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news you can trust I ** wednesDAY 24 june 2020 I vol. 19, no 591

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States gave FG control over their DisCos’ shares, trouble is getting it back … As Buhari rejects counsel to excise states’ shares in DisCos from FG’s control ISAAC ANYAOGU

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ontrary to the Federal Government’s claims that state governments are trying to assume ownership of the DisCos, evidence shows that the states’ investments in DisCos’ equity give them a right to stake a claim.

During the process of privatising the power sector between 2005 and 2013, the Nigerian government sold a 60 percent stake in assets of the state-owned Nigerian Electricity Power Authority (NEPA) to core investors.

In order to spruce up the rickety power assets, investments in transformers and overhead lines Continues on page 31

Inside

N397bn debt: AMCON says it did not order demolition of Ikoyi P. 30 property FG sees hope for economic recovery in mass housing, roads construction post P. 30 COVID-19

Geoffrey Onyeama (l), minister of foreign affairs, and Godwin Emefiele, CBN governor, during an Extra-Ordinary Virtual Summit of the Authority of Heads of State and Government of the member states of the West African Monetary Zone hosted by West African Monetary Institute, Accra Ghana, yesterday.

Nigeria’s foreign reserves face further strain N Hope Moses-Ashike & Segun Adams

ig er ia’s already strained foreign reserves may come under more pressure in coming months as the country’s quarterly balance of payment deficit

As balance of payment deficit jumps to 5-year high

for the first three months of 2020 swung to its highest in at least 25 quarters.

The balance of payment, which measures the export and import transactions of Nigeria

with the rest of the world, hit -$11.182bn as at first quarter of 2020, from a surplus of $6.28bn and $2.096bn in the fourth and first quarters of 2019, respectively, according to BusinessDay

analysis of CBN data.

This deficit shows that Nigeria imports more goods, services, and capital than it exports, Continues on page 31

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Covid-19 and business growth:Crafting a winning strategy

Franklin Ngwu

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ith the increasing negative impacts of COVID 19, chief executive officers, senior management and boards of most profit and nonprofit organizations are in a state of panic and flux. From the many webinars that Lagos Business School organized and some COVID 19 induced strategy reviews and retreats that I am involved in, the worries are the same.

Are we going to survive and how do we survive and grow amidst the crisis? In some instances, the management of some firms are already planning for the closure of their businesses. “With the way things are going, is it true that what some of us need is a plan with the least exit cost as it is becoming clear that our business will not survive COVID 19”. This I was asked in a recent interactive session with some business executives.

While there is no doubt as to the increasing negative consequences of COVID 19 on the economy and some businesses, the doubt is in the reactive way businesses are attending to the crisis particularly from strategy, operations and financials. In strategy, what you observe generally include efforts

to quickly rethink the strategy and vision, align products and process with the strategy, rethink and adjust investment allocation, improve required capacity and skills, rethink strategic alliances and partners, imbibe flexibility and agility.

For operations, you see firms trying to tighten business controls and limits, increasing their public affairs and public relations activities exemplified with increased CSR activities of firms in terms COVID 19 support, reactive shift in the supply chain, fast paced adoption of new technologies to upscale their business digitization and processes. In finance, firms are trying to better understand their risk exposure to improve their mitigation strategies through approaches like risk transfers, cost reduction, hedging and improve their financial strength if possible.

While the above reactive approaches can be helpful, it cannot be applied as one size fits all tactic. It is also very important to state that the assertion that some business sectors will completely collapse is erroneous. Some sectors will no doubt thrive more than others, but what is important is for every business to critically review their business situation, growth and sustainability amidst what we know and don’t know about COVID 19. As the current situation is called a new normal or low touch economy, a good way to start is to first understand and deeply imbibe the three planning principles of safety, flexibility and resilient.

For safety, the focus is how will you continue to look after your employees and customers. In flexibility, businesses should work to develop the ability to modify decisions and operations to meet with changing customer needs and demands. In being resilient,

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Some sectors will no doubt thrive more than others but what is important is for every business to critically review their business situation, growth and sustainability

firms should innovate and develop viable and sustainable operations and processes making best use of their resources to maintain availability (see ISO 2020).

With good embeddedness of the planning principles of safety, flexibility and resilience as the long-term focus of a firm, a more proactive approach to COVID 19 is for every concerned business to carry out a test developed recently by Board of Innovation. With nine questions that require deep examination, the test helps a firm to get a better insight as to the firm’s preparedness for the new normal or the low touch economy.

Based on the score achieved, the firm can therefore rethink and adopt appropriate strategic response to COVID 19. Interestingly, the test is easy to answer but requires the CEO, Senior Management and the Board to have good understanding of both their business and the operating environment. Using scores from 1 to 5, the management and board of a firm are required to score their firm in terms of how significant or important factors like employee interaction, physical location, client interaction, employee gatherings, level of travel required and client gathering are to the survival, value creation and profitability of the business.

Other factors include, the extent to which your employees or clients can be classified as exposed groups, the level of dependence of the firm on local and international supply chains, and the extent to which demand fluctuations of the products or services of the firm are related to the health and socio-economic crisis. For instance, if high employee interactions and gatherings are required for the firm to conduct their business, the score will be either four or five. This same

is for client interactions and gatherings. If clients need to share the same equipment or gather in groups to use the products or services, the score will also be four or five. However, if the required interaction or gathering is low, the firm will score from one to three. Based on the marks achieved, the firm will understand their state vis-à-vis survival and growth amidst Covid 19. If at the end of the test, the senior management and the board score the firm a total of 25 marks and above, it suggests that a deep rethink of their strategy is required. This does not mean that the firm will collapse or that their strategy should be discarded, rather it suggests a re-examination and adjustment of significant parts of their strategy. It will require a deeper assessment of each the factors with scores of three and above to see how it can be reduced. For instance, if employee interaction or physical location are highly required for business operations, the question is if the need for such can be reduced. Using the above approach helps the firm to develop firm specific effective strategies for business growth and profitability. As a score of 3 and above in any of the factors means that a change is needed, the next step is to rethink the strategy by asking key questions such as who will take the lead, what plans should be made and what will be needed, how and when to start, criteria for measuring performance and then how to sustain the improvement, value creation and profitability of the firm.

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

Where you shop matters – how thinking local can kick-start COVID-19 recovery

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s countries around the world begin to reopen businesses, restart economies and assess the cost of COVID-19, there are many unknowns. However, we all recognise that the impact on small businesses has been severe, and that many are facing an uncertain future.

To gain a deeper understanding of the impact of the pandemic on commerce across the Central Europe, Middle East and Africa (CEMEA) region, Visa has conducted a survey of merchants and consumers – the COVID-19 CEMEA Impact Tracker. The findings show just how severely some of our local businesses have been affected by COVID-19.

At least half of the merchants surveyed have suffered a high impact on their business, and 70 percent and above say they have suffered medium-to high impact. These small businesses have also seen less visits from customers, and customers are spending less when they do shop – between 60 percent and 89 percent of merchants say they have seen average spending decline, and it is an issue that has impacted almost every segment of commerce.

With such a decline, it is no surprise that many entrepreneurs are experiencing an enormous amount of anxiety about their future. Merchants are concerned about cash flow, whether they can afford to pay salaries or to keep all of their staff, and not being

able to engage with their customers. At least half say they are suffering severe anxiety and stress since the outbreak.

Although many countries are attempting to reignite business, recovery may not be straightforward. Visa’s survey has also shown that COVID-19 has changed the way that many consumers shop. The majority say that they have optimised their purchasing – buying in bulk, cutting out impulse purchases and luxuries, and buying non-perishable food. Depending on the local market, between half and three-quarters of shoppers are trying to avoid the busiest periods in the store.

Customers are also more particular about the hygiene of where they shop. Over half state a preference for outlets that enforce hygiene measures and are avoiding unwrapped produce. For dining out, people are even more particular.

