BusinessDay 23 Sep 2020 by BusinessDay

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news you can trust I ** WEDNESDAY 23 september 2020 I vol. 19, no 656

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Interest rate cut to 11.5% means more liquidity for banks, savings rate drop P. 2 FG looks inward to upturn dwindling revenues P. 2

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*NTB - Nigerian Treasury Bills; *CP - Commercial Paper

Isa Ali Ibrahim Pantami (r), minister of communucation and digital economy, with Bashir Ibrahim Hassa, general manager, business development, North, BusinessDay Media Limited, after a meeting on the State of Nigerian Communications and Digital Economy in Abuja, yesterday. Pic Tunde Adeniyi

ISAAC ANYAOGU

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Axxela Nsp-spv Funding 1 (Natural Gas) PowerCorp plc plc

4.63

…Reform business environment, invite private sector investments

Dangote Cement plc

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Nigeria, states cannot deliver development now - Sanusi igeria’s federal and state governments are incapable of delivering meaningful development in the short and medium term because tax revenues are too poor due to the inability to diversify exports and create value from primary commodities, Sanusi Lamido Sanusi, a former Central Bank of Nigeria governor has said. Sanusi while delivering a

FGN

Spot ($/N) 25-Feb-21 5-Mar-21 23-Jul-30 30-Apr-25 20-May-27 27-Feb-34

$-N 450.00 465.00 1m £-N 580.00 600.00 Currency Futures 389.54 €-N 515.00 545.00 ($/N)

Benchmark Sovereign & Corporate Bonds

FINANCIAL REPRESSION SERIES

Have stocks gained from Nigeria’s financial repression? N DAVID IBIDAPO

igerian stocks saw a short-lived gain from the artificially low interest rate environment until the Covid-19 pandemic struck. The financial repression tac-

tics employed by Nigeria’s monetary authority, which triggered low interest rates on naira assets, peaked in the fourth quarter of 2019 and contributed to a modest rally in stocks. In that period, Nigerian stocks rose 8.47 percent, according to data compiled by BusinessDay.

A low interest rate environment typically translates to lower cost of borrowing for companies and leads investors seeking higher returns to invest in the stock market. The outbreak of the Covid-19 pandemic and decline in global oil prices however eroded the

early gains made as stocks consistently trended downwards through April to shed approximately 30 percent of investors’ holdings. However, investors began taking advantage of low valuContinues on page 30

Wednesday 23 September 2020

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Interest rate cut to 11.5% means more liquidity for banks, savings rate drop … analysts see no spike in credit growth … say confusing message around Nigeria’s willingness to re-open FX market HOPE MOSES-ASHIKE & BUNMI BAILEY

igeria’s central bank’s surprised deeper easing of its benchmark interest rate by 100 basis points to 11.5 percent yesterday from 12.5 percent in May 2020 is seen to translate to more liquidity for banks and further drop in savings rate. After the two-day Monetary Policy Committee (MPC) meeting in Abuja between Monday and yesterday, Godwin Emefiele, governor of the CBN, also announced the adjustment of the asymmetric corridor around the monetary policy rate (MPR) to +100bps/ - 700bps from (+200bps/ 500bps) previously. This is in spite of recent pressure on inflation caused by higher food prices and the expectation of further pressure in the near-term as power sector and fuel subsidy reforms get underway. Nigeria’s inflation rate rose to 13.22 percent in August 2020, highest recorded in 29 months, since March 2018, when it stood at 13.24 percent. “This was a deeper easing than we would have expected at this stage,” Razia Khan, managing director, chief econo-

mist, Africa and Middle East Global Research, Standard Chartered Bank, said. According to Khan, the action of easing policy while inflation is still accelerating sends - at best - a confusing message around Nigeria’s willingness to re-open the FX market. With little additional messaging around FX policy intentions, the CBN appears to have stepped back from action that might have had a more immediate impact on inflation expectations. The effect of this cut will be to push the rate on the standing deposit facility (the lower corridor around the MPR) even lower, to 4.5 percent (from 7.5% earlier). In the Monetary, Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2020/2021, the CBN stated that the remunerable daily placements by banks at the standing deposit facility (SDF) shall not exceed N2 billion. Any deposit in excess of N2 billion shall not be remunerated; and SDF deposit not exceeding N2 billion shall be remunerated at the interest rate prescribed by the MPC from time to time. This is more in line with ex-

Godwin Obaseki, re-elected governor of Edo State, displays the certificate of return presented to him by May AgbamucheMbu (l), national commissioner, Independent National Electoral Commission (INEC), at the INEC Office in Benin City, Edo State.

Skyrocketing prices shift consumer taste to value brands BUNMI BAILEY

igerian cons u m e r s a re s e e k i n g cheaper alternatives in the face of persistent inflation that has lowered their purchasing power, casting a pall on the immediate outlook for producers of premium products. At 13.22 percent in August 2020, the steady march of inflation means spending on discretionary purchases will be limited and when Continues on page 30 necessary. Value brands are relatively cheap but provide the same value as premium brands. Food prices have soared following the country’s land border closure policy last year and disrupity in revenue reporting by the enterprises. The deployment of Directors of Revenue to the FGOEs is in compliance with Presidential approval that was conveyed via SGF’s circular reference IFEOMA OKEKE SGF.50/S.3/C.9/24 dated Ocn addition to the protober 16, 2018, on the approved tocols business pasRevenue Performance Mansengers have had to go agement Framework for Govthrough to get to their ernment Owned Enterprises business destinations as a (FGOEs). result of Covid-19 since the At the event organised by resumption of international the Office of the Accountant- flights, the recent ban on General in collaboration with Emirates Airline by the FedJK Consulting Company, the eral Government of Nigeria minister also said the Treasury and non-issuance of visas Directors would also be expect- by the United Arab Emirates ed to look for opportunities and (UAE) to Nigerians may be avenues for revenue improve- adding to their woes. ments, which is government’s BusinessDay’s checks ultimate goal. show that UAE stopped isThe Directors would deploy suing visas to Nigerians, so Information Technology in the the Federal Government discharge of their duties, and decided to reciprocate by according to the finance minbanning Emirates Airline, ister, the “Integrated Revenue the UAE airline, from operMonitoring System is being put in place to help the monitoring ating into Nigeria. Some business passenof the revenues of the FGOEs gers and tour operators told online real-time and to ensure its improved transparency and BusinessDay that this was affecting their operations accountability.” She noted that Nigeria’s but commended the Federal Government for standing by Nigerians by reciprocating

FG looks inward to upturn dwindling revenues Onyinye Nwachukwu, Abuja

ederal Government of Nigeria is refocusing attention on its own agencies and strengthening surveillance on their revenue generation systems to ensure enhanced accountability and boost dwindling incomes. This comes amid concerns that quite a number of Federal Government Owned Entities (FGOEs) remits less operating surpluses to the Consolidated Revenue Fund than is required by law and/or Financial Regulations. Zainab Shamsuna Ahmed, minister of finance, budget and national planning, said on Tuesday, that the income generating activities of the FGOEs would now be monitored online real-time and to ensure improved transparency and accountability. Ahmed was speaking at the orientation workshop for Treasury Directors selected to be involved in revenue operations of the FGOEs, saying the directors were expected to have better understanding of business processes and operations of the FGOEs while driving improved transparency and accountabil-

tions to farming activities due to banditry, flooding and climate change. A research report by Lagos-based Coronation Merchant Bank published earlier last year stated that most Nigerian consumers were leaving premium brands for cheaper value brands. Abiodun Keripe, head of research at Afrinvest Limited, notes that people might impose even more drastic budget cuts and purchase brands that are lower than value, given the need to ration and live within their means. Ridwan Muhammed, a Lagos-based consumer, says he started using unbranded groundnut oil because he could no longer afford the branded due to

higher price. “I used to cook with branded groundnut oil sold between N650 and N700, but I now use unbranded ones going between N400 and N450,” he states. Also, another consumer noted that she had changed her toothpaste because of rising prices of superior products. “I changed my toothpaste brand because of changes in price. It sells at N600 today, but I have switched to a brand that goes at N300-N350. Besides, they serve the same function,” Sade Alabi, a hair stylist, says. Analysts expect consumers to remain price-sensitive and continue trading down to cheaper and unbranded alternatives where possible.

The inflationary pressure could squeeze the revenue and profit performances of listed fast-moving consumer goods (FMCGs), which simultaneously face higher costs and lower demand caused by Covid-19 and slowing economy. A review of the 2020 half-year financial performance of leading players in the consumer goods sector was largely underwhelming. International Breweries recorded loss in first half of 2020 while the Nigerian Breweries reported 11 percent revenue drop. Unilever Nigeria reported a 36.1 percent decline in revenues to N27.3 billion in the first six months of 2020, from N42.7 billion in the same period of last year. Cadbury had

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More trouble for business travellers over Emirates ban, UAE visa restriction

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the same treatment. However, business travellers worst hit by these decisions have pleaded with both governments to come to their aid as this is adding to the troubles the impact of Covid-19 is having on their operations. “When the Federal Government announced September 5th as the new date for resumption of international flights after five months of shutting down the airspace, we were all hopeful that business would resume as usual. Sadly, barely two weeks after the resumption of flights, the UAE stopped issuing visas to Nigerians and the Federal Government stopped Emirates from operating in Nigeria. “Dubai is a top destination for business people. Our businesses have been shut down since lockdown. These decisions are only making things worse for us.

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We plead with both governments to sit together and come up with a solution,” Emeka Onuaha, a businessman dealing on textiles, says. Further checks show that before the Covid-19, Dubai was the biggest destination for Nigerian travellers with over 20 flights a day terminating in Dubai from Lagos and Abuja. It is believed that over 300,000 Nigerians pass through Dubai every year for business, tourism and medical purposes, among others. Tayo Ojuri, managing partner -Aglow Aviation Support Services Limited, states that most Nigerians visit Dubai for business and tourism, and Dubai is a connecting destination to other destinations. According to Ojuri, these policy decisions will affect the plans of business travellers and the cost implications are very high. @Businessdayng

“Many passengers travel through Emirates and connect flights from Dubai to Asia, Europe and America. The ban and visa restrictions have implications for investors who come into Nigeria to invest. Sadly, Emirates does not have code-share agreements with other airlines on African routes. So, this decision is affecting their operations and I believe with time, the UAE and the Federal Government of Nigeria will resolve the issue,” he says. Bernard Bankole, president, National Association of Nigeria Travel Agencies (NANTA), notes that the decision to ban Emirates is affecting the business of travel agencies, but we are solidly behind the government on this decision. “Government’s decision to reciprocate the same treatment by the UAE government to Emirates, the

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Obaseki’s victory: Lessons for Nigerian leaders!

Franklin Ngwu

s the Edo state governorship election results started trickling in last Sunday 20th September, the social media was on fire with all kinds of messages and images. Of the many that I received, three occupied my mind throughout Sunday night as I had a deep reflection about Nigeria and Nigerian leaders. The first one read “Breaking: APC Ize Iyamu leads with wide margin in Kano and Lagos State……While the second one read “Edo no be Lagos”, the third one had a relaxed PMB picture with the inscription “Everybody carry your cross, I am for nobody”. In my 17th July column titled “Edo 2020: Obaseki Should be Supported’’, I implored Adams Oshiomhole to remember the wider interest of Edo people and Obaseki’s focus for a better Edo state and support his second term bid. Using both National Bureau of Statistics reports and other empirical evidences, I pointed out that as Obaseki can be described as one of the islands of governance rectitude in our Nigerian sea of governance turpitude, it will be inappropriate not to support him. I pleaded to Oshiomhole that to err is human and to forgive is divine and that Obaseki failures are his failures

and Obaseki’s success also his success. Reminding him that he is 68years, I reiterated that he should focus on building a good legacy rather than unnecessary ego driven power tussles. Very concerned and envisaging what the likely election outcome will be, I even went spiritual reminding him that while Galatians 6:9, counsels us “not to become weary in doing good, for at the proper time we will reap a harvest if we do not give up, Philippians 2:3 tells us to “do nothing out of selfish ambition or vain conceit. Rather in humility value others above yourselves”. I prayed that God will grant him the humility to listen and appreciate wise counsel. Most regrettably, all my pleas like many others who also pleaded were received with deaf ears. It even seemed that the more the pleas, the more infuriated Adams Oshiomhole became with an irreversible determination to remove Obaseki from power. He was disqualified to contest, humiliated and technically chased out of APC with no genuine reason. With possible divine intervention and strategic negotiation, he was received and overwhelmingly supported to contest the governorship election under PDP. On Saturday 19th September, Edo people practiced true democracy and firmly decided that the governance of Edo state is for Edo people and should be decided by Edo people. As prayed, the Independent National Electoral Commission (INEC) respecting and upholding the will of the people declared Godwin Obaseki the winner on Sunday 20th September with a total vote count of 307,955 against his closest rival, Oshiomhole’s benefactor, Pastor Osagie Ize-Iyamu who scored 223,619. With a wide margin of 84,336, Edo people clearly demonstrated that

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Possibly reading the body language of the President, it seemed that INEC and all the security agencies acted in line with their objective mandate for a free and fair election

democracy is a government of the people by the people and for the people of Edo state. The election result serves many purposes not only for Edo people but for wider Nigeria and particularly our leaders. First is that governance is a serious business and support for candidates should not be based on ego or selfish interest of power brokers and heavy politicians. It should be mainly based on the candidate’s assessed capability and commitment to truly serve the people with inclusive and sustainable good governance. In a sober reflection of all that transpired, I implore Adams Oshiohmole to answer this very simple question- were all the fights justified, necessary and for what purpose. At 68 and given all the blessings that God has bestowed on him, should the current approach be the best way to end an enviable struggle and achievements. I don’t think so. As it is for Oshiomole, it should be for other politicians who are mainly guided by their political and personal interests in their political permutations and engagements. Just as Edo people were exemplifying democracy on Saturday Sept 19th, 2020, the opposite was the case in Enugu state. In a solidarity visit with his political group (Ebeano) to Governor Ifeanyi Ugwuanyi, Senator Chimaroke Nnamani stated as follows: “I was governor from 1999 to 2007. When it was time to hand over, I named the zone that will produce my successor and from that zone named my successor in Sullivan Chime, who of course, is a member of the Ebeano political family. After eight years that Chime served, he also named his successor to come from Enugu north. That was in 2015 and

that is why we have the present governor, who is the leader of the Ebeano as governor. So, after eight years, it is within your right to name the zone that will succeed you. Whether it is Udi, Nsukka or Enugu East and whoever you name will become the governor.” Will Enugu people learn and behave like Edo people? Time will tell! The second big lesson from the election is that INEC and security agencies can conduct a relatively free and fair election if they so decide. While the Edo election cannot be described as perfect, it is certainly better than previous elections such as Kogi and Ekiti states. What is therefore required is the sustained commitment from good leadership which is the last and main lesson. Just as PMB said in 2015 and one of the social media images depicted him as saying that he is for nobody and for everybody, so it is supposed to be. With such posture, Nigeria can work as everybody and institution will perform its responsibilities in line with agreed terms and conditions and not based on sentiments or affiliations with powers that be. This really showed in the Edo election. Possibly reading the body language of the President, it seemed that INEC and all the security agencies acted in line with their objective mandate for a free and fair election. We pray that PMB will continue with such body language and approach in all aspects of our governance especially in assembling an inclusive, unifying and competent team. Dr. Ngwu, is an Economist/Associate Professor of Strategy, Risk Management & Corporate Governance, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@ lbs.edu.ng

Reimagining sustainable climate financing for developing countries for Post-2020 Paris Agreement Implementation Era

obilising sustainable climate finance for developing countries especially in a post-2020 Paris Agreement implementation and post COVID-19 era has to be holistic, integrated to make the desired impact in developing countries, and this task has to be undertaken jointly and consciously by both developing and developed countries. Late February, the UK government launched the COP26 private finance agenda ahead of the 2020 UNFCCC Conference of Parties scheduled to hold in Glasgow from 9th to 19th November, 2020. The COP26 private finance agenda was launched with the objective of ensuring that private finance decisions take climate change into account and that the right framework for reporting risk management and returns are embedded in considerations to help finance the transition to a net-zero carbon economy. While mobilising private finance for the climate is very important, the COP26 agenda has been criticized by climate experts for not being holistic and inclusive enough to drive inflow of private finance to developing and low in-come countries. According to Clara Shakya, Director of Climate Change at the International Institute for Environment and Development (IIED), increasing the visibility of the climate risk through the tools that the agenda sets out, will allow climate investment in poor developing countries that are failing to attract private finance for normal investments. She advocated for commitment to help the poorest countries reduce their climate vulnerability and build governance and institutions that manage their risks. These are countries which currently use more public investment than private investment. Recently, there has been a buildup in the demand for increasing developing countries’ access to climate finance. Earlier this July, the Green Climate Fund (GCF) hosted high level panelists

to a workshop to share their views on available options to developing countries for financing a green and resilient recovery which will inform the work of the United Nations High-Level Initiative on Financing for Development in the Era of COVID-19 and beyond. One of the panelists, Ken Ofori-Attah, Ghanaian Minister of Finance, decried Africa’s payment of 6-8 percent interest for risk premium on lending from institutions such as the African Development Bank (AfDB), especially when the same loan is secured by AfDB at a rate of 0.75 percent, calling it unnecessary, since Africa had not defaulted on its loan repayments in recent times. He further advocated for the deployment of Africa’s unused special drawing rights (SDRs) which is over $260 billion, to solve her liquidity problems, and also pointed out that African Finance Ministers have proposed a special purpose vehicle with an AAA wraparound for solving Africa’s green infrastructure and sustainable development needs. The same sentiments were echoed last year by Bachir Ouedraogo, Burkina-Faso Energy Minister at the 2019 Green Growth Knowledge Platform (GGKP) - Global Green Growth Week hosted by the Global Green Growth Institute (GGGI) in Seoul, Korea when he decried the huge interests charged on borrowing for green energy projects in Africa. Other solutions advocated by other panelists such as Rwandan Environment Minister, Dr. Mujawamariya Jeanne d’Arc, included the use of blended finance to solve the misalignment of finance, de-risk finance and catalyse private finance for sustainable development in Africa. This opinion was shared by the GCF Executive Director, Yannick Glemarec, who added that the $17 trillion yielding negative interest rate in G20 counties as at Mid-2019 could be very useful for de-risking investment in Africa and other developing countries towards green resilient recovery and growth.

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These ideas aimed at solving the climate finance gap for developing countries are laudable, but their successful adoption will require deliberate, consistent, coordinated, and extensive high level political and diplomatic engagements with the G20 countries to actualise. Unfortunately, other challenges with closing the climate finance gaps are self-inflicted by the developing countries, and they include: lack of interest and understanding by private and government institutions, ministries, departments and agencies (MDAs); lack of coordination and inter MDA rivalry; and selfish abuse of power by National Focal Points (NFPs) or National Designated Authorities (NDAs). From my research and work to support a few GCF projects for some West African and Asian countries, I realised that Nigeria is significantly under-utilising the financing opportunities that the Clean Development Mechanism (CDM) provides, compared to other countries and was also missing out on utilising the GCF-provided opportunities. For instance, as at 2017, Nigeria had only 4.9 percent of CDM projects registered in Africa, while South Africa had 27.6 percent, Kenya – 8.9 percent, Uganda – 8.1 percent, and Morocco 7.3 percent. Upon returning to Nigeria after my studies in the UK, I took the time to engage government officials on the need for Nigeria to explore the climate finance opportunities that the UNFCCC provides. A senior colleague in international development who was supportive of my aspiration for Nigeria to access these funds and understood the opportunities Nigeria was missing, helped arrange separate meetings with the then House of Representatives Committee Chairman on Climate Change and the Committee Chairman on Environment and Habitat. I also attempted seeing the Minister of Environment, Amina Mohammed, however, the weekend preceding the week I was to meet her, and she was announced

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Akachukwu Okafor

the Under-Secretary General of the United Nations and our meeting facilitator saw no need for our meeting to go ahead. Even before I met the legislators, and before the failed meeting with the Minister, I had discussed Nigeria’s climate financing gaps with the NDA and Director of the Climate Change Department with emphasis on the need for Nigeria to increase its inflow of climate finance. He pointed out that lack of capacity and resources were challenges the department faces – even when the GCF readiness support programme is designed to solve capacity problems. With further engagements with key stakeholders, we are working on getting a Central Bank of Nigeria entity to become accredited by GCF to access climate finance. However, I got to learn from more experience working on some climate finance projects, that lack of coordination on country climate mitigation and adaptation priorities based on Nationally Determined Contributions, and inter MDA rivalry for funded project leadership and management – i.e. who controls the budget were more obvious challenges. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Okafor Akachukwu is a Science Policy Research Unit (SPRU), University of Sussex trained energy, environment, climate change and sustainability expert. He was a speaker at the Finance and Investment Session of 2019 Green Growth Knowledge Platform (GGKP) held in Seoul, Korea. aka@changepartnersintl.com

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Insecurity and the death of rural credit markets (2) Small Business handbook

Emeka Osuji

ast week, we began a discussion of informal credit markets, particularly with regard to the impact of insecurity on the markets. To put that discussion in proper context, we shall step back a bit into the theoretical foundations of the market for those that found themselves surviving in the informal sector, so as to lay firm foundation for proper understanding of what is happening in that market and why. To do this, we shall borrow copiously from my fairly well-received 2005 book, titled “Microfinance and Economic Activity: Breaking the Poverty Chain”. The section of it focusing on informal credit markets is still full of freshness that can help in this regard. The preponderance of small businesses in both the rural and urban areas has led to the development of

thriving markets that are significantly devoid of the trappings found in structured markets. Although credit markets are essentially divided into two - formal and informal markets, the dividing line is very thin. In reality, the chain of credit suppliers is a spectrum or continuum that ranges from informal suppliers, such as landlords, landladies, suppliers, registered and unregistered finance companies, moneylenders, village meetings, “Esusu”, Revolving Savings and Credit Associations (ROSCAS), Accumulating Savings and Credit Associations (ASCAS), pawn brokers and traders who give credit to their customers, to formal institutions like deposit money banks and so on. Informal credit markets are the alternative sources of finance when formal sources are not available. These markets display characteristics that give them their comparative advantage in terms of speed of delivery and operational cost reduction, though they are not known to share the benefits of these advantages with their clients. Their core features include informality, adaptability and flexibility of operations. They operate mostly in specialised market segments, making smallsized loans and operating below the radar of the regulatory authorities. Loans are based more of familiarity than collateral. Social sanction takes the place of legal enforcement. Information is scarce. It is this information scarcity that causes

much of the distortions in informal credit markets. They are patronised mainly by individuals and small and microenterprises that lack alternative sources of funds. Lack of credit information makes many lenders shy away from small businesses operating in the informal sector, or to place very high risk premiums on their loans. The same lack of information prevents the borrower from finding alternative lenders at cheaper rates in this market, where the moneylender is ripping off his clients. This is the basis of the issues of information asymmetry, adverse selection and moral hazard, which play key roles in this market. Perhaps, the risk perception of lenders and, by extension, the risk premium paid by small borrowers, would be reduced if lenders had access to adequate information on borrowers and the borrowers are aware of alternative sources of funds. Unfortunately, this is not happening. There are many misconceptions about the poor, their credit behaviour as well as the businesses they run. A lot would be gained if some of the negative notions or myths surrounding the poor, which have compounded their plight, are dismissed through improved knowledge. Many people do not know that poverty does not automatically imply lack of integrity among the poor. There is abundant evidence that the poor, who lack influence and access to the

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The same lack of information prevents the borrower from finding alternative lenders at cheaper rates in this market, where the moneylender is ripping off his clients

Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii, Twitter: emekaosuji_

Good intentions aren’t enough

t was the scientific genius Albert Einstein who said, “Education is not the learning of facts but the training of the mind to think’’. It’s hardly enough to put things in place or to merely make things available if you want people to actually make use of them. Rarely will human beings automatically adapt to an ‘’inconvenient’’ change without being directed to do so. Even then, consistent pressure must be applied if you desire to see any appreciable result. Examples that come to mind are public waste bins and Zebra Crossings. You must train people’s minds to use them otherwise it will amount to a complete waste of time and resources. I remember a vigorous campaign in the United Kingdom in the late 1970s to create enough awareness about the use of Zebra Crossings. It was so in your face and deliberately so too. All television and radio stations carried the government adverts, so you couldn’t miss them, anywhere you turned. A generous use of billboards was also employed in the campaign. The message was loud and clear and it certainly sunk in. A similar approach was used for the “keep Britain clean’’ campaign. Who can forget the logo depicting an individual dropping his or her litter in the public dustbin? They knew it was necessary to educate their citizens on the need to use the waste bins provided, otherwise people would continue to drop litter on the floor even if there’s a waste basket just a meter away. Sounds familiar? It infuriates me whenever I see people do that. Unfortunately for me, it’s still a daily occurrence in these

climes. It’s not uncommon to see empty bottles being flung out moving vehicles, sparing no thought for the safety of otherwise, not to talk of keeping the environment clean. It was Lee Kuan Yew who correctly observed that if you want to achieve First World results, it’s not enough to merely provide First World infrastructure. It must be also accompanied with substituting Third World thinking with a First World mindset. John Dewey, the highly revered American educationist, psychologist and philosopher was always quick to point out that schools exist for society and not just for themselves; therefore one of their primary objectives should be to advance the cause of their community and society. As a way of ensuring this duty is met and satisfied, he suggested a regular evaluation be carried out on their continual ability to achieve this. Call me an idealist if you will but I’m convinced if a similar quality assurance scheme was to be introduced in Nigeria, it would catalyse needful changes in the school system, which would ultimately produce more useful school leavers and graduates for the progress and wellbeing of the society. In furtherance to this, John Dewey advocated that lessons ought to include ways in which teachers can help pupils to develop into individuals with the ability to translate moral concepts into concrete action. He warned educators not to make the mistake of assuming pupils will automatically transform into moral individuals just because they have learned in theory – moral, immoral and non-moral ideas. The ability and resolve to practicalise this knowledge can only develop and manifest through inten-

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tional character development. Concerning this Dewey said, “The kind of character we hope to build up through our education is one that not only has good intentions, but which insists on carrying them out. Any other character is wishy-washy, it is goody, not good.’’ In this same vein, he clarified the difference between knowledge or information and judgement. The first two are merely held but the latter is knowledge that is utilised to accomplish an end in mind. Understanding of morals is therefore only useful when it transforms the individual into a person of character, evidenced by his speech and behaviour. The Nigerian National Bar Association recently did Nigerians proud by exemplifying in very practical terms, both the academic and moral impetus of education. They refused to sit idly by and instead did what they felt they could, to first call out and then register their association’s opposition to Governor Nasir El Rufai’s perceived dictatorial tendencies and failure to protect the lives, property and interest of a significant section of the Kaduna state’s demography. Through their National Executive Committee, they did this by withdrawing the invitation they had earlier extended to the Kaduna State Governor to speak at their 2020 Annual General Conference. On behalf of the multitude of Nigerians who yearn for those principled and courageous enough to speak to power, I say “Thank you NBA” for demonstrating in very practical terms, the social focus of education. Truth is, one cannot remain on the side lines and yet expect change to occur. But then, a mind trained to think and not just

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instruments of coercion, are more trustworthy than the rich. In trying to establish the impact of insecurity on informal credit markets in Nigeria, we shall give some insight to the nature of financial markets patronized mostly by the poor, drawing considerably from the work of Hoff and Stigliz done in the 1990s. Hoff and Stiglitz examined these markets within the framework of imperfect information paradigm, which posits that the conduct of moneylenders reflects the fact that they have total control of the market, hence they are brash, arrogant and brutal. In most cases, they exercise monopoly powers. They are not afraid of competition or loss of market share. This has led many to think that rural credit markets are imperfect or simply monopolistic, a view to which Hoff and Stiglitz did not subscribe. Many authorities agree that the high interest rate charged by moneylenders is due to the shortage of funds in that market. In other words, the interplay of demand and supply forces determines the price of funds, otherwise called interest rate. This price must be high enough to compensate for scarcity and risk. This is the situation faced by borrowers before the introduction of rampant insecurity in Nigeria, a situation that has compounded this plight.

Character Matters with Daps

Dapo Akande

to store up facts would know this. Sometime in the future, one of your offspring who finds himself facing the same issues bedevilling us today may well summon up the courage to ask you, ‘’so what did you do?’’ When that happens, wouldn’t it be good to know you did the best you could? Changing the nation…one mind at a time.

Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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Africa has a tremendous amount of hope - If only we knew it

David Hundeyin

efore I get started, I must first of all clarify that this is not an “Africa Rising” article. As I am sure we have all figured out by now, the entire ‘Africa Rising’ narrative was a castle built on beach sand. It was merely ‘Commodity Prices Rising,’ and once they fell, well, you know the rest of the story. In many respects Africa is actually nosediving if anything, led by the unprovoked implosion of Nigeria and South Africa, its de-facto economic leaders. Even before the COVID-19 pandemic and the subsequent lockdowns and the economic carnage they generated, Africa had been on a steady downtrend for close to a decade. Political instability, dipping commodity prices, unreal youth unemployment levels, civil conflicts and a continued absence of a supranational trade and infrastructure strategy had seen a billion of the world’s youngest people completely fail to catch any sort of economic wind. Despite this however, Africa somehow consistently manages to keep chugging along without experiencing the sort of total and absolute civilisational implosion that really ought to have happened by now. Nigeria is now one of the world leaders in conflict death, but as I sit here in my Lagos apartment writing this article, said conflicts could as well be in New Caledonia for all the influence they

have on my life. There are several African countries that would qualify as ‘failed states’ by global standards and yet somehow they never actually fail in a visible and irreversible manner. What is responsible for this and why do I think this presents an unprecedented opportunity for humanity? Other people have been where we are Some weeks ago, I had the opportunity to sit down for a long chat with an investor who has businesses operating in Nigeria. I wanted to know - why did he even bother? Adversarial, illiterate government led by people who have never produced 1 kobo of value in their whole lives, an ignorant, undereducated population that lacks globally useful skills and only has enough disposable income for food, shelter, phone airtime, soap and toothpaste - why would an investor with international links and aspirations of growth even both with a big-for-nothing mess like the Nigerian market? His answer was simple - “You guys just need to open up.” He told me that as abhorrent as I might find Nigeria’s present situation, other countries have been here too. India, he mentioned, was exactly where Nigeria is right now, back in 1990. The country was a dirt poor, overregulated, pseudosocialist mess led by a government of price-control-subsidy-and-inshallah merchants. It had a regulated rupee exchange rate with vast divergence in the parallel market, and it had run out of forex reserves to meet its import bill. The step that India took to fix this however, was precisely the step Nigeria is doing everything in its power to avoid taking. Indian Prime Minister Narasimha Rao led a program of promarket reforms and deregulations that took India’s plethora of business regulatory bodies from over 80 to just 5. He liberalised the FX market and stopped spending forex reserves to “defend” the rupee. The result was that in just 6 years, India became one of the world’s hottest destinations for foreign invest-

ment, business process outsourcing and talent recruitment. The rupee-USD exchange rate rose far beyond what it was when the government was still “patriotically” wasting USD reserves to “defend” it. Today, India - which proportionally was more or less equal to Nigeria in 1990 - is no longer Nigeria or Africa’s proverbial mate. It is a country that is able to go head-to-head with China and hold its own economically and diplomatically, because such fearsome capacity has been built inside its economy within just 30 years of implementing Rao’s reforms. All that Nigeria and the rest of the continent needs is the political will to break permanently from our nonsensical pseudo-Marxism and practise capitalism. Africa’s leadership is Africa’s existential threat According to this investor who shall remain unnamed, there is a recognition in global economic circles, that Nigeria and Africa are not in fact hopeless basket cases. If African countries would implement these reforms he says, investors are willing to put their money down and wait for the poverty to abate as increased trade volumes bring heightened economic prosperity. Yes, he said, Nigeria’s addressable market is tiny and most of Africa’s market cannot afford anything more than N70 noodles and N100 soda - but 1 billion of you still exist. If that 1 billion can be arranged in a way to become twice as economically productive as they currently are - which on a per capita basis is not by any unachievable - that is an extra $1 trillion worth of value to be had. My interaction with this fellow is typical of interactions I have had on several occasions with other similarly connected people. Dr. Richard Ikiebe of Pan African University once described Nigeria as “the world’s biggest black market economy.” In his words, Nigeria has not collapsed and is unlikely to collapse in the economic sense because a tremendous amount of productivity and entrepreneurial vitality exists in the

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With leaders like this, Africa’s vast youthful economic breakout will continue to be stunted and delayed, but the good news is that they are getting older

off-book private sector. In his words, no matter what difficulty Nigeria presents, Nigerians know that if they balance a tray filled with “pure water” on their heads and hawk it in the streets, they will survive. They won’t live well, but they will survive. That entrepreneurial energy and complete lack of expectation from their government is obviously an enabler of bad governance, it must be said. It is also however, a huge opportunity for growth provided the right policies are put in place. This is however, where the problem is - leadership. Africa’s leadership is made up almost entirely of people who have never known what it means to be productive. In the world they inhabit, the economy is not an all-encompassing entity that must work for everyone. It is rather a sweet cake that must be attacked and divided up by the state for the benefit of those in and around power. The idea that the economy must be superior to the state is simply not a popular one in African leadership circles. Nigeria for example, is led by an individual who has never worked a day in the private sector in his entire life, and who has lived exclusively on political appointments for the past 45 years - what would he know about productivity? Why would he care? Over the past 5 decades, he has gone from 3-time coup plotter to state governor to petroleum minister to head of state to PTF chairman, and finally to President - failing at each job and each time being handed a bigger one afterward. With leaders like this, Africa’s vast youthful economic breakout will continue to be stunted and delayed, but the good news is that they are getting older. Inevitably they will become extinct and the question will then be about whether the replacements are more productiveminded than their forebears. Frankly, I do not know. David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

Rev. Fr. Ejike Mbaka unfounded story: Should we even regulate this social media?

onestly, you need to be a critical thinker to discern certain things in this volatile space called social media. Don’t be too quick to agree and believe certain information, especially the sensitive ones. Always do your research. Dig deep and deeper. Research requires skill. It goes beyond just extracting information on Google. Not all stories or even opinions deserve to be in the public domain. Some stories are simply wacky and blended with falsehood. It’s even more disgusting to see people you hold on high esteem to mess up this digital space with unfounded stories. You don’t wish to disagree with social media because you highly regard them. You see them as role models and sometimes you feel like bashing them but you don’t. And as for those ones you know personally. You are meticulous about how you put your words across to them. You don’t want to sound disrespectful with your words. Ironically, some of them might even want to bash you if you have an opposing view. That’s crazy, everybody is still learning. Nobody knows it all. Yesterday, it was all over this volatile space that ”Reverend Mbaka is this”, ”Mbaka is that” ..Bla Bla Bla... One of those whom I regard was not left out. He lambasted the Clergy. What was Mbaka’s offense? He used different case studies to preach forgiveness to his congregation. And one of those examples he cited is a particular scenario from the ongoing Big Brother Nigeria TV show. On this same TV show, one lady verbally

abused a young man for no justifiable reason. It was on this premise that Reverend Mbaka said the ’lady will not win the prize’. Eventually, the lady lost out. What is wrong in illustrating a point with practical examples? I am sure that most of his congregants watch the TV show. So, it was just easy for the Clergy to pass his message to them using it as a case study. Boom! All the bloggers cast their ridiculous headlines. Some people updated their timelines as usual even without trying to verify the information. It was a clear and simple message to the church, deliberately or ignorantly taken out of context. Many people will only read a headline and drop misleading comments. The video clip through which Mbaka addressed the congregation is still available. Don’t just post on your timeline without watching that video. Watch the video and analyse it yourself. As it stands now, it appears that some people are just looking for every slightest opportunity to attack Nigerian Clergies. When a pastor falls short, it becomes a thing of celebration for some people. It becomes another justification for your sentiments. There are many instances; in fact, the list is endless. Did you see the numerous posts about CAMA? I mean the bill that seeks to somewhat regulate the churches. It’s outrageously pathetic when I read certain views. So, it is wrong for churches to have bank accounts in the digital age? Pastors are rejecting the CAMA Bill because they are scammers. It that what that means to you? If your

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pastor scams you, you are simply ignorant. The way Christ lived on earth is well detailed. If you follow his teachings, you will not be scammed. So here is the point - resist that temptation of being too quick to spread falsehood. Research and Think! Research and Think. I cannot emphasize this enough. It doesn’t matter who is posting or writing. A lie told many times always seems to be true. It only seems, but it is not the truth. I guess this is just the reason, the Nigerian Government wants to pass the Social Media Bill. Nigerians have opposed it but they still want to go ahead with it. Trust me, the effects of falsehood are ravaging. Facebook, Twitter, and co. have been the catalyst to this problem. Trust me, there is so much junk on social media. Even the educated and influencers contribute to these junks. And they sound so intelligent. So, it can be very easy to be influenced when you see their posts. Again, Research and Think. Till now many people still believe that President Buhari is dead. Some said he was cloned (Jubril). How stupid was I to have believed such nonsense and falsehood! The man they said is dead was with Pastor Adeboye (Redeem Church General Overseer) recently. Governors, Ministers, Lawmakers have been meeting him. His daughter got married, dignitaries were there. Both the political and non-political classes were all present. You have also seen pictures of him with those people too on social media. A few months ago, Donald Trump confirmed that Buhari called him asking for ventilators.

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JUSTICE OKAMGBA And you are still dumb to believe that Buhari is dead. You can only deliver yourself from such mental slavery. Just you alone. Again, did you know that even this new electricity tariff news has attracted many falsehoods? When you see millions of people writing stuff on a particular issue you think they are informed. Get your ass to work by carrying out your research and stop accepting everything you see on social media? However, I am not disputing the goodies which social media has brought. The message is simple - if the proposed Social Media Bill seeks to eradicate falsehood and not to suppress constructive public opinion. Then, we are good to go. The primary purpose of that bill should be eradicating falsehood and nothing more. Justice Godfrey Okamgba is a journalist. He writes from Lagos. godfreyjustice67@gmail.com

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Frank Aigbogun editor Patrick Atuanya

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

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Obaseki’s victory shows voters are tired of ‘godfathers’ Godfathers are rapacious and nihilistic

odwin Obaseki, the candidate of the People’s Democratic Party (PDP) at the 2020 Edo Governorship election has been declared winner with about 85,000 more votes than his closest challenger, Osagie Ize-Iyamu, of the All Progressive Congress (APC), in an election where voters said they are fed up with meddlesome “godfathers” in Nigerian politics. Several factors have been blamed for the failure of the party that controls the Federal Government, had the biggest financial war chest and grassroot advantage having been in power in the state since 2008, chief among them is an electorate tired of scheming “godfathers” perceived to maintain a chokehold on the governor. Adams Oshiomhole, the swashbuckling former labour leader and governor of the state, may have ruined Ize-Iyamu’s chances by turning him to a spectator in his own show. It became difficult to define what Ize-Iyamu stood for under the blinding sheen of Oshiomhole, whose foray into national politics has left a smudge on his reputation at home. Ize-Iyamu paid the price of tethering his ambition on the back of a spent force. The phrase “Edo no be Lagos”

trended over social media over the past week, a reference to Bola Tinubu, the APC national leader’s unilateral scheme to replace former governor Akinwunmi Ambode with Babajide Sanwo Olu, ruining his second term ambition. Sanwo Olu won the election despite the electorate, bequeathing Lagos, the shameful reputation of claiming to be ‘progressive’, yet under the thumb of one man. Last week, Tinubu made a misguided broadcast urging Edo people to vote for his party. To a people who bravely fought oppression from Europeans hundreds of years ago, it sounded like an affront. This galvanised those who otherwise would not have come near a polling booth vow to rescue their state from external influence. Political “godsons” take note, it’s the people that have the power, they will save you if you serve them. However, the election was not perfect. Observers reported widespread vote-buying by both the APC and the PDP. Only 25 percent of those who registered to vote actually turned up at the polling units. The optics of the Rivers state governor meddling in the process was bad for the election. There were some cases of meddling by security agencies and poor use of technology even as the country is in the throes of a deadly pandemic. Overall, the election, happening

off-season witnessed better preparation by a characteristically shoddy electoral umpire. Materials and personnel reportedly arrived early in many voting centers. Security agencies largely resisted the temptation to compromise the election and the Federal Government did not unduly interfere in the process. Some have attributed the relatively peaceful conduct of the election to the threat by the United States to deny visas to those who promote violence in the election. It is not clear how much of a deterrent this was, but many are now urging foreign governments to do more including asset forfeiture for those who terrorize Nigeria’s elections. Nothing gets the attention of our perfidious politicians than the prospect that they could be stuck in this hellhole they have reduced the country to, with the rest of us. However, we are convinced that the victory is largely because the Edo people decided to take their own fate in their hands. They chose to provide a collective rebuke to people who through threats and intimidation cripple a governor’s chances for success. The governor’s own record of modest accomplishments justified another term. The APC in Edo State allowed the outsized ambition of Oshiomhole to corrode its influence in the Niger

Delta. It unwisely kicked out one of its best governors, who in four years have attracted industries and investments including a modular refinery, industrial hub, and a power plant. True in many parts of the world, people do not win an election solely by their own effort. There are private and institutional donors to campaigns, volunteers who persuade voters and support the campaign in various ways. In exchange some lobby for appointments, a concession to promote a cause, change/pass a law but rarely seek financial gain. This is not the case in Nigeria. The “godfathers” here are rapacious and nihilistic. Late Lamidi Adedibu, the erstwhile strong man of Ibadan politics, was locked in a fierce battle with his protégé, Rasheed Ladoja in 2004, over government appointees and allocations. Since then, “godfathers” have become tin gods, insisting on cornering choice contracts (which are never executed), choosing the governor’s cabinet, and propping their children as their protégé’s successor. Worse still, some are using the resources exploited from their protégés to buy influence in other states and at the national level. We congratulate the people of Edo State and Godwin Obaseki. It is now up to the good people of Edo state to hold their governor to account.

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Wednesday 23 September 2020

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COMPANIES&MARKETS InfraCredit completes drawdown of AfDB $10m subordinated unsecured 10-year facility HOPE ASHIKE

nfraCredit, a ‘AAA’ rated specialised infrastructure credit guarantee institution, has announced that the drawdown of $10 million subordinated unsecured 10-year facility has been completed under the Subordinated Loan Agreement with the African Development Bank (AfDB) an international financial institution and multilateral development bank. According to a statement by Stefan Nalletamby, the Bank’s Director of Financial Sector Development at the time of the Bank’s Board approval of the facility, “The Bank’s support will strengthen the capital base of InfraCredit, underpinning the expansion of the Company’s core business of guaranteeing of bonds issued to fund infrastructure projects. This adds to the

Bank’s existing initiatives to mobilize domestic institutional savings and stimulate non-sovereign local debt capital market development in Nigeria. This ultimately helps to increase private sector financing for critical infrastructure projects in key sectors including energy, agriculture, water, health and education, through local capital markets”. Specifically, this facility will help to increase private sector financing for critical infrastructure projects in sectors such as power, renewable energy, telecommunications, healthcare, transportation, agriculture, amongst others. Analysts say this investment by AfDB demonstrates the strong investor confidence in the fundamentals of InfraCredit’s business and will promote the deepening of the local debt capital market.

Pursuant to the drawdown, InfraCredit’s capital base will increase to $146 million (c. N 58.5 billion). According to the Chief Executive Officer of InfraCredit, Chinua Azubike, ‘’Despite the impact of COVID-19, and changes to macro-economic assumptions, we are pleased to have reached yet another milestone in our pursuit to strengthen our robust balance sheet and guarantee issuing capacity. Notwithstanding challenging market conditions, we have continued to demonstrate our strong fundamentals, solid underlying portfolio performance, proven track record and profitability. With the admission of AfDB to our capital structure, we are confident of our continuing ability to deepen market penetration and support access to long term domestic credit for the growing pipeline of infrastructure

projects that will create jobs and support local economic growth.” InfraCredit is a ‘AAA’ rated specialised infrastructure credit guarantee institution backed by the Nigeria Sovereign Investment Authority, GuarantCo (a Private Infrastructure Development Group company), KfW Development Bank and Africa Finance Corporation to provide local currency guarantees and mobilize long term debt financing for infrastructure in Nigeria. InfraCredit’s guarantees act as a catalyst to attract domestic credit from pension funds, insurance firms and other long-term investors into credit-worthy infrastructure projects, thereby deepening the Nigerian debt capital markets. InfraCredit operates on a commercial basis with a developmental role and benefits from private sector governance.

International Breweries confirms Whiting as non-executive director GBEMI FAMINU

nternational Breweries Plc, the third largest brewer in Nigeria with a market share of 16 percent, has announced an addition to its administrative structure. In a public statement sent to the Nigerian Stock Exchange (NSE) and signed by the company’s secretary, Muyiwa Ayojimi, the company announced the appointment of Andrew Whiting as a non-executive director of the company with effect from September 8, 2020. According to the statement, Whiting is a lawyer by training and holds a Bachelor of Laws and Bachelor of Business Scie n c e d e g re e s f ro m t h e University of Cape Town. His career began in global law firms Herbert Smith Freehills (London) and

Maltina deepens market penetration with two new flavours

L-R: Goddie Ofose, Chief Executive Officer, December 29 Media, Habeebat Raji, Business Executive, Lilvera Nigeria Ltd, Onyebuchi Johnson Opara, Group Managing Director/Chief Executive Officer, Lilvera Group And Paix Otene, Head Administration, Lilvera Nigeria Ltd, at the Lilvera Nigeria Limited Media Interactive Session in the company’s headquarters in Lekki Phase 1 Lagos at the weekend.

Convergence Partners’ subsidiary, inq. acquires Vodacom Business Africa’s operations in Nigeria IFEOMA OKEKE

onvergence Partners’ subsidiary, inq. has been officially launched into Nigeria, bringing to fruition the dream of building a pan African network across African cities to reimagine a better future through digital solutions. Headquartered in Mauritius, inq. (formerly Synergy Communications) has extended its reach via the 100 percent acquisition of Vodacom Business Africa’s operations in Nigeria, Zambia and Cote d’Ivoire with a

further planned acquisition in Cameroon pending regulatory approvals. This landmark transaction grows inq.’s regional footprint as a leading enterprise solutions provider to 12 cities in seven countries across Africa including its existing operations in Botswana, Malawi and South Africa with an additional investment in Mozambique. Under the inq. banner the company will embark on the next phase of building a unified Pan-African cloud and digital service provider, bringing to market

a very relevant suite of next generation technology solutions in the fields of Edge AI, SD-WAN/NFV and Cloud. Currently operating in 12 African cities : Lagos, Abuja, Port Harcourt, Kano, Gaborone, Lusaka, Ndola, Blantyre, Lilongwe, Mzuzu, Abidjan and Johannesburg, the inq. team prides itself on global best practice methodologies customized to local customs in each of the 16 cities, covering different sectors including banking, oil & gas, FMCG, mining, health, real estate, IT, public sector and logistics. “Covid-19 has acceler-

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ated digital transformation, and inq. is perfectly positioned to deliver intelligent connectivity through seamless delivery of cloud and digital services and technologies to our clients. We are about simpler, seamless solutions”, Valentine Chime, MD inq. Nigeria said. Domiciled in Mauritius, inq. Holdings Limited is a subsidiary of the Convergence Partners Communications Infrastructure Fund, a fund dedic ated solely to communications infrastructure and related services and technologies across sub-Saharan Africa.

