporters for stepping down for him, expressed joy that the people of integrity and intellect are now taking part in politics, especially in Edo State. Obaseki said he left his former party, APC, because of impunity in the party. While describing APC as a party whose DNA is impunity, noted that the PDP is a party of unity, and urged members to bring in umbrella big enough to accommodate more people in the party.

How West Africa refined product market creates viable revenue window for Nigeria DIPO OLADEHINDE

igeria stands a very good chance of benefitting from the current plunge in international crude oil prices if managers of its economy, especially those in the oil and gas sector, take a holistic view and see opportunities in the West Africa market. The downstream market in West Africa is largely underdeveloped and is mostly under the control of government which has often resulted in inefficiencies, leading to most countries depending heavily on import to fulfil their requirements for petroleum products. For Africa’s biggest oil-producing country, this is a golden opportunity to play regional dominance following the move by the Federal Government to exit subsidy and deregulate the downstream sector. Nigeria is the second-largest producer of oil in Africa, producing over 1.5 million bpd as at May 2020. With proven crude oil reserves estimated at about 37 billion barrels as at 2015, Nigeria boasts of about 29 percent of the continent’s crude reserves (2nd in Africa). Playing regional dominance @Businessdayng

in West Africa petroleum products market will enable Nigeria’s downstream sector act as an enabler to other critical industries such as petrochemical, construction, agricultural, industrial sector, and others. “The West African market holds significant potential as refineries such as Ivory Coast, Gabon and Senegal cannot meet current demand for refined products in the region, estimated at 39 billion litres,” PwC said in a report titled ‘Nigeria refining revolution’. “There is an opportunity for potential uptake by neighbouring countries if the market has Nigeria’s refined products readily available.” PwC noted that this shift will see Nigeria become a net exporter of refined products and the refining hub of West Africa by the start of the next decade. The advent of Dangote refinery – which is set to produce 650,000bpd of refined products – and other modular refineries will significantly impact the current landscape in the downstream sector which upon completion will exceed domestic consumption levels and subsequently export excess refined products to neighbouring African countries.

Tuesday 23 June 2020

BUSINESS DAY

news DisCos face bleak future over N930bn... Continued from page 1

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The reconciled position shows that Federal Government’s ministries, departments and agencies (MDAs), on the other hand, owe the DisCos a total sum of N45.8 billion. Both the NBET and the DisCos have held meetings and agreed on the outstanding market invoice as well as the debt owed the DisCos by government MDAs, BusinessDay learnt. However, the DisCos are disputing the size of the N308.2 billion interest on their debt to the market on the basis that they are not allowed to charge interest on their own debtors. “We are not allowed to charge customers who owe us interest, so it is not fair that we are charged interest on our debts,” said a director in one of the DisCos who asked not to be named. According to the data, Abuja DisCo emerged the most indebted, to the sum of N173.5 billion including interest, while it is owed over N7 billion by various government MDAs under its franchise area. Enugu DisCo is indebted to the tune of N113 billion including interest but has outstanding collections from the MDAs to the tune of N2.5 billion. Kaduna DisCo followed with a debt of N107 billion including interest to the market while it is expecting to collect N8.7 billion debt from various government MDAs under its network. Benin DisCo, according to the document, owes NBET N72.2 billion including interest charged on the debt but it is owed N1.7 billion by government MDAs it serves. Ikeja DisCo, the report said, is indebted to the market to the tune of N97.6 billion including interest charged on the debt but is being owed N1.6 billion by various MDAs under its jurisdiction. Ibadan DisCo is indebted to the tune of N85.3 billon including interest calculations and it is in turn being owed N2.6 billion by government MDAs. Jos DisCo, similarly, has obligations to the market to the tune of N35.9 billion including interest charged and in turn, it is being owed N7.2 billion by the various government MDAs under its franchise area. In the case of Kano DisCo, its debt to the market including interest on the debt is N76.1 billion but it has unpaid invoices from the government MDAs to the tune of N1.3 billion. Port Harcourt DisCo has

debts of over N100.4 billion including interest on the debt but the government MDAs it services owe it N2.5 billion. Yola DisCo, now in the control of the government, has the least debt of N16.8 billion and the MDAs owe it N2.4 billion. “These figures show clearly that the DisCos are in a complete mess financially and they cannot now be counted on to make the required investment to improve power supply to Nigerians,” a financial analyst following the matter told BusinessDay. “Add to this the growing demand that governance too must be addressed at this key point of the value chain.” Following a directive from the Nigeria Electricity Regulatory Commission (NERC) in December 2019 requesting that the DisCos and NBET agree on a common figure for all invoices and payments for the period February 2015 to December 2018, the players began harmonising the financial position of the sector. The reconciliation was necessary to understand the true position of the accounts after the Federal Government approved N600 billion bailout to the sector under the NBET payment assurance facility expansion loan. In March, President Muhammadu Buhari took it a step further and approved the composition of a power sector reform coordination group under the leadership of Vice President Yemi Osinbajo that will extend the reconciliation to the present date. In a statement, Nasir elRufai, governor of Kaduna State, said the new working group would incorporate the ongoing efforts of his committee to ensure all power sector initiatives are on the same page. El-Rufai was appointed as the head of the ad-hoc committee reviewing the ownership of the electricity distribution companies (DisCos) in November. A draft report of the committee seen by BusinessDay recommended that operators should respect contract terms, GenCos should be encouraged to invest in DisCos to aid their recapitalisation, and operators should honour governance rules. To resolve the illiquidity in the Nigerian electricity market, the committee recommended that market rules should apply and players act based on Willing-BuyerWilling-Seller (WB/WS) arrangements. The report proposed the recapitalisation of the DisCos by encouraging GenCos to invest in them so that they can bring in their capital and management expertise. www.businessday.ng

L-R: Simeon Lalung, Plateau State governor/ chairman, Northern Governors’ Forum; Atiku Bagudu, Kebbi State governor/ chairman, Nigerian Governors’ Forum, and Muhammad Badaru, Jigawa State governor, briefing State House Correspondents after their meeting with President Muhammadu Buhari on the lingering crisis in APC, at the Presidential Villa, Abuja, yesterday. NAN

Clark, Fasoranti, Nwodo, 13 others sue... Continued from page 1

Court, Abuja, demanding N50 billion over what they termed lopsided appointments and developments in

the country. In the suit filed Monday by Mike Ozekhome (SAN), counsel to the plaintiffs, the group alleged that since the inception of his administration in 2015, President Buhari’s appointments have contravened the provisions of the 1999 Constitution and the Federal Character Principle. The 16 elders listed in the suit marked FHC/ABJ/ CS/595/2020 include Edwin Clark, Reuben Fasoranti, John Nnia Nwodo, Pogu Bittus, Ayo Adebanjo, Alaowei Bozimo, Sarah Doketri, Chukwuemeka Ezeife and Idongsit Nkanga (air commodore). Others are Kofoworola Bucknor-Akerele, Julie Umukoro, Stephen Bangoji, Tijani Babatunde, Rose Obuoforibo, Adakole Ijogi, and Charles Nwakeaku. They are alleging that the Southern region has been deliberately short-changed by the Buhari-led government. They are praying the court to, among other things, determine whether it was not “reckless and adverse to the interest of Nigeria” for President Buhari to obtain a loan facility from the Islamic Development Bank, African Development Bank, the World Bank, China, Japan, and Germany amounting to $22.7bn for infrastructural development, only to allocate the bulk of the funds to the Northern region. They are seeking a declaration that the loan facility (purportedly for infrastructural development) wherein less than 1 percent of the amount is to be allocated to the South East Zone of Nigeria for specific infrastructural development violates section 16 (1) (a) (b) and S16 (2) (a) (b) (c) of the 1999 Constitution (as amended).