Since the start of the pandemic, there’s been an increase of consumers who have purchased from online groceries and pharmacies for the first time – in some markets as many as 70 percent of consumers have begun shopping online in these categories due to COVID-19. In response, more merchants are developing or acquiring eCommerce capabilities. Prospects for future growth remain optimistic, with merchants, from 21 percent to 31 percent anticipating an incremental

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increase in online retail across CEMEA. Visa recognises the importance of supporting these local merchants in the communities where they are present. Small businesses are a vital part of our economy. According to the World Bank’s International Finance Corporation, small-to-medium enterprises contribute more than half of employment and GDP in most countries irrespective of income levels. Small businesses create jobs and support innovation, and as we have seen during the COVID-19 crisis, local businesses can be a focal point for community interaction and initiatives.

With all of this in mind, and to help small businesses to tackle the challenges facing them today, Visa has launched “Where You Shop Matters.” Through this initiative, we aim to provide focused support for small businesses and to encourage consumers to support the businesses in their communities.

We have conducted our survey to understand the needs of consumers and businesses. Based on the findings and insights, we will be rolling out a number of different programs to help get local economies adapting faster during and after the crisis, and to build resilience for a better future. This includes a “Small Business Hub”, which will include resources for small businesses, including a digital toolkit with information and articles on how owners can enhance their business

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Kemi Okusanya

or start a new enterprise, and how to adapt to new digital ways of working.

We will be encouraging consumers to think about where they spend, and how shopping local can support sustainability, build community spirit and create economic opportunities for all. At Visa we are committed to making a difference, and we hope “Where You Shop Matters” can contribute to helping business owners and their customers become a part of rebuilding local economies and create businesses that can thrive.

Okusanya is the vice president and country manager, Visa West Africa.

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Recovery 102: Public policy should prioritise households and SMEs Small Business handbook

Emeka Osuji

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few weeks ago, I began to write about the need for us to start the necessary steps to restart the Nigerian economy, having succeeded, to a reasonable measure, in keeping it fairly stable thus far. In that piece, title “Recovery 101: Business Continuity and Consumer Spending”, I observed that the effects of the current pandemic will be hard to overcome, unless we begin from the beginning – helping businesses, particularly small businesses, to return to full operations, and putting money in the hands of consumers, especially the hardest hit, to enable them resume spending. These suggestions were borne out of my understanding of where the pandemic hurt business the most – their cash flows and the importance of consumer spending in a capitalist economy – well over 60 percent of GDP in many economies.

Now, I want to advance that conversation in Recovery 102, in which we look at the role of public policy in directing attention to what is needed to meet the propositions in Recovery 101. For the avoidance of doubt, and at the risk of repeating some of what I have said elsewhere, one of the first casualties of COVID-19 is the cash flow of all categories of business. The

pandemic put a knife on the life wire of business by snuffing out their sources of cash and leaving them high and dry. This situation has precipitated a number of negative outcomes culminating in disruption at every level of the production value chain, breaching contracts and inducing bankruptcies.

As consumers’ incomes evaporated and excessive inventory stockpiled, job losses became unavoidable as suicides were even contemplated.

Clearly, and as we learnt in college Keynesian Economics, consumption is a direct function of disposable income.

Since there is no future for producers in an environment of vanishing consumer power, it becomes indubitable that this recovery should begin with consumer empowerment. Rebuilding consumer power will impact positively on a number of economic variables that are central to economic recovery, including a much needed economic optimism. For example, rising optimism among firms, to be generated by rising demand for goods and services, will lead to increased investment, employment and incomes.

How do we deal with the doubleheaded challenge of business continuity and raising consumer empowerment? We can crack that nut by looking at whatever is capable of halting the procyclical momentum that has developed from the pandemic. To boost consumer spending and get cash flows streaming down the vaults of business once again, we must put money in the hands of economic agents in our economy. Whose money will it be; one may ask? Everyone with the capacity will put money in the system, including banks and other institutional investors.

However, the government should lead

the way. Not only does the government have the right institutional framework to manage the required kind of spending, it also has the capacity to conjure money, including the ability to print it, if need be.

Regarding institutional framework, if Nigeria has ever needed the support of her banking system, to get out of a crisis, this could be the time. Any serious effort to restore the national economic equilibrium disturbed by COVID-19 would require game-changing champions to deliver sufficiently dizzying blows to the by-products of the pandemic that are now lacerating the economy and drawing much blood from its members. As the crisis brought business to a sudden screeching stop, the first casualty was cash flows, which vapourised, generating a chain reaction that has since culminated in massive job losses and imminent bankruptcies.

According to a certain Nigerian politician, when a nation is at war, it calls out its generals to help her win the war.

Similarly, and assuming this proposition, which is yet to be fully tested, is valid, when the need for finance arises, a nation should also call on its banks for help. Therefore, this recovery should be led by the banking industry, captained by the development banks, which are specialised financial institutions, mostly nationally owned, set up to drive and sustain development through financial provision for the less attractive sectors of the economy, including the informal sector. They sometimes specialise in specific sectors, such as agriculture, industry and infrastructure. The Bank of Industry, in my view, has been a leading light in this direction.

It is in the nature of the capitalist system to be pro-cyclical - manifest-

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It is in the nature of the capitalist system to be pro-cyclical manifesting a recurrent tendency to experience booms and bursts. Stock markets grow bullishly, draw in as much lose capital as possible, form a bubble and then suddenly break up at the seams

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii

Does one size fit all?

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hank God for cable or satellite television; depending on what you like to call it. Whenever you receive visitors at home, you know the variety of global news and other assorted programs will keep them entertained for a while. At least until you’re ready to attend to them. And even as you do attend to them, it’s always there, ever ready to provide current issues for you and your guest to discuss, debate or just laugh at. Especially during those awkward quiet moments. Children nowadays have it so easy. In our days, we children were the entertainment; albeit reluctant ones. Much like court jesters called to amuse the King in his palace at his own expense, our parents would summon us to come and dance for their guests.

One major difference however, is that if the court jester failed in his unenviable task of quickly reversing the King’s mood, there’s a high chance he’ll lose his head at the gallows within the hour.

He literally had to perform his duty as if his life depended on it, because it did. We faced no such threat to our lives, only the pang of humiliation and wishing every single time that the floor would be so kind as to open up beneath us. Funny, but I don’t think I ever remembered to raise this issue before either of my parents passed. I’m sure the mere introduction of the matter would have elicited guffaws of laughter. They would call us into their midst, introduce us to their guests as their youngest kids, place the vinyl record in the record player and ask us to start dancing. Just like that!

Whether we were not in the best of moods, busy having fun elsewhere already or simply had no inclination to dance at that moment really didn’t concern them. Dance they say, so dance we must.

Till this day I squirm when I remember how my older brother Banky and I would step from side to side on one spot while swinging our arms in the same fashion. Sorry, I still can’t bring myself to call it dancing. I pitied the guests who were

compelled to watch because if they had been expecting some sort of Jackson 5 elaborate repertoire, they must have been horribly disappointed.

Our movements lacked no such imagination or enthusiasm so were certainly less pleasant to the eyes. But at least they always had a good laugh, even if it was always at our expense. Till date I’m a terrible dancer and I’ll be the first to admit it. I’m sure the permanent scars these episodes must have left somewhere in my psyche played a part in this. No one can convince me otherwise.

Anyway, it’s a convenient excuse so let’s leave it at that. But believe me, it was tortuous.

Although the above is on a lighter note, there are times when we put our children through things which affect them for life. The intent may not be malicious but the consequences can only be described as adverse. It’s important we get to know and understand each and every one of our children as unique individuals in themselves. And merely for the fact that they are human beings with an innate ability to reason, perceive and feel emotions, ethical consideration demands they be accorded the respect and dignity this bestows upon them.

Every child is wired differently, with his own strengths and abilities, weaknesses, areas he naturally gravitates toward and others which cause him to scamper. And so, when we’re making choices for them, satisfying our ego should not be our primary concern but what’s best for him or her.

Utilitarianism, a teleological ethical theory, states an action or decision would be considered morally correct only if it causes the greatest amount of pleasure and the least amount of pain, to the greatest number of people. Meaning, more people must benefit than those who lose or are disadvantaged by it. But there’s yet another theory which holds highly the autonomous will and it says, “act so that you treat humanity whether in your own person or that of another, always as an end and never as a means

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only”. The crux of this is that we should not use people only to satisfy our selfish ends.