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Bowmans ( Johannesb u r g ) , w h e re h e p r a cticed corporate law, with a focus on mergers and acquisitions. Whiting joined SABMiller plc in 2012, which later became part of the AB InBev group, the world’s largest brewer. He has held a number of strategic roles in the company including global legal director – mergers & acquisitions, legal and corporate affairs director – UK & Ireland and currently, corporate affairs director – Africa. More recently, Whiting led the Brexit strategy and the corporate rebrand for AB InBev’s UK and Ireland business and has developed and implemented regional corporate affairs strategies for eight AB InBev businesses in Africa (including Nigeria), focusing on regulatory proactivity and corporate reputation.

haking up the beverage industry, Ma lti na re ce ntly launched two new flavoured malt, Maltina Pineapple and Maltina Vanilla in addition to the Maltina Classic brand. In unveiling the new Maltina flavours, the brand announced a new campaign titled ‘Own The Flavour”, which invites consumers to flavour up their day and express themselves creatively while enjoying the new Maltina flavours. Ke h i n d e Ka d i r i , t h e Portfolio Manager, non alcoholic drinks, Nigerian Breweries, said “With the Own The Flavour campaign, Maltina is encouraging young Nigerians to freely express themselves on their own terms while owning their narrative and flavour of choice”. According to Kadiri, in supporting the campaign, Maltina has partnered with three brand ambassadors who embody the campaign and showcase freedom of expression in their own industries. They include the iconic Kannywood actress, Rahama Sadau, the multitalented actress, producer, and humanitarian, Osas Ighodaro, and the media personality, award winning actress, and entrepreneur, Tomike Adeoye. The three ambassadors are set to go on a flavour @Businessdayng

tour around the country, meeting people, capturing stories, and giving consumers a taste of chilled Maltina Pineapple and Maltina Vanilla along the way Elohor Olumide Awe, the Senior Brand Manager, Maltina, said the brand is excited to unveil the three brand ambassadors. “We have chosen these amazing women who already are owning their flavour in various ways. We believe they embody our campaign messagel,” Awe said. Emmanuel Oriakhi, the marketing director Nigerian Breweries, said the launch of flavoured malt is long overdue and as the market leader Maltina is taking the lead to reintroduce consumers to the refreshing and indulgent taste of its nourishing Maltina drink infused with flavours. “We understand our audiences, and we see that young consumers are looking for exciting flavour experiences and variety in their favourite malt drink, just as they seek excitement in their daily lives,” he said. Continuing its innovation to meet the needs of Nigerians and being the first flavoured dark-malt drink in Nigeria, the new Maltina Pineapple and Maltina Vanilla have all the nutritious benefits of a malt drink coupled with the excitement of new invigorating flavours.

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Facebook to open Lagos office in 2021

...To house a team of expert engineers, developing innovations for Africa JUMOKE AKIYODE-LAWANSON

acebook announced September 18 that it will be opening an office in Lagos, Nigeria - its second office on the African continent after the launch of the first in Johannesburg South Africa. A i m e d at su p p o r t i ng t h e enti re Sub -Sa ha ran Africa region, the office is expected to become o p e rat i o na l i n H 2 2 0 2 1 and will be the first on the continent to house a team of expert engineers building for the future of Africa and beyond. Facebook’s office will be home to various teams servicing the continent from across the business, including sales, partnerships, policy, communications and engineers. Ime Archibong, Facebook’s head of new production experimentation said: “The opening of our new office in Lagos, Nigeria

presents new and exciting opportunities in digital innovations to be developed from the continent and taken to the rest of the world. All across Africa we’re seeing immense talent in the tech ecosystem, and I’m proud that with the upcoming opening of our new office, we’ll be building products for the future of Africa, and the rest of the world, with Africans at the helm. We look forward to contributing further to the African tech ecosystem.” The investment of the new Facebook office follows the 2018 opening of NG_ Hub, its first flagship community hub space in Africa in partnership with CcHub, and the 2019 opening of a Small Business Group (SBG) Operations Centre in Lagos, in partnership with Teleperformance. Providing outsourced support to all English-speaking advertisers across Sub-Saharan Africa, the SBG office supports Small Medium Businesses (SMBs) through its Advocacy, Community & Education

(ACE) programme, as well as its Marketing Expert sales programmes – all aimed at enabling SMBs to accelerate the growth and development of their businesses. “Our new office in Nigeria presents an important milestone which further reinforces our ongoing commitment to the region”, Kojo Boakye, Facebook’s director of public policy, Africa, said. “Our mission in Africa is no different to elsewhere in the world - to build community and bring the world closer together, and I’m excited about the possibilities that this will create, not just in Nigeria, but across Africa,” he said. Since the opening of its first office in 2015, Facebook has made a number of investments across the continent, aimed at supporting and growing the tech ecosystem, expanding and providing reliable connectivity infrastructures and helping businesses to grow locally, regionally and globally.

The Next Titan Nigeria searches for aspiring entrepreneurs in 7th edition OBINNA EMELIKE

he Next Titan, Nig e r i a’s f o re m o st entrepreneurial reality show, is back and bigger for the 7th season, scouting for ambitious entrepreneurs whose business ideas are outstanding and unstoppable by any pandemic or lockdown. The contestants will live together for 10 weeks in the same house, and battle one another over 10 tough business tasks by demonstrating their entrepreneurial acumen with outstanding business ideas, commercial insight and business savvy to stay out of eviction to win the grand prize of N10,000,000 for the support of their business idea or existing business. Prior to the pandemic, the process starts by allowing the contestants pitch their business ideas through auditions at different zones in Nigeria. But this year, due to the “Covid 19”, the audition will be held online. All you need do is, log into the website, fill the form and upload a two minutes’ video talking about your business idea. After the auditions, Top 50 contestants would be selected for the Top 50 On-

line Boot Camp, where they would go through series of tests and challenges till the final 16 with the brightest ideas are shortlisted to move into the main stage, “Titan Mansion” to compete by carrying out weekly business activities for 10 weeks on television. The contestants would be coached by top Nigerian business leaders who would take advantage of their position as judges to mentor the contestants and millions of viewers round the world. Each week, the budding entrepreneurs will be divided into two teams to tackle a business task-led by their supervisors. After completing each task, both teams return to the weekly boardroom to discuss their experiences and give their report before the board of judges. In the boardroom, a team will be declared a winner or a loser. The winners will be rewarded with a treat while the losing team will nominate some of their colleagues for eviction, and the process with argument that follows will enable the board of judges to evict at least one of the candidates from the competition. It will feature weekly evictions in the boardroom by www.businessday.ng

the judges until the winner eventually emerges. From the inception of the show, six remarkable entrepreneurs in their distinctive field of expertise have emerged winners, two of which recently made “the Forbes Africa 30 under 30 Entrepreneurs” namely David Okeowo the CEO of Enterprise Hills, and Ogechukwu Alex Obah CEO of BodylikeMilk, a skin care professional. After being listed on Forbes Africa 30 under 30, Oge said, “Wining The Next Titan helped me push my dreams. Apart from the money, the training in the academy helped. After winning the show, I was able to build my brand and web store where people can pay and get their products. The funds helped me to achieve this and helped me to push my products out globally”. Last season, Amifeoluwa Yakubu, a garment manufacturer, CEO/co-founder, Garms & Raiment, emerged victorious in the grand finale after competing with Har vey Oiku, Catherine Agbo and Dr. AFES Hilda. The young entrepreneur has since then advanced in her field of expertise, as well as, becoming an employer of labor.

L-R: Olayiwole Onasanya, permanent secretary, Lagos State Ministry of Agriculture; Abisola Olusanya, acting commissioner for agriculture, and Olawale Oke, rice facilitator, APPEAL Projects, during APPEAL Projects Tour to Badagry in Lagos.

L-R: Devon King’s Brand Influencer, Christine Obute Otigba ‘Chef Obubu’; Winner of The King’s Chef Challenge, Murinatu Abubakar; Category & Brand Manager, PZ Wilmar, Toyin Popoola-Diana and Marketing Manager, PZ Wilmar, Chioma Mbanugo, at The King’s Chef Challenge prize presentation ceremony in Lagos recently.

L-R: Hassan Ismail, media strategists; Obinna Nwosu, former group deputy managing director, Access Bank Plc, and Omowunmi Olalere, MD/CEO Numero Homes, during the grand opening of GreenIvy Estate in Ibeju Eti-Osa, Lagos.

L-R: Daniel Akanbi, sales manager, Procter & Gamble; Pauline Tallen, honorable minister of women affairs and social development, and Ifeoma Anagbogu, permanent secretary women affairs, at the official handover of Pampers® diapers donated by P&G as part of its P&G Rigakafi program to the ministry of women affairs in Abuja

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Wednesday 23 September 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

One size does not fit all: Financial inclusion in a digital age Jadesola Opawumi

hese days financial inclusion is fast becoming a buzz word in financial services especially when a financial technology product or service is newly introduced to the market. For Lendtechs, I think they have to redefine what financial inclusion means to them. Though Lendtech, better known as ‘digital lending’, has opened up significant access to funding for individuals and SMEs, I’m concerned about the one size fits all approach that most digital lenders seem to have adopted. What I see with most lengths is that there seems to be more focus on using technology to provide faster service to consumers seeking finance and less emphasis on how to ensure the loans are repaid. To a large extent, digital lenders have been able to solve the problem with the ease of access to loans through technology. They have also gone ahead to relax or eliminate traditional requirements such as the provision of guarantors and collateral to ease consumers’ access to loans but if they are being honest, a lot of them are bleeding from non-performing loans. Lending is serious business and

financial technology innovations are not only meant to broaden financial access at scale but also improve the quality of financial services through efficiency. We cannot ignore the fact that our environment plays a huge role in how we do business so whenever we introduce a financial technology product into the market, we must not forget that the product is designed for human beings and Nigeria is one peculiar market. Lenders must understand that

borrowers react differently to different lending products in terms of adoption and especially with loan repayment; if you ask me, this is probably more important than giving out the loans. In my experience, assessing a borrower’s ability and willingness to repay is not just about their past credit history, it starts from the way the loan product is uniquely designed. I strongly believe that digital lenders have the opportunity to improve financial inclusion by

leveraging non-traditional data sources to develop and customize lending product features, improve the assessment of the borrower, appraise collateral and predict the risk of default. So instead of just focusing on faster turnaround time for loan disbursement, there’s a need to focus more on the product features that will drive repayment after the loans have been disbursed. It’s like working from the answer. For example, a travel loan prod-

uct should not be designed the same way as a payday loan even if the loan product is targeted at salary earners. It must have unique features that are peculiar to travel i.e local or international travel, duration of the trip, events of default which may include the traveller deciding not to return from the trip or diversion of loan repayment proceeds e.t.c. These unique product features should then inform the requirements and conditions for lending. The key thing is for lenders to base lending decisions on the analysis of alternative data sets including the type of loan product, their risk appetite as well as their loan recovery structure and resources rather than the traditional lending data. The ability of digital lenders to understand and predict repayment behaviour in more detail means they can not only reduce the risk of defaults but also potentially target a much wider customer base, which had been previously underserved by traditional lenders. Jadesola Opawumi is a 3rd-time startup founder with expertise in the E-commerce and Fintech Space. She currently serves as the Co-founder/ CEO at PayQart and Spredda. Prior to founding these startups, I was the head of Consumer Banking & Specialized products at Addosser Microfinance Bank.

Leveraging digitized social welfare programs for female financial inclusion boost (1) Onyeka Akpaida

he McKinsey Global Institute estimates that widespread adoption and use of digital payments and financial services could increase the GDP of all emerging markets by $3.7 trillion by 2025. This additional GDP could create up to 95 million new jobs, raise overall productivity and investment levels, and make government spending more efficient. Interestingly, no one stands to benefit more from

this growth than women. It is a fact beyond argument that women and girls shoulder the global burden of poverty. Decades of research show that poverty deprives women of vital health, education, and socioeconomic opportunities throughout their lives. For women in low and middleincome countries, digital savings, credit, and payments services can provide them with a critical link to the formal economy and a gateway to greater economic security and personal empowerment. When women-headed households in

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Kenya adopted mobile money accounts, poverty dropped, savings rose, and 185,000 women left agricultural jobs for more reliable, higher-paying positions in business or retail. Government-to-person (G2P) payments- a form of social safety programme have been identified as a key enabler in deepening financial inclusion and women’s economic empowerment. The World Bank’s Global Findex 2018 report advised that if governments digitized cash payments, they could enable up to 100 million

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unbanked adults to open their first account. Digitizing G2P transfers from cash payments to financial accounts for beneficiaries has led large numbers of low-income people, many of whom are women, into the formal financial system for the first time Leveraging on the behavioural change influenced by the pandemic, this moment in history is one in which G2P payment programmes when well-designed can promote long-term women’s economic empowerment through financial inclusion beyond its use as an

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immediate response to the crisis. COVID-19 pandemic with social distancing and widespread lockdowns saw many countries prioritizing opening bank accounts to ensure G2P payments got to beneficiaries safely to curb the spread of the virus. Government officials in India are combining digital payment and ID technologies to deposit money directly into the accounts of citizens living in distant villages, increasing the transparency and efficiency of social welfare programs.

The 8th Edition

BusinessDay Investment and Capital Market Conference Theme:

New Perspective on Asset Allocation and Behavioral Finance in Volatile Markets

Date:

September 10, 2020 The Investing & Capital Markets Conference is a fixture on BusinessDay and the Nigerian Stock Exchange’s annual calendar of events. Investors, regulators, analysts, and business leaders gather to discuss the most pressing issues affecting the raising of capital, trading of securities, and integrity of financial markets in Nigeria as a whole. Some of these issues include new economic events, regulatory developments, technological innovations, back office support systems, geopolitical trends, emerging practices in portfolio construction, swings in market sentiment, and investor engagement. This year, the conversation ranged across: • Market developments over the past year, especially those aimed at making the Nigerian market more competitive, transparent, accountable, and efficient

• Current regulatory revisions and introductions under consideration • Market fundamentals • Investor perceptions • Risk and return in a rising inflation environment • Progress made in simplifying market participation for retail investor groups • Prioritization of liquidity and the contraction of \ investor horizons post-COVID-19 • The 12-month outlook. This year’s event was proudly sponsored by Alliance Law Firm, Anchoria Investment & Securities Ltd., Comercio Partners, Central Securities Clearing System Plc., FBN Quest Merchant Bank, EFG Hermes Nigeria Ltd., STL Trustees, VFD Group and the Nigerian Stock Exchange.

Highlights of panel sessions and presentations Chasing Alpha on a treadmill? A fund manager’s view of trends and bends in Nigerian markets, a presentation by Mr. Erik Renander, Portfolio Manager, HI EMIM Africa Fund

r. Renander gave a breakdown of the direction and destinations of global fund flows in 2020: 1.1 trillion dollars had moved to money market funds, 200 billion dollars to bonds, 70 billion dollars to gold and 40billion to equities, and most of the flow in equities was to developed markets and away from emerging markets. Frontier markets have fared the worst. Basically, there is a flight to safety. He also observed that China is becoming its own asset class distinct from Asia or emerging markets classifications. Mr. Renander acknowledged that the appeal for Nigerian Treasury bills has significantly dimmed, since the current yields do not compensate for the associated FX risks. In his assessment, the CBN’s current FX policy is significantly hurting the attractiveness of the Nigerian market from a foreign investor point-of-view. For funding needs, he expects Nigeria to tap the local market and its banks, the Eurodollar market. Another option would be to borrow from the IMF and World Bank. With 2% yield on treasury bills, Nigerian banks will be pressured to provide finance to local corporates, which will pay higher rates. On Africa’s recovery from the global recession,

Erik Renander

he believes that it will generally be a slow recovery as Africa was already facing serious challenges before the global recession pandemic hit its shores. However, Africa might outperform the rest of the world as it is coming from a very low base and the continent is very responsive to changes in efficiency. Comparing Nigeria and South Africa, the two subSaharan giants, Renander stated that he is particularly

encouraged with the anti-corruption reforms in South Africa, and the fuel subsidy removal and power sector reforms in Nigeria. But there remains a lot of work to be done. In his assessment, the FX policies and border closure policies in Nigeria remain significant negatives. More importantly, Renander notes that by leveraging on the power of social media, youth across the continent have started demanding for better leadership. He sees this as a driver for good governance. He expressed his optimism about the African Continental Free Trade Area (AfCFTA), and the renewed focus of developing infrastructure around the continent. He believes that over time, intracontinental trade will become a game changer for growth in Sub- Sahara Africa In assessing current investment opportunities in Nigeria and Africa, he advised Nigerians to invest in their country themselves as the current FX policy would make it very difficult for foreign investors to come in. The exit of foreign investors should open up new opportunities for local investors to exploit. He opined that a devaluation of the Naira might even support the growth of the market, like that in Continues on page 18

Wednesday 23 September 2020

BUSINESS DAY

BUSINESSDAY INVESTMENT AND CAPITAL MARKET CONFERENCE

Highlights of panel sessions and Lamido Yuguda

Haruna Jalo-Waziri

Zimbabwe. For the rest of Africa, he remains bullish on gold and mobile technology. He concluded with stating that investors should pay close attention to block chain and cryptocurrencies especially in Africa. He opined that the same way Africa has become a global leader in mobile payments, it might become a lead in the adoption of block chain technology.

Fireside Chat with Mr. Lamido Yuguda, the Director General of Securities and Exchange Commission (SEC) Mr. Yuguda, who resumed as DG of SEC on 6th July 2020, outlined a fivepoint agenda which would drive the key priorities of the regulator during his tenure. These include, boosting the commission’s operational efficiency, continued implementation of the capital market masterplan, restoration of investor confidence, improvement of investors’ experience in the market and raising awareness about the attractiveness of the capital markets for issuers and investors. The DG explained that the 2015-2025 capital market master plan is currently in its midlife, and is due for a review that takes into account the current realities facing the capital market. He emphasized the need to restore the confidence in the capital market, in order to attract new investors. He shared one revealing statistic. The average age of investors in Nigeria is currently above 50 years, meaning that the vast majority of economically active adults are keeping away from the market. “We have an average age of the CSCS customer above 50 years which means a lot of young people are not in this market.” It was therefore paramount that all efforts should be directed towards reversing this trend. Part of this effort would include simplifying the operational processes so that investors can buy or trade their equities as efficiently as possible. The DG explained that the COVID-19 pandemic exposed the need for countries to be self-sufficient in critical infrastructure, including healthcare, as countries were so quick and effective in closing their borders to outsiders. He stated that the Nigerian capital market should be the vehicle that will attract people and institutions that have the money to invest towards

Nnamdi Nwizu

Uche Val Obi

developing the country’s infrastructure. With an attractive policy environment and returns, the market an provide the funds to address infrastructure needs such as rail lines and hospitals. He pointed out that some market operators have seen this gap and have begun to create these kinds of funds. He gave assurances that the SEC is working with other regulators to create incentives to attract these kinds of funds. With regards to the effect of the fall in oil price on equity valuation, and whether the federal government should intervene directly in the market, the DG explained that the Nigerian capital market has three unique structural characteristics. First, the preponderance of foreign investors, whose exits always negatively impacts the capital markets. Secondly, domestic institutional investors like the PFAs who are very liquid but choose to invest very little in the capital markets. Thirdly, domestic retail investors who have refused to return to the capital market because of the losses suffered in the 2008/2009 financial crisis. While acknowledging that oil prices are an important determinant of economic activity in Nigeria, he believes that addressing these three fundamental factors will release pools of autonomous funds that can be harnessed to significantly improve the performance of the Nigerian capital market. The DG revealed that the SEC is working towards completely eradicating the problem of unclaimed dividends. At the end of 2019, the value of unclaimed dividends stood at N158.44 billion. Of this figure, over N100 billion is attributed to unclaimed shares. Towards achieving this, the SEC had mandated all capital market operators to update their KYCs. The SEC is also working to harmonize ID systems and processes to create a seamless environment for investors. This includes leveraging on shareholders’ BVN and new technology to create a system where customers can have a unique ID throughout the entire system. This would apply not only to the investor, but also to issuers and market operators. Mr. Yuguda surmised that in a nutshell his aim is to contribute his best towards making the SEC a regulator that would be a reference point for the continent, and the Nigerian capital markets a preferred destination for investors.

Choppy Markets

Panel 1: Row, row, row your boat: An Investor’s guide through

Mr. Nnamdi Nwizu, Co-Managing Partner, Commercio Partners

• Moderator: Mrs. Omobolanle Adekoya, Partner, Capital Markets and Accounting Advisory Services, PwC Panelists • Mr. Haruna Jalo- Waziri, CEO, Central Securities Clearing Systems Plc • Mr. Uche Val Obi, SAN, Managing Partner, Alliance LF • Mr. Nnamdi Nwizu, Co- Managing Partner, Commercio Partners • Ms. Ete Ogun, MD, Anchoria Asset Management

Mr. Haruna Jalo-Waziri, CEO, Central Securities Clearing Systems Plc Mr. Jalo-Waziri stated that of the 13 million accounts opened with the CSCS only about 500,000 remain fully active, implying that the overwhelming number of accounts have become dormant. He explained that the CSCS was directing efforts to not only reactivate the dormant accounts but also attract new investors. To achieve this, the CSCS has invested in technology to improve operational efficiency and reduce turnaround time for processes. He further announced that the CSCS had developed the capacity to do T+1 and even T+0 if needed. Mr. Jalo-Waziri highlighted two major events, in the past, that were responsible for a surge of investors coming into the capital markets. The first was the Federal Government privatization policy, which saw number of accounts opened in the CSCS go from 1.6 million to 5 million in the space of a few years. The second was the banking consolidation policy, which took off in 2005, which saw accounts opened at the CSCS go from about 4.5 million to 9 million. He explained that what the market needed now are such catalysts to spike investor participation in the market once again. Mr. Jalo-Waziri also announced that the CSCS was able to move their ratings from A to A+, joining only two other CSDs in Africa at that rating. This was an independent recognition of significant improvements that the CSCS had recorded in risk management, operations, capital base and partnerships.

Ete Ogun

Mr. Nwizu explained that it was important to shift the thinking paradigm of investors from a short-term to a long-term focus. The savvier investors are the more products that can be sold to them. Similarly, the more investors understand the market, the more willing they are to go into the market, so financial literacy is indeed key for market development. Mr. Nwizu believes that despite the apparent challenges there are still opportunities in the Nigerian market. For example, in evaluating the Nigerian equities market with price to earnings ratios compared to other African countries, Nigeria’s average PE ratio is 9, Kenya’s is 12, and South Africa’s is 17. He also stated that dividend yield currently stands at 19 times which is better when compared to fixed income markets and more than compensates for price volatility. Nwizu however acknowledged that excluding the biggest names, on the stock market, investors are indeed left with very limited offerings, making it critical for all stakeholders to work together attracting encouraging new big names to list.

Mr. Uche Val Obi, SAN, Managing Partner, Alliance Law Firm Mr. Uche Val Obi stated that it is important for regulators and players in the Nigeria capital market to be proactive in rule making. He reiterated the point that the domestic market does not have the capacity to meet all the funding requirements of the Nigerian capital market. This makes it necessary to attain the legal and regulatory harmonization with other major economies that will serve as sources of major funding to the Nigerian capital markets. He referenced as a good example, a report done by the Emerging Capital Market Taskforce Initiative, which had the objective of easing the flow of investments between the United Kingdom and Nigeria. Mr. Obi further explained that the Nigerian Capital Markets cannot operate in isolation in today’s global financial system. He advised that the Nigerian capital markets should always benchmark best practice globally rather than holding on to antiquated rules that might unnecessarily frustrate viable cross border transactions. He encouraged operators not to be shy in seeking out novel transactions, because it is in attempting such new transactions that rules governing such transactions will be defined.

Wednesday 23 September 2020

BUSINESS DAY

BUSINESSDAY INVESTMENT AND CAPITAL MARKET CONFERENCE

presentations... Guy Czartoryski

Ms. Ete Ogun, MD, Anchoria Asset Management Ms. Ogun explained than significantly growing financial literacy is very key in market development, because without doing that other reforms might not have the desired effect. She also noted that clients complain about the bureaucracy associated with the capital markets, meaning that this might be another factor discouraging new and younger investors from being part of the capital markets. On trending investment options among investors, Ms. Ogun stated that non-traditional asset classes such as structured products and Eurobonds have become more popular with institutional investors and HNIs, while the retail investors appear to be more interested in traditional asset classes. “Rediscovering Risk: Not so bad after all”, a Presentation by Mr. Guy Czartoryski, Head, Research, Coronation Asset Management Mr. Czartoryski explained that investors in the Nigeria capital markets should understand that the days of easy risk-free returns are over, at least for now. For the last ten years investors had enjoyed a 14% interest on treasury bills, which therefore assured them a 2% margin on inflation. However, due to changes in CBN policies the current yield on treasury bills has seriously gone down to about 2%, far below inflation rate therefore making it very unattractive to investors. In addition, Nigerian banks that were the default destination for savings, are currently contending with the highest cash reserve ratio in the world and a loan-to-deposit ratio of 65%. These requirements have forced the banks to crash their savings and time deposit rates. His presentation showed that the net result of the disappearance of risk-free returns is that investors have increasingly diverted money to managed funds or Collective Investment Schemes (CIS). He suggested that there is a good possibility that managed funds might replicate the astronomical growth of the pension funds which currently stands at N10 trillion. Investors that will succeed are investors that will understand a variety of asset classes not just T-bills, bonds or equities.