They are seeking “a declaration that the 1st defendant’s procurement of any loan which would increase Nigeria’s outstanding debt by up to 30 percent of its GDP or which would increase its interest payment above 50 percent of government revenue is unconstitutional”. Also listed as 2nd to 4th defendants in the matter are the Attorney-General of the Federation, Clerk of National Assembly, and the Federal Character Commission. Reacting to the development, John Bayeshia, analyst and senior advocate of Nigeria (SAN), lauded the leaders for instituting the suit, saying it was democratic and would serve as a wake-up call for President Buhari as it was likely to die a natural death. “It may just be to embarrass Buhari and let him know people’s feeling about his government. It is a constructive engagement. It is better than saying you want to go the street and bring down the government, that is democracy,” Bayeshia said. “But they must have done their home work because at the end of the day Buhari would come and roll out the list of appointments and defend them.” Martin Onovo, former presidential candidate, said President Buhari had violated the constitution by appointing only Northerners and people mostly of a particular religious affiliation to position in his administration. “It is clear they are doing the right thing. What Buhari is doing is a violation of the constitution of Nigeria and the federal character and he is not listening to anybody,” Onovo said. “The constitution is clear about federal character. Today Nigeria is a Muslim enclave. The judiciary, NNPC, legislature, port, name it, they are all controlled by his [Buhari’s] people. I said it before that he would ruin the economy.

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Now we are seriously in debt, borrowing all the time. These things are scientific and clear and we have been keeping quiet for long,” he said. The plaintiffs, in the suit they filed through a consortium of lawyers comprising of 10 senior advocates (SANs) led by Solomon Asemota and Mike Ozekhome, are further praying the court to determine: “Whether the power to appoint designated public officers including permanent secretaries, principal representatives of Nigeria abroad, which is vested in the 1st defendant has been lawfully exercised by him since the inception of his administration from 2015 till date and whether his actions are in breach of Sections 171(5), 814(3) (4) of the 1999 Constitution (as amended). “Whether the power to appoint Nigeria’s Armed Services Chiefs, other Commanders or top officials of the respective Armed Forces Higher and High Commands’ General Staff ; namely the Chief of Defense Staff (CDS), Chief of Army Staff (COAS), Chief of Naval Staff (CNS) and Chief of Airforce Staff (CA8); the other statutorily established Nigerian National Security agencies or services , namely: The Inspector General of the Nigerian Police (1GP), the Directors General (DGs) of the State Security Service (SSS), National Intelligence Agency (NIA) and the Defense Intelligence Agency (DIA); the Heads of National Security Associated Federal Government (FG) establishments, namely the Nigerian Civil Defence and Security Corps (NCDSC), Economic and Financial Crimes Commission (EFCC), the Nigerian Customs and Excise Service, the Nigerian Immigration Services (NIS), the Nigerian Correctional Services (NCS), the National Emergency Management Authority (NEMA), the National Youth Service corps (NYSC), the National Security Adviser (NSA), the Ministers @Businessdayng

of Defence, Interior, Police and the respective National Security ministries’ Permanent Secretaries’ which is vested in the 1st defendant, has been lawfully exercised by the 1st defendant since the inception of his administration and whether these appointments are in compliance with 81(2), 814(3)(4), 8217(3) of the 1999 Constitution (as amended). “A declaration that because the 1999 Constitution (as amended) is not suspended; it must be obeyed and adhered to. “A declaration that Nigeria is a federal system of government, with federating states, and a Federal Capital Territory in accordance with Section 2(2) of the 1999 Constitution (as amended). Therefore, any system of governance operated contrary or inconsistent with the provisions of the 1999 Constitution (as amended) shall be deemed unconstitutional or illegal. “An order of perpetual injunction restraining the Defendants, whether by themselves, servants, agents and/ or privies, howsoever, from further appointing persons from only favoured sections of the country as Heads of key government positions and security and quasi security agencies of Nigeria to the detriment and exclusion of other sections of the country. “An order of perpetual injunction restraining the Defendants, whether by themselves, servants, agents and their privies howsoever, from further violating the Public Service Rules 2008 and Armed Forces Act 2004 by extending tenures of personnel who have reached retirement age in accordance with the law. “An order directing the 1st Defendant to forthwith revert the lopsided appointments complained about in the security and quasi security agencies and immediately take steps to appoint persons from other states and geopolitical zones, in line with the provisions of the 1999 Constitution (as

Tuesday 23 June 2020

BUSINESS DAY

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Tuesday 23 June 2020

BUSINESS DAY

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Tuesday 23 June 2020

BUSINESS DAY

Free Zones as economic PPP as catalyst for urgent centres of excellence: economic growth: the The Lekki Example Alaro City Example

ree zones are specially designated areas for diversifying the Nigerian economy by boosting manufacturing and xports through tax and customs duty exemptions. In Nigeria, there are two types of free zones – specialised and general free zones. The only specialised free zone in the country at the moment is the Oil and Gas Export Free Zone located in Onne, Rivers State. There are 31 general free zones in the country, of which 14 are operational, with one serving as the clearest illustration of how free zones can stimulate the nation’s economy – the Lekki Free Zone (LFZ). The LFZ is an ambitious, 16,000-hectare business hub; a joint venture between the Lagos State Government and private investors, that has been widely hailed as one of the biggest economic stimulants in the country. Expected to create 300,000 jobs and attract more than $20 billion of investment, the LFZ is pacing quickly toward these goals. Hundreds of investors, both foreign and local, have established a presence in the zone, taking advantage of the strategic position of Lagos as an economic hub and its rapidly growing population (estimated at over 20 million). There is also another major attraction for investors exemption from all federal, state and local government taxes, levies and rates while operating their businesses in the zone. Some of these taxes include: Value Added Tax, Withholding Tax , Company Income Tax and Custom/Import Duties. Experts say this and other incentives like trade in foreign exchange within the zone are the biggest attractors of investors looking to tap into the Lagos population and economy. “These investors are attracted by, among other things, the tax breaks available with operating in a free trade zone,” said Bidemi Olumide, Partner and CEO of Taxaide, a tax management and data protection firm. “For your company to be operating in that territory, you have a significant rebate in taxes, and that’s a conservative way of putting it. You have zero to no income taxes; you have no transactions taxes; etc.” The ease of doing business in free zones is a major characteristic, and the LFZ has made a significant effort to reduce complaint hassles and costs for businesses in the zone. “On the regulatory side, you are not dealing with multiple regulators; you are dealing with one regulator, which is the Nigeria Export Processing Zones Authority (NEPZA),” said Mr. Olumide. “NEPZA then organises all the relevant regulators under one umbrella so that you have only one port of call for all regulatory matters and this reduces your compliant costs. Just as obtains globally, the free trade zone is the place to be for all businesses that seek to add value.” Businesses are not the only ones seeing the value in the LFZ. People who live in residential areas of the LFZ will benefit from the advantages of building in a free trade zone: absence of local council taxes/levies and cheaper construction costs as a result of tax and duty incentives. “Residents, because they live within the LFZ, will be exempt from tenement rates, land use charges and all local government charges,” said Mr. Olumide. “There will be no car/radio license; they are exempt from all those local government levies. They will also benefit from a significantly improved regulatory landscape where they do not have to respond to multiple regulators; and of course, the general sanity that comes with living in such an environment.” Alaro City, located on the North West Quadrant of the LFZ, is providing this option for people who decide to live in the LFZ. A partnership between the Lagos State Government and Rendeavour, the largest new city builder in Africa, Alaro City is a mixed-use, city-scale project planned on 2,000 hectares (over two times the size of Victoria Island). The city is designed to include industrial and logistics locations, complemented by offices, homes, schools, healthcare facilities, hotels, entertainment and 150 hectares of parks and open spaces. Odunajo Ojo, CEO of Alaro City, confirms that construction costs, both for businesses and residents building their homes, are reduced due to the free zone benefits. “We see 20-30% cheaper construction costs due to the fact that there is zero duty on imported construction materials like steel and panels that may