Parents, please take note as we sometimes unknowingly fall into this category when it comes to our children. And it applies to other unequal relationships too, such as the employer/employee relationship. Here, the employer should always take the interest of the employee into consideration. As this theory avers, it’s because every human being has intrinsic value and enjoys sovereignty as an individual and it’s this sovereignty or autonomy as rational beings that sets us apart from any other of God’s creation. It would therefore be wrong to coerce someone to do our bidding against their will purely for our benefit, as this would be to relegate them to objects only of instrumental value. And this would amount to them being used purely as a means to an end.

However, take note that the theory doesn’t say individuals should never be used as a means to an end but that they should never be used ONLY as a means to an end. This means that if the instruction the employer gives his employee or subordinate will lead to a benefit for both of them, that would be deemed to satisfy the moral code. The problem is when it’s for the benefit of one and to the detriment of the other. Therefore, if your boss gives you an instruction which legitimately advances the cause of the organisation, no ethical standard would have been regarded as breached since you would also be a beneficiary.

As we conclude, I believe parents who try to vicariously live their lives through their children, which subsequently prompts them to compel their children to pursue career paths which hold no interest to them, which their natural abilities are not suited to or which fail to fan the flames of their passion, fall into this category of those who fail to see another as an end in himself. Or as a person who has his own noble aspirations and goals in life.

To coerce such to do our will only, while totally

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ing a recurrent tendency to experience booms and bursts. Stock markets grow bullishly, draw in as much loose capital as possible, form a bubble and then suddenly break up at the seams. The build-up that leads to the crash comes principally from the activities of private commercial banks, which are very willing to lend during good times but highly risk averse at the slightest sign of economic crisis. Since the Global Financial Crisis of 2008, the world has witnessed several stock market crashes.

Expectedly, the importance of development banks has become even more enhanced. They are usually the strong line of defense when economies need reflation. They offer a rare combination of finance and commitment, especially on a long term basis – something incongruent in commercial banks.

A fundamental reason for the establishment of development banks is to have a countervailing force against the shortcomings of private banks.

While the private sector is viewed as the engine of growth in the contemporary mixed economic system, it has its own frailties that tend to sow the seed of the business cycles, which punctuate economic prosperity at intervals.

When the economy is growing rapidly or significantly, banks tend to be readily available to make loans and support the growth. However, they are not quite forthcoming when the economy is looking down.

Character Matters with Daps

Dapo Akande disregarding their ambitions would be doing them a great disservice which could literally ruin their lives. Life finds meaning when we align with our purpose but conversely can be depressingly empty when we remain outside of our purpose. The hard truth is that it’s not every person who pursues the fulfilment of his purpose, who will succeed.

There are so many variables, just as there are countless decisions, we will need to make during the course of our journey that can make or break us. We should take comfort in this though; happiness does not come only when you fully achieve your goal. As the people of Okinawa would say, it comes when you find your “flow” doing that very thing your DNA has been wired to do. Happiness is found in the pursuit as it’s not a final destination. There is a school of thought which says, “the happiest people are not the ones who achieve the most. They are the ones who spend more time than others in a state of flow.”

That’s why parents must remember one thing before unduly interfering in their children’s lives; life is not a “one size fits all” affair.

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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Economic reality and Nigeria’s tax law: An imperative for peculiar specificity (1) RILWAN BALOGUN

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inston Churchill once said that, “a country trying to tax itself into prosperity is like a man standing in a bucket trying to pull himself up by the handle of same bucket” Today marks barely 1500 days that the world’s economy has been troubled and distorted with the occurrence of the deadly coronavirus, globally code named COVID-19. As of May, 2020, global cases stand at over 4.4 million with very close to 400,000 deaths, and paltry 1.6 million recoveries affecting virtually all the 195 countries of the world critically. The top hit countries are China, Italy and the United States of America with 1,171,63,927 and 46,167 cases recorded respectively.

Aside from the perceived debilitating effects on human existence, there is a multifaceted area that still needs to be considered when determining what forms the sacrosanctity of human survival; and that is its economic activities. No doubt, business activities form the scalar or fulcrum of every thriving economy. According to the International Monetary Fund, IMF boss, he was quoted as saying that the impact of the COVID-19 pandemic is not inconsequential, presumably; therefore, the economy of many African countries would inescapably slip into recession. In this way, Nigeria’s economy is no exception.

From various economic management team to bulky legislations the Nigerian government seem always grappling with holding a balance between growing its economy through increase in fiscal mobilisation on one hand and granting reprieves through various tax incentives to Small and Medium Scale Enterprises, SMEs, with a view to having more robust participants in the sector.

As of today, the survival of many businesses organisations post COVID-19 is dicey and as the major contributors to the economy, the government needs to be proactive to their plight. On the other hand, the government is hell bent on seeing fiscal mobilisation; majorly Indirect Tax i.e. Value Added Tax as the most viable last resort to generate income and stabilise its damaging economy.

For example, recent announcement by the Saudi Arabia government of an increase in VAT from 5 percent to 15 percent with effect from 1st July, 2020 to fund revenue deficit arising from COVID-19 impact and fall in oil pricing perfectly fit into the pedestal one economy who position itself on the side increasing VAT with a view to resuscitate dying economy.

Records for the past years show that Nigeria’s tax contributions to its GDP is abysmally low at the rate of 5.8 percent, 5.5 percent, 5.1 percent, and 6 percent in 2015, 2016, 2017 and 2018 respectively. In fact, 2019’s contribution which was 4.7 percent, despite all the government’s effort, was abysmally below the previous year’s scale which shows that the tax system and administration in Nigeria is dwindling and gradually driving into the marginal side.

According to National Bureau of Statistic (NBS) report on tax contribution to the nation’s GDP, despite the federal government implemented tax amnesty initiatives from 2016 to 2018 so as to drive up tax revenue and expand its tax base, there was still no level of improvement as tax contribution was still dilly-dallying and at best regarded as a ricocheted economy. It is therefore safe to say that the Finance Act 2020 was necessitated by Nigeria’s tax poor contribution to its GDP; low Value Added tax rate of 5 percent, incommensurate tax incentives which has dwarfed corporate tax base and wide spread tax apathy among others.

Basically, the essence of the Act is to incentivise economic activities so as to stimulate GDP growth and facilitate increase in the revenue generated.

There seems to be certainty that there is uncertainty to the end of this coronavirus pandemic and the time when economic activities will return to normalcy. However, as uncertainty abounds, life changing opportunities are already surfacing out of the blues.

Going by world history, each time an

economic or health crisis breaks out, the direction and momentum of every facet of the society is palpable, altered and vicariously threatened. From the Black Death in the 1300s, the 90’s Flu, the 2000s SRS Pandemic, down to the 2008 Global Financial crisis, the world’s economy, has been, in one way or the other negatively dampened and altered, thus having a retrogressive impact on the world economic projection.

Legal obligations vs realities of the COVID-19 pandemic Compliance with statutory obligation, especially as regard to compliance with date is of very essence in law. This to the effect that, where a stipulated date or time is statutorily enshrined for the performance of an act by an individual or corporate organisation, even the government, the consequential effect of non-compliance usually attracts, either a punitive sanction or severe penalties. Under law of taxation, however, penalties are often awarded based on the quantum of money defaulted in multiplier to the number of days defaulted.

Despite the above normative legal practice, the occurrence of the COVID-19 pandemic has severely affected the global economy, and as the microcosm of the larger economy, business units which are contributors to the larger economy is not exempted, to say the least, they are the worst hit. To term with the reality of the day, the government at every level appear confused, due to the fact that it is cut torn between its constitutional role of stabilising the economy and saving it from the cocoon of economic recession on one hand, and alleviating the pang of hardships, dampening the spirit of actors in the private sector, which are key contributors to the nation’s economy.

Summarily, these are the realities that are at stake: The world economy is negatively altered and nose diving, with international business activities grinding at a halt.

Nations of the world suffer economic crises as a result of the global health challenges created by the COVID-19 pandemic; thus, global recession inescapably looms.