Niyi Adenubi

Lilian Olubi

Guidance and diversification will be crucial in dealing with new set of products being launched which include money market funds, fixed income funds, credit structures and an increasing role of private equity and venture capital. In his estimation, interest rate risk management and all forms of risk management are more important than ever for fund managers. Technological innovation is also gradually introducing young people into the market and with time they will play a bigger role in the market. Considering the percentage of young people in Nigeria’s population, he is of the view that their full entry into the market will not only deepen the market but also set it on the path of sustainability.

on aggressive quantitative easing so fund managers, around the world, trying to hedge against currency risks are looking to invest in commodities such as gold and copper and even cryptocurrencies. He ended his presentation by encouraging investors to be careful in picking their asset managers, and to focus on asset managers who have adopted cutting edge technology in their operations.

“New perspectiwve on asset allocation and behavioral finance in volatile markets”, a presentation by Mr. Niyi Adenubi, Executive Director, Institutional Business and Investor Relations, VFD Group M r. Ad e nu b i e x p l a i n e d t hat t h e “Behavioral finance” is a concept that deals with the roles that emotions play in determining how successful an investor can be in the market. He quoted the prospect theory which alludes to the concept that when investors suffer losses it registers on their minds more than when they enjoy gains. As a result of this emotional reaction the simple investment principle of buying low and selling, becomes very difficult to implement practically, as in practice most people actually sell on the low and buy high leading to the creation of bubbles. According to him, some of the cognitive and emotional biases common to investors include confirmation bias, anchoring bias, recency bias, familiarity bias, loss aversion, and overconfidence. “The discipline to stay with a conviction even when you seem wrong in the market relies on one’s control of his emotions.” Mr. Adenubi said that the VFD group had developed strong processes designed to help investors cut through these biases. These processes included: portfolio rebalancing, diversification, defined investment policies and training. On asset allocation, Mr. Adenubi acknowledged the gold ETF as a welcome asset class that has enjoyed good inflow, but the markets needed more commodity asset classes. Most Central banks in trying to stimulate their economies had embarked

Panel 2: Is it all in the mind? Interpretations and perceptions of market events against performance Moderator: Ms. Tosin Ajose, Lead Advisor, Deal HQ Panelists Mrs. Lilian Olubi, CEO, EFG Hermes Nigeria Ltd Mr. Bunmi Asaolu, Head Equities, FBNQuest Merchant Bank Mr. Niyi Adenubi, Executive Director, Institutional Business and Investor Relations, VFD Group

Mr. Niyi Adenubi, Executive Director, Institutional Business and Investor Relations, VFD Group Mr. Adenubi took the position that the global trend is for businesses to go private rather than public, and in such cases the wealth created is not evenly spread since regulators impose restrictions on those who have access to non-public investing opportunities. To achieve broad participation ad open access to the upside of successful companies, government policy must explicitly encourage viable businesses to list on the stock exchange. Mr. Adenubi further stated that in the era of digital technology data is everything. Yet, in the Nigerian capital markets there is still a huge gap in the use of data algorithms to reduce the human interference in decision making. However, he remains optimistic that with growing trend of Nigeria’s youth being very adept at adopting new technology, very soon the desired technological innovations would not only take hold in the capital markets, but could actually turn out to be the saviour of the capital markets. He also insisted that every nation needs both its local investors and FDIs

Bunmi Asaolu for a robust capital market. Therefore, he advised the NSE and the CBN to work together towards addressing the FX challenges and also formulate policies that would make the Nigerian capital market attractive to foreign investors

Mrs. Lilian Olubi, CEO, EFG Hermes Nigeria Ltd Mrs. Olubi stated that there was actually a lot of data being put out to empower investors with the right knowledge, but the issue is whether the investors understand the plethora of information available today. She acknowledged that there have been significant efforts to drive financial literacy in the country, with some secondary schools even including it in their curriculum. However, these efforts should be measured to know how impactful they have been. She observed that issuers are not paying enough attention to retail investors, and tended to over concentrate on institutional investors. Listed companies should also be more willing to share their success stories to retail investors and also target millennials who are the future of the market. Mrs. Olubi advised that investors should not remain averse to the market because of focusing on near term incentives, but also consider the long run performance of the market, as the market has consistently been able to beat inflation. Mr. Bunmi Asaolu, Head, Equities, FBNQuest Merchant Bank Mr. Asaolu opined that an improvement on a single issue may drastically change the sentiments that the general population have about the capital markets, so a catalyst can possibly kick start a rally, due to investors’ psychology. Examples of this have played out in the US stock market. Mr. Asaolu reiterated the view of other speakers that investor education is very important. This being the case, opportunities for engagements between investors and market participants should be created and made broadly accessible for all parties. He also encouraged the stock exchange to do better in the enabling of online access to retail investors in particular. This will be part of the push to bring the market closer to investors using technology.

Wednesday 23 September 2020

BUSINESS DAY

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Wednesday 23 September 2020

BUSINESS DAY

AGRIBUSINESS

In association with

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Nigeria’s agric sector handicapped by low technology Josephine Okojie

o w s c a l e technology use, ineffective credit model, and lack of competitiveness in the agricultural sector among others have hampered the country’s quest to fast-track economic diversification through the sector. Experts in the agricultural sector say that innovation and improved technology which is vital in boosting farmers’ productivity and attain food sufficiency are lacking in most farms across the country. The experts have identified low technology and innovation as the biggest challenges limiting farmers’ productivity in the country. They noted that the low use of technology and lack of innovation in the sector has continued to affect farmers’ cultivation areas and their ability to perform timely operations. “We must be innovative in our design, implementation, and execution of agricultural

programs, projects, and activities in agriculture now because it is technology that drives today’s agric,” AfricanFarmer Mogaji, chief executive officer, X-Ray Farms revealed. “If we must feed ourselves and drive economic growth then it is time the government takes the issue of technology and innovation serious in the agric sector,” Mogaji said. Globally, innovation and technology are positively impacting crop production as farmers deploy farm

machines, tractors, and drones to aid farming as well as Artificial Intelligence. But Nigeria is grossly lacking in the adoption of mechanisation and tractors. Nigeria is listed among the least countries in the world with mechanised farming. The rate of the use of agricultural machinery is still below that which is considered necessary to meet the rising demand for food, as stipulated by the Food and Agriculture Organisation (FAO).

Available statistics show that Nigeria is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/ hectare which is far below the Food and Agriculture Organisation ( FA O ) ’s 1 . 5 h p / h e c t a r e recommended tractor density for Africa and other developing countries. When measured on mechanisation scale in 2003, 12 years ago, Nigeria had only 30,000 tractors and currently adding 1,000 new

ones each year, which is still not considered sufficient in replacing the ones that are aging, broken down, and worn out. Abiodun Olorundero, m a n a g i n g d i r e c t o r, AquaShoots Limited, said what may mitigate further progress made so far in the agriculture sector is lack of technology. “Lack of technology and innovation remains one of the reasons why we still have a shortfall in production. Technology is very crucial if Nigeria really wants to boost agric productivity. The government must key into agriculture using technology t o a t t r a c t t h e y o u t h ,” Olorundero said. Similarly, farmers have continued to record scanty yields, as opposed to their counterparts in developed countries who make use of advanced farming machines. The use of hoes, cutlasses, and in some cases- toolmounting animals is responsible for poor agric output in the country, thus making agriculture laborious and giving farmers scanty

yields and poverty. “Currently, more than 70 percent of farm labour is provided by human power; over 20 percent is provided with draft animal power and less than 10 percent by mechanical power,” Elesa Yakubu, national president, Tractor Owners and Operators A s s o c i a t i o n o f Ni g e r i a (TOOAN), told BusinessDay. Yakubu called on the government to create an environment that is conducive for farm machinery manufacturers, to establish assembly plants and also provide special funds to agricultural institutions to undertake research and development for local manufacture of agricultural machinery and implements. “Government must in the interim partner with at least 2 reputable tractor manufacturers to establish Complete Knocked Down (CKD) assembly plants, but in the long-term encourage the design and manufacture of indigenous products, tractors; implement the use of local tractors and other equipment,” Yakubu said.

PAN pledges sustainable development Lagos APPEALS trains farmers on agro-export procedures Agencies with APPEALS project demonstrated to them,” she better understanding of export Josephine Okojie procedures to help cushion Beneficiaries’ was to increase further said. for poultry value chain She noted that the project the effects of the COVID-19 h e L a g o s S t a t e the export potential of farmers Josephine Okojie

he Poultry Association of N i g e r i a ( PA N ) , Lagos chapter has said that it would do all within its reach to ensure sustainable development across the poultry value chain in the state. Making the assurance was Godwin Egbebe, newlyelected chairman of PAN – Lagos chapter shortly after the Annual General Meeting (AGM) of the association held recently in Lagos. Egbebe noted that it has become imperative for farmers to take the bull by the horns in a bid to make the poultry value chain more viable than it is by engaging in activities capable of making their businesses flourish considering the important role it plays. He further stated that he and other members of the executive members would in the next two years embark on series of projects of which would portray the association as a force to reckon with in Nigeria and beyond.

“In the next two years of which we are going to be calling shots as far as Lagos PAN is concerned, we are going to engage in on numerous projects which would make us pride ourselves as number one in Nigeria and even beyond the shores of the country,” he said. He said that the association plans to establish its hatchery in partnership with various individuals as part of its strategy to revamp the sector in the state. “A l s o, w e a re g o i n g to ensure a formidable working relationship with government as it is a known fact that we are siamese twins in the development of the agricultural sector most especially the poultry value chain,” he further said. “It is also our target to secure a permanent site for Lagos PAN, ensure capacity building of members through training, workshops and seminars both locally and internationally. “This would enable our members to rank among the best and also meet up with global best practices,” he added.

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Agro-Processing, Productivity Enhancement, and Livelihood Support (APPEALS) project has tasked farmers, especially those in Lagos and beneficiaries of the initiative to contribute to the growth of the Nigeria economy through the export of agricultural products. S p e a k i n g a t a t h re e day training organised for farmers, Olayiwole Onasanya, permanent secretary, Lagos State Ministry of Agriculture, congratulated the beneficiaries for being part of the APPEALS project. He said that part of the mandate of the project is to develop the export potential of the beneficiaries and to ensure successful linkage to international market, noting that the meeting with the certification and regulatory agencies is one of the strategic ways in achieving the feat. Oluranti Sagoe-Oviebo, Lagos State coordinator of APPEALS project, charged the farmers to work towards standardising production and processing of aquaculture, rice, and poultr y for the export market to earn foreign exchange. Sagoe-Oviebo said the goal of the training tagged ‘Meeting of Certification and Regulatory

who are beneficiaries of the initiative. The coordinator while stressing the urgent need for farmers to begin to contribute to the country’s foreign trade through the export of agro commodities said farmers should be abreast of the standard that will earn their products premium prices. “We are training our farmers on best practices that will ensure that they get certification from relevant agencies and to ensure that they are getting premium prices for whatever they are selling,” she said. “A lot of our beneficiaries are encouraging us with the pace at which they are adopting the technologies we have

had over 70 beneficiaries in the second quarter. She also disclosed that the project had acquired a rice colour sorter machine to further prove the quality of rice and enhance the productivity of rice farmers in the state. The coordinator revealed that 5,000 farmers had been trained and 720 beneficiaries supported with the grant for technology adoption so far in the three value chains of the APPEALS project, which are rice, aquaculture, and poultry. Speaking also, Sadiq Yunus, deputy director -export division of the National Agency for Food and Drug Administration and Control (NAFDAC), said the training was necessary for a

Oluranti Sagoe-Oviebo, State Project Coordinator, Lagos APPEALS; .Olayiwole Onasanya, permanent secretary, Ministry of Agriculture; Folake Ogun, communication officer, APPEALS project during the graduation event of beneficiaries of the APPEALS project in Lagos recently.

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pandemic on farmers. Yunus said that NAFDAC was ready to propel MediumS ma l l S c a l e E nt e r p r i s e s (MSMEs) through facilitations at no cost. “All our processes for product registration are automated and online. Local products that are exported with NAFDAC license have more value in the host country,” he said. “There are processes to certify a product satisfactory to issue health certificate for that product. “This training is to teach them what to do to ensure that their products are considered safe and of good quality, not only for the local markets but also for the international market,” he added. Speaking on standardising the production and processing of aquaculture products for export and high earned market, Olanike Oladosu, representative of the Federal Department of Fisheries (FDF), said farmers should identify potential customers, meet the standards of the importing country and ensure to achieve competitive pricing. She also highlighted reasons why farmers should target high earned market, high-class point of sale and presentation, and product packaging.

Wednesday 23 September 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Why we don’t want multiple co-insurers in our business – Loss Adjusters Modestus Anaesoronye

embers of the Institute of Loss Adjusters of Nigeria (ILAN) have lamented the complexity of recovering their evaluation fees when multiple co-insurers are involved in businesses contracts. According to them, they said when multiple co-insurers are involved it becomes difficult for loss adjusters to recover their fees after an evaluation work. Shamsideen Femi Hassan, immediate past president of ILAN said it has approached the Nigerian Council of Registered Insurance Brokers (NCRIB) to let its members realize the difficulty adjusters go through to recover their debts. Hassan said, during my tenure, “ILAN paid a courtesy visit to NCRIB. At the meeting, ILAN President sought assistance of members of the NCRIB in reducing the long list of co-insurers on some accounts, with some insurance companies holding as low as 0.5 percent share, considering attendant difficulty being experienced in recovering loss adjusters’ fees and expenses incurred in course of the claim evaluation process”. He said it is either because of the resultant small amount involved or the long

L-R: Cyril Matthew, deputy corps commander, RS2.1 Lagos Sector Command; Charles Nwachukwu, divisional head Institutional Business, Cornerstone Insurance Plc ; Imoh Etuk, zonal commanding officer, RS2HQ Lagos; Chidiebere Nwokeocha, executive director, Business Development, Cornerstone Insurance; & Tokunbo Bello, executive director, Technical/Operations, Cornerstone Insurance during the Media Launch of a partnership on Covcid-19 Enlightenment Campaign by both organisations in Lagos .

list of coinsurers with majority of them in doubtful financial positions which has culminated in huge unpaid debts over the years.” According to Hassan, the NCRIB leadership promised to convey their prayers to the larger body of insurance brokers with request for their cooperation in reducing the challenges so posed to the fortune of loss adjusters. Business Day had reported that he nation’s insurance industry faces imminent shortage of loss adjusters, if issues related to low payment scale and delayed pay-

ments from underwriters are not resolved. Investigations further reveal that the loss adjusting profession charged with the responsibility of ascertaining the extent of loss suffered by an insured and the recommendation of proper sum of indemnity is steadily being eroded from the domestic insurance industry as its members are being hit hard by poor revenues resulting from their low payment scale compared with their international counterparts and the huge debts owed them

by underwriting companies. The implication of this development is that, the loss adjusting firms have become less sustainable, inability to pay quality remuneration, manpower shortage and increasingly less attractive to younger generation of job seekers. Analysts fear that if the loss adjusting profession in Nigeria is completely eroded, it would cost local underwriting firms and the country huge foreign exchange to secure loss adjusting services from other markets.

Unitrust Insurance successful rights issue pushes paid-up capital to N6.4bn Modestus Anaesoronye

eneral underwriter, Unitrust Insurance Company Limited said after a successful rights issue which brought into the company N 1.45 billion, the firm’s total paid-up capital has risen to N6.4 billion. This underscores advancement in the Company’s recapitalization project as directed by the National Insurance Commission (NAICOM). This was disclosed during the Company’s Annual General Meeting held recently,

where the board announced a gross written premium of N3.53 billion for 2019 financial year as against N3.168 billion in 2018. Underwriting Profit also increased to N301.735 million from N220.25 million in 2018, while Investment Income increased to N1.262 billion from N1.148 billion in 2018. The Company recorded a profit after Tax of N801.35 million in 2019 as against N 757.35 million in the previous year. “The shareholders’ fund increased to N11.933 billion in 2019 from N11.323 billion” “Our business model will www.businessday.ng

be driven by structural analysis of our strengths, weaknesses, opportunity, and Threats (SWOT) for responsive bonding irrespective of the challenging situations we will experience”, John Ijerheime, managing director of the Company said. He also added that” the company has successfully raised N1.45 billion through right issue and have over N 6.4 billion qualifying Capital as required by NAICOM for the ongoing recapitalization process in the industry. The Insurer also disclosed that within the month of April

and June 2020 it has paid N 240.63 million as claims to its clients on various insurance policies for Second Quarter 2020 in fulfillment of its avowed commitment to prompt claims settlements. Unitrust Insurance Company Limited is one of the leading general insurers in Nigeria with a track record of serving their clients that dates back over 34 years. Founded in 1981 whilst commencing service in 1986, the organization celebrated its 34th year of committed service within the insurance industry on August 13th, 2020.

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Nigeria Re names Akinsola Ale new managing director Modestus Anaesoronye

igeria Reinsurance Corporation has announced the appointment of Akinsola Ale as the new managing director, following the confirmation by the National Insurance Commission (NAICOM) on August 31, 2020. A statement by the firm said the Board of Directors had forwarded his name to NAICOM as the nominee for the position stemming from the board meeting held on July 3, 2020 which rounded off a thorough selection process in line with Nigeria Reinsurance Corporation’s succession plan. Before his new appointment as Managing Director, Ale was Executive Director Technical Services of Nicon Insurance Limited and briefly acted as the Managing Director/Chief Executive Officer of the firm. He was responsible for delivering on the enterprise-wide charge of steering the company to the path of sustainability and success and ensuring that the overall objectives of the organisation. His prudent management of financial resources and strong decision-making policies, coupled with his professional training over the years, as well as his ability to relate well with people of diverse backgrounds will be major assets in propelling the Corporation to new heights. A graduate of Insurance

Akinsola Ale

from the University of Lagos (1989), and an Associate of the Chartered Insurance Institute (ACII), London (1991). Akinsola has over 30 years working experience in and outside the Insurance Industry with 25 years in top management positions. Five of those years have been as Managing Director/CEO in Organisations operating in diverse spectre of the economy ranging from Integrated Marketing Communications, Printing and Telecommunications Infrastructure Development. These challenges have broadened his knowledge base and made him a well-grounded Executive. As pioneer Head of Marketing and Business Development at Sovereign Trust Insurance Company Ltd (now Plc), he developed market penetration skills for a new entrant in the Insurance Industry as well as all the indices critical to the success of a new organisation with the attendant challenges both in the short term as well as the medium/long term.

AIICO Partners NGO to feed underprivileged community Modestus Anaesoronye

IICO Insurance Plc, in partnership with We Stand Foundation, recently organized a Feeding Relief Programme to cater to the needs of underprivileged people in Lagos. Three hundred (300) families within the Iwaya Community, Yaba, were beneficiaries of the relief packages which include a variety of food items and reusable nose masks. According to Abimbola Shobanjo, AIICO’s Corporate Responsibility and Sustainability, manager, “It was indeed a great delight to bring smiles to the faces of these people. Besides solving hunger, we also considered their wellbeing a high priority in view of the need to continue to keep safe. We leverage on key partners to spot opportunities and drive these initiatives.” Babatunde Fajemirokun, @Businessdayng

managing director/CEO AIICO stated, “This endeavour is reflective of our corporate culture of touching lives and impacting communities. These are challenging times and we are mindful of the impact. We have a long-term plan in place to ensure the sustainability of these efforts.” It will be recalled that AIICO organized a similar programme during the lockdown period where food and other health and safety packages were distributed to people in different communities to mitigate the impact. AIICO Insurance is a leading composite insurer in Nigeria with a record of accomplishment of serving its clients that dates back over 50 years. Founded in 1963, AIICO provides life and health insurance, general insurance, investment management and pension management services as a means to create and protect wealth for individuals, families and corporate customers.

Wednesday 23 September 2020

BUSINESS DAY

BANKING

Share your experience at banks with us via: hope.ashike@businessdayonline.com

Banks’ requirements for granting new credit facilities in 2020/2021 fiscal years HOPE MOSES-ASHIKE

igerian Banks are expected to meet certain criteria in order to be allowed to grant new credit facilities in the 2020/2021 fiscal years according to the Central Bank of Nigeria (CBN). The criteria include minimum capital adequacy ratio, specified liquidity ratio, provisions of the prudential guidelines, minimum shareholders’ funds, pacified cash reserve requirement, and sound corporate governance. This was stated in the Monetary, Credit, Foreign Trade and Exchange Policy Guidelines For Fiscal Years 2020/2021, released on September 11, 2020 by the CBN. Following the introduction of the LDR policy, total gross credit increased by N3.33 trillion between May 2019 and June 2020. SANUSI, ALIYU RAFINDADI

Sanusi, Aliyu Rafindadi, a member of the MPC said in his personal statement that most of this increase in credit was extended to manufacturing, consumer credit, general commerce, Information and Communication Technology (ICT) and Agriculture. The minimum ratio of total qualifying capital to total risk-

weighted assets shall remain at 10.0 per cent for regional and national commercial banks, and 15.0 per cent for international commercial banks in the 2020/2021 fiscal years. Report on the Banking System Stability Review shows that despite the challenges posed by the COV-

APO Microfinance Bank Limited has been honoured with the ‘Most Supportive Microfinance Bank’ award by the Chartered Institute of Bankers (CIBN). L APO MFB, the largest player in the sub-sector shared the award with two other microfinance banks for its proactive response to clients needs since the outbreak of the Covid-19 pandemic. It will be recalled that the Bank had moved swiftly to develop and deploy practical and effective measures to mitigate the impact of the pandemic on clients, staff and its stakeholders in the early days of the pandemic. The measures included shutting down all the company’s operations across Nigeria on March 25 for three months even before the enforcement of the federal government-sanctioned lockdown in Lagos, Ogun and the Federal Capital Territory. To support official efforts, LAPO MFB also embarked

on an intensive Covid-19 awareness campaign which was broadcast on prominent radio stations across the country in Yoruba, Hausa and Pidgin; the campaign also featured extensive communication deployed on the organisation’s social media pages and website. In addition, the microfinance bank distributed rice, tomato paste and other food items to clients across the country to alleviate the hardship caused by the pandemic. Also, LAPO Microfinance Bank has also made cash

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sions. They are encouraged to maintain a higher level of capital commensurate with their risk profile. Banks and banking groups are required to comply with the appropriate guidelines for the measurement and calculation of capital requirements. The policy gidelines stated that the minimum liquidity ratio for commercial, merchant and non-interest banks shall be retained at 30.0, 20.0 and 10.0 per cent, respectively, subject to review from time to time. In the 2020/2021 fiscal years, the ratio of loans to deposits ratio shall be a maximum of 80.0 per cent. The Cash Reserve Ratio (CRR) for deposit liabilities which stood at 22.50 per cent in 2019 and adjusted to 27.5 percent in January 2020 shall continue to apply, subject to review by the CBN in line with prevailing economic and liquidity conditions. The maintenance period for the Cash Reserve Ratio shall be as prescribed from time to time, the CBN said in the guidelines.

DafriBank appoints new CEO as it plans commercial banking operations in Nigeria

LAPO Microfinance Bank wins CIBN award for Covid-19 response HOPE MOSES-ASHIKE

ID-19 lockdown, the banking system remained sound and resilient. The industry capital adequacy ratio had increased to 15% in June 2020, which meets the industry prudential benchmark. The Non-performing loans ratio (NPL) has declined to 6.4% in June 2020 from 6.6% in April 2020 and 9.36% in the corresponding

period of 2019. Total Assets of the industry has continued to rise, standing at N47.82 trillion as at end-June 2020. Total banking industry credit to the economy has continued to increase even during the months of the lockdown, standing at N18.9 trillion as at end-June 2020. “Even with an increasingly fragile global macro-financial condition and rising domestic credit, the Nigerian banking sector remained largely resilient with NPLs ratio continuing to moderate from 11.2 percent in May 2019 to 6.4 percent in June 2020,” Godwin Emefiele, governor of the CBN said in his personal statement at the last Monetary Policy Committee (MPC) meeting in July 2020. According to the policy guideline, not less than 75.0 per cent of banks’ capital shall comprise paid-up capital and reserves. Banks shall also maintain a ratio of not more than one to ten (1:10) between adjusted capital funds and total credit net of provi-

contributions to two states to complement their ongoing efforts to provide palliatives to low-income Nigerians, the segment which the bank serves. LAPO MFB was also quick to adapt its pre-loan training manual to digital platforms to provide easy, non-physical access to clients. To ensure that clients are abreast of the realities and opportunities inherent in the “new normal” economy, LAPO is also deploying structured quarterly Webinar sessions to its Clients to provide deep insights for business

FRANK ELEANYA

outh Africa-based borderless digitalonly financial institution, DafriBank, has appointed a new CEO and kicked off the construction of a new headquarters in Lagos, Nigeria. This is part of plans to commence commercial banking operations in Nigeria by 2023. The new CEO, Ramaswamy Easwara, holds multiple academic degrees, including Bachelors in Accountancy, with the major studies in accounting, economics, taxation, and auditing. He also holds an ACMA degree from the Institute of Cost Accounting of India (ICAI). Qualification includes Scrum Foundation Certificate (SFC). He holds certifications in blockchain technology, data analytics, and artificial intelligence. He has over 18 years of experience working for some blue-chip financial institutions such as HSBC; ABN Amro, BNP Paribas, and

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Ramaswamy Easwara

IndusInd Bank. In a statement sent to BusinessDay, the bank said Easwara whose appointment took effect from September 1, will lead the growth and sustainability ambition of the digital bank. He also worked in multiple large-scale projects and provided successful implementation, operations, solutions delivery and structuring deals, business management, which involved data analytics and presentation to the management team. “Following a rigorous and extensive search process, we @Businessdayng

are pleased to have appointed someone of Easwaran calibre, experience, and ability to fill the important position,” said Xolane Ndhlovu, chairman, DafriGroup plc. “Easwaran’s strong knowledge of digital banking and successful background in financial services put him in an excellent position to lead the growth and sustainability of DafriBank.” DafriBank has subsidiaries in Nigeria and a presence in 23 countries. The company plans to migrate from digitalonly operations to commercial banking in 2023.