be used in building specialised facilities,” he said. “You also get exemptions from port clearing protocols for consignments, which includes construction materials, going to the zone. The presence of all relevant regulatory agencies in the zone, as well as direct engagement with authorities for building approvals via the management of the zone, also result in cheaper costs.” The city offers more – its masterplan, which has garnered several international acclaims, is structured around six greenways which are aligned north to south with existing topography. Transport infrastructure is planned to support local economic activity and allow for higher density, mixed-use development. Construction on 3.5 kilometres of initial road networks (comprising of rain gardens and cycling lanes) is well under way while a modular 50MVA power plant is expected to power initial energy needs. The city’s residential areas have attracted significant interest; with phase one of residential plots sold out and phase two ongoing. Its commercial areas have attracted over 20 multinational and Nigerian businesses already. One of such businesses is Ariel Foods FZE, a multinational food manufacturer, which launched its factory in Alaro City in January 2020. Located on 15,414 square metres, the facility is Nigeria to meet its own requirements and export nutritional ready-to-eat foods. Because boosting the nation’s export status is a major reason for establishing free zones, the ongoing construction of the Lekki Deep Sea Port serves as another pointer to the LFZ’s potential. Upon completion, the port will feature two container berths of 680 metres in length and 16.5 metres water depth, thus making it Nigeria’s deepest seaport. The channels will be dredged to 14 metres depth, with potential to reach 19 metres as traffic grows. The breakwater will be 1.5 kilometres long. the largest ready-to-eat therapeutic foods factory in Africa. At its launch, the company’s chairman, Dhiren Chandaria, said the facility has a yearly production facility of 18,000 metric tonnes and is the most technically advanced manufacturing facility in the world, capable of enabling A partnership between Tolaram Group and China Harbour Engineering Company, the port will be capable of accommodating fifth generation ships which can carry 18,000 20- foot containers. Designed to include terminals for containers, dry bulk and liquids, it will accommodate 1.2 million 20-foot container equivalent units. Expected to be completed in 2022, the port will be managed by CMA Terminals Nigeria, a subsidiary of CMA CGM, a French container transport and shipping company widely ranked as the fourth biggest in the world. Biodun Dabiri, chairman of Lekki Port Board of Directors, said the seaport was critical for aiding the economic potentials of the LFZ. “It would support the massive industrial and petrochemical complex being embarked on in the northern and southern quadrants of the zone; with investment over the next three years peaking at over $20 billion,” he said. The southern portion of the LFZ hosts the behemoth Dangote Refinery. Planned on over 2,500 hectares, the refinery site is located on the South East Quadrant of the LFZ and will host an integrated refinery, a petrochemical plant and pipeline infrastructure. Estimated to cost $15 billion upon completion, the 650,000 barrels per day refinery will be Africa’s biggest refinery and the world’s largest single-train facility. It will produce Euro-V quality petrol and diesel, as well as jet fuel and polypropylene. At full production capacity, the refinery is estimated to be able to produce 50 million litres of fuel and 17 million litres of diesel daily. Construction going on in the refinery complex includes crude and product-handling facilities; a pipeline system; access roads; tank storage facilities; a terminal which includes breakwater, jetty and harbor; as well as supporting infrastructure such as administrative buildings, fire station, security and pump stations. The construction of all these, according to the Dangote Group’s Executive Director, Devakumar Edwin, has already created about 37,500 direct and indirect jobs. These and more are early days pointers to the impact the LFZ will have on the nation’s economy. Once again, Lagos has shown exemplary leadership in identifying and unlocking economic catalysts through the steady progress being made in the LFZ. A replication of this model, even on smaller scales, across the various free zones in the country will make a significant impact on the diversification and development of Nigeria’s economy.

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igeria faces a recession barely four years after its last one, mainly caused by the COVID-19 pandemic and its effects – depressed global crude prices, lockdown measures in economic hubs and disruptions to international trade. However, a combination of the country’s growth prospects, and a global recession caused by the pandemic, point towards one of the most vital catalysts for urgent economic growth – Foreign Direct Investment (FDI). Global economic shocks have resulted in investors seeking a more diversified portfolio and greater focus is being placed on Africa. While the continent has not been immune from the pandemic and there is a lot of uncertainty about the extent of damage wreaked by COVID-19 and how long it will last, appetite for investment in the continent has remained bullish. Experts also point at the rapid shifts in government policies in the continent due to economic and fiscal challenges as opportunities for investors. Nigeria is one of the countries leading the way for more investment friendly policies to attract foreign investment. Private Public Partnerships (PPP) have been further strengthened and already show signs of their potential in revitalising Nigeria’s economy. Perhaps the biggest example of this is the recent injection of $221 million by the China Harbour Engineering Company into the Lekki Deep Sea Port Project as part of their equity funding. This fresh investment, coming during global shocks caused by the pandemic, has not only served as a statement of faith in the country’s growth potentials but has also shown how increased PPPs are the key to urgent economic development. PPPs are agreements between public and private sector (for example between a government and private business), which are typically long-term, to work together in providing projects and services (usually infrastructure) to the population. In Nigeria, PPPs have been identified by economists as increasingly vital for effective funding and operations of critical social and economic infrastructure. “Given current economic realities, they are even more important due to their dual role of stimulating both economic and infrastructure growth,” said Blessed Okonkwo, an investment banker.

In Lagos State, a PPP project has emerged as Nigeria’s biggest example of this dual role – Alaro City, a mixeduse city-scale project planned on 2,000 hectares in the Lekki Free Zone. Alaro City is a partnership between the Lagos State Government and Rendeavour, the largest new city builder in Africa. Launched in January 2019, it has already shown promise as a much-needed infrastructure provider and more importantly as a catalyst for investment in the country. Over two times the size of Victoria Island, Alaro City is a mixed-income, city-scale development with industrial and logistics locations, complemented by offices, homes, schools, healthcare facilities, hotels, entertainment and 150 hectares of parks and open spaces. The city’s masterplan has garnered several international acclaims. Construction on 3.5 kilometres of initial road networks (comprising of rain gardens and cycling lanes) are well under way while a modular 50MVA power plant is expected to power initial energy needs. The city’s residential areas have attracted significant interest, with phase one of residential plots sold out and phase two ongoing. Its commercial areas have attracted over 20 multinational and Nigerian businesses already. Lola Akande, the Lagos State Commissioner for Commerce, Industry and Cooperatives, during a recent ministerial press briefing to mark the one year old administration of Governor Babajide Sanwo-Olu, said the companies, already in various stages of building their facilities in the city, would create thousands of immediate jobs. “The companies will engage about 2,050 employees in the first phase of their operations,” she said. The number of these companies have continued to further increase after the commissioner’s