In Nigeria, the Federal Government revenue has drastically collapsed due to a downward slide in the global price of crude oil, which forms 90 percent of the government’s

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As of today, the survival of many businesses organisations post COVID-19 is dicey and as the major contributors to the economy, the government need be proactive to their plight

Maximising the impact of COVID-19 stimulus package for SMEs

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ue to the ravaging pandemic, Small and Medium Enterprises (SMEs) are currently in a dip as business activities were grounded to a halt during the lockdown which lasted for over a month. The plunge in exchange of goods and services required that some employees be laid off and others sent on furlough. According to an article published by McKinsey – SMEs account for two-thirds of global employment and half of global GDP. A failure to protect them could put the entire global economy at risk.

The article expatiates on why protecting SMEs is crucial in building a sustainable economy post pandemic. Fact remains that a high number of large companies are depend-

ent on SMEs for business continuity and also some small cities and towns rely solely on them not to mention the employment opportunities created by SMEs. In an attempt to cushion the effect of the pandemic on businesses, the Federal Government through the Central Bank of Nigeria (CBN), introduced a Targeted Credit facility of N50 billion to support Micro Small Medium Enterprises (MSMEs), manufacturers and the health sector. Similar to this, is the N1 billion MSMEs intervention scheme by the Oyo state government as a way of stimulating the dwindling economy. Other states are not left out, as they have all started rolling out intervention packages for SMEs. Recall that as part of the palliative meas-

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ures for businesses, a three-month repayment moratorium for all government funded loans was declared by the president. In the same vein, the Lagos State Employment Trust Fund (LSETF) announced the suspension of loan repayment obtained by 11,000 MSMEs and technology start-ups in the state.

Meanwhile, SMEs could be more susceptible during a crisis, owing to the fact that they may be experiencing liquidity challenges, inflexible supply chains and disproportional representation. However, in an attempt to provide relief for SMEs, the Government must look beyond providing only funds to setting up an integrated structure to ensure that all concerted efforts are aimed towards achieving the same goal and also with focus

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total revenue (IGR) or contributions to the GDP. With the fact in the 3 above, it is economically wise for a responsive government to diversify its economy by strengthening its GDP through a concerted approach to generate funds via fiscal mobilisation.

Taxation, though comparably less to other contributors, however is no doubt another viable untapped goldmine that can be fallen back on so as to rejig, revamp and stimulate the economy.

In response to the reality poised by the global health challenge, business organisations had been held hostage, with virtually all business organisations forced to work from home, thus causing innumerable loss of revenue to the business firms.

More so, because there is a limit to which individuals can have close contact, thus, it stands to reason to envisage that statutory stipulate time for filing statutory document, Annual Returns, and other compliance documents has been a mirage to comply to, and of course being a unprecedented phenomenon, which has never been prepared for, there is no adequate technological advancement put in place to obviate the physical activities of the participants, hence, infractions to these stipulated was foreseeably unavoidable.

Aside the issue of non-compliance with statutory stipulated time, the naked truth is that corporate organisation earnings or revenue is dangerously affected and the economic reality is that it will take uncertain number of months for 70 percent of business organisations, especially the ones that are Private Limited Liability Company, LTD and Small, Medium Scale Enterprises and Business Name alike o bounce back to business goings due to the downgrading dungeon in which the COVID-19 pandemic has buried them. It is therefore predictable that, statutory meetings most of their financial obligations would practically be impossible until they return to a going concern.

It is in the light of the economic conundrum and confusion that the government weighed its options by prioritising its realities at stake and felt the need to at first devise means to ease the colossal loss and hardship of the business organisations before every other means to resuscitate the economy is devised.

Oluwatosin Ojebisi

on future growth.

Finally, in order to accelerate the impact of the various stimulus packages and palliatives offered by the government, SMEs should be granted easy access to bailout funds, an enabling environment for sustainable business growth, inclusivity of SMEs in government projects as well as public procurement participation and continuous planning and strategising for the next normal.

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Wednesday 24 June 2020

BUSINESS DAY

Editorial Publisher/Editor-in-chief

Frank Aigbogun

Face masks not an option to fight against COVID-19 All hands must be on deck to curb and defeat COVID-19 virus

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

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he daily surge in COVID-19 confirmed cases should not only prompt the federal and state governments to take more actions in the fight against the deadly virus, but also encourage Nigerians to comply fully with preventive measures as a complementary effort in combating the disease.

One of such important preventive measures is the use of face masks. Ironically, however, Nigerians complied to the use of facemasks when the number of COVID-19 cases in Nigeria was still low.

But with cases in their thousands, most people have developed a nonchalant attitude towards the preventive measure. Now, for one reason or another, they wear masks below the chin. Many don’t even wear any mask at all.

This is made worse by the laxity on the part of security agencies who enforce the use of facemasks in public places. Only formal organisations seem to mandate their employees to mask-up within office vicinity. But who mandates them when they are out?

The use of masks is part of a comprehensive package of the prevention and control measures that can limit the spread of certain respiratory viral diseases, including COVID-19.

Masks can be used either for protection of healthy persons – worn to protect themselves when in contact with an infected individual. It is also used as a source control in which case it is worn by an infected individual to prevent onward transmission.

COVID-19 has been primarily regarded as a respiratory disease and the spectrum of infection with this virus can range from people with very mild, non-respiratory symptoms to severe and acute respiratory illness, sepsis with organ dysfunction and death.

Some people who are infected have reported no symptoms at all.

Interactions with people are inevitable on a daily basis and research has proved that tiny respiratory droplets produced when people talk can linger in the air for about eight minutes. In this situation, while social distancing has been emphasised as a necessary measure, researchers have found that masking policies correlate with fewer COVID-19 cases, estimating that widespread uptake of the use of masks could

considerably limit infections. This places masks as a very effective way to curb infections.

Nigeria is currently battling with surging COVID-19 cases and Lagos state, the hotspot of the COVID-19 cases, is considering re-imposing lockdown measures. As at Sunday, Nigeria reported 436 patients with Lagos accounting for 38.7 percent.

Total confirmed patients stood at 20,244 of which 12,847 are receiving care, 6,879 have been discharged and 518 have died.

It remains in the best interest of the federal government to ensure strict compliance of the use of nose masks else Nigeria risks combating the virus for a longer than anticipated period, overwhelmed healthcare facilities, mass graves of Nigerians and ultimately a much slower economic recovery.

This is why we join other wellmeaning Nigerians and health officers to call on Nigerians to comply with the guidelines and preventive protocols. We are convinced that beyond individuals risking the lives of family members, not complying with masking policies will also delay business recovery and may further threaten individuals’ disposable income,

throwing more people into poverty.

We hereby highlight some tips on how to wear a face mask, believing that the tips will help a great deal in stemming the rising rate of community transmission. It is advised that before putting on the mask, you wash your hands for at least 20 seconds with soap and water, or rub your hands together thoroughly with alcohol-based hand sanitizer.

It is also necessary to check for defects in the face mask, such as torn or broken loops. Pull the bottom of the mask over your mouth and chin.

Be sure the mask fits snugly. Don’t touch the mask once in position. If the mask gets soiled or damp, replace it with a new one.

The fight against COVID-19 is a fight for all. For that reason, we encourage everyone to play his/her part to ensure that the deadly COVID-19 virus is curbed and defeated. That the virus is real is not in doubt and we want to place on record that numbers being reported are not true reflection of the facts on ground, but they are the best we’ve got.

This explains our strong advice that the usage of face masks must be compulsory and enforced everywhere with stricter sanctions.

HEAD, HUMAN RESOURCES Adeola Obisesan

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

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• The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests.

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wednesday 24 June 2020

BUSINESS DAY

news Here’s what new survey says about COVID-19 impact on retail business … malls have witnessed 30% drop in footfall arising from lockdowns CHUKA UROKO

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he retail business, globally, is about the worst hit of the various segments of real estate market by the ravaging coronavirus, otherwise called COVID-19 pandemic, a recent survey by CEBRE has shown.

CEBRE, an acronym for Czech Business Representation to the EU in Brussels, founded by three most important cross sectoral Czech entrepreneurial and employers organisations, notes in the survey that as Covid-19 is shutting down shops and causing millions of people to lose jobs, property owners’ ability to collect rents has also been limited.