Wednesday 23 September 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Apapa: Truckers say traffic control method obsolete, seek automated system …Implore govt to adopt their proposed technique to free Apapa amaka Anagor-Ewuzie

ruckers under the aegis of the Association of Maritime Truck Owners (AMATO) have described the system of using security taskforce to control traffic in Apapa metropolis as obsolete, as it creates opportunity for compromise as well as extortion. According to them, there is need to develop an electronic system that is devoid of human interference, if Nigeria want to eliminate traffic congestion in Apapa Port area. Remi Ogungbemi, chairman of AMATO, who stated that Apapa bridges have become market places while check points become tollgates, said the system presently being used to administer trucks into terminals, factories and jetties in Apapa has become obsolete and there is need for a change. He however stated that it was sad that many people are benefiting from the chaotic

system, which has become bread and butter for many. “Some people have grouped themselves into a cabal, and if you are not a member of that cabal, your trucks would not be allowed to go. Every morning and night,

monies exchange hands but the money cannot be seen physically because they are very smart in doing it, and if you are not a member of that caucus, your trucks cannot go,” he said in a phone interview.

Ogungbemi, who stated that the Presidential Task Team overseeing traffic control in Apapa has over stayed their usefulness, said that it is unfortunate that the only solution that government has is to set up committee that

L-R: Bashir Jamoh, director general, Nigerian Maritime Administration and Safety Agency (NIMASA) receiving a plaque from Alexandre Gorges Gomes, first counsellor deputy head of Delegation, European Union Delegation to the Federal Republic of Nigeria and to the Economic Community of West African States (ECOWAS), after an engagement session in Abuja recently.

h e We s t A f r i c a Container Terminal (WACT) Onne, Nigeria’s leading container terminal in the Eastern part of the country, said it has received two more state-of-the-art Mobile Harbour Cranes (MHCs) and two 45 tons Reach Stackers, making the terminal one of the most equipped in the country. The arrival of the latest set of MHCs brings the number of such cranes at the port to four, a feat that is unmatched by any other terminal in Eastern Nigeria. In 2019, WACT invested $14 million to acquire its first set of two MHCs and other sophisticated modern cargo handling equipment, including 14 Specialised Terminal Trucks and two Reach Stackers. Since then, it has consistently implemented its growth and development plan of becoming the most efficient container terminal in West Africa.

In 2020, the company announced a further investment in its Phase Two terminal upgrade, which includes acquiring three additional MHCs to bring the total in operation to five; 20 Rubber Tyre Gantry Cranes; three Reach Stackers; 13 terminal trucks and trailers, and empty container handlers. The upgrade also includes the deployment of reefer racks with a 600-plug capacity and expansion of the current yard, new workshop, and a new terminal gate complex. Confirming this, Noah Sheriff, WACT Commercial Manager, said the two new Konecranes Gottwald Mobile Harbor Cranes arrived Onne aboard MV Hanna on

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Tuesday, 8th September. He said the cranes are highly sophisticated and designed to provide versatile and economical handling of containers at the terminal. “These cranes stand for high performance, versatility, and eco-efficiency. Now, WACT Onne will maintain her superior services and match our liner customers’ quest to upgrade their vessel fleet calling East Nigeria,” he said. Aamir Mirza, managing director of WACT, said the acquisition of additional container handling equipment is part of the company’s earlier announced expansion of the existing terminal capacity - a US$100 million investment that

checklist that would enable traffic managers to identify the trucks and have all the information about where the truck is going and when it supposed to go. This checklist would be made available to the police on the road, terminal operators, and shipping companies.” In addition to this, he said, the hardcopy of the checklist would also be printed and pasted in strategic places for people to relate with. “This would be used by all the trucks including Flour Mill, Dangote, container trucks and petroleum tankers, and it would compel them to leave the roads and bridges to their private parks but our fear is that 90 percent of the people benefiting from the problem on Apapa road would not like a change.” He however noted that if government adopts their proposal that it can be handed over to a specialist to administer even as he pointed out that the NPA as the technical regulator for the port can be made to implement the new system.

Cargo movement to river, inland ports, maritime security top agenda for maritime agencies

WACT receives two multi-million dollars mobile harbour cranes in Onne Port amaka Anagor-Ewuzie

members would come and see the problem as an opportunity to enrich themselves. Stating that truckers want government to invite technocrats to come up with a creative idea to serve as a technique for addressing Apapa problem, he disclosed that truckers have come up with their own solution, which has been demonstrated to its members, the Nigerian Ports Authority (NPA) Apapa and Tin-Can Island Ports as well as LASTMA headquarters. “The system we have developed is so transparent to the extent that before any truck would leave the private park where it is stationed, the trucker must receive message alert on his WhatsApp telling him that it is his turn to go into the port even the security operatives on the road would also have same message on their phones so that they can be able to identify trucks that are coming into the port,” he explained. Continuing, Ogungbemi said that “We also designed an electronic and hardcopy

amaka Anagor-Ewuzie started last year, which will be fully in place shortly. “The expansion plan will deliver sufficient capacity to meet the envisaged growth in East Nigeria for the next 15 plus years,” he added. Recall that WACT made history on August 15, 2020 when it received the largest containership ever to berth at any Nigerian port. The huge container carrier named Maersk Stadelhorn, with a length overall of 300metres and a beam of 48.2metres, has the capacity to carry about 10,000 TEUs (Twenty Equivalent Units) of containers. Maersk Stadelhorn was also the largest gearless containership ever to visit Nigeria. WACT, which is part of the Onne Oil and Gas Free Zone, is the first Greenfield container terminal built under a public-private partnership model in Nigeria. In addition to excellent hinterland connections to other parts of the country, the facility offers excellent customer service and superior e-commerce capabilities.

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a r g o m ov e m e n t from Lagos Ports to Onitsha River Port and other inland dry ports in the country through the waterways were issues in the front burner at the just concluded All Heads of Maritime Agencies Monthly Meeting hosted by National Inland Waterways Authority (NIWA) at its Headquarters in Lokoja, Kogi State. George Moghalu, managing director of NIWA, who briefed newsmen at the end of the session, stated that maritime agencies are also looking for ways to harmonise their operations. According to Moghalu, the meeting also looked at issues concerning maritime security and safety, even as briefings from both Nigerian Maritime Administration and Safety Agency (NIMASA) and NIWA on waterways security were received. “Government is conscious and making effort on security and also taking safety measures on waterways seriously to curb mishaps on our waters,” he said. @Businessdayng

He further disclosed that there were discussion on efforts made in the area of trade, development of manpower, enforcing protocols to reduce the carnage on our waterways, and the removal of wrecks which is being address by all the sister agencies in the country. He further stated that the meeting set up a committee on multi-model approach to cargo delivery, and briefing was received on the Nigerian Railway Corporation support on cargo movement from the ports to the dry port especially in Kaduna. “It has become very important for us in the maritime sector to have decided to setup a platform where we can share ideas, synergise and contribute our quota in developing polices and building the industry,” Moghalu said. The meeting was attended by Bashir Jamoh, DG/CEO of NIMASA; Hassan Bello, executive secretary of Nigerian Shippers Council; Sam Nwakohu, Registrar of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) as well as representatives of Nigeria Customs service and Nigerian Railways Corporation.

Wednesday 23 September 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Set up taskforce on Apapa rail speedy completion, Minister orders CCECC MIKE OCHONMA

oncerned by the earnest completion of the Ebute Metta Junction corridor of the ongoing standard gauge rail project extension into the Apapa port which has witnessed protracted delays majorly due to the corona-virus pandemic, Nigeria’s minister of transportation, Rotimi Amaechi has directed the Chinese Civil Engineering & Construction Corporation (CCECC) to set up a task force that will work assiduously towards the completion of the Apapa train station at the same time with other major and minor stations along the Lagos-Ibadan corridor that are at various stages of completion. Amaechi disclosed this during the last ministerial project tour to see progress of work on the $1.5 billion, 156.5 kilometer Lagos-Ibadan standard gauge rail project. He told the CCECC to ensure that all the stations included the Apapa train station are completed and delivered to the federal government at the same time. According to the minister,

Revamped Haojue motorcycle targets S/West market penetration …Fuel efficient and competitively priced MIKE OCHONMA Associate Editor

igeria motorc yc l e ma rke t came up alive once again following the official launch of its Haojue Xpress 125cc Commercial Motorcycle (Taxi-Model) motorcycle with a phased introduction to the South-west region of Nigeria by Boulos Enterprises Limited (BEL), owners of the franchise in the country. As a fall out of the product market research and to meet the yearnings of the commercial and private buying public, the motorcycle comes with a highly efficient engine, integrated with many advanced technologies, that makes it economical, powerful and durable. According to company sources, Haojue Xpress motorcycle has been tested and proven to have fuel consumption lowered by a generous 30 percent compared with other major competing brands in Nigeria and globally. With this comparative advantage over competition, the operator saves more fuel and earns more income. With excellent performance at low and middle speed laced with a strong torque of 10 Nm generated at low speed; the overall performance improvement of 25 percent has been observed. Irrespective the gear po-

sition at start-up, during acceleration or during climbing of a hill, the rider will always have enough power and speed to move faster. The optimized layout of the engine coupled with the piston backed cooling technology lengthens engine life span even when working with heavy load every day thus excellent engine performance is guaranteed. Haojue Xpress motorcycle also has other massive benefits for the user as it is safe, durable and reliable; the agility gives the rider a unique riding experience, good trafficability and unmatched comfortability. T h e m o t o rc y c l e a l s o comes with a basic kick startup system, a high strength light aluminum alloy wheels that resist road impacts thus making the motorcycle safer than the old-fashioned wire wheels fitted to other motorcycles in the commercial motorcycle (taxi-model) market segment. This allows the working commercial motorcycle riders to save more money as they pay less for maintenance. This success story of motorcycle business cannot be complete without an excursion into the journey of Boulos Enterprises Limited (BEL) in the country. The conglomerate was incorporated in 1964 by the Boulos brothers, Anthony and Gabriel Boulos, with the initial focus of their business on trading and general www.businessday.ng

merchandise which includes distribution some motorcycle brands from Western Europe. With the passage of time and in order to realign their business strategies, the duo reviewed their product lines and thereafter took a strategic decision of focusing on promoting Suzuki and marine outboard motors from Japan, and Haojue brands of motorcycles. Boulos Enterprises Limited has since remained a leading motorcycle and outboard motors assembling and distribution company in Nigeria. The growth in Suzuki motorcycle business stimulated the company to establish the

first assembly plant at Oregun, Ikeja in 1969. The ban on fully built motorcycles gave the company the impetus to embark on establishing a manufacturing/assembly plant considering the bright future of automobile business in Nigeria. Following evolving trends and level of technology, BEL embarked on construction of a phased integrated motorcycles manufacturing complex at its present 25 acres plot at Ogba industrial scheme Ikeja, with an installed capacity of 150,000 units of motorcycles assembling yearly on a single 8-hours shift per day.

‘’I have insisted that a special task-force be set up to make sure Apapa station is completed same time as all the others. If you see the station at Olodo, there are improvements; they finished flooring, roofing, lighting, ceilings; just doors and windows left. Again, what is left at Kajola is just painting. There is improvement in Olodo and Ebute-metta. And to that extent, the upcoming Apapa station should not be left out’’. He noted that much work has not been done on the Apapa station because the building of the station just commenced, and called on the project managers to finish all the stations at same time. Amaechi also disclosed that the contractors were expecting more engineers on site to speed up construction’. “The only station in which I am not satisfied is this last station in Ibadan. However, they have given us the following targets that by end of September, three stations will be ready; end of October, all the seven minor stations will be ready while by end of December, everything will be ready,” he said.

Mitsubishi Pajero production ends in 2021 ...But Massilia Motors assures of after-sales support in Nigeria

MIKE OCHONMA

fter a successful 39 years run with more than 3.3 million global sales, and with production of the legendary Mitsubishi Pajero ending stopped by 2021, gradually leaving the stage for the now popular Pajero Sport, Massilia Motors, distributors of Mitsubishi Motors in Nigeria has assured that it will still back up the model with quality aftersales support in terms of service and genuine parts. General manager, Massilia Motors, Olatunji Itiola stated that though Mitsubishi Motors Corporation has announced the end of production of the model next year, the Pajero will still be available for purchase till end of 2021 due to popular demand.

According to him, “We assure all our Pajero customers that Massilia Motors, known for its pedigree in after-sales backup, will continue to support the legendary Pajero with quality service and genuine spare parts.” To reaffirm Massilia Motors as a trust worthy and reliable company in the provision of quality goods and reliable services, Thomas Pelletier, group managing director/country delegate of CFAO in Nigeria was recently recognized by the BusinessDay newspaper and Nigerian Stock Exchange (NSE) with the Next Bulls Award. Next Bulls Awards celebrates private companies for their impressive growth, market reputation, regulatory compliance, and world-class corporate values.

Qualifiers emerge in children’s Toyota Dream Car Art Contest MIKE OCHONMA

i n e c h i l d re n h a d emerged in the 2020 Toyota Dream Car Art Contes held in Lagos before the outbreak of the coronavirus on February 29, 2020 when accreditation for the annual event and the actual contest held. This year’s event attracted children from different schools to share their concepts about the future of vehicular mobility by drawing their dream cars in the contest. The contest comprises of age categories 0-7 years, 8-11 years and 12-15 years. A total of 850 children participated in the contest, and

three (3) winners emerged from each category, making nine (9) winners in all that emerged winners after the rigorous assessment of entries. All the winning entries were judged based on the originality, creativity (the big idea behind the drawing), environmental friendliness, safety and futuristic concept in their drawings. The Nine (9) winners were invited to the award of prize and certificate at Toyota (Nigeria) Limited corporate headquarters on Lekki amid strict observance of Covid-19 regulations with 20 persons in attendance on August 21, 2020. In attendance with their parents are winners that each of went home with lap-

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tops, other corporate gifts and fidence of these budding most importantly certificates. artists and future leaders in Toyota Dream Car Art the creative world, assuring Contest is a CSR initiative of that Toyota will continue to Toyota Motor Corporation organize the contest annually Japan to develop the innate as long as it remains relevant artistic talent in children and to its CSR objectives. to cultivate an enduring relaIn response, Esemudje, tionship with them. Toyota one of the parents, thanked distributors and dealers alike the organizers on behalf of the globally have keyed into this entire winners and expressed initiative because of its ac- his gratitude to Toyota (Nigeceptance and impact on chil- ria) Limited for the opportudren’s psyche the world over. nity given to their children to B u n m i O n a f o w o k a n , exhibit their talents. general manager, corporate He said the event would services of Toyota Nigeria leave an indelible and sweet Limited welcomed everyone memory in the minds of the and encouraged winners to children and encouraged continue to showcase their TNL to continue this laudable God-given talent. positively. project which he described as He added that the plat- an unforgettable experience form will help build con- for the children. @Businessdayng ???????

Wednesday 23 September 2020

BUSINESS DAY

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Wednesday 23 September 2020

BUSINESS DAY

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Wednesday 23 September 2020

BUSINESS DAY

Live @ The Exchanges MTNN, others seen drive Nigeria stock market’s N43bn gain Iheanyi Nwachukwu

nvestors at the Nigerian stock market booked about N43billion gain on Tuesday September 22 as investors raised bets on stocks like MTNN, Red Star Express, Dangote Sugar Refinery and FBNH. The Nigerian Monetary Policy Committee (MPC) in its fifth meeting in 2020 considered amongst other things, developments in the global and domestic economy and decided to cut its benchmark interest rate to 11.5 percent, from 12.5 percent since May 2020. The CBN, however, re-

tained the Cash Reserve Ratio (CRR) at 27.5 percent and Liquidity Ratio at 30 percent. By vote of three members, the MPC adjusted the Asymmetric Corridor around the MPR to +100/-700 basis points, from +200/-500 basis points. The share price of MTNN increased most, from N120.1 to N123, adding N2.9 or 2.41percent. It was followed by that of Red Star Express which moved from N2.96 to N3.25, adding 29kobo or 9.80percent. Dangote Sugar Refinery also advanced from N12 to N12.1, up 10kobo or 0.83percent. FBN Holdings moved up from N4.9 to N5, up by 10kobo or 2.04per-

cent. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.31percent on Tuesday September 22 to 25,654.90 points from preceding day’s low of 25,574.35 points. The market’s negative return year-to-date (YtD) decreased to -4.42percent. Also, the value of listed stocks on the Nigerian Bourse increased by N43billion to N13.407trillion as against preceding trading day’s low of N13.364trillion. In 3,254 deals, investors exchanged 262,046,333 units valued at N4.399billion. Zenith Bank, FBN Holdings, Transcorp, FCMB, and GTBank were actively traded stocks.

FG lists benefits of Vitapur systems house Iheanyi Nwachukwu

he Federal Government has reiterated its commitment towards boosting foreign exchange (FX) earnings for Nigeria, as it inaugurated Systems House of Vitafoam Nigeria Plc’s subsidiary, Vitapur Nigeria Limited in Lagos. The Government also assured manufacturers in Nigeria of enabling environment that will enhance their global competitiveness, especially through fiscal incentives. In his keynote address at the inauguration of Vitapur Systems House, the Honourable Minister, Federal Ministry of Environment, Mohammad Abubakar explained that the project was designed to phase out Ozone Depleting Substances and mitigate climate change. Abubakar stated that the technological innovation had potential to enhance Nigeria’s foreign exchange earnings among others. “Availability of Ozonefriendly and Low Global Potential blowing agents in the production of rigid foam. Generation of foreign exchange for the country from export of Methyl formate and foreign exchange savings from local production. Building of local capacity in the formulation of Methyl formate-based systems

and consequently generating employment and wealth. The Methyl formate systems will serve as source of raw material to ice making machine manufacturers. The project will lead to increased capacity utilization in enterprises that will be using the Methyl formate being produced by Vitapur”, said Abubakar. In his welcome address, Vitafoam’s Group Managing Director and Chief Executive Officer, Taiwo Adeniyi expressed optimism that the collaborative efforts of the government through its agencies such as United Nations Development Programme (UNDP) and United Nations Industrial Development Organisation (UNIDO) had largely accounted for the success of the project. Adeniyi, however urged the government to create enabling environment for manufacturers to enable them compete favourably in the global space. “I will like to crave the indulgence of the Honourable Minister to use your good office in engendering government policies that will foster an enabling environment for private entrepreneurs to set up Sandwich panel production lines across the six geopolitical zones in Nigeria. For example, the current tax regime that subjects one of our major materials (prepainted galvanized induced steel) to 5percent import levy

and 40percent Customs duty while imported insulated panels are granted import levy and Customs duty waiver is a major disincentive to local manufacturers. This has a huge impact on our cost of production and ability to compete with imported finished products. “In addition, I will like to advocate speedy approval for the commencement of HPMP phase II with Vitapur and outright ban on importation of ODS PU chemicals and products into Nigeria to encourage local production”, Adeniyi said. Responding, Abubakar pledged federal government’s determination to create enabling environment for manufacturers In Nigeria as they occupy critical segment of foreign exchange earnings. Vitafoam’s Chairman, Bamidele Makanjuola assured the federal government that Vitafaom and its subsidiaries would continue to strive towards generating foreign exchange for Nigeria. He stressed that Vitapur had blazed the trail of leveraging panels to build schools across Nigeria, especially, in the northern part where panels insulate the buildings from heat. The heart of the inauguration ceremony was a brief facility tour by the Minister, his entourage and other dignitaries.

NSE lists United Capital Plc N10bn 5-year bond Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) on Tuesday September 22, 2020 listed on its Daily Official List the United Capital Plc N10billion 5-year

bond. At a coupon rate of 12.5percent, the senior unsecured fixed rate series I bond is due 2025. It is under the company’s N30billion Debt Issuance Programme. The bond offer had opened on May 4, 2020 and

closed on May 15, 2020. The stockbroker to the bond offer is United Capital Securities Limited. The coupon is paid semiannually and payable in arrears on November 28 and May 28 of each year up to and including the maturity date.

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Tuesday 22 September 2020

BUSINESS DAY

NEWS

Unstable fiscal regime stifling Nigerian petroleum industry - Mele Kyari OLUSOLA BELLO

L-R: Chantelle Abdul, MD/CEO, MOJEC International; Olalere Odusote, commissioner for energy and mineral resources, Lagos State, and Enobong Ezekiel, chief commercial officer, Eko Electricity Distribution Company, at the just concluded Lagos Smart Meter Hackathon, in Lagos.

FG defends controversial water bill, says no hidden intentions ONYINYE NWACHUKWU, Abuja

inister of information and culture, Lai Mohammed, and his water resources counterpart, Suleiman Hussein Adamu have defended the controversial National Water Bill 2020, insisting that it has no secret intentions as being widely contended. Addressing a joint news conference Tuesday in Abuja, the two ministers particularly dismissed widely-held views that the National Water Bill would cede a vast swathe of land along river banks to herdsmen, and encourage the widely rejected Rural Grazing Area (RUGA) programme of government. The ministers also insisted that the bill did not in any way affect land ownership. Their clarifications fol-

lowed controversy that has trailed the National Water Resources Bill 2020, which is currently making its way through the National Assembly. Critics have, among other things, accused the Federal Government of having a hidden agenda by pursuing the bill. Lai Mohammed explained that there was nothing new about the National Water Resources Bill because it is an amalgamation of Water Resources Laws that have been in existence for a long time. The laws include; Water Resources Act, Cap W2 LFN 2004; The River Basin Development Authority Act, Cap R9 LFN 2004; The Nigeria Hydrological Services Agency (Establishment) Act, Cap N1100A, LFN 2004; as well as the National Water Resources Institute Act, Cap N83 LFN 2004. He said the laws were being re-packaged to incorporate necessary modifications in

line with current global trends as well as best practices in Integrated Water Resources Management (IWRM). “The overall objective of this amalgamation is the efficient management of the Water Resources Sector for the economic development of Nigeria and the well-being of its citizens,” Mohammed clarified. According to him, “the bill provides for professional and efficient management of all surface and ground water for the use of the people (i.e. for domestic and non-domestic use, irrigation, agricultural purposes, generation of hydroelectric energy, navigation, fisheries and recreation). The bill, the minister also said “will ensure that the nation’s water resources are protected, used, developed, conserved, managed and controlled in a sustainable manner for the benefit of all persons.” Reacting particularly to

criticisms that the bill was aimed at taking the resources of a certain part of the country for the use of herders, meaning the Federal Government could be seeking to implement RUGA by subterfuge, the minister explained, “This is not the intent of the bill and it is not even possible, as the bill reiterates the fact that land can only be acquired by any of the institutions established in accordance with the Land Use Act. “Some say it is RUGA, and we are saying that this bill was in National Assembly since 2008, and RUGA didn’t come into being until 2019. “For God’s sake let us have a free mind about this country and it gives some credit to those who are running the government,” he urged. Critics also contend that with the bill, the Federal Government is poised to take over the nation’s water resources by licensing and commercialising the use of water.