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speech, with the announcement in early June that RunGas, a gas infrastructure firm, will expand its LPG cylinder manufacturing with a move to Alaro City. The potential is almost limitless. Stephen Jennings, the Founder and CEO of Rendeavour, says Rendeavour’s new cities are major catalysts for additional investment. Foreign investors, in particular, see the sort of urban development being facilitated by Rendeavour as the panacea to challenges such as securing land titles, infrastructure and taxes. Rendeavour is also currently building new cities in Ghana, Kenya, Zambia and the Democratic Republic of Congo. “These cities are providing homes, offices, schools, hospitals and industrial parks within well-planned urban environments, delivering new roads and utilities such as power, water and ICT, to thousands of people today, and to hundreds of thousands in the future,” said Mr Jennings. “Looking to our work in Kenya, Ghana and Zambia as examples, we have invested hundreds of millions of dollars of our own capital to develop sustainable and inclusive new cities,” said Mr Jennings. “In turn, this has catalysed well over $1 billion in additional investment in construction, plant and equipment in these countries by indigenous and multinational companies looking to build their own futures on this great continent. In our cities, more than 75 companies, including Unilever, MTN and Africa Logistics Properties, the IFC- and CDCfinanced Grade A warehousing business, are building or have completed offices, manufacturing facilities and world-class logistics and warehousing complexes.” In Alaro City, the biggest example of this potential is Ariel Foods FZE, a multinational food manufacturer, which launched its factory in January 2020. Located on 15,414 square metres, the facility is Nigeria to meet its own requirements and export ready-to-eat nutritional foods. Mr. Chandaria’s decision to TTinvest in Nigeria was made easier by existing relationships with Rendeavour. Mr. Jennings, a serial investor in Nigeria – he led the introduction of Renaissance Capital into Nigeria and is also the founder of RenMoney, a leading micro finance bank the largest ready-to-eat therapeutic foods factory in Africa. At its launch, the company’s chairman, Dhiren Chandaria, said the facility has a yearly production facility of 18,000 metric tonnes and is the most technically advanced manufacturing facility in the world, capable of enabling – is optimistic about the economies of emerging markets. This optimism, when combined with his track record and the ease of doing business his cities provide, influence investment decisions by international businesses to move to Africa and Nigeria. Experts in the real estate sector predict that Alaro City is geared to become one of the most vital PPPs for Lagos State, in terms of both revitalising the sector and contributing to economic development. Governor Sanwo-Olu agrees with this sentiment and has hailed Alaro City as the model of the sort of PPPs the Lagos State Government needs. “Our goal is for Alaro City to become a veritable model for PPPs of this kind,” he said during the launch of the Ariel Foods facility. “We also intend for it to serve as a model for the kind of reasonably- priced and climate-friendly urban developments that Lagos deserves, as a 21st century megacity. We are thus grateful to Rendeavour for being excellent partners and investors on this project. Our administration in Lagos State will continue to guarantee policies, programmes and initiatives that will attract investments and create the right environment for these investments to thrive and create economic value.” Nigeria may be on a sure path to a recession, but it won’t stay in the pits for long, according to experts, if the right policies are created and supported to bring economic value. PPPs as Lagos State and its Alaro City have shone a brighter light on the possibilities in catalysing economic growth via this model.

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Tuesday 23 June 2020

BUSINESS DAY

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Tuesday 23 June 2020

BUSINESS DAY

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Discos say high import duty, others slowing 2021 metering target HARRISON EDEH, Abuja

lectricity Distribution Companies (DisCos) have decried high import duty for meters, and other hurdles that are slowing the firms’ 2021 metering target of the Meter Asset Providers (MAP) regulation. The Association of Nigerian Electricity Distributors (ANED) discloses this in a statement obtained by BusinessDay on Sunday, as it called on the Federal Government to intervene in finding a means to cut the duty on imported meters, to enable faster metering for the DisCos’ customers towards ending the estimated billing regime. The statement issued by the executive director, Research and Advocacy at ANED, Sunday Oduntan, notes that some of the MAP companies have the capacity to install about 3,000 meters per day for the DisCos if the meters are available. “These are separate companies but DISCOS support Meter Assets Providers (MAP) and we want them to succeed,” Oduntan says. He further says, “There should be zero percent import duty on meters. We must assist local meter manufacturers to bring in components duty-free until Ajaokuta Steel Company is ready. The high import duty at the ports is killing the power sector. “When Customers are metered, they would be happy. Estimated billing is not good for the DisCos revenue collection drive. While those importing meters are finding it hard because of the import duty, the local meter manufac-

turers are also finding it difficult to continue production because they have to pay import duty on at least seven different components which they import for use in producing the meters in Nigeria.” The DisCos’ group note that the power firms cannot be blamed for the current slow process of providing meters for their customers as that role was alienated to the MAP companies since the Nigerian Electricity Regulatory Commission (NERC) implemented the MAP regulation in 2019 and gave permits to metering firms to provide and install the meters for DisCos. The DisCos also says with the current import duty and other challenges befalling the implementation of MAP, the NERC order that DisCos should provide meters for all electricity consumers by 2021 may not be realistic. “On the part of the federal government, what has it done to ensure that the meters are available for them to be installed for the customers of the DisCos? There is an urgent need for the Government to intervene so that there will be more meters available to be installed.” ANED also said the Nigerian Electricity Management Services Agency (NEMSA) which tests and certifies meters for the DisCos, recently confirmed that although the DisCos were to present 1.023 million meters for testing in the first phase of MAP scheme which began in May 2019. However, only 273,000 meters have been tested and certified by NEMSA due to the hiccups the MAP firms are facing in the importation of meters.

Terminal operators worry over high rate of manual inspection of cargo at ports …want Customs to deploy technology to drive cargo examination

AMAKA ANAGOR-EWUZIE

erminal operators under the aegis of the Seaport Terminal Operators Association of Nigeria (STOAN) have decried the high rate of manual examination of cargoes at the nation’s seaports, and asked the Nigeria Customs Service (NCS) to deploy technology to drive the process. Vicky Haastrup, the chairman, who spoke in Lagos at the weekend, said manual examination of cargoes was not efficient and does not promote social distancing. “We have a situation where people must visit the port physically to do Customs documentation and cargo examination before they can take delivery of their consignments. This is not safe at this time and it is also inefficient. The Nigeria Customs Service should do everything possible to install functional scanners at the port to reduce the high rate of physical examination of cargoes as well as human contacts,” she said. According to Haastrup, Customs should also make it possible for consignees to process their release documents and make necessary duty payments online without having to visit Customs commands. “There is also a need to reduce the number of government agencies that participate in cargo examination at the port in addition to reducing the number of checks carried out on cleared cargos both inside and outside the port premises. Customs’ clearing process must become smart at this time,”

Haastrup said. The STOAN Chairman also said that due to declining oil revenues, Nigeria must begin to make a deliberate attempt to shift its balance of trade. “Nigeria must move quickly from being a net importer to a net exporter of food. The government will need to support farmers for better agricultural yields that will be attractive to the international market. Farmers also need to be supported in reducing wastages experienced during harvests and in the course of getting their produce to the market. Funding and logistics support for the farmers is also of great importance at this time,” she further advised. She called on the government to simplify the cumbersome processes and unnecessary bureaucratic bottlenecks associated with documentation and processing of export cargoes at our ports. “Terminal operators and the Nigerian Ports Authority (NPA) worked hard to keep the ports running during the Covid-19 lockdown because we are aware of the importance of seaports to the wellbeing of our people. We knew the port had to remain open to ensure that there was no shortage of food, drugs and other essential supply to Nigerians,” she said. She added: “The shipping sector is key in securing the continuity of economic activities, ensuring supply chains to industries, transportation of essential goods, including energy and food supplies, and transportation of vital medical and protective equipment, and supplies. www.businessday.ng

Hope Uzodimma, governor, Imo State, performing the foundation laying ceremony of an Infectious Disease Hospital at IMSUTH, Orlu. With him are: From R-L: Mele Kyari, GMD, NNPC; Placid Njoku, deputy governor, Imo State, and Timipre Sylva, minister of state for petroleum.