According to the survey, in Dubai, arguably the home of real estate, just 10 percent to 20 percent of mall retailers paid rent in April and many not until the end of May, noting that the paying share was higher for other assets like multi-family apartments which recorded 89 percent, though not all in full.

In Nigeria, the retail business had seen what looked like a revolution, leading to the development of Western-styled retail malls such as The Palms in Lekki, Ikeja City Mall, Novare Lekki Mall, Jabi Lake Mall in Abuja,

Festival Mall in Festac Town, Lagos, among others.

These malls, apart from the convenient and comfortable experience it offered, retail business also created a lot of jobs for many categories of workers, including mall attendants, farmers, manufacturers, and even middle-level manpower who worked as centre managers, company lawyers, etc.

But today, with the drastic drop in consumer purchasing power and the social distancing rule, both footfall and occupancy rate have dropped considerably and with that retailers income has also dropped, limiting their capacity to pay rent.

Fabian Ajogwu, a professor and senior advocate of Nigeria, is the chairman of Novare Equity Partners, developers of the 22,000 square-metre Novare Lekki Mall in Lagos.

Ajogwu disclosed at a real estate Webinar n Lagos recently that retail business was really going through tough times as a result of the rampaging coronavirus pandemic and governments’ reactionary measures.

“What we have witnessed in all of this is a drop in what we call footfalls in the mall for obvious reasons; the impact is not necessarily from COVID-19, but from the reactionary measures that has

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come from government across states and regions,” he said.

Continuing, the professor explained, “what that has done is to shut down demand. When you shut down demand, then there is a drop in footfall in the mall and we have witnessed 30 percent drop in the first three weeks of the lockdown measures and subsequently a gradual rise coming back.”

The CEBRE survey affirms this, pointing out that real estate services firms expect rent prices to decline for even the strongest sectors. It notes that recovery may take, at least, 12 months for warehouses and, at least, 36 months for shops, restaurants and hotels.

“The pain is universal. But as is often the case, the biggest companies may be best positioned to control their fates— and many of the world’s largest property owners have already announced steps designed to speed up the comeback,” the survey noted.

It recalled that, in early May, real estate powerhouse, Brookfield Asset Management, said it would spend $5 billion to invest in struggling retail businesses, pointing out that Brookfield owns 152 million square feet of retail space and another roughly 300 million of offices, hotels and apartments.

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14

Wednesday 24 May 2020

BUSINESS DAY

news

Court refuses to bar Obaseki from participating in PDP primaries

A

the Edo State governor, from participating in the People’s Democratic Party (PDP) primary election slated for Thursday.

I, formerly known and addressed as Augustine Folake now wish to be known and addressed as Augustine Folake Eunice. All former documents remain valid. General Public please take note.

I, formerly known and addressed as Miss Njoku Chinyere. A. now wish to be known and addressed as Mrs. Akagha Chinyere Gift.

All former documents remain valid. General Public please take note.

CONFIRMATION OF NAME This is to notify the general public that Adeyemi Olalekan Peter Adebiyi and Olalekan Peter Adebiyi. refers to same and one person. All former documents remain valid. YabaTech and general public should take note.

I, formerly known and addressed as Fagbola James Babatunde now wish to be known and addressed as Olawuyi James Babatunde. All former documents remain valid. General Public please take note.

Federal High Court in Port Harcourt, Rivers State, has refused to bar Godwin Obaseki,

CHANGE OF NAME

CHANGE OF NAME

Obaseki was granted waiver bythePDPrecentlyafterhejoined the opposition party from the All Progressives Congress (APC).

CHANGE OF NAME

I, formerly known and addressed as Adeniyi Adeola Oluwafunsho now wish to be known and addressed as Segilola Adeola Oluwafunsho. All former documents remain valid. General Public please take note.

The suit was instituted by one of the governorship aspirants of the PDP, Omoregie OgbeideIhama, who had vowed not to step down for Obaseki.

A major reason stated by Ogbeide-Ihama was that Obaseki recently joined the party and only those who purchased the forms during the stipulated window should be allowed to participate in the primary election.

Just like Obaseki’s former

party, the APC, Ogbeide-Ihama also questioned his educational credentials. Ogbeide-Ihama also prayed that the primaries be put on hold pending when the court would hear the motion on notice.

The judge, E. A Obile, however, did not grant that prayer, but asked that the motion seeking to bar Obaseki be served on the defendants including Obaseki via newspaper publication.

CHANGE OF NAME

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Several newspapers, online publications, earlier on Tuesday reported that Obaseki had been barred by the court from contesting the election. Those accounts of the court proceeding were inaccurate, PREMIUM TIMES later confirmed.

Obaseki joined the PDP last Friday after he was disqualified by his former party, APC, from seeking re-election allegedly for submitting questionable certificates.

Wednesday 24 June 2020

BUSINESS DAY

Live @ The Exchanges COVID-19 realities: Corporates look to Capital Market as FMDQ Exchange admits over N23bn Debt Securities to its platform Stories by Iheanyi Nwachukwu

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he current business climate, marred by the impact of the coronavirus pandemic has seen most corporates and business entities look to the debt capital markets as a viable avenue to efficiently raise capital in order to meet their financing needs towards business expansion and/or working capital management, amongst others.

As the leading organiser for the Nigerian debt capital market (DCM), FMDQ Securities Exchange Limited (FMDQ Exchange or the Exchange), towards empowering the Nigerian financial market, provides a choice platform for the registrations, listings, quotations, and trading of debt securities.

The Exchange approved the listing of the FBNQuest Merchant Bank Funding SPV Plc Series 1 N5billion Fixed Rate Senior Unsecured Bond, and the quotations of the Coronation Merchant Bank Limited N6billion Series 9 and N9 billion Series 10 Commercial Paper (CP) notes under its N100 billion CP Issuance Programme as well as the Mixta Real Estate Plc N3.30 billion Series 20 - 23 CP notes under its N20 billion CP Issuance Pro-

gramme on its platform.

The Exchange also admitted the registration of the Guinness Nigeria Plc N10billion CP Programme, allowing the company raise funds from the market up to the limit approved within its registered CP Programme as at when the need arises. Issues from this CP Programme will also be quoted on FMDQ Exchange.

These admissions to FMDQ Exchange’s platform are reflective of the potential of the Nigerian DCM and the commendable level of confidence demonstrated by both issuers and investors in the market.

They also validate the efficient processes and integrated systems through which FMDQ Holdings PLC (FMDQ Group or FMDQ), through its wholly owned subsidiaries – FMDQ Exchange, FMDQ Clear Limited, FMDQ Depository Limited and FMDQ Private Markets Limited - has sustained its uninterrupted service delivery to the market and its diverse stakeholders during this difficult time and beyond.

As is the corporate tradition for FMDQ Exchange, these securities shall be availed the benefits of the value-driven listings and quotations service on the Exchange, including global visibility through its website and systems, liquidity credible price formation and continuous information disclosure

to protect investor interest, amongst others.

In keeping with its commitment to the development of the market, FMDQ Exchange shall sustain its efforts in supporting issuers with tailored financing options to enable them achieve their strategic objectives, deepen and effectively position the Nigerian DCM for growth, in support of the realisation of a globally competitive and vibrant economy.

With a vision to become “the leading African builder of ecosystems of financial infrastructure and services for markets”, and a mission to “collaborate to empower markets for economic progress towards delivering prosperity”, FMDQ Group is unwavering in its pursuit of product and market innovation and as well as stakeholder engagement, towards making the Nigerian financial markets globally competitive, operationally excellent, liquid and diverse, in line with its GOLD Agenda.

FMDQ Group is Africa’s first vertically integrated financial market infrastructure (FMI) group providing a one-stop platform for the seamless and cost-efficient execution, risk management, clearing, settlement and depository services, as well as data and information services across the debt capital, foreign exchange and derivatives markets in Nigeria.

NSE upgrades data portal (X-Dataportal) to further improve access to the market

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he Nigerian Stock Exchange (NSE) has upgraded its Data Portal (X-DataPortal).