Experts call for optimisation of Nigeria’s Enugu entrepreneurial development gain traction as SME Centre concludes first Hackathon series blue economy to spur growth GBEMI FAMINU

conomic experts have emphasised the need to optimise Nigeria’s blue economy- using ocean resources for economic growth, in order to spur growth and development, especially in the investment space. This, they noted, would also help to reduce the reliance on oil as an economic determinant. Speaking at the pre- Nigerian Economic Summit (NES26) webinar themed “Investment Opportunities in Nigeria’s Blue Economy” hosted by the Nigerian Economic Summit Group (NESG) on Friday, September 18, Rotimi Amaechi, minister for transportation, said that the Covid-19 pandemic created a sense of urgency for new development and the blue economy represents a beacon of hope for rapid growth to Nigeria. The NES26 is scheduled for

October, 2020. The minister, represented by Paul Adaliku, a director in the federal ministry of transportation, decried the loss of $10 billion annually to illegal fishing while the dumping of toxic waste and indiscriminate use of plastics continue to hinder the growth of Nigeria’s maritime economy. “The Nigerian blue economy is an emerging economy and its sustainability will need institutional support and logistics from the ministry of transport to setup implementation frameworks to attract investments and track the socio-economic impact of these investments for the benefit of the people. The ministry is ready to mobilise players in the maritime sector and other institutions for optimisation of the blue economy in order to support new growth for the coastal and sea economies,” he said. www.businessday.ng

OBINNA EMELIKE

he Enugu SME Center has successfully concluded the first edition of its Hackathon Series, a quarterly series in partnership with the private sector to bring the ideas of the teeming youth of Enugu State to the limelight. The first series of the initiative, which started with online registration on July 7,2020 with focus on project themes around agriculture, education, healthcare, small business tools and other use cases & services, brought together over 300 teams, which was screened down to 25 considered disruptive and later to Top 10 marked marketable. However, at the final stage of the challenge, which held at Hotel Sunshine, Enugu on September 11, 2020, the top 10 projects were further pruned to top 3 by the judges, which included members from public and senior private sector executives from School of Enterprise Develop-

ment, Lagos Business School, and Geneysis Tech Hub. The top three projects include; Creation Energy, project that converts cassava waste to electricity; Teen Coding Hub, which teaches kids and teens how to code and Green Axis/ Cosmos Automation, which recycles waste into raw materials for manufacturing firms/ an automated irrigation system.

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I, formerly known and addressed as Fadairo Olusegun Adesanya now wish to be known and addressed as Fadairo Olusegun Gabriel. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Eki Felix Emoavusi now wish to be known and addressed as Eki Felix. All former documents remain valid. General Public please take note.

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aving waited endlessly for the Petroleum Industry Bill to be passed, Mele Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC), has cried out, saying that the absence of a stable fiscal environment was inhibiting the growth of the Nigerian petroleum industry, especially the upstream sector. Mele Kyari, who stated this while playing host to members of the House of Representatives committee on Petroleum Resources (Upstream) during oversight visit to the corporation recently, said international investors were losing confidence in the nation’s oil and gas industry and tasked the lawmakers to act fast and arrest the situation. “We need to act quickly to move from this unstable situation to a very stable one and the only way is for us to get the Petroleum Industry Bill (PIB) to work so that countries and investors can work with us,” the GMD stated. He said foreign capital was needed in the upstream sector and that the only way to attract it was to have stable laws and a friendly business environment that could guarantee cost recovery and a decent return on investment for investors.

He disclosed that the uncertainty in the sector created by the long delay in the passage of the PIB has led to a number of divestments from the country in the recent past. The GMD also stated that the drive by the management of NNPC to entrench the culture of transparency in the corporation has improved its business fortunes and creditworthiness as lenders are now willing to grant credit to it. Chairman of the committee, Musa Sarki Adar, expressed the readiness of his committee to provide the necessary support for the corporation to discharge its duties without hindrance. He acknowledged the corporation’s efforts at deepening transparency and accountability, stressing that the committee was impressed with the level of professionalism exhibited by the NNPC management and the leadership role played by the GMD in rallying the oil and gas industry to provide support for the Federal Government’s fight against the Covid-19 pandemic. In a presentation, the managing director of the Nigerian Petroleum Development Company (NPDC), Mansur Sambo, said the company has increased its gas production to 860mmscf/d and is now the largest supplier of gas to the domestic market.

Shell to continue operations in Nigeria despite cost-cutting plans DIPO OLADEHINDE

oyal Dutch Shell has its sights still trained on Nigeria, despite announcing plans to slash as much as 40 percent of its upstream oil and gas operations in a bid to redesign its business toward a greener portfolio. Shell will reduce its upstream oil and gas expenditure to focus on just key assets in Nigeria, Gulf of Mexico, and North Sea, according to Reuters’ sources. “We are looking at a range of options and scenarios at this time, which are being carefully evaluated,” a spokeswoman for Shell told Reuters, confirming that the group is undergoing a strategic review of the organization and its operations. BusinessDay reported

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in July that Shell warned in its second-quarter 2020 outlook that it could write down between $15 billion – $22 billion in post impairment charges in second quarter 2020, due to the heavy effect of the pandemic in their business. Shell had earlier this year shocked investors by cutting the dividend by 2 thirds for the first time since World War 2. Shell pioneered Nigeria’s oil and gas industry and remains a major investor in Africa’s biggest oil producing country.

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I, formerly known and addressed as Nwaokoro Ogechi Joy now wish to be known and addressed as David Ogechi Joy. All former documents remain valid. General Public please take note. CORRECTION OF NAME This is to notify the general public that my name was wrongly written as Mesaq Tomilayo on my BVN instead of my correct name Akinwuyi Mesaq Tomilayo. All former documents remain valid. General public should take note.

Wednesday 23 September 2020

BUSINESS DAY

news FINANCIAL REPRESSION SERIES

Have stocks gained from Nigeria’s... Continued from page 1

ations and respite was restored in the market, improving the Nigerian Stock Exchange’s (NSE) year-todate (YTD) performance to -4.42 percent as at close of market Tuesday.

The recovery of stock prices, not withstanding, has been slow as foreign investors shy away from the Nigerian equity market due to shortage of dollars. But for the dollar shortage, stocks may have benefitted more from the low returns on fixed income assets. The foreigners who tend to drive activity on the stock market have abandoned the market and the result has been obvious. Analysis of the domestic and foreign portfolio participation of the Nigerian equity market reveals that since November, the share of domestic transactions has outpaced foreign transactions monthly. In the 10 months through July 2020, the share of domestic transactions – retail and institutional – in the equity market averaged 57 percent with foreign transactions at 43 percent. While domestic transactions on the local bourse have grown at a compounding average of 2 percent since October 2019; foreign transactions have declined, similarly, at -11 percent. “The financial repression policy in Nigeria has influenced activities on the local bourse as domestic investors have the controlling share of activities,” Gbolahan Ologunro, a Lagos-based equity analyst with CSL Stockbrokers, told BusinessDay. Similarly, Oscar Onyema, CEO, NSE, said in one of his presentations to clients that, “as expected, domestic partici-

pation in the Lagos bourse has seen an uptick from 40 percent to 61 percent.” Onyema said the increased participation of local investors in equities was due to the lowinterest-rate environment, which had positioned the exchange as a viable market for the destination of private capital. While the repression policy of the CBN may have increased domestic participation on the local bourse, it has also to an extent compulsorily exposed domestic investors to the high risk in the stock market amid the choice of settling for low yields or potential high returns in a risky market. Prior to the policy, domestic investors were yet to recover from the 2008-2009 global financial crises that saw the NSE shed as much as 70 percent in value between March 2008 and April 2009. The crisis was particularly painful. Some retail investors even suffered strokes due to loss of investments. This is because the financial fortunes of many retail investors are tied in some way to the market, either directly through investments or indirectly through the pension funds. Since then, domestic investors’ exposure has been redirected to fixed income securities that are riskfree and assure a fixed return. According to Ologunro, the initial reaction to the steep decline in yields was evident in the share price of bellwether stocks; however, the gains have been wiped out almost completely by the global pandemic. For example, domestic investors who took positions in Nigerian tier-one banks, which most analysts will regard as safe bets for investors, would have had their value eroded by at least 19.3 percent year-to-date.

Interest rate cut to 11.5% means more liquidity... Continued from page 2

isting market rates – correcting what previously looked like a bigger mismatch between the policy rate and market interest rates. However, with banks still likely to face an upper limit of N2 billion, as the amount that can be placed with the CBN, this will force banks to do something else with any additional liquidity, Khan said. Bismarck Rewane, managing director, Financial Derivatives Company Limited, does not believe that the reduction in interest rate will not lead to a weakness in the currency because the currency values have been held very strongly by inflows of foreign portfolio investments and some borrowing. “My view is that there will be some stalking of inflationary pressures. I think that the Marginal Propensity to

Save (MPS) will be reduced, so national savings to GDP will come down and the international flows will also be negatively impacted. “The CBN was between a rock and a hard place. The most important thing would have been to hold at this time to allow these things to materialise. So, let us see if the reduction will make an impact, but I doubt if there will be a spike in credit. I doubt if it will deal with the unemployment issues in terms of materiality, and I doubt if it will ease the currency pressures,” Rewane said. Reacting to the development, Gbolahan Ologunro, a research analyst at Lagosbased CSL Stockbrokers, commented, “The recent decision by the MPC to reduce the MPR is aimed at aligning market rates with the MPR, given the current wide divergence. www.businessday.ng

Zenith Bank plc bled by -10.22 percent YTD, GTBank (-14.48%), Access Bank (-35.50%), UBA (-16.08%), First Bank (-20.33%), respectively. Since the pandemic hit Nigeria, domestic investors have also applied caution, following steps of foreign investors in the local bourse. Data from the NSE reveal that total domestic transaction slumped to N68.62 billion in July 2020 from N132.69 billion in March 2020, signifying a deceleration in the volume of transactions executed by domestic players since the economy got hit by the twin shock i.e. health shock and oil price slump. Sadly, despite the gradual easing of lockdowns, recovering oil price and reopening of economies around the world, foreign investors have not returned to the Nigerian equity market despite low valuation of fundamentally sound stocks. The average Price to Earnings ratio of Nigerian stocks is around six times, less than half of the frontier market average of 14 times. The dollar management policy of the CBN and the slow process of unifying the multiple exchange rates in the market have kept foreign investors off the shores of Nigeria, and weighing on loss reversals in holdings of domestic investors. “We will continue to record low transactions from foreign investors in the NSE until the CBN takes the bold step of unifying the exchange rate,” an economist who pleaded anonymity told BusinessDay. “The costs of the CBN’s obsession with naira and reluctance to unify the exchange rates as suggested by the respected international bodies outweigh whatsoever benefit the CBN perceives,” the economist said.

“More importantly, this corroborates the apex bank’s agenda in stimulating credit creation in the economy through reduction in lending rate amid declining output. Recall the CBN reduced the interest on savings deposit to 10 percent of MPR from 30 percent in order to drive down cost of funds for DMBs and in turn support lower lending rates. “With this decision, the interest rate on savings accounts will trend further downwards. However, this may not translate into any meaningful improvement in loan creation in the economy, as banks will likely remain cautious in expanding their loan book due to the multiplicity of headwinds in the operating environment.” The CBN on September 1, 2020, ordered all Deposit Money Banks to review interest rates on savings accounts to a minimum of 10 percent of the MPR. Omotola Abimbola, a mac-

PFAs face ‘reinvestment risk’ due to the negative real interest rate

Real return on assets has remained largely below inflation after a policy by the Central Bank restricted non-bank domestic investors from investing in short-term OMO bills. In this interview, YEMI SADIKU, head, investment, AIICO Pensions, speaks with MICHAEL ANI on the implications of this policy on pensioners’ fund, savers and the economy. Excerpt:

Yemi Sadiku

ow is the financial repression in the country affecting pension

funds? The way it will impact on pension funds is the reinvestment risk going forward. Before, we could do CBN OMO at relatively high rates, but now, we cannot do OMO anymore. Even though the one-year OMO now is offering about 9 per cent. The one-year treasury bills which we can invest in are offering about 3.5 per cent. As our OMO that we have matured, we need to look for where to invest that money but we definitely cannot go to the Treasury market anymore because the rates are low. The bond market that we would have gone to, the rates are also very low. Unfortunately, there is nowhere we can go. That was why I said Reinvestment risk is what is going to affect us going forward. For this year, a lot of the

PFAs that classified their bonds available for sale, it will look like they have outperformed everybody else because offcourse as yields continue to go down, the prices of those bonds will continue to go up and vice versa. So if they sell today, they will make a killing, however, next year, there is nothing they can do next year. That was why I said it is the “reinvestment risk” going forward. Where are the investment opportunities for PFAs amid this current environment of low yields on government securities? With the maxim of higher risk higher returns, PFAs may have to take on more risk to improve their portfolio returns. With almost 70 per cent across the industry invested in FGN instruments, returns will be challenged as the FGN continues to drop its borrowing rates in its drive to manage its Debt Service to revenue ratio.

FG looks inward to upturn dwindling ... Continued from page 2

continued reliance on highly volatile oil revenues would mean sustained instability in expenditure caused uncontrollable exogenous global price, and that revenue generation by the Federal Government Owned Entities is an important sector with huge potentials and

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possible solutions to drop in oil revenue. She cited an IMF survey that showed that the combined revenues from the entities far exceed Federal Government entire budget. “It is in this light that the deployment of the Treasury Directors is considered expedient to the selected FGOEs as a pilot test in 10 agencies, includ@Businessdayng

Private Equity investments may be a veritable avenue to provide these higher returns, even though the choice of the fund manager is very important just as well as the sectors to be invested in and the gestation period of such PE investments. Listed equities would typically provide immediate yield upticks but this sector has also been challenged in recent times, thus driving PFAs to manage the downside risks of their investment in listed shares. What impact does the reinvestment risk faced by PFAs have on pensioners? With almost 70 per cent of Retiree Funds across the industry invested in FGN instruments, the impact would only be significant in the short term depending on how the manager has structured his portfolio in terms of what’s held to maturity or available for sale and the tenors of such instruments. Retiree Funds are hardly invested in volatile variable income instruments and have to hold a significant holding in bank placements to accommodate liquidity needs of the retirees/pensioners. What impact does it have on the economy? The declining rates may force “savers” to invest in Entrepreneurship, while also providing cheap loans to consumers and the real sector which should ultimately jumpstart the economy for greater growth. What impact does it also have on the growth of the pension industry? The Pension industry may suffer an initial short term decline in returns on a portfolio as rates decline, but with the impact of improved activity in the real sector, it may increase the number of contributors in the pension industry which should hopefully increase the volumes contributed monthly.

ing the Nigeria Ports Authority (NPA), Department for Petroleum Resources (DPR), Nigerian Communication Commission, Nigerian National Petroleum Corporation, Nigerian Maritime Administration and Safety Agency, Federal Inland Revenue Service, Nigerian Shippers’ Council, Nigerian Customs Service, Corporate Affairs Commission, Federal Airports Authority of Nigeria.

Wednesday 23 September 2020

BUSINESS DAY

News Skyrocketing prices shift consumer taste... Continued from page 2

an 18.5 percent decline to N15.9 billion from N19.5 billion, while PZ Cussons saw marginal 0.6 percent decline in its third quarter of 2019/2020 (nine months ended February 2020) period. “As things stand, we expect this will negatively impact revenue of consumer companies with very elastic product portfolios and presence of higher premium products in their product mix,” Ayorinde Akinloye, a consumer analyst at CSL Stockbrokers, says. Earlier in September, the Federal Government had removed subsidy on petrol, and increased electricity prices across Nigeria, with the retail price of petrol increasing 10 percent to about N160 per litre. The transition to a service-reflective regime in which electricity tariff will be consumption-based for customers enjoying grid supply for at least 12 hours each day, is expected to exacerbate inflationary pressures for the rest of the year. The effects on households are already telling, no thanks to drop in income levels due to the effects of Covid-19. “I have not been paid since June. And for my family to survive, we had to cut down on our expenses to the barest minimum.” Ayodele Shittu, a lecturer in one of Nigerian public universities, tells BusinessDay. Shittu further says he has reduced the quantity of loaves of bread and snacks he buys every day for the children. For consumer goods makers, especially those

offering goods on the higher end of the market, sales are expected to drop. “I think it will be a tough one for premium brands producers as it would put more pressure on their sales revenue,” Damilola Adewale, a Lagos-based economic analyst, states. Industry players in the consumer goods sector have been facing myriads of challenges from fragile economic growth and unfavourable protectionist policies of government such as border closure, foreign exchange restriction for food imports and 7.5 increments in Value Added Tax, analysts say. About 82.9 million Nigerians are extremely poor, constituting 40.1 percent of the total population with real per capita expenditure below N137,430 in 2019, according to the National Bureau of Statistics’ (NBS) Poverty and Inequality report in May 2020. The World Bank predicted that there would be 95.7 million Nigerians living below the poverty line by 2022. The present negative growth recorded in the second quarter of 2020 shows that the economy is in critical dire straits as it is confronted with three critical macroeconomic issues (soaring unemployment, rising consumer prices and economic downturn). “To reverse the trend, policies to grow the economy and put money in the hands of Nigerians are a must. The country must address issues of unemployment now at 27.1 percent and at the same time ensure policy costs do not exceed benefits to households and businesses,” Adewale advises.

More trouble for business travellers ... Continued from page 2

UAE airline, is quite commendable. The government is protecting the interest of the people. It may cause temporal pains for us but it is in the interest of the citizens of Nigeria. “Emirates connect passengers to 180 destinations across the world and Nigeria constitutes one of the highest passenger traffic for the airline. The decision is indeed affecting the airline and I am sure very soon, it will be resolved,” Bankole states. Before the resumption of international flights, the Nigerian government released a schedule for airlines to operate from Nigeria. From the schedule, Emirates is supposed to operate 12 weekly flights, which constitutes

about two daily flights from Lagos and Abuja, apart from Tuesdays and Saturdays, which are one daily flight from Abuja. The airline, supposed to carry an average of 200 passengers on each flight, is losing revenues accrued to processing 400 passengers on a daily basis. Wi t h a n av e ra g e o f between N200,000 and N250,000 as cost of flight ticket per passenger on each flight, the airline may be losing between N80 million and N100 million on the two daily flights. However, Emirates Airline on Saturday said it was working closely with the Nigerian and the UAE governments on the ban and would give updates on the progress of talks between the two as soon as possible. www.businessday.ng

R-L: Tunde HassanOdukale, MD/CEO, Leadway Assurance; Adetola Adegbayi, executive director, Leadway Assurance; David Alao,CEO, Leadway Asset Management; Aderonke Adedeji, MD/ CEO, Leadway Pensure; Ayodeji Wuraola, MD/CEO, Leadway Capital and Trusts, and Oye Hassan-Odukale, immediate past MD/CEO, Leadway Assurance and current chairman, Leadway Holdings, at the official unveiling of the 50th anniversary logo of Leadway Assurance Company Limited in Lagos, yesterday. Pic Olawale Amoo.

Nigeria, states cannot deliver development ... Continued from page 1

keynote address at the fifth edition of the Kadinvest, a platform for demonstrating that Kaduna State is open for business organised the state government, on Tuesday, used practical examples to highlight how poor economic policies by various governments, an overdependence on crude oil and a consumption mentality had led the country to the edge of economic disaster.

Sanusi noted that Nigeria’s nominal GDP per capita was $2,400 in 2019 while tax revenue per capita was $75 and development spending was $36 per capita at the federal level. This compares poorly with Kenya, where GDP per capital was $2,151 roughly 90 percent of Nigeria’s per capital GDP in the same year. Yet Kenya was able to raise $280 per capital and invest the $280 per capita on development. So, Kenya which has 90 percent of Nigeria’s per capita GDP was able to realise four times as much in tax per capita and spend seven times as much per capita on development than Nigeria. “These numbers are extremely important when we begin to hope the Federal Government can give us development,” Sanusi said. Sanusi, an economist and Islamic scholar, noted that for the Federal Government to get to the point where Nigeria was anywhere near what Kenya had done, the government had to multiply its tax revenue per capita four times and also multiply its development spending seven times. “How long does the country have to wait for the government to raise its revenues and make these investments? “I think we should be honest in the short and medium term and realise that the abil-

ity of government to steer the country into development is limited in terms of spending, and its best option is to spend a lot of time on business environment reform and invite private sector investment into these areas,” the former emir said. The Buhari-led government has created a hostile environment for private capital through the connivance with the CBN, and has refused to float the naira but has kept managing the rates even when the assumptions are unsustainable thereby deterring investors unsure of how to recover proceeds of their investments. Nigeria’s ports are problematic and the country has worsened the situation by shutting its borders for the past one year, even though its economy is highly informal, ruining hundreds of small businesses who rely on cross-border trade. It has also created disaffection with its neighbours, endangering the AfCTA pact it signed with the rest of Africa. With a poor manufacturing base hampered by high cost of selfgenerated power, inadequate infrastructure and poor access to capital, border closure has only increased poverty, analysts say. These policies have kept away investors despite proactive laws including the Finance Act 2019, the new Companies and Allied Matters Act, 2020, and the Federal Competition and Consumer Protection Act (FCCPA) 2019, designed to stimulate investments. Furthermore, Sanusi said states needed to work harder as only two states in Nigeria collect enough revenues to meet overheads, saying there was need to fix issues of multiple taxation, who collects what taxes between Federal and state governments and constraints including legal, political and institutional, otherwise states cannot be relied upon to finance de-

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velopment. Why have we not made progress? According to Sanusi, history tells us about potential solutions to current period of stagnation. Before there was oil and Chinese loans and independence, Nigeria’s economy was better diversified and was consistently in a trade surplus for over 80 years before independence, except in 15 years. He attributed this to dynamism in trading sector and diversification of the country’s export base. “We had rubber, cocoa, palm oil, Ivory, palm kennels, cotton, and diversity meant that the country was less vulnerable to attempts at trade shocks driven by only one export,” Sanusi said. This changed in the early 70s with the ascendancy of crude oil and its attendant boom and bust when Nigeria began to rely exclusively on crude and ignored other commodities. “As we know from development theory, over the long term, trade shifts against primary exporters and companies operating on the global scale needs to move away and diversify to not just its product base but diverse from primary production to secondary and tertiary sectors,” he said. Nigeria failed at this. Not only did it not fail to diversify its expert earnings, it did not even add value to the crude oil as its refineries were left to rot away by various governments. The former emir compared Malaysian economy with Nigeria’s over a 30-year period (1985-2015). Malaysian exports have transformed from rubber, cork and wood and nonferrous metals accounting for 60 percent of its GDP to electric machine apparatus, office machines and automatic data processing equipment, telecoms, and product manufacturing, representing 60 percent of its exports in 2015. “All those sectors contributed barely 2 percent of exports, and GDP per capita increased from $310 to $4,305. There was growth and diver@Businessdayng

sification into higher value areas of the GDP,” Sanusi said. Nigerian exports between 1985 and 2015 remained stagnant at crude petroleum and oils obtained from bituminous materials, which accounted for 89 percent of exports in 1985 and 77 percent of exports in 2015. In this 30-year period, Nigeria has generated a similar increase in wealth $345 to $2,655 (GDP per capita) with Malaysia but without any structural transformation in what the economy actually produced. Malaysia started from a lower GDP per capita of $310 to over $4,000. “When you add inflation and devaluation and begin to look at purchasing power parity, Nigeria’s GDP per capita numbers actually look inflated,” he said. This is the difference between Nigeria and the Malaysia, he said, noting, “This is because we were growing but we did not diversify and that explains the huge levels of poverty in the country. It explains the huge levels of inequalities in the country; it explains the vulnerability of the economy to shocks, in terms of trade and the relatively slow pace of growth in the Nigeria.” He deplored the rampant consumption culture that does little to promote production. Using the smartphone as an example, he said Nigeria was a consumer of technology with millions of dollars’ worth of investments in towers’ broadband and internet but has made little use of it for production. “The problem is that we have all these investments in technology without investing in the human capacity to use the innovation,” he said. “There is enough investment in towers and networks and broadband, but what can Kaduna State do to produce young people who know better than to forward gossips on WhatsApp,” he asked before an audience comprising the governor, his cabinet, and several dignitaries.

Tuesday 22 September 2020

BUSINESS DAY

NEWS

NEXIM urges S/South budding exporters to tap into N50bn export fund IGNATIUS CHUKWU, PORT

igerian Export and Import Bank (NEXIM) is pushing entrepreneurs and budding exporters in the South-South zone to tap into its N50 billion non-oil export support fund and join other parts of Nigeria to become viable exporters in the sector. This is also as the Nigerian Export Promotion Council (NEPC) continues to coach

young entrepreneurs from the zone on how to secure export licenses and certification needed to become exporters. BusinessDay learnt that over 1000 small businesses have so far benefited from the non-oil export fund while Small and Medium Enterprises (SMEs) have made it into the Central Bank of Nigeria’s (CBN) top 100 non-oil exporters. The funding aspect was simplified by a NEXIM official, Obol Effem, during a

presentation at a seminar in Port Harcourt on the role of regulatory organisations in non-oil exports value chain on Tuesday. He noted that several products were available in the bank and that N1 billion available to each of the 36 states to identify one product where they have a comparative advantage in terms of export. This should result in 36 products that Nigeria would excel in export business.