Here’s why Nigeria’s FDI plunged 48% in 2019 BUNMI BAILEY

ew investment regulations for multinational enterprises in the oil and gas industry caused a sharp drop in foreign direct investment (FDI) flows to Africa’s largest economy. According to a recently released 2020 World Investment report by the United Nations Conference on Trade and Development (UNCTAD), FDI into Nigeria declined by 48.2 percent to $3.3 billion in 2019 from $6.4 billion in 2018. “FDI flows to Nigeria almost halved, to $3.3 billion, due to a slowdown in investment in the oil and gas industry. FDI to West Africa decreased by 21 percent to $11 billion in 2019. This was largely driven by the steep decline in investment in Nigeria due to new investment regulations for multinational enterprises in the oil and gas industry,” the report said. “The development of a

$600 million steel plant in Kaduna State offers some evidence of investment diversification, a long-standing policy objective,” it said. Although the new investment regulations were not stated in the report, Ayodele Oni, an energy partner at Bloomfield Law Practice, believes that the regulations that affected FDI were the Finance Act and the Deep Offshore and Inland Basin PSC (Amendment) Act, both of 2019. “The Finance Act makes changes to the tax and fiscal regimes and one of such changes, is the restriction on the amount of interest deductible by a tax payer on foreign related party loan to a maximum of 30 percent of Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA). It also reduced the withholding tax exemption available in relation to interest on foreign loans from 100 percent where

tenor is 7 years to 70 percent,” Oni said. “The Deep Offshore and Inland Basin PSC (Amendment) Act also makes some changes to the fiscal aspects of the Production Sharing Contract regime of the upstream petroleum sector. Many of those changes are great for the country in terms of receiving more, which could then mean investors could receive less and may be unattractive to some investors,” he said. Last year, it was reported that Ghana was West Africa’s largest recipient of FDI in 2018, overtaking Nigeria. But in its 2020 revised report, Nigeria still remains West Africa’s largest recipient of FDI as it recorded $6.4 billion against $2 billion in 2018 and Ghana had $3 billion as against $3.3 billion. FDI flows to Africa in 2019 declined by 10 percent to $45 billion. Increased FDI flows to some of the continent’s major

economies, including Egypt, were offset by reductions in others, such as Nigeria and South Africa. The report also forecasts that the COVID-19 pandemic will severely curtail foreign investment in Africa in 2020, mirroring the global trend. The downturn will be further exacerbated by the extremely low oil prices, considering the resource-oriented investment profile of the continent. With this, FDI flows are expected to decline between 25 percent and 40 percent. “Depending on the duration and severity of the global crisis, the longer-term outlook for FDI in Africa could draw some strength from the implementation of the African Continental Free Trade Area Agreement in 2020, including the conclusion of its investment protocol. In addition, investment initiatives for Africa by major developed and emerging economies could help the recovery,” it states.

Nigeria needs to spend wisely, diversify COVID-19: Nigeria’s school system needs decentralised learning now - EduTech economy - Aig-Imoukhuede GBEMI FAMINU

oronavirus (COVID-19) pandemic has created opportunity for Nigeria to spend wisely and diversify the economy, Aigboje AigImoukhuede, founder/chairman of Africa Initiative for Governance (AIG), has said. Speaking in a webinar organised by the AIG, a not-for-profit founded to inspire the transformation of Africa’s public sector, he says while governments have so far committed $15.6 trillion in responsetoCovid-19,anaverageof $2,042.00perperson,Nigeria’s$6.5 billionincommitmentsamountto a paltry $32.50 per person. Aig-Imoukhuede recommends that the private sector should collaborate more with the government. The webinar was held in collaborated with the Blavatnik School of Government, University of Oxford to host a virtual

discussionon“COVID-19andthe Oil Price Crash: Nigeria’s Tough Choices”. Other stakeholders called for Nigeria to use the opportunity presented by the Covid-19 to diversify the economy. Prominent Nigerians who participated in the webinar included, former President of Nigeria – Olusegun Obasanjo; former Emir of Kano State, Sanusi Lamido Sanusi; speaker, House of Representatives – Femi Gbajabiamila, and head of the Civil Service of the Federation, Folasade Yemi-Esan, among others. The webinar also featured CeylaPazarbasiogu,vicepresident for Equitable Growth, Finance and Institutions (EFI) at the World Bank, Paul Collier, professor of EconomicsandPublicPolicyatthe Blavatnik School of Government, University of Oxford, and Ngaire Woods, Dean of the Blavatnik School.

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Jumoke Akiyode-Lawanson

n the wake of the ongoing COVID-19 pandemic and shutdown of schools nationwide, Olufemi Shonubi, general manager, EduTech, has called on the Federal Government of Nigeria to decentralise the learning process for school children, as the negative effect of the pandemic has necessitated the search for a convenient school system to strengthen learning in the country. EduTech is an establishment geared towards transforming education with hands-on and technologybased learning solutions in educational campuses and organisations. Shonubi said although this model was still desirable in the country due to the gap between demand and access to quality education, the @Businessdayng

outbreak of COVID-19 has made it so imperative that any country that delays in adopting it will play catch-up in the future and pay the price with low skilled and half-baked graduates. “In recent years, the provision of e-learning solutions was necessitated by the growing gap between demand and access to education. Considering the current situation brought about by the novel Coronavirus (Covid-19) pandemic, however, we are finding that e-learning solutions are needed now more than ever,” he said. In a bid to lead the way and expand education technology, EduTech has successfully launched a new e-learning platform, VigiLearn 3.0, which will enable individuals to gain valuable knowledge through short courses as well as full degrees from reputable Nigerian universities.

Tuesday 23 June 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Seplat Petroleum’s CEO shows how COVID-19 impacts operators, government revenues …maps clear path for expansionary economic diversification STEPHEN ONYEKWELU

perators and government revenues face the effects of global volume restrictions and lower oil prices thanks to the COVID-19 pandemic, necessitating urgent use of oil and gas to rapidly diversify the economy. In April, oil prices decreased by around 50 percent from January levels. The United States market reported record lows with crude oil prices turning negative for the first time in history. The main cause of this was total lockdown due to COVID-19. Although oil prices have clawed back some gains to $40 per barrel, the coasts are not clear yet. Crashing oil prices meant that to shore up oil prices there had to be volume restrictions from the Organisation of Petroleum Exporting Countries and its allies including Russia known as OPEC+. According to Austin Avuru, chief executive officer of Nigeria’s indigenous Seplat Petroleum Plc, a combination of volume restriction and lower oil prices mean lower revenues for operators and lower revenues for Nigeria in terms of rent. This has also made the case for urgent economic diversification necessary if Africa’s most populous country is to become the giant it has the potential to be. “The immediate impact is that operators have had to cut down

on their capital expenditure. When you cut down on your capital expenditure, it means you are terminating contracts and letting contractors go,” Avuru said at BusinessDay’s Digital Dialogues titled ‘A National Conversation: Mapping Nigeria’s Response to COVID-19.’ Seplat Petroleum Plc’s experience and response to COVID-19 is a typical example for operators in the sector. In this instance, the company billed to operate four to five rigs drilling about 18 wells. But