The revamped X-DataPortal provides a more efficient, user-friendly experience for subscribers. The new features i n c l u d e d a t a p ro d u c t s, subscription management, payment gateway integration and a lot more.

The X-DataPortal which was first introduced in 2013, is an online application that serves as a repository for real time, delayed, end of day, and historical data for all financial instruments listed on the NSE. It is a consolidated, streamlined platform for market participants to access affordable, quality and timely data.

Speaking on the development, the Chief Executive Officer, NSE, Oscar N. Onyema, noted that, “The upgrade of the X-DataPortal

is in line with the desire of the NSE to continue to provide an exchange that is easily accessible leveraging digital technology.

“The newly enhanced X-DataPortal has, therefore, been equipped with marketfocused features that will complement the NSE website and other NSE portals in response to stakeholders’ increased demand for easy access to data. Given the importance of Market Data in investment decisions, we remain resolute in our commitment to provide capital market participants with more channels to access relevant market information required for making investment decisions.”

On his part, the Divisional Head, Trading Business, NSE, Jude Chiemeka, stated that, “At the NSE, we recognize that data fuels every aspect of

the trading process. We are, therefore, pleased to introduce the improved X-DataPortal that will serve as a principal source for brokers, fund managers, research analysts, other professionals and nonprofessional participants like students and investors to get quality real-time and reference data reports for analysis, research and reporting purposes. We believe that the customer-centric approach we have adopted will deliver a superior customer experience in engaging with our capital market.”

The X-DataPortal provides users with additional features such as seamless purchase of market data; easy access to customized data; instant notifications; and real-time prices. Existing users of the portal will also be migrated to the new portal and can log in with existing credentials.

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16

Wednesday 24 June 2020

BUSINESS DAY

Wednesday 24 June 2020

BUSINESS DAY

17

INTERVIEW

‘It is not in Nigeria’s interest to continue wheat importation’ In 2019, over N400billion was spent importing wheat into Nigeria. As the crop remains Nigeria’s highest agricultural good import, SANI UMAR, director, Northern Nigerian Flour Mills PLC who is also the Coordinator for Nigerian Wheat at the Flour Milling Association of Nigeria (FMAN) in this Zoom interview with CALEB OJEWALE, discussed the need and current efforts to boost local wheat production. He also highlights an offtaking arrangement where all local wheat production is bought. Excerpts:

With productivity taking a hit this year, don’t you think farmers would also need some sort of support?

We are already doing a lot in terms of giving the farmer support, in terms of research and development, good seedlings for them to get higher yields per hectare. This year we did some Anchor Borrowers’ Program with the farmers, giving them a lot of assistance in terms of inputs with the agreement that we are going to mop up everything that is produced.

Going forward we may do more than what we did last year when we supplied some fertilizer and other inputs so that they can produce more. In terms of support, I do not think the industry is in a good position to say that this is the support we are going

We prefer to have our wheat locally sourced. However, if it is not available, what can we do? We have to keep our industries running by finding other ways to survive to give right now. We have to look at the situation before we could say ‘ok, this is what we are going to do’. However, I am not ruling out the association making some support for the farmers for the losses incurred and to boost their production.

In 2016 a Memorandum of Understanding was signed with the Wheat Farmers Association of Nigeria

(WFAN) to offtake all wheat produced by farmers in Nigeria. Four years after, can you give some insights into how this relationship has fared over the last four years?

We have been in good terms with the wheat farmers association.

The relationship over the last four years with them has been very cordial. In the past, it was more of antagonistic due to some mistrust on the side of the wheat farmers. However, after engaging them in regular discussions and extensive collaboration, the wheat farmers association can now attest to the fact that we have made significant impact and the level of our support has been both consistent and increasing.

We have done a lot in terms of research and development. We have been trying to see how we can have good seedlings that give them more yields. We engage with the Lake Chad Research Institute to conduct necessary research and give us feedback, which we pass back to the farmers.

We have purchased over N1 billion worth of wheat over the last four years. Therefore, I think the relationship has improved significantly compared to what the expectations were before.

In sourcing from these local farmers, how have they evolved in terms of meeting quality requirements? Is it there yet? And if not, what more needs to be done so that they can give not just the right volume, but also the right quality needed for processing.

We are not yet getting the quality we need, because the right seedling is not available. Over the years, farmers have been recycling the same seeds, planting it repeatedly and the yield has been declining. What is needed is to have good seedlings. We are hoping authorities can allow us to have some good varieties brought in from neighbouring countries. Specifically, we identified one seedling called Imam from Sudan, which is good for our environment.

If the authorities could allow, we are willing to bring in that kind of seedling so that the yield can improve much more than we are getting now.

This variety you are talking about in Sudan, what challenges have you faced in trying to get it adopted locally?

There is the Seeds Council which certifies all seeds produced in the country and we have to go

with our involvement in the local production.

Do you think there is a lack of attention on Wheat in terms of government policy and finance from the CBN such as what is flowing to rice, the lack of which is probably limiting growth in wheat production?

I think the Central Bank of Nigeria (CBN) is doing its best in terms of assisting with local wheat production. The issue is probably not in terms of Finance as such but attention is being given more to the rice production than wheat because of many reasons. As I said, the areas of production is restricted to the northern part of the country. Wheat has a period of planting which usually starts from November and if you are late a day, your yield will decline. It is a very sensitive crop that requires specialization in terms of its cultivation.

Financially I don’t think CBN is doing badly because they collaborated with the Wheat Farmers Association of Nigeria. They are doing all they can to ensure farmers get some assistance in terms of Anchor Borrowers, but probably we need to pay more attention more than what we are doing, judging by how the rice production has improved significantly compared to be local Wheat production.

through them. That is why I’m saying if the authorities would allow the importation of the seedlings from Sudan because we did our own investigations and confirmed the Imam variety can produce well in the northern part of Nigeria because we have a similar kind of weather. Still, we have to go through the process of getting the seed certified by the seed council and approvals from other necessary agencies.

Apart from this Imam variety you have mentioned and looking at the work you’ve been doing with the Lake Chad Institute, what efforts have you been spearheading in getting the local varieties improved so that they give some of what you expect in terms of output?

We are doing seed multiplication to see how we can develop an improved variety, for instance with the ‘Norman seed variety’ which we did about 25 hectares of land.

We also did some research on durum wheat variety for production of pasta products. These are some of the things we are doing to see how we can improve on the seedlings being used by farmers.

What is the cost difference between imported and locally sourced wheat, and what is responsible for it?

The local variety costs more because the cost of production is always higher.

Wheat is only grown in the northern part of the country mostly within Kano, Jigawa, Sokoto, Kebbi axis. The irrigation facilities are not available everywhere, limited only to some few regions of the country. The cost of course is always higher in terms of the locally produced wheat. You cannot compare with the imported wheat.

We tend to see on an average a difference of 20 – 40 percent in price difference, which is in favour of imported wheat.

Occasionally local wheat prices can be as much as 70 or 80 percent more than imported wheat. Low yields per hectare is the primary reason for high prices.

Going forward, if we are to drastically improve on local sourcing, what strategy needs to be put in place and can you project a timeframe over which we can have a roadmap to make locally produced wheat cost effective and competitive with the foreign alternatives?

We are expecting all stakeholders to put hands on deck and to be involved

in the mass production of wheat. We as millers and end users of the locally produced wheat are doing all we can to see how we can improve the situation. However, the federal, state and local governments, as well as financial institutions all have to be involved in making the environment conducive for local wheat production. Everybody has to be involved. The irrigation facility has to be provided. The financial sector has to come in with good subsidies for the farmers so that they can access loans to increase the acreage they are cultivating.

What we are doing from the Flour Milling Association of Nigeria, is to provide the necessary support in terms of training, capacity building and making sure that the right seedlings are available for farmers so that we have the best quality at the end of the harvests. It is supposed to be the collaboration of all stakeholders to make it a reality.

If all the irrigation facilities can be provided, other crops will also benefit this. It is the same area of cultivation for rice, wheat, vegetables etc. If the facilities are available, I think it will give us much hope that local wheat production will increase but it will be difficult for somebody to say within the next 2,3 or 4 years. We are only hoping that things will get better by the day

I would like you to speak specifically to some of the interventions by FMAN in boosting local wheat production, what has been done over the years?