There is also a refinancing scheme that helps NEXIM to subsidise commercial loans to exporters and fund the extra interest above nine per cent. Effem said NEXIM was dedicated to reducing the bottleneck hindering export business especially in the era of push for non-oil export. He said Nigeria was focusing on manufacturing, agro processing, solid minerals, and services sectors in the new drive, targeting the West

African market, Africa, Asia and the advanced economies. Addressing the exporters, the South-South zonal coordinator of NEPC, Joe Itah, said the intensified efforts were in tandem with the drive for export by the President Muhammadu Buhariled administration, which places emphasis on diversification of the economy through non-oil exports. He said the decision has been bolstered by the ad-

vent of coronavirus which shut down mono-product economies especially those dependent on oil, thereby exposing almost all countries of the world to new threats, risks, and deaths. A deputy superintendent of Customs, Musa Mohammed, while speaking, warned against engaging non-licensed customs agents in handling exports, and advised those interested in export to always contact the Customs.

AfCTA: OPS heightens call to strengthen MSMEs as strategic vehicle for trade HARRISON EDEH, Abuja

igeria’s organised private sector players have called for the strengthening of Micro Small and Medium Enterprise (MSMEs) in the country as Africa prepares to commit to borderless continental market come January 2021. Some organised private sector members made this submission during an interactive engagement with Wamkele Mene, the secretary general of the African Continental Free Trade Area (AfCTA) on Tuesday in Abuja.

Adetokumbo Kayode, president of Abuja Chamber of Commerce and Industry, said at the interactive forum that Nigeria’s MSME were strategic vehicle in strengthening intercontinental trade since there are several small scale businesses in Africa. Kayode said “we’re very competitive and have a large market. We must take advantage of that. Many of us are worried about the government delay in signing this pact. However, other private sector stakeholders at the forum, raised concern on security and power sector reforms

to deepen trade advantage for Nigeria businesses. “We need to develop our raw materials and make sure that we compete favourably in the AfCTA; but we must pay attention to our infrastructural deficit,”Olumide Ayodele, technical adviser to the director-general of the budget office of the federation said at the forum. Fola Aiyeola, ECOWAS international business directory and African inter business directory, urged the Federal Government to sort out security concerns and power sector reforms to ensure Nigerian has competitive edge.

Shippers’ Council to seal terminals collecting transfer charges from consignees AMAKA ANAGOR-EWUZIE

orried by the rising cost of doing business in Nigerian ports especially within bounded terminals, the Nigerian Shippers Council (NSC) has warned it would not go back on its promise of sealing off seaports or bounded terminals that are collecting charges on transfers that were not initiated by the consignee. Hassan Bello, executive secretary of the NSC, who gave this warning in Lagos on Tuesday during on-thespot assessment of Denca Bounded Terminal and Kachicares Resources Ltd., said that if goods were transferred from the seaport to off-dock terminal that those responsible for initiating the transfer must bear the cost. According to him, there must also be Standard Operating Procedure (SOP) or Memorandum of Understanding (MoU) between the seaport and bounded terminals because its current procedure was basically an informal arrangement between both parties, which is not ac-

ceptable. “The shipper cannot pay for what is not his responsibility because he has already nominated in the bill of lading, where his cargo should be consigned to. Therefore, transferring the cargo from the original terminal to another is not the responsibility of the consignee. Bello noted that if the council discovers that either the seaport terminal or bounded terminal was charging fees abolished, the port regulator would be left with no option than to take very strict measures, which include sealing of premises of the operator. To ensure operational efficiency, he said the council would be posting its staff permanently to bounded terminals to collect weekly report of charges, how long it takes a container to exit and difficulties experienced by cargo owners. “We are reviewing the operational efficiency of bounded terminals and you know the main terminals are the seaport terminal and off-dock terminals are used to decongest the seaports, and we must www.businessday.ng

ensure efficiency. Recall that in July this year, we issued some circulars which talked about two things; no cargo will be transferred to any terminal except that which has been nominated by the shipper himself. Also, all charges accruing out of that transfer should not be borne by the shipper, which is international practice and standard,” Bello explained. As regards the Denca Bonded Terminal, Bello said he was not happy with what was happening at the terminal, adding that there was about N40 million charges belonging to shippers that had not been refunded. He said that going forward they would work with Nigerian Customs to ensure proper situation, location and geographical availability to be considered before a terminal was situated. Tony Asiadiachi, general manager, Denca Bonded Terminal, said that containers transferred to their terminal come with bills such as transfer charges to cover the cost of transportation (barging and trucking) and terminal storage charges.

Seyi Makinde (m), governor, Oyo State; Femi James (l), project manager, Peculiar Ultimate Concerns Limited, and Kunle Bello (r), project admin manager, during the inspection of the ongoing reconstruction and remodeling of the Lekan Salami Sports Complex, Adamasingba, in Ibadan. NAN

Cornerstone Insurance, FRSC partner to raise awareness on COVID-19 MODESTUS ANAESORONYE

nderwriting firm, Cornerstone Insurance Plc has partnered with the Federal Road Safety Corpse (FRSC) to enlighten the public on safety measures regarding Covid-19. The insurer through its corporate social responsibility arm, Cornerstone Foundation recently donated to the FRSC 800 branded reflective jackets, 20 branded kiosks

and education fliers on Covid-19 preventive measures. From this, Lagos and Ogun got 500 reflective jackets, and 12 kiosks, while those meant for Abuja would be presented at a later date. The items were received on behalf of the FRSC in Lagos by the Imo Etuk, zonal commanding officer, Zone RS2HQ Lagos. Chidiebere Nwokocha, executive director, business development at Cornerstone Insurance, said the insur-

er’s partnership with FRSC dates back to 2014 when it embarked on ‘Safe Route to School’ Campaign, where we covered 17 local governments across the country with over 57,000 students to ensure they get to school safely. According to him, other CSR programmes with FRSC include First Aid training for schools, training for drivers, medical check-ups, and Ember month promo for commercial drivers across Lagos, Ogun Rivers, Abuja and Kano.

Corporate leaders chart path for Nigeria’s post COVID-19 economic development SEYI JOHN SALAU

orporate leaders in Nigeria will on Thursday, September 24, converged on Lagos for the 36th annual Omolayole Management Lecture (OML), to chart a path for Nigeria’s post Covid-19 economic development. This was revealed by Wale Adediran, president and chairman of council, Chartered Institute of Person-

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nel Management of Nigeria (CIPM), stating that the outbreak of the Covid-19 pandemic brought about a technological disruption in our everyday life. Themed, “Leading at the speed of technology: Implications for the corporate world”, Adediran said that the annual lecture organised by AIESEC Alumni Nigeria, was aimed at addressing contemporary socio-economic issues of both national and international @Businessdayng

concern. He said a pre lecture leadership summit centred on energy as imperative for economic development of the nation would hold to further advance the objective and proffer solution to Nigeria’s economic challenges. Busola Alofe, registrar/ CEO of the CIPM, said the lecture would bring about a renewed hope for Nigeria on how best to leverage technology to benefit the country.

Wednesday 23 September 2020

BUSINESS DAY

NEWS

FG projects N20bn revenue from lottery in 3 years JAMES KWEN, ABUJA

L-R: Jimi Lawal, chairman, Kaduna State Economic Development Council; Sanusi Lamido Sanusi, former governor of Central Bank of Nigeria, and Nasir El-Rufai, governor, Kaduna State, at the opening of Kaduna Investment Forum (KadInvest 5.0), in Kaduna, on Monday. NAN

Truck drivers pray court to stop multiple taxation by states, LGAs FELIX OMOHOMHION, Abuja

eavy Duty and Haulage Transport Association of Nigeria has approached the Federal High Court, Abuja, praying it to order the attorney-general of the federation, 36 states of the federation, and the FCT to stop multiple road blocks and collection of taxes, levies and fees from heavy duty and haulage vehicles across the country. The originating summons with reference number FHC/ ABJ/CS/1198/2020 and dated September 21, 2020 was filed by their lawyer, Abel Ozioko. Joined in the suit as defendants are the 774 local government areas in country through the Association of Local Governments of Nigeria (ALGON) and the National Freight Haulers Association. The truck drivers are asking the court to determine

whether the provisions of items 59, 62 (a) and 63 of Part 1 of the Second Schedule to the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and sections 2 (2) and 3 of the Taxes and Levies (Approved List For Collection) Act, the states and local governments are prohibited from mounting road blocks for the purposes of tax collection. The truck drivers decried extortion and harassment of their members on highways, adding that the food crisis already being witnessed in Nigeria was as a result of difficulty faced by their members in conveying food items to various parts of the country. They are seeking a declaration of the court that the defendants “are by the provisions of Sections 2 (2) and 3 of the Taxes and Levies (Approved List for Collection) Act, prohibited from mount-

ASUP urges Abia to pay Poly workers GODFREY OFURUM, Aba

he Academic Staff Union of Polytechnics (ASUP) has urged the Abia State government to at least defray 50 percent of the about N5 billion owed to the Abia State Polytechnic, in salaries and subventions. Anderson Ezeibe, president of ASUP told newsmen in Aba that the union pushed for half payment of the sum at the education summit, which ended on Tuesday, September 22, 2020. The 3-day education summit was organised by the Abia State government to find a lasting solution to the challenges facing the Abia State Polytechnic, including the non-payment of staff salary. “We seek consensus views to defray what the government is owing. The government is owing the institution N2.7 billion unreleased subventions since 2015, Ezeibe stated. “And the staffs are owed salaries put together hovering around N3 billion. The major reason salaries have not

been paid is that government has not released subventions meant for the institution. We are asking that a lump sum of 50 percent be released to the institution and the remaining 50 percent be spread across one year.” “However, there are consensus positions already and these include the fact that workers are owed 21 months’ salary arrears. Another challenge is that of frequent changes in the management of the institution. This is not in the best interest of the institution. “We also have a consensus view that people should not be imported from outside to administer the institution. If you have four out of five chief executives called to administer the institution in the last five years from outside, what kind of institution is that?, he queried. Ezeibe explained there was an agreement that a lot of programmes in the institution needed to be accredited, but stressed that the accreditation was tied to the issue of staff salaries. www.businessday.ng

ing a road block in any part of the federation of Nigeria for the purpose of collecting any form of tax, levy or fee from heavy duty vehicles and haulage drivers.” “A declaration of this court that by Section 2 (2) and (3) of the Taxes and Levies (Approved List for Collection) Act, the 4th to 41st defendants are not empowered to collect any form of taxes, levies or fees from heavy duty vehicles and haulage drivers on any federal highway or federal trunk roads in Nigeria. “A declaration of this court that the 1st plaintiff is entitled to monitor the trucks of its members transporting goods and produce on several highways in Nigeria, to ensure their compliance with all traffic regulations and to avoid diversion of their trucks. “A declaration of this honourable court that the 4th to

41st defendants are only entitled to collect tax from payable at the 3rd and 42nd defendants a single haulage fee at the state of departure and a point of loading of the goods at the point of off-loading the single haulage fee payable at the point”. They are further demanding an order restraining the defendants’ agents or by themselves, whatever name they may be called from collecting multiple taxation or further stopping or erecting or hindering any road movement whatever of the plaintiffs’ means in any part of Nigeria highway or federal trunk road in Nigeria. The plaintiffs want the court to stop the defendants from collecting for the purpose tax, levy and haulage fee from heavy duty drivers. No date has been fixed for hearing.

Autogas: FG readies plan with over 1m vehicle conversion kits for easy access HARRISON EDEH, Abuja

o address concerns around the economic impact of hike in the price of petrol, the Federal Government is intensifying efforts at making alternative fuel source available, assuring that over 1 million vehicle conversion kits would be established in the six geopolitical zones of the country for easy access to autogas. The autogas which is liquified petroleum gas, comes in form of compressed natural gas and liquified natural gas for vehicles. The government said alternative fuel has to be made available for people who cannot afford the regular petrol that currently sells around N160. The government also informed that some filling stations across the country were already keying into the plan by converting their stations to provide alternative and cheaper source of fuel to Nigerians which the CNG offers. Justice Derefaka, technical adviser, gas business and

policy implementation to the minister of state for petroleum resources, gave this assurance on Tuesday at “Goodmorning Nigeria” a Nigerian Television Authority programme monitored by our correspondent in Abuja. Derefaka said that the government was mindful of the concerns of Nigerians in calling for alternative source of fuel, noting that efforts were in top gear to ready the options with an official launch for pilot collocation and conversion centres across the country for CNG. Derefaka said the environmental benefits and affordability benefits of the CNG were huge, adding “there will be a list of certified conversion centres to be unveiled soon within the last quarter.” According to Derefaka,”what we are doing is to bring this gas for the filling stations to collocate this gas so that ordinary Nigerians can have access to this cheaper source of fuel, after he has converted his vehicle to dual fuel.”

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he Federal Government is projecting to earn over N20 billion revenue from lotteries over the next three years with the implementation of a central monitoring platform to connect all operators in Nigeria. The central monitoring platform, the government said, would help pluck leakages in the system. This is also as the minister of special duties and intergovernmental affairs, George Akume has inaugurated a ministerial taskforce for the recovery of unpaid revenues from lottery operators and permit holders from 2015. Addressing journalists after the inauguration on Tuesday in Abuja, the director-general of the National

Lottery Regulatory Commission, Lanre Gbajabiamila said Nigeria has been generating over N1 billion from lottery in the last two years as against N500 million before they came on board. “Considering what we are doing now, if we start the implementation of this central monitoring platform by the first quarter of next year, before the year is over, we will make about N8 billion and we will be making at least a minimum of N20 billion for the next two to three years”. Inaugurating the task force, Akume said given Nigeria’s current economic climate, definitive measures must be taken to boost revenue so as to fund development projects. He charged the task force to determine what funds are owed to the government from

‘N17bn judgment: Shell’s request to S/ Court to review own judgment abuse of court process’ FELIX OMOHOMHION, Abuja

ome indigenes of Ejama-Ebubu in Tai Eleme local government area of Rivers State, on Tuesday, described the application by Shell Petroleum Development Company of Nigeria Limited for the Supreme Court to review and set aside a N17 billion judgment entered against it last year as an abuse of court process. The Supreme Court had on January 11, 2019, upheld the judgment of the Court of Appeal which slammed N17 billion damages against the oil giant for oil spillage in EjamaEbubu. In a preliminary objection to the application filed by Shell asking the apex court to set aside its earlier judgment in the matter, Isaac Agbara, and others who are the respondents in the suit prayed the court to reject the application.

The respondents in the preliminary objection argued through their lead counsel, Lucius Nwosu, a senior advocate of Nigeria, described Shell’s request as scandalous and an affront on the finality of the Supreme Court of Nigeria. Nwosu, while urging the court to dismiss Shell’s application for being incompetent, submitted that the Supreme Court cannot sit on appeal in its own judgment. The senior lawyer further argued that the action of the oil giant was a deliberate abuse of court process with a weighty request based on 23 grounds. Nwosu further contended that the Supreme Court by its unanimous judgment on January 11, 2019, put an end to the over 30 years old legal tussle on the oil spillage suffered by the respondents and their people in the oil producing region.

Avale Africa, Teach for Nigeria collaborate to support struggling teachers GBEMI FAMINU

n a bid to help ameliorate the plight of Nigerian Teachers following the socio-economic impact of the Coronavirus (COVID-19) pandemic, Avale Africa’s technology platform is being used to crowdfund donations in the #NigeriansForTeachers campaign in collaboration with Teach for Nigeria. The campaign aim to reach 5,000 teachers, many of whom have had their lives disrupted by COVID-19 and challenges to salary payments by their employers. Uzo Okonkwo, the chief operating officer of Avale Africa, said the initiative plan to bring the much needed @Businessdayng

relief to Nigerian teachers, especially as school resumption draws near. “Teachers have been begging and borrowing these past months. For such important members of our society, this shouldn’t be. We are looking forward to helping drive donations that will make sure next month’s World Teachers’ Day isn’t spent in misery,” said Okonkwo. Folawe Omikunle, CEO, Teach for Nigeria, said COVID-19 had made life unbearable for most Nigerians, especially teachers. “Things have been very deplorable for Teachers. We feel compelled to act now and intercede to Nigerians on their behalf rather than wait for fatalities.

CONFIDENTIAL - MSG

Wednesday 23 September 2020

BUSINESS DAY FMDQ Daily Quotations List

22-Sep-20

The FMDQ Daily Quotations List (DQL) contains data relating to, amongst other things, market and model prices, rates of foreign exchange products, fixed income securities and instruments in the financial market (the “Information”). The Information does not constitute professional, financial or investment advice. We attempt to ensure the Information is accurate; however, the Information is provided “AS IS” and on an “AS AVAILABLE” basis and may not be accurate or up to date. We do not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of any of the Information, neither do we accept liability for the results of any action taken on the basis of the information. Bonds Rating/Agency

Issuer

Description

Issue Date

Coupon (%)

Outstanding Value (₦’bn)

Maturity Date

TTM (Yrs)

Yield (%)

Closing Price

Benchmark Federal Government of Nigeria (FGN) Bonds ^16.39 27-JAN-2022

27-Jan-12

16.39

605.31

27-Jan-22

1.35

3.95

116.13

^12.75 27-APR-2023

27-Apr-18

12.75

735.96

27-Apr-23

2.59

3.96

121.48

^14.20 14-MAR-2024

14-Mar-14

14.20

719.99

14-Mar-24

3.47

3.96

132.95

13.53 23-MAR-2025

23-Mar-18

13.53

267.80

23-Mar-25

4.50

4.79

135.03 126.89

22-Jan-16

12.50

670.34

22-Jan-26

5.33

6.45

^16.2884 17-MAR-2027

17-Mar-17

16.29

608.39

17-Mar-27

6.48

7.50

144.46

^13.98 23-FEB-2028

23-Feb-18

13.98

713.69

23-Feb-28

7.42

7.75

134.60 139.90

^12.50 22-JAN-2026 FEDERAL GOVERNMENT OF NIGERIA

^14.55 26-APR-2029

26-Apr-19

14.55

667.39

26-Apr-29

8.59

8.03

^10.00 23-JUL-2030

23-Jul-10

10.00

591.57

23-Jul-30

9.83

9.00

106.41

^12.1493 18-JUL-2034

18-Jul-14

12.15

1075.92

18-Jul-34

13.82

9.58

119.43

^12.40 18-MAR-2036

18-Mar-16

12.40

668.10

18-Mar-36

15.48

9.68

121.60

^16.2499 18-APR-2037

18-Apr-17

16.2499

402.04

18-Apr-37

16.57

9.90

151.19

26-Apr-49

28.59

10.00

145.02

^14.80 26-APR-2049

26-Apr-19

14.80

876.41

16.47 FGNSK 26-SEP-2024

26-Sep-17

16.47

100.00

26-Sep-24

4.01

4.40

143.95

15.743 FGNSK 28-DEC-2025

28-Dec-18

15.74

100.00

28-Dec-25

5.26

6.23

142.14

6.73

7.57

118.84

FGN Sukuk FGN Roads Sukuk Company 1 PLC

11.20 FGNSK 16-JUN-2027

16-Jun-20

11.20

162.56

16-Jun-27

FGN Green Bond FEDERAL GOVERNMENT OF NIGERIA

Rating/Agency

Issuer

13.48 FGNGB 22-DEC-2022

22-Dec-17

13.48

10.69

22-Dec-22

2.25

3.95

120.29

14.50 FGNGB 13-JUN-2026

13-Jun-19

14.50

15.00

13-Jun-26

5.72

6.81

135.90

Description

Issue Date

Coupon (%)

Outstanding Value (₦’bn)

Maturity Date

Avg. Life/ TTM (Yrs)

Risk Premium

Valuation Yield (%)

Modelled Price

104.24

Sub-National Bonds A+/GCR; Aa-/Agusto

LAGOS STATE GOVERNMENT

16.50 LAGOS 30-DEC-2023

30-Dec-16

16.50

42.62

30-Dec-23

1.93

9.84

13.79

LAGOS STATE GOVERNMENT

16.75 LAGOS IIA 11-AUG-2024

11-Aug-17

16.75

46.37

11-Aug-24

2.35

3.06

7.01

120.29

LAGOS STATE GOVERNMENT

17.25 LAGOS IIB 11-AUG-2027

11-Aug-17

17.25

38.77

11-Aug-27

4.98

8.56

14.31

109.91

Corporate Bonds BBB+/GCR; A-/Agusto

UNION BANK OF NIGERIA PLC

15.50 UNION I 3-SEP-2021

07-Sep-18

15.50

7.02

03-Sep-21

0.95

1.00

3.80

110.78

BBB+/GCR

FLOUR MILLS OF NIGERIA PLC

15.50 FLOURMILLS I 30-OCT-2021

01-Nov-18

15.50

10.11

30-Oct-21

1.10

1.00

4.13

112.13

BBB+/GCR

*FCMB LIMITED

14.25 FCMB I 20-NOV-2021

20-Nov-14

14.25

26.00

20-Nov-21

1.16

6.73

9.98

104.54

A-/GCR

FORTE OIL PLC

17.50 FORTE 2-DEC-2021

02-Dec-16

17.50

4.10

02-Dec-21

0.72

1.63

3.96

109.48

Aaa/Agusto; AA+/GCR

MIXTA REAL ESTATE PLC

17.00 MIXTA 16-JAN-2022

17-Jan-17

17.00

3.00

16-Jan-22

0.82

1.19

3.72

110.55

BBB-/GCR

FCMB LIMITED

17.25 FCMB III 8-DEC-2023

09-Dec-16

17.25

5.10

08-Dec-23

3.21

1.36

5.33

134.71

A+/GCR

STANBIC IBTC

182D T.bills+1.20 STANBIC IA 30-SEP-2024

30-Sep-14

16.29

0.10

30-Sep-24

4.02

1.00

5.41

138.86

A+/GCR

STANBIC IBTC

13.25 STANBIC IB 30-SEP-2024

30-Sep-14

13.25

15.44

30-Sep-24

4.02

1.00

5.41

128.01

AA+/GCR

DANGOTE CEMENT PLC

12.50 DANGCEM I 30-APR-2025

24-Apr-20

12.50

100.00

30-Apr-25

4.60

2.84

7.84

117.70

BBB+/GCR; A-/Agusto

UNION BANK OF NIGERIA PLC

15.75 UNION II 3-SEP-2025

07-Sep-18

15.75

6.31

03-Sep-25

4.95

1.42

7.11

135.52

BBB-/GCR; Bbb/Agusto

WEMA FUNDING SPV PLC

16.50 WEMA FUNDING SPV II 12-OCT-2025

12-Oct-18

16.50

17.68

12-Oct-25

5.05

3.97

9.85

125.96

A+/Agusto

ACCESS BANK PLC

15.50 ACCESS BANK 23-JUL-2026

23-Jul-19

15.50

30.00

23-Jul-26

5.08

2.94

8.87

126.55

AAA/GCR

VIATHAN FUNDING PLC

16.00 VIATHAN 14-DEC-2027

15-Dec-17

16.00

9.67

14-Dec-27

4.43

1.00

5.74

138.63

BBB+/GCR; Bbb+/Agusto

UNION BANK OF NIGERIA PLC

16.20 UNION III 27-JUN-2029

27-Jun-19

16.20

30.00

27-Jun-29

8.76

3.35

11.54

125.24

AAA/GCR; A+/Agusto

*NMRC

14.90 NMRC I 29-JUL-2030

29-Jul-15

14.90

6.88

29-Jul-30

6.19

1.00

8.24

130.84

Aaa/Agusto; AAA/GCR

*NMRC

13.80 NMRC II 15-MAR-2033

21-May-18

13.80

10.39

15-Mar-33

8.18

1.00

8.93

126.76

AAA/GCR; Aaa/Agusto

NSP-SPV POWERCORP PLC

15.60 NSP-SPV GB 27-FEB-2034

27-Feb-19

15.60

8.50

27-Feb-34

13.43

1.56

11.08

131.15

African Development Bank

11.25 AFDB 1-FEB-2021

10-Jul-14

11.25

1.62

01-Feb-21

0.36

1.00

3.20

102.86

Issue Date

Coupon (%)