the company has cut that down to seven wells, one rig now on contract, which means three to four rigs have been let go. “Each of those rigs will probably have 200 personnel on board. That is the number of staff whose jobs are at risk. The entire multiplier effect will be job losses and lower revenues for both the operators and the country,” Avuru summarised. Nigeria’s 2019 budget performance showed that oil and gas accounted for 45 percent of total

revenue down from 65 percent of government revenue. This was due to higher costs and lower revenues from operators and ancillary services in the oil and gas sector. The chief executive officer anticipates that oil and gas will probably account for less than 40 percent of the total budget revenue in 2020. This means that the place oil as the major revenue driver of the economy is slipping away. Additionally, the diversification that has been talked about

for decades is upon Africa’s biggest crude oil producer without further escape. This implies that it is time to seek other sources of revenue to fund the budget. The rental revenues from oil and gas have become much smaller as a percentage of total budget revenue than it used to be. Seplat Petroleum emphasises gas delivery to the economy because of its multiplier effect. “If we consume 3 billion cubic feet of gas locally, we probably will be generating some 15 gigawatts of electricity. This will probably light up entire West Africa with all the multiplier effect. Heavy industries such as steel and cement will benefit,” Avuru said. Nigeria is now a net exporter of cement, this can also happen for petrochemicals. To achieve this, the emphasis has to shift from oil and gas rental to fund the budget to gas in particular as an enabler of economic development and the multiplier effects that come with it. In this regard, the entire West Africa sub-region is to be seen as a local market. An improvement in terms of gas distribution, gas to power heavy industries has many multiplier effects that will then generate more taxes from value-added tax, withholding taxes, transfer pricing and other taxes other than oil and gas revenues. “This is the diversification we are seeing ahead of us particularly using gas as a major enabler,” Avuru said.

Why Rystad Energy expects Nigeria’s crude oil reserves to fall by 6bn barrels DIPO OLADEHINDE

ime was when Nigeria was regarded as the most sought-after beautiful bride by many suitors as it commanded a lot of attention within the global oil market. But not anymore. Today, Nigeria’s oil fortune, to say the least, is fast ebbing, albeit diminishing at such an unprecedented pace worrisome enough to threaten the country’s economic health. In its annual global energy outlook for 2020, Norwegian independent energy research firm, Rystad Energy expects potential reserves in Nigeria to fall further by 6 billion barrels. Rystad in its report says that COVID-19 pandemic which is being experienced globally will affect the demand for oil and thus, put a lid on exploration in remote offshore areas, further reducing world’s recoverable oil by around 282 billion barrels. “In Nigeria, after a decade long debate on oil policy reforms,

potential reserves are expected to fall further by 6 billion barrels,“ the report said. Considering Nigeria’s reliance on the oil and gas industry, one would expect that the Federal Government would do everything to ensure 100percent productivity in the sector. However, the reverse has been the case, with the situation getting worse with each passing year. Accounting for 2.2 per cent www.businessday.ng

share of the global oil reserves with Africa largest of 37.5 bb, Nigeria stands favourably among countries with relatively high energy security. However, the country has not done enough to shore up its reserves in the last decade, despite the rhetoric of stakeholders to that effect. Also, the number of active rigs, a technical indicator of the level of exploration, development and production activities in the coun-

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try’s oil and gas sector – shrunk from 59 in 2013 to only eight in May 2020, according to data from Organisation Petroleum Exporting Countries (OPEC). The latest episode of oil price collapse in the international market, where prices have dropped to below $30 per barrel, will lead to further cost-cutting by oil producers. Most exploration, development and production investments in @Businessdayng

Nigeria need oil price to be above $40 per barrel to be profitable. Active oil exploration brings about a billion investments in the country’s economy as well as the development of related sectors of the economy and infrastructure. It also supplies new jobs for Nigerian citizens and improvement of social and living standards in general while absent of oil exploration implies reverse of increased economic growth. For North Africa, Rystad expects production to fall further by 4 billion barrels in Libya due to no imminent peace in the country, while in Algeria, shale exploration potential is expected to reduce by 7 billion barrels. “OPEC countries are expected to lose 21 billion barrels of reserves potential as the negative developments in Venezuela and Iran outweigh the increased strength and reserves potential of core OPEC countries in Arab Gulf region,” Head of Analysis, Per Magnus Nysveen said.

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Tuesday 23 June 2020

FINANCIAL TIMES

World Business Newspaper

US Supreme Court limits SEC’s power to recover ill-gotten gains High court rules that regulator can only claw back the net profits of a fraud KADHIM SHUBBER

he Supreme Court on Monday narrowed the power of the Securities and Exchange Commission to claw back ill-gotten gains through federal lawsuits. The court in a 8-1 decision said the US securities regulator could only obtain a sum reflecting the net profits of a scheme, not the total amount taken from investors. The ruling came after a married couple pursued by the SEC for defrauding Chinese investors appealed a court ruling ordering them to pay back $26m. “The court holds today that a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible under [the law],” wrote Sonia Sotomayor, an appointee of Barack Obama, in the majority’s opinion. The decision is the second in recent years to limit the SEC’s ability to seize money from accused fraudsters. In 2017, the court ruled that the regulator’s disgorgement powers were timelimited to five years. Disgorgement is a tool the SEC uses to obtain billions of dollars each year, along with other penalties including fines. Under Jay Clayton, the SEC chairman since

The US Supreme Court’s decision was the second in recent years to limit the SEC’s authority to recover funds from accused fraudsters © REUTERS

2017, the regulator has made frequent use of the tool to seize the proceeds of Ponzi schemes and other frauds that target retail investors. Though the SEC has internal administrative courts that are unaffected by the ruling on Monday, its authorities in federal court are important because the agency is unable to obtain injunctions against ongoing frauds through

its internal processes. The ruling on Monday stopped short of the more extensive relief requested by Charles Liu and Xin Wang, who had asked the Supreme Court to find that the SEC had no power at all to seek disgorgement. The couple were sued in 2016 for defrauding Chinese investors in a scheme involving the EB-5 visa scheme, which allows

foreign investors to reside in the US if they make qualifying capital investments. The SEC alleged that they misappropriated much of the money, spending it on salaries and marketing materials, as well as diverting some to their own accounts and companies. The district court ordered the couple to repay the full $27m they had raised from at least 50

Chinese investors, less a couple of hundred thousand that had not been spent. That decision was upheld by an appeals court. On Monday, the Supreme Court sent the case back to the lower court for further proceedings to determine what legitimate business expenses might be deducted from the $27m disgorgement order. The court also declined to rule on other questions about the SEC’s disgorgement power, such as whether funds had to go to investors, rather than the government, or whether orders that held others jointly liable were allowed. An attorney for the couple said: “We’re pleased to see that the Supreme Court overturned the judgment against Mr Liu and Ms Wang awarding a judgment of gross revenues as ‘disgorgement’ to the SEC and clarified that traditional equitable principles limit the SEC’s authority only to seek an award of profits less legitimate business expenses (ie, net profits) for the benefit of victims.” A SEC spokesperson said the court’s decision “allows us to continue to strip wrongdoers of their ill-gotten gains and return money to its rightful owners, following the court’s direction to ensure that our efforts embody principles of equity and fairness”.