We have been assisting wheat farmers in the country in the last four years and our intervention has been over N250million. We made a donation of N20million to the Lake Chad Research Institute for research on improved technology and modern Agronomy practices in the year 2016.

We also donated water pumps and some wheat seedlings to farmers. In 2018, we procured 50 multicrop threshers from outside the country and they were donated to wheat farmers in order for them to have a good harvest at the end of the season and also reduce postharvest losses.

We also engaged over 400 farmers in Kano, Jigawa and Sokoto on the outgrower program and we have stationed our staff to be monitoring the program so that we can achieve what we want in increasing wheat production. With these interventions, improvement in off take price for wheat has been to the advantage of the farmers.

Looking at all the support

given so far, what insights are you getting in terms of helping to scale up output?

The important thing for us is to have built confidence with the farmers. As I mentioned earlier, the farmers were looking at us as not being serious in terms of local wheat production. There was a lot of misunderstanding that they will produce and nobody will offtake the harvests. With our coming and all these interventions, the first thing we did was to give confidence to the farmers that we are around and willing to take whatever they produce.

This was the first thing we did and I’m happy to say that we have that confidence with the wheat farmers in the country. When we donated the water pumps and the seedlings, we saw an increase in terms of the output of wheat production in the country. We just donated the threshers in 2018, so it is now we are going to assess what level of improvement is recorded in terms of harvesting the wheat.

Already, we have seen from what we are buying that it is much cleaner than what we used to get. This shows the threshers have contributed in terms of getting good variety of wheat, clean and without impurities.

You have spoken so much about what the private sector is doing to scale up wheat production. In all of this, isn’t there a role for government to also complement your efforts?

We look forward to the government

,

Looking at this point you just made about the importation not being sustainable. We don’t exactly have the dollars to continue importing with oil prices low because of the COVID-19 pandemic. How will this further affect your ability to get raw materials with 95 percent still imported?

The COVID-19 already had negative impacts on our operations because as you know, everything was at stand still for the last two to three months internationally.

Also, the local production where we wanted to mop everything produced was also affected this season. This was due to restrictions of movement, and as all the markets were closed the farmers could not take their harvested wheat to the markets. There were also a lot of challenges in moving the goods from wherever we can source them.

However, we are doing our best and still buying whatever we can get from the farmers so that we keep our promise that whatever is produced locally we will make sure we mop up everything.

Considering the whole nation had to be on lockdown for so many weeks, this affected the Milling operation of our members. Also, the issue of foreign exchange, with sourcing and accessibility being affected seriously.

The dollar we were getting at a reasonable rate has now been reviewed upward. Whatever we are now getting to source our

raw material is not like it used to be before the COVID-19. Also, people have been affected in terms of even purchasing power, because if you are not allowed to go out to do your business, then your ability to spend money and buy whatever you want to buy is affected directly. Of course, this is a worldwide issue, but we have to deal with it and we pray that it will soon be over so that life can return to normal.

,

C

onsidering wheat is by far Nigeria’s highest agricultural import, how have flour millers been coping with this?

Wheat production has not been consistent over the years due to the non-availability of a National strategy for Wheat development.

It is only the Flour Milling Association of Nigeria that is paying much attention to see how we can improve wheat production in Nigeria; all other stakeholders are not keen in making wheat importation reduced to the barest minimum.

For flour millers, we are not finding it easy and are not keen to continue importing because of the Forex and other logistics involved. We prefer to have our wheat locally sourced. However, if it is not available, what can we do? We have to keep our industries running by finding other ways to survive.

We tend to see on an average a difference of 20 – 40 percent in price difference, which is in favour of imported wheat. Occasionally local wheat prices can be as much as 70 or 80 percent more than imported wheat

coming in terms of providing the irrigation facilities because that is under the Federal Ministry of Water Resources, especially in the states where the crop is grown in good quantity and they have the land.

We are also looking at investment in research and production of high yielding seeds variety, which can give us good baking quality at the end of the day. Also, major agricultural credit schemes like NIRSAL, CBN and the rest can give us more encouragement. Likewise, the federal ministry of agriculture and rural development will have to come in, in terms of providing capacity building and extension programs so that the farmers can get the latest information on how to grow wheat using the latest technology and maybe at a minimum cost.

When you say imported wheat has certain advantage over the local ones, in what ways exactly?

The foreign wheat has as an advantage in terms of coming in one particular variety. That is the first point. It is either soft wheat or hard wheat, which can give more gluten and more quality bread at the end of the day. Our problem locally is the wheat we are growing is a mixed one. You cannot get 100 percent soft or hard wheat, and by having a mixture of the two when you want to bake your bread you are not going to get the best out of it.

It is not that we do not want to buy or use the local wheat 100 percent, but quality of the variety being used in the mills is a challenge. The

quality of wheat is what determines the quality of flour produced and then it goes to the Bakers who in turn get the best quality of bread.

If we can have a good varieties (such as Imam and Norman), over a period of time I believe we can compete with the imported wheat.

Any final words you’d like to share?

I want to make an appeal to all the stakeholders to understand that local wheat production is very vital in feeding the nation. We have areas where we can develop and grow wheat. What we need is to have the necessary infrastructure in place.

We the flour milling association are doing all we can in collaboration with the wheat farmers association.

We always ask them of their challenges and intervene in whichever way we can so that we boost the local wheat production. It is not in our interest to continue buying wheat from outside, but because the wheat is not available locally, we have to survive.

We employ a lot of people, providing employment across the Nation and if these people are not employed then you are creating more problem for the society. Therefore, we need to keep our employees in place. We have to make sure the raw material is available for us to continue to produce. Bread is a staple food in Nigeria and there is hardly any house where in two days they do not eat bread. I believe bread is more consumed than rice because bread is consumed everyday regardless of position or status.

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Wednesday 24 June 2020

BUSINESS DAY

BANKING Banks key into CBN’s nationwide cashless policy to apply charges Stories by HOPE MOSES-ASHIKE

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ith the cashless policy of the Central Bank of Nigeria (CBN) going nationwide as at June 16,2020, Deposit Money Banks (DMBs) have positioned to apply necessary charges according to the directive of the regulator.

Cashless policy is an initiative introduced by the CBN to reduce the amount of physical cash in circulation thereby encouraging the use of electronic platforms for settlement or payment for goods and services.

Last week, precisely on June 16, 2020 Fidelity Bank Plc sent a note to its numerous customers, updating them on the initiative.

The note reads: “kindly note that commencing June 16, 2020 the Central Bank of Nigeria (CBN)’s cashless policy will take effect nationwide.

With this policy in place, all cash transactions by individuals and corporates above the limits will attract processing fees”.

On September 18, 2020, the CBN issued a circular which allowed for bank charges on deposits effective the same day. This however, was kicked against by the public resulting in suspension of the charges by the National Assembly.

Godwin Emefiele, CBN governor

Consequently, customers are to pay huge fees for cash deposit or withdrawal above N500k individual or N3m corporate in Abia, Abuja, Anambra, Kano, Lagos, Ogun or Rivers State. Rest of the country was to take effect from March 31, 2020 but for the delay which was as a result of the intervention by the National Assembly.

In the circular to deposit money banks signed by Sam Okojere, director, payment system management depart-

ment, the nationwide implementation of cashless policy would take effect on the stated date.

Responding to this development, Taiwo Oyedele, head of tax PwC, said the policy will affect supermarkets and retailers with a lot of cash takings, and even tax collectors who collect taxes in cash.

He said in his tweeter account that without careful implementation with relevant exemptions, this policy will negatively affect financial

inclusion and further complicates ease of doing business for small businesses.

In a note to its customers on ‘important update on stamp duty’, Access Bank Plc stated, “you may recall that the CBN mandated a charge of N50 as stamp duty charge on all credit received into current and savings accounts.

This is in respect of deposits and electronic transfers into all Naira-denominated accounts for transaction values of N10,000 and above. We recently discovered that the charges on applicable transactions carried out between February 1, 2020 and April 30, 2020 were inadvertently not passed on your account.

We sincerely apologise for this.

However, in compliance with the CBN mandate, we will be required to process the accumulated charges for the said period on your account for remittance to the Central Bank of Nigeria.

Also on stamp duty charge, Fidelity Bank on March 18, 2020, informed its customers that stamp duty charges have been extended to savings accounts effective February 1, 2020. This is in line with the recent Finance Act 2020, which was signed

by President Muhammadu Buhari on January 13, 2020.

With this development, some changes were made to stamp duty collection in the Finance Act.

Access Bank extends its Womenpreneur initiative to 6 African countries

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ccording to the World Economic Forum, women are seen as the future of Africa, being one of the largest contributors to economic growth and having the highest entrepreneurship rates in SubSaharan Africa. Interestingly their contributions are not fully maximized as there are vast potentials not harnessed due to barriers such as finance, manpower, skillset, technology and more. Access Bank’s W Initiative offers women across various segments opportunities to new markets, access to affordable finance and capacity building programs in addition to a wide array of financial and lifestyle offerings Launched in 2019, the Womenpreneur Pitch-A-Ton was the first women-in-business support initiative of its kind in the industry offered by the Access Bank W Initiative.

The program in its maiden edition provided financial grants worth N9Million to the top 3 applicants with a free mini

MBA certification for 50 women entrepreneurs in Nigeria.

This it did in conjunction with the International Finance Corporation (IFC, a member of the World Bank Group). This year, the program is being extended to 6 other African countries where Access Bank’s W initiative has its presence. These countries are Nigeria, Ghana, Rwanda, Zambia, Sierra-Leone, Gambia and Congo hence the tag name “Womenpreneur Pitch-A-Ton Africa”.

The Womenpreneur PitchA-Ton Africa is targeted at

Herbert Wigwe, group managing director www.businessday.ng

women above the age of 18 years who have been in business for at least one year.

Speaking on the initiative, Ayona Aguele-Trimnell, group head, W Initiative Access Bank stated that the Pitch-A-Ton is an expansion of the Womenpreneur business workshop, under the bank’s women proposition.

She further commented “Having had a successful program last year, we are really excited to take it a step further by extending this opportunity to more women entrepreneurs trying to power the wellbeing and growth of their societies. This time around, we will provide up to N9 million financial grant and a unique capacity building program aimed at empowering women entrepreneurs.”

Access Bank has been a leading advocate for women’s economic empowerment in Nigeria and this is the key motivation for the W Initiative which caters to the women economy particularly in the areas of capacity building and creating networking opportu-

nities for women” she added.

Ada Udechukwu, head, women banking, explained the mechanics for participation: “Interested persons who meet the criteria are required to fill an online application.

The five hundred candidates selected from this pool will then send in a sixty seconds video pitch which will be screened by a credible panel of business experts to select fifty finalists.”

The Pitch-A-Ton is designed as a 3-month virtual Programme incorporating pitching sessions and an 8-weeks intensive mini-MBA online training and business coach in collaboration with the IFC. Also, as part of the graduation requirements, the fifty finalists will pitch their businesses, infusing learnings from the mini-MBA and will stand an opportunity to win financial grants up to N5 million.

Call for entries will commence in June 2020 and end August 2020, more information can be accessed from www. womenpreneur.com.ng

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Union Bank achieves goal in 2019 citizenship, sustainability, innovation report

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nion Bank, one of Nigeria’s foremost financial institutions, has announced the release of its 2019 Citizenship, Sustainability, and Innovation (CSI) report - an annual report outlining the Bank’s social and environmental investments during the year in view.

The report gives a detailed, year-long account of responsible business practices, innovation, and community impact.

The 2019 report was prepared in line with the Nigerian Sustainability Business Principles (NSBPs) and the Global Reporting Initiative (GRI) standards, highlighting Union Bank’s commitment to transparent reporting of its CSI efforts. The report also provides insight into the Bank’s commitment to making lives better for Nigerians by enabling success and championing development in Nigeria, in line with 14 out of the 17 Sustainable Development Goals (SDGs).

According to the report, in 2019, Union Bank achieved its plan to deepen its sense of shared ownership and accountability, leveraging the unique three-pillar model: Citizenship, Sustainability and Innovation. This model informed the Institution’s choice

of partnerships, as the Bank continues to explore ways and opportunities to deepen engagement and ensure sustainable and scalable impact.

Speaking on the release of the report, Emeka Emuwa, chief executive officer, expressed his satisfaction at the contributions of the bank as a leading financial institution committed to making lives better for Nigerians.

“We have continued to make progress in embedding Citizenship, Sustainability, and Innovation into our operations as a Bank. Last year when I presented our scorecard, I highlighted that our focus for 2019 would be to deepen our sense of shared ownership and accountability. We have achieved this and more by making significant, and strategically aligned contributions aimed at enabling youth empowerment, social innovation, arts, and culture, and fostering a globally competitive economy,” he said.

After more than a century in business, Union Bank has solidified its position as Nigeria’s most trusted financial partner, innovating in response to evolving customer needs and championing growth and development for all, especially those at the bottom of the pyramid.

Unity Bank, boost access to e-Learning

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nity Bank Plc has forged a collaborative partnership with Dynamiss, a digital learning solutions provider, to provide low-interest credits to schools to boost access to digital learning resources in Nigeria.

Under the partnership, a full e-learning package comprising microsoft school portal, discounted Airtel data and free contents and devices powered by Dynamiss will be supported with financing from Unity Bank to enable schools to acquire the robust Learning Management System (LMS) at affordable rates.

The Dynamiss’ LMS has been developed by the largest learning platform provider in the UK in collaboration with Microsoft Corporation.

The provision of Learning Management System is coming at a time when Nigeria grapples with a global pandemic, making it imperative for a digital learning system that combines the advantage of remote learning and rich modern curriculum.

Speaking at a webinar with the theme: “Affordable Digitalization Conference 2020, Shaping the Future of Education” to unveil the initiative recently, Unity Bank’s Head, Personal and SME Banking, Opeyemi Ojesina said: “Unity Bank is supporting the initia@Businessdayng

tive in order to empower and prepare the next generation for a competitive future defined by cutting edge technology”.

He further stated: “The elearning market is estimated to hit over $600 billion by 2025, therefore, partnering with Dynamiss to drive this initiative provides a huge opportunity for everyone interested in the education sector”.

“On our part, we are committed to providing low interest credit to as many schools that sign up to the Dynamiss Learning Management System across the country. This is in addition to making available to the schools, cost-effective account products suitable and tailored for the schools and their employees.”

Ojesina added: “Beyond our loan products, which are tailored to assist schools grow their businesses effectively, we also offer rich bouquet that includes, but not limited to asset finance and working capital.

This is even as we train and equip schools with the necessary financial tools for success.”

With the fear of the spread of COVID-19 compelling schools to remain shut, it is believed that the adoption of the Dynamiss Learning Management System will help students return to classrooms and mitigate the impact of the loss of learning on students at this period.

Wednesday 24 June 2020

BUSINESS DAY

INTERVIEW Mastercard Foundation’s partnership with Africa CDC will help curtail COVID-19 impact on the continent The Mastercard Foundation is partnering with Africa Centres for Disease Control and Prevention (Africa CDC) to support COVID-19 responses on the continent. In this interview with CHUKS OLUIGBO, CHIDINMA LAWANSON, country head, Mastercard Foundation, Nigeria, gives insight into the partnership and what it aims to achieve.

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he African Union Commission (AUC) Commissioner for Social Affairs recently announced a partnership between the Africa CDC and Mastercard Foundation to support COVID-19 responses. Can you tell us more about this partnership?

The Mastercard Foundation is partnering with Africa Centres for Disease Control and Prevention (Africa CDC) to respond to COVID-19. The Mastercard Foundation is committing US$40 million, through its COVID-19 Recovery and Resilience Program, to the Africa CDC’s Partnership to Accelerate COVID-19 Testing (PACT). The Mastercard Foundation is one of several partners involved in this initiative. Our partnership will enable the following: (a) The purchase of 1 million test kits; (b) Training and deployment of 10,000 community healthcare