Outstanding Value ($’mm)

Maturity Date

TTM

Yield (%)

Closing Price

Supranational Bond Aaa/Moody's; AAA/S&P

Rating/Agency

Issuer

Description

FGN Eurobonds BB-/Fitch; BB-/S&P

6.75 JAN 28, 2021

28-Jan-11

6.75

500.00

28-Jan-21

0.35

5.38

100.44

B1/Moody's; B/S&P; B+/Fitch

5.625 27-JUN-2022

27-Jun-17

5.63

300.00

27-Jun-22

1.76

5.04

100.96

BB-/Fitch; BB-/S&P

6.375 JUL 12, 2023

12-Jul-13

6.375

500.00

12-Jul-23

2.80

5.48

102.29

B2/Moody's; B/S&P; B+/Fitch

7.625 21-NOV-2025

21-Nov-18

7.625

1118.35

21-Nov-25

5.17

6.62

104.32

6.50 NOV 28, 2027

28-Nov-17

6.500

1500.00

28-Nov-27

7.19

7.14

96.46

B2/Moody's; B/S&P; B+/Fitch

8.747 JAN 21, 2031

21-Nov-18

8.747

1000.00

21-Jan-31

10.34

8.26

103.32

B1/Moody's; B/S&P; B+/Fitch

7.875 16-FEB-2032

16-Feb-17

7.875

1500.00

16-Feb-32

11.41

8.40

96.20

B2/Moody's; B/S&P; B+/Fitch

7.625 NOV 28, 2047

28-Nov-17

7.625

1500.00

28-Nov-47

27.20

8.69

88.91

9.248 JAN 21, 2049

21-Nov-18

9.248

750.00

21-Jan-49

28.35

9.28

99.70

Description

Issue Date

Issue Yield (%)

Outstanding Value (₦’bn)

Maturity Date

Days to Maturity

Risk Premium

B2/Moody's; B/S&P; B+/Fitch

FEDERAL GOVERNMENT OF NIGERIA

B2/Moody's; B/S&P; B+/Fitch

Rating/Agency

Issuer

Commercial Papers

Valuation Yield (%)

Discount Rate (%)

A2GCR

FLOUR MILLS OF NIGERIA PLC

FMON CP XIII 26-OCT-20

27-Apr-20

6.75

10.00

26-Oct-20

3.96

4.72

4.70

A1+GCR; Aa2.ng/Moody's

DANGOTE CEMENT PLC

DANC CP XV 12-NOV-20

21-May-20

5.00

34.00

12-Nov-20

2.42

3.31

3.29

Aa-Agusto; A1+/GCR

NIGERIAN BREWERIES PLC

NBRP CP VIII 8-JAN-21

15-Apr-20

7.00

24.33

08-Jan-21

108

3.25

4.57

4.51

A3GCR

MIXTA REAL ESTATE PLC

MREP CP XXIII 18-FEB-21

28-May-20

9.00

1.24

18-Feb-21

149

5.93

7.55

7.32

A1+GCR; Aa/Agusto

MTN NIGERIA COMMUNICATION PLC

MTNN CP II 5-MAR-21

08-Jun-20

5.95

80.00

05-Mar-21

164

2.89

4.63

4.53

A-Agusto

GUINNESS NIGERIA

GUNG CP II 19-MAR-21

22-Jun-20

6.50

2.50

19-Mar-21

178

3.44

5.28

5.15

CSPL CP I 21-MAY-21

24-Aug-20

7.00

5.00

21-May-21

241

4.91

7.12

6.80

Tenor

Rate ($/₦)

Tenor

Rate ($/₦)

A3GCR; Bbb-/Agusto

CARDINALSTONE PARTNERS LIMITED

Days to Maturity

Maturity

Closing Rate (%)

Yield (%)

1-Oct-20

0.57

##CBN Official Rate

379.00

12-Nov-20

0.89

CBN SMIS Window

380.69

403.75

100

31-Dec-20

1.27

I&E FX Window

385.80

12M

420.81

Tenor

Currency Spot

Benchmark Nigerian Treasury Bills

1.38

CBN OTC FX FUTURES 395.23

Currency Forwards

114

14-Jan-21

142

11-Feb-21

1.59

1.60

386.33

219

29-Apr-21

2.11

2.14

1.38

387.03

Rate (%) Money Market

233

13-May-21

2.20

2.23

387.88

OBB

1.00

261

10-Jun-21

2.32

2.36

390.46

O/N

1.75

400.15

282

1-Jul-21

2.41

2.46

338

26-Aug-21

2.65

2.72

Benchmark Open Market Operation Bills 9

1-Oct-20

1.95

3-Nov-20

1.85

1-Dec-20

1.61

1.62

105

5-Jan-21

2.00

2.01

133

2-Feb-21

1.80

1.81

161

2-Mar-21

1.95

1.97

231

11-May-21

2.08

2.10

259

8-Jun-21

2.13

2.16

322

10-Aug-21

2.24

2.28

Fund Manager

Net Asset Value (₦’bn)

Funds Fund Name Cordros Money Market Fund

Cordros Asset Management Limited

8.87

First Ally Asset Management Money Market Fund

First Ally Asset Management Limited

0.72

Valuation Date

Units in Issue

Net Asset Value Per Unit

Bid Price (₦)

Offer Price (₦)

Yield (%)

No. of Units Redeemed

21-Sep-20

88,677,504.00

100.00

4.19

1,025,056.00

98,974,944.00

21-Sep-20

1,500,000,000.00

0.48

1.00

3.82

0.00

1,500,000,000.00 500,000,000.00

No. of Units Outstanding

FSDH Treasury Bills Money Market Fund

FSDH Asset Management Limited

10.48

21-Sep-20

104,845,860.00

100.00

4.00

0.00

Greenwich Plus Money Market Fund

Greenwich Asset Management Limited

6.69

17-Sep-20

63,677,420.00

105.02

100.00

3.92

71,000.00

63,606,420.00

SFS Fixed Income Fund

SFS Capital Nigeria Limited

4.95

21-Sep-20

4,849,453,458.00

1.02

9.43

0.00

5,000,000,000.00

Stanbic IBTC Bond Fund

Stanbic IBTC Asset Management Limited

106.59

21-Sep-20

480,267,321.00

221.95

N/A

95,984.00

999,904,016.00

Stanbic IBTC Money Market Fund

Stanbic IBTC Asset Management Limited

324.41

21-Sep-20

324,408,751,594.00

1.00

3.66

1,028,665,674.00

323,380,085,920.00

Net Asset Value ($’bn)

Valuation Date

Units in Issue

Net Asset Value Per Unit

Bid Price ($)

Offer Price ($)

Yield (%)

No. of Units Redeemed

No. of Units Outstanding

0.27

21-Sep-20

226,147,630.00

1.21

N/A

0.00

400,000,000.00

No. of Units Outstanding

Fund Name Stanbic IBTC Dollar Fund

Fund Manager Stanbic IBTC Asset Management Limited

Fund Name Chapel Hill Denham Infrastructure Debt Fund

Fund Manager Chapel Hill Denham Management Limited

Fund Name Vetiva Funds Manager Limited Composition: 86% Tbills; 14%Bonds

Issuer Vetiva Funds Manager Limited

Net Asset Value (₦)

Valuation Date

Units in Issue

Net Asset Value Per Unit

Bid Price (₦)

Offer Price (₦)

Yield (%)

No. of Units Redeemed

58.73

30-Jun-20

543,683,223.00

108.03

N/A

Net Asset Value (₦’bn)

Valuation Date

No. of Units Issued

Net Asset Value Per Unit

BidPrice (₦)

OfferPrice (₦)

Yield (%)

No. of Units Redeemed

No. Units of Outstanding

0.658

21-Sep-20

3,520,359.000

187.00

186.00

188.00

N/A

1,550,000.00

3,520,359.00

NOTE: This is an abridged version of the DQL, that represents the outstanding values and market capitalisation of the asset classes listed, quoted or have been granted permitted trading status on FMDQ. This version may be different to what is contained in the full DQL available on FMDQ's website ( www.fmdqgroup.com )

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* : Amortising Bond (Average life is calculated & not the Term-to-Maturity)

^ : Market Prices

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PT: Permitted Trading

FGN: Federal Government of Nigeria

##CBN Official Rate as at September 21, N/A : Not Available FRN: Federal Republic of Nigeria 2020

@Businessdayng

#Risk Premium is a combination of credit risk and liquidity risk premiums

Wednesday 23 September 2020

BUSINESS DAY

LIVE @ THE STOCK EXCHANGES Prices for Securities Traded as of Tuesday 22 September 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 225,712.18 6.35 -0.78 140 4,335,906 UNITED BANK FOR AFRICA PLC 205,196.53 6.00 0.83 216 18,054,275 ZENITH BANK PLC 524,321.45 16.70 -0.30 371 45,884,184 727 68,274,365 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 179,476.46 5.00 2.04 201 24,138,393 201 24,138,393 928 92,412,758 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,503,605.11 123.00 2.41 126 13,279,235 126 13,279,235 126 13,279,235 BUILDING MATERIALS DANGOTE CEMENT PLC 2,295,356.35 134.70 -0.22 94 2,692,037 LAFARGE AFRICA PLC. 209,401.34 13.00 - 44 251,742 138 2,943,779 138 2,943,779 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 226,551.16 385.00 - 6 327 6 327 6 327 1,198 108,636,099 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,163.30 40.65 - 1 30 UPDC REAL ESTATE INVESTMENT TRUST 10,139.42 3.80 - 2 4,400 3 4,430 3 4,430 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,692.74 115.05 - 0 0 0 0 0 0 3 4,430 CROP PRODUCTION FTN COCOA PROCESSORS PLC 572.00 0.26 - 0 0 OKOMU OIL PALM PLC. 74,404.98 78.00 - 12 36,497 PRESCO PLC 49,500.00 49.50 -0.80 39 12,664,028 51 12,700,525 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 1 500 1 500 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,740.00 0.58 - 7 27,750 7 27,750 59 12,728,775 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 24,388.79 0.60 -1.67 39 20,968,844 U A C N PLC. 18,152.17 6.30 -1.56 44 1,243,450 83 22,212,294 83 22,212,294 BUILDING CONSTRUCTION ARBICO PLC. 152.96 1.03 - 2 23,601 2 23,601 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 23,760.00 15.00 - 43 331,171 ROADS NIG PLC. 165.00 6.60 - 0 0 43 331,171 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 17,631.97 0.95 - 5 10,968 5 10,968 50 365,740 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,341.89 0.81 - 12 133,000 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 29,679.69 13.55 - 47 208,959 INTERNATIONAL BREWERIES PLC. 88,644.83 3.30 -2.94 71 1,245,890 NIGERIAN BREW. PLC. 335,869.89 42.00 - 56 267,271 186 1,855,120 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 145,200.00 12.10 0.83 134 2,619,235 FLOUR MILLS NIG. PLC. 80,572.46 19.65 - 32 260,401 HONEYWELL FLOUR MILL PLC 7,137.18 0.90 -2.17 31 1,252,402 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 801.90 4.50 - 5 15,020 NASCON ALLIED INDUSTRIES PLC 26,494.38 10.00 - 23 121,221 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 225 4,268,279 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 13,898.70 7.40 - 36 204,199 NESTLE NIGERIA PLC. 931,371.10 1,175.00 - 46 11,268 82 215,467 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 7,254.90 5.80 - 23 224,494 23 224,494 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,874.53 4.25 - 21 42,912 UNILEVER NIGERIA PLC. 82,728.08 14.40 - 17 17,715 38 60,627 554 6,623,987 BANKING ECOBANK TRANSNATIONAL INCORPORATED 73,398.20 4.00 - 46 2,435,335 FIDELITY BANK PLC 51,285.39 1.77 1.69 102 5,418,431 GUARANTY TRUST BANK PLC. 747,551.95 25.40 0.20 268 20,331,506 JAIZ BANK PLC 16,794.62 0.57 3.51 15 996,366 STERLING BANK PLC. 33,396.89 1.16 -0.85 37 1,548,437 UNION BANK NIG.PLC. 145,603.76 5.00 -6.54 54 4,160,515 UNITY BANK PLC 6,662.92 0.57 1.79 11 1,119,485 WEMA BANK PLC. 21,215.96 0.55 -1.82 18 9,841,664 551 45,851,739 AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 200 AIICO INSURANCE PLC. 10,083.88 0.89 -1.11 23 1,094,750 AXAMANSARD INSURANCE PLC 19,425.00 1.85 - 7 265,455 CONSOLIDATED HALLMARK INSURANCE PLC 3,639.53 0.34 9.68 3 160,800 CORNERSTONE INSURANCE PLC 10,899.84 0.60 -6.25 22 1,121,500 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,904.09 0.26 4.00 23 15,408,030 LAW UNION AND ROCK INS. PLC. 4,983.74 1.16 - 2 27,640 LINKAGE ASSURANCE PLC 3,800.00 0.38 -5.00 2 150,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 -4.76 5 762,118 NEM INSURANCE PLC 10,719.42 2.03 - 9 61,800 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 3,498.66 0.55 - 0 0 REGENCY ASSURANCE PLC 1,533.81 0.23 - 2 10,000 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 9,356.76 0.39 -2.50 20 600,421 119 19,662,714 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,972.63 1.30 - 9 257,527 9 257,527

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,671.82 1.36 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,900.00 4.45 - 32 339,157 CUSTODIAN INVESTMENT PLC 28,527.04 4.85 - 15 112,695 DEAP CAPITAL MANAGEMENT & TRUST PLC 450.00 0.30 - 0 0 FCMB GROUP PLC. 40,793.58 2.06 0.98 39 20,527,864 ROYAL EXCHANGE PLC. 1,492.16 0.29 - 1 12,502 STANBIC IBTC HOLDINGS PLC 434,244.50 39.10 - 25 254,015 UNITED CAPITAL PLC 18,900.00 3.15 1.59 63 2,796,024 175 24,042,257 854 89,814,237 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 1 22 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 888.28 0.25 - 1 84,000 2 84,022 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,302.26 3.50 - 19 275,732 GLAXO SMITHKLINE CONSUMER NIG. PLC. 5,979.38 5.00 - 11 214,304 MAY & BAKER NIGERIA PLC. 5,296.47 3.07 - 15 1,005,451 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 3,646.38 1.92 -1.54 17 798,095 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 62 2,293,582 64 2,377,604 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 -4.76 3 2,018,000 3 2,018,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 764.87 0.26 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 2 110 TRIPPLE GEE AND COMPANY PLC. 197.98 0.40 - 2 13,100 4 13,210 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 -4.76 12 2,024,098 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 12 2,024,098 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,428,097.57 380.00 - 9 341 9 341 28 4,055,649 BUILDING MATERIALS BERGER PAINTS PLC 1,883.85 6.50 - 6 4,920 BUA CEMENT PLC 1,364,733.47 40.30 - 18 32,285 CAP PLC 11,970.00 17.10 - 16 73,965 MEYER PLC. 265.62 0.50 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 40 111,170 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,994.25 1.70 - 8 39,200 8 39,200 PACKAGING/CONTAINERS BETA GLASS PLC. 27,698.45 55.40 - 7 381 GREIF NIGERIA PLC 388.02 9.10 - 0 0 7 381 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 1 60 1 60 56 150,811 CHEMICALS B.O.C. GASES PLC. 1,814.83 4.36 - 1 204 1 204 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 7,500 1 7,500 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 2 7,704 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 11 1,545,452 11 1,545,452 INTEGRATED OIL AND GAS SERVICES OANDO PLC 28,094.99 2.26 -1.74 27 562,954 27 562,954 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 69,414.59 192.50 - 19 17,203 ARDOVA PLC 14,848.28 11.40 - 20 55,829 CONOIL PLC 10,582.77 15.25 - 12 24,244 ETERNA PLC. 3,495.11 2.68 - 6 56,858 MRS OIL NIGERIA PLC. 3,794.59 12.45 - 2 1,618 TOTAL NIGERIA PLC. 27,161.75 80.00 - 33 73,697 92 229,449 130 2,337,855 ADVERTISING AFROMEDIA PLC 887.81 0.20 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,010.64 3.25 9.80 36 8,206,151 TRANS-NATIONWIDE EXPRESS PLC. 384.45 0.82 9.33 2 2,508,990 38 10,715,141 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 3,748.05 2.42 - 2 32,342 IKEJA HOTEL PLC 1,912.49 0.92 - 2 2,000 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 3 2,410 7 36,752 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 1 1,000 1 1,000 PRINTING/PUBLISHING ACADEMY PRESS PLC. 175.39 0.29 - 0 0 LEARN AFRICA PLC 879.45 1.14 - 1 80 STUDIO PRESS (NIG) PLC. 1,064.85 1.79 - 0 0 UNIVERSITY PRESS PLC. 677.31 1.57 - 57 345,648 58 345,728 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 547.04 0.33 - 2 4,800 2 4,800 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0

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BUSINESS DAY Wednesday 23 September 2020 www.businessday.ng

Uncanny University

Covid-19 could push some universities over the brink Higher education was in trouble even before the pandemic

UE TO BE completed in 2022, Boston University’s $141m datasciences centre will tower over the city like an uneven Jenga tower, providing 350,000 square feet of space. The University of Reading in Britain has nearly finished a £50m ($65m) life-sciences building, designed to make more space for subjects that are attracting lots of students. The University of New South Wales (UNSW) in Australia has pumped more than A$500m ($360m) into new facilities, as part of a project intended to push it into the top 50 of global rankings. If these plans made sense in a world where students were crossing borders in droves, today they seem barmy. All three institutions are now considering cuts. Boston has said that it is likely some staff will have to be laid off or furloughed. Reading has announced that 15% of full-time jobs at the university are on the line. UNSW has already cut 8% of its staff and closed two of its eight faculties. At all three universities plans for new facilities are on hold. Covid-19 has put immense pressure on all universities. But the problems are about to get particularly severe for those in America, Australia, Canada and Britain that have come to rely on international students to fill their coffers. There are now more than 5m such students, up from 2m in 2000. In Australia foreign students provide a quarter of universities’ income (see chart 1). In Canada the tuition fees for a science degree at McGill, one of the country’s top universities, cost C$45,656 ($34,000) a year for an overseas student, compared with C$2,623 for a local. Even before the pandemic, many such universities worried about worsening relations with China, the biggest source of international students. And higher education in America, Australia and Britain has also faced increasing scepticism from conservativeleaning governments about the value of a university degree. Academics, used to tricky questions, now face an existential one: how will universities survive with many fewer students in them? The problem is that campuses make an excellent breeding ground for the virus, and students travelling across the world are a good way to spread it. A study by researchers at Cornell found that, although the average student at the university shares classes with just 4% of their peers, they share a class with someone who shares a class with 87%. The potential for the rapid spread of the disease was shown by the arrival of recruits at Fort Benning, an American army base. When 640 arrived in spring, just four tested

positive. A few weeks later, more than a hundred did. According to the New York Times, some 6,600 covid-19 cases can be linked to American colleges. Welcome to the virtual freshers’ week Many lecturers are understandably reluctant to get close to students. In July a letter from the provost of the University of Colorado Boulder, seen by The Economist, put pressure on staff to teach in person, warning that not doing so “simply deflects the burden of this vital mode of instruction onto fellow faculty members”. Indeed, at the end of the 2019-20 academic year most American colleges planned to open for in-person teaching. Now they are not so sure. According to data collected by the College Crisis Initiative at Davidson College, less than a quarter of universities will teach fully or mostly in person next term (another quarter have yet to decide what to do). Even if professors turn up in person, many students will not. Harshita Bhatia, a 24-year-old from Mumbai, was supposed to start a masters in economics at the Australian National University in July. She has deferred it until February, not wanting to miss out on the full experience of university life in another country. Polling by QS, a consultancy, suggests that four in ten students may cancel or defer their plans to study overseas. More will do so if tuition goes online. In Australia visa applications from students are down by a third this year. Strict regimes are emerging at the places which are welcoming students. At Harvard, where 13% of last year’s intake came from overseas, only 40% of undergraduates will return for the first term of the new year, with the rest continuing to learn from afar. Those on campus will be tested for the virus

every three days and sign contracts promising not to have guests in their dorms. The University of Bolton, in northern England, is aiming to create a “covid-secure” campus, so that it can open in September. To get to classes students will have to pass through a body-temperature scanner, where they will be provided with masks and hand sanitiser. The university has bought 1,000 bikes to lend to students, so they do not have to take public transport. Viruses like company The risk is that, beyond the lecture hall, youngsters will ignore many restrictions. In July the University of California, Berkeley reported an outbreak involving 47 covid-19 cases, with most traced to parties in the fraternities and sororities. At the time, administrators urged students to keep gatherings to below 12 people, to hold them outside, to stay at least six feet apart and to cover their faces; they have since announced that all classes will be online and only 3,200 of the university’s 40,000 students will be allowed to live on campus. Even for students who do move into their dorms, a lot of teaching will be online. A video from Johns Hopkins University touts its new “on-campus studios” for lectures, the idea being that students can take part in lectures from the safety of their rooms. Such Zoom lectures may accelerate a long-running trend. Online-education providers, such as Coursera, have not revolutionised higher-education, as was routinely forecast at the start of the 2010s. But they have carved out a niche in the market, mostly offering business-focused classes to older students. Over the past five years or so a growing number of universities have begun to offer degrees online, sometimes in partnership with “online-programme managers”. In America an estimated one

postgraduate in three was studying fully online last year, up from one in five in 2012. This number now looks set to rise. In May Dan Tehan, the Australian education minister, offered funding for short online courses in topics that are judged to be “national priorities” like teaching and engineering that would run for six months, with fees ranging from A$1,250 to A$2,500. “We want to enable people, rather than bingeing on Netflix, to binge on studying,” he said. UNSW has announced plans to offer more remote courses. Tyler Cowen, an economist at George Mason University who runs his own education website, predicts a big increase in online learning. Many students, however, prefer in-person teaching. Last year just one in seven American undergraduates pursued a degree online, estimates Richard Garrett of Eduventures, a consultancy. International students also tend to want “the cultural immersion” of another country, he says. Lots gravitate to big cities: in America, New York University is home to the most international students with 19,605; in Britain, University College London is, with 19,635. The experience of either city—with all the possibilities of exploration and romance which urban life brings, even under semi-lockdown—cannot be replicated through video calls in a parental living room. The prospect now for international students is a far less appealing university experience—either wholly virtual or wholly surreal. Despite this, they will face little prospect of lower fees. The University of Adelaide is one of the few universities to have cut prices, offering students a 20% “Covid-19 Offshore Study Fee Rebate” so long as they confirm their place. Privately, administrators at British

universities expect to make more use of discounts (sorry, “scholarships”) to entice foreign students, but they will try not to publicise that. Many universities argue that the education students receive will be just as good as it was before the pandemic. It remains to be seen how many students (and parents) will buy this. As a college counsellor working at a school in Xi’an in China asks: “Without the whole experience, why pay $50-60k for online courses you can get on Coursera?” For those students not put off by these changes, other problems loom. The collapse of air travel means there may not be enough flights. Bolton is one of a number of British universities which is contemplating bringing students directly over from China and India. “We can charter a plane that will seat 300 people for around £300,000,” explains George Holmes, the vice-chancellor. Representatives would meet students in Delhi; on arrival, they would be whisked off to a hotel or halls to quarantine. The university would heavily subsidise the costs. Indeed, entry restrictions currently prevent students from getting to lots of countries. Since February all Chinese visitors have been banned from entering Australia. Pilot programmes to fly in groups of a few hundred students were abandoned when the local case count rose. Currently Canada will not let in students who did not get a visa before March. Some Indian students are allowed into America, but Chinese ones are not. Both would be welcome in Britain, so long as they quarantined for a fortnight. In July the Trump administration gave up on plans to rescind the visas of international students at universities that had moved to solely online teaching, after legal challenges from a number of universities, including Harvard and MIT. But later that month it announced first-year students will not be able to enter the country if they do not have in-person courses. Embassies and consulates have begun opening, but it is unclear whether they will be able to get through the visa backlog. All this spells trouble. A report by the Institute for Fiscal Studies (IFS), a British think-tank, predicts that universities in that country will lose the equivalent of a quarter of their annual income, with highranking institutions suffering the greatest losses (see chart 2). Four leading Australian universities— UNSW, Sydney, Melbourne and Monash—receive more than a third of their income from foreign students. Across the world, it is prestigious universities that recruit the most globetrotters.

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