Berlin and ECB signal end to legal impasse over bond-buying German finance minister seeks to reassure constitutional court on flagship policy MARTIN ARNOLD

ermany’s finance minister has said the stand-off between the country’s highest court and the European Central Bank is about to be resolved “without drama”, adding to signs that a solution could be found as soon as this week. The ECB is planning to try to defuse the legal impasse with Germany’s constitutional court on Thursday by publishing the official account of its last monetary policy meeting at which it discussed whether its bondbuying had an excessive impact on economic and fiscal policy — the subject of a contentious constitutional ruling last month. The Karlsruhe-based court shocked Europe when it said that Berlin officials and the EU’s top judges had failed to properly scrutinise the ECB’s €2.2tn sovereign bond-buying programme, in a move that threw the bank’s flagship policy into doubt. The court ordered the German government and parliament to ensure that the ECB provided

Astrid Wallrabenstein is sworn in as a new judge of Germany’s constitutional court at a ceremony in Berlin on Monday © Bernd von Jutrczenka/Pool/AFP/Getty

a “proportionality assessment” of its bond-buying to ascertain whether the “economic and fiscal policy effects” did not outweigh other policy objectives. It also said that if the ECB failed to comply within three months, the Bundesbank must stop buying bonds and plan to sell the more than €500bn it holds. The growing signs that the ECB and German government are working on a solution to the legal confrontation with the www.businessday.ng

constitutional court have eased fears that the central bank’s bond-buying could be disrupted. Eurozone government bonds rallied on Monday. “This is not a drama without resolution,” said Olaf Scholz, the German finance minister, speaking via video-link to the Frankfurt finance summit on Monday. “We will soon see there will be a resolution without drama.” His comments came as Luis de Guindos, vice-president of the ECB, said it was “ready to

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co-operate, but always with full respect of our independence”. The yield on Italy’s 10-year bonds fell 4 basis points to 1.38 per cent on Monday, narrowing the closely watched spread with Germany’s 10-year bonds to 181 basis points, close to threemonth lows. Bond yields fall when their prices rise. As well as publishing its official account of the bond-buying discussion at the ECB’s last monetary policy meeting, the central bank plans to provide some unpublished documents to the Bundesbank so it can pass them to the German government and parliament. The unpublished documents are likely to include the full minutes of the central bank’s governing council monetary policy meetings, which provide more detail than the official published accounts of the meetings, according to two people briefed on the matter. They could include the minutes of meetings at which the ECB discussed buying sovereign bonds before it started the policy in March 2015 and before its @Businessdayng

started publishing official accounts of its monetary policy meetings earlier that year. “Our monetary policy decisions have always been proportionate and appropriate,” said Mr de Guindos in an interview with Der Spiegel on Monday. “We stand ready to co-operate with the Bundesbank and to provide information to facilitate the response that the German institutions have to give to the constitutional court.” Jens Weidmann, president of the Bundesbank, said in an interview with the Frankfurter Allgemeine Zeitung at the weekend that “with regard to the judgment, I am confident that we will find a way to make the considerations of proportionality clearer”. A further optimistic note was sounded over the weekend by Astrid Wallrabenstein, a judge recently appointed to the German constitutional court, who said in an interview with FAZ that she hoped “things will ultimately develop in the right direction and that in the end everyone will get over certain injuries”.

Tuesday 23 June 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Zero-fee trading helps Citadel Securities cash in on retail boom Higher volumes and wider spreads have driven outsized returns for market makers RICHARD HENDERSON

itadel Securities and its majority owner Ken Griffin are among the big winners from a boom in retail investing, cashing in on the zero-fee trading that has lured huge numbers of first-time investors to the US stock market. Chicago-based Citadel Securities accounts for 40 of every 100 shares traded by individual investors in the US, making it the number one retail market maker, according to Piper Sandler. The company is a big buyer of customer trades from the leading US retail brokerages such as Charles Schwab and TD Ameritrade, which have slashed commissions to zero to keep up with fast-growing challengers such as Robinhood. Citadel Securities pays tens of millions of dollars for this order flow but makes money by automatically taking the other side of the order, then returning to the market to flip the trade. It pockets the difference between the price to buy and sell, known as the spread. Easy access to the market against the backdrop of wild swings in prices have led to higher trading volumes for stocks and options this year — increasing the raw material Citadel Securities uses to turn a profit. At the same time, the rise in volatility has forced spreads wider, increasing the potential income for market makers. “In the stay-at-home environment people don’t have anything

Easy access to the market against the backdrop of wild swings in prices have led to higher trading volumes for stocks and options this year © Bloomberg

to do and are locked in front of a computer,” said Rich Repetto, an analyst at Piper Sandler. Citadel Securities, a sister firm to Citadel, Mr Griffin’s Chicagobased hedge fund, is privately held and does not share financial data. But Virtu Financial, the closest rival to Citadel in retail market making with about a one-third share, acknowledged a sharp upturn during its first-quarter earnings presentation last month. It called the higher volumes and wider spreads a “powerful combination” that “drove outsized returns for market makers”. Virtu’s figures offer clues to the profits on offer. Earnings from market making, which in Virtu’s case

included retail and institutional orders, jumped 267 per cent in the first quarter from the same period a year ago to $652m. Money spent on buying order flow, the biggest cost after exchange and clearing fees, increased much less, up 167 per cent to $62m. Shares in Virtu have leapt 47 per cent so far this year, while the broader financials sector is down 18 per cent. “Not only are retail market makers getting increased trading volume, they are likely getting increased profitability per trade,” said Tyler Gellasch, executive director of Healthy Markets Association, a trade group. Payment for order flow, or PFOF,

is a controversial practice. Some critics chafe at the idea that a Wall Street giant such as Citadel — run by the richest man in Illinois — can profit from activity on platforms such as Robinhood, which was explicitly set up to “democratise” the business of share trading. “We didn’t build Robinhood to make the rich people richer,” cofounder Baiju Bhatt told the FT in 2016. “The mission is to help the everyman, the rest of us, to be part of the financial system.” Critics of PFOF also argue that market makers can, in theory, “front run” orders by, for example, jumping ahead of a customer’s stock purchase to buy it themselves, making a small gain if the

share price increases. Some wave away the idea, saying that concerns over front-running should be limited to ultrafast proprietary trading groups targeting big block trades from institutional investors that can move the market, rather than smaller orders from everyday investors. Instead, supporters of PFOF highlight the fact that retail customers tend to receive better prices from marketmakers than are available on the stock market. Citadel Securities said that its handling of retail trades in the first quarter “resulted in significant savings for [investors] and underscored the value that liquidity providers like us bring to this market”. What is clear is that PFOF has become vital to the brokers, who rely on the revenue to offset a collapse in commissions from trading. TD Ameritrade made $202m from selling its equities and options order flow in the first quarter, according to company filings, the most of the big brokers, including $83m received from Citadel Securities. TD Ameritrade said the amount of orders sent to any particular market maker “is reflective of their outperformance” in achieving a price that matches or beats the stock market. The brokerage said it monitored trades to ensure customers received fair prices and used the proceeds from PFOF to invest in its platform. Robinhood’s revenues from equities and options order flow came to $91m for the period, with $39m from Citadel Securities. In the past, the company paid to settle charges with Finra, the US regulator, for failing to properly monitor trades sent to market makers.

Brussels refers LSE-Refinitiv deal for full antitrust investigation Regulators worry a combined group could offer customers preferential data services PHILIP STAFFORD AND JAVIER ESPINOZA

russels has sent the London Stock Exchange Group’s planned $27bn takeover of Refinitiv for an in-depth antitrust investigation, with regulators concerned that a combined company could offer its customers preferential services for critical data used on global markets. The EU’s competition watchdog warned on Monday that it also had worries about an overlap in European sovereign bond trading and would examine a possible concentration of derivatives trading. A completed deal would transform the LSE into one of the world’s largest managers of financial markets, running exchanges, trad-

ing venues, clearing houses and supplying vast quantities of vital trading data. The LSE plans to buy the data provider in an all-share deal that would involve Blackstone, the private equity group, taking a 37 per cent economic interest in the stock exchange group. Brussels has been formally examining possible conflicts of interest in the deal for a month. Authorities will now have until October 27 to make a final ruling. That deadline could be extended if authorities demand the two companies make concessions, such as selling assets, to satisfy their concerns. The US competition agency, part of the Department of Justice, began asking market participants about the deal at the start of June. www.businessday.ng

Margrethe Vestager, executive vice-president responsible for competition policy, said consumers and users needed to be offered competitive terms. “Financial markets provide an essential function for the European economy,” she said. “Access to financial market infrastructure and financial data products is needed to make investment decisions, trade, and to protect savings.” In response, the LSE said it would continue to engage constructively with the Commission. Brussels has already intensely scrutinised the deal in a so-called pre-notification phase, where companies and regulators have a chance to identify potential concerns and remedies before a formal probe starts.

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The agency has sent a 130-page questionnaire to rivals of the LSE and Refinitiv, according to one person who has seen the document. It asks whether the LSE and Refinitiv could discriminate on pricing, offering more advantageous terms to Refinitiv’s customers. Regulators also have concerns that Refinitiv’s rivals that are licensing LSE data could receive a slower or more inferior service, the person said. A combined business would control vast amounts of data used every day on the world’s equity, bond and derivatives markets. Nearly $20tn of fund managers’ stock and fixed-income assets rely on LSE’s FTSE Russell data, as it is the benchmark for daily closing share prices in their portfolios. Re@Businessdayng

finitiv has more than 400,000 users. Cross-selling indices, data and analytics to each other’s customers is a key part of the deal for the LSE and Refinitiv. Brussels is also looking at the potential overlap between MTS, the LSE’s bond-trading venue, and Tradeweb, in which Refinitiv holds a 54 per cent economic interest. The early investigation “suggests that it is difficult for a new trading venue to . . . become a real alternative to incumbent venues”, the EU said. In recent weeks Italian authorities and politicians have highlighted MTS as a national strategic asset because it allows fund managers and the country’s central bank to find and buy sovereign debt.

leaderSHIP

BUSINESS DAY Tuesday 23 June 2020 www.businessday.ng

CEO in focus

Tariye Gbadegesin: Investment professional bridging Nigeria’s infrastructure gap DIPO OLADEHINDE

ariye Gbadegesin, an investment professional with 20 years of experience in the financial services sector and over $3 billion of transaction experience is embarking on a quest to change the narrative of Nigeria’s infrastructure gap. Blackouts are an everyday event in Nigeria. A weak electricity grid and insufficient generating transmission, distribution capacity cause widespread and regular power outages, forcing millions of people to rely on costly and polluting diesel generators to keep the lights, refrigerators, and computers on. In order to change this narrative, Tariye Gbadegesin, the Managing Director and Chief Investment Officer of ARM Harith Infrastructure Fund Managers (Armhith) is playing a big role in making sure infrastructure finance plays a critical role in promoting economic growth, improving standards of living, reducing poverty, enhancing productivity and improving competitiveness. Armhith is a joint venture firm between Asset & Resource Management Company Ltd (ARM), a Nigerian institutional investor with $2.3 billion of assets under management and Harith General Partners (Pty) Ltd (Harith), a South African infrastructure fund manager with over $1 billion of assets under management. Armhith is also the first equity infrastructure fund to be licensed by the Nigerian Securities and Exchange Commission under its recent Infrastructure Fund rules. Also, Tariye Gbadegesin was on the founding team to establish the Africa Finance Corporation (AFC), a pan-African development finance institution (DFI) with $6 billion under management. At AFC she led several of its investments in the power, transport, industrials and telecommunications infrastructure. Tariye Gbadegesin was the head of Industrial and Telecommunications Infrastructure leading the firm’s deployment of debt and equity capital across Africa.

•Gbadegesin

In that role Tariye delivered investments of over $800 million in four years. Tariye was a non-executive Director on the Board of the Main One Cable Company, a telecoms and data services company serving West Africa and Cabeolica Wind IPP in Cape Verde, the first commercial wind IPP in sub-Saharan Africa. Clearly, Tariye’s experience is highly needed as Nigeria is currently faced with a huge infrastructure gap that has hindered its desire to exploit its rich natural and human resources to stimulate economic development. For instance, in spite of the country’s huge oil and gas, sunlight and hydro resources, Nige-

ria cannot generate enough electricity to drive its development. In an opinion article titled ‘De-Risking Infrastructure Investments in Africa’ Gbadegesin narrated that in several cases of African infrastructure projects, the underlying sectors have systemic risks that can only be allocated to the government. One clear example is the growing apprehension in government circles over the sovereign guarantee given by the Buhari administration in 2015 to Azura-Edo IPP, a powergenerating private company, to enable it secure a $237 million loan to finance its 450MW project in Edo state. “The landmark project finance arrangement was to be

‘‘

Tariye’s experience is highly needed as Nigeria is currently faced with a huge infrastructure gap that has hindered its desire to exploit its rich natural and human resources to stimulate economic development

the blueprint to attract much needed capital to Nigeria’s energy-hungry market. However, success relied on the government resolving issues with other parts of the electricity system right such as tariff adjustment and gas availability in a timely manner, which has not been the case,” Gbadegesin said in an article published on africaglobalfunds.com. To truly tackle the problem, Gbadegesin reckons DFIs and the Nigerian government must create solutions for Nigeria’s electricity system in its entirety. “DFIs and the government can use their capital and guarantees, respectively, to drive delivery of gas, support gradual increases in tariffs, and provide backstops to investment in transmission and distribution. This would make the entire system more commercially viable and take advantage of smart credit enhancements like the Put Call Option Agreement (PCOA) to attract private capital,” Gbadegesin said. According to her, some lessons for Nigeria’s electricity system can be found in the successful turnaround of the Societe Ivoirienne de Raffinage (SIR), a 50-year-old refinery in Cote d’Ivoire were the refinery

built up debt arrears over the last 10 years and these liabilities became a drag on the sovereign’s balance sheet because of the refinery’s government ownership. The government of Cote d’Ivoire wisely integrated a fuellinked levy that was securitised by lenders and is fully transparent to all parties. The loan was then backed by a sovereign guarantee. However, the refinancing facility was tied entirely to the value of the levy amount to ensure that the risk of the sovereign guarantee crystallizing would be minimal. “Participation by DFIs such as the Africa Finance Corporation (AFC) and the African Trade Insurance Agency strengthened the validity of the government’s commitment to maintain the levy and other policy commitments,” Gbadegesin said. She noted that structuring by AFC requires full transparency and security of the levy collection that aligns with global best practices and gives international lenders comfort. Financial close occurred in 2018, and the loan performance has been successful. Gbadegesin noted that DFIs have increasing amounts of capital at their disposal as the African Development Bank (AfDB) just doubled its capital from $93billion to $208billion, the largest in the history of the AfDB. “One wise use of these monies would be to fix systemic risks, such as those inherent in Nigeria’s electricity value chain thereby reducing the probability that government guarantees actually crystalize. This would give governments much more comfort in providing support and therefore stimulate private capital into infrastructure,” Gbadegesin said. She got global experience from working at the International Monetary Fund, Boston Consulting Group and PricewaterhouseCoopers. She has proficiency in French and Spanish and a working knowledge of Portuguese. She has lived in the US, Kenya, Cost Rica and Nigeria. Tariye Gbadegesin has a bachelor’s degree in Economics from Amherst College, and an MBA from the Harvard Business School.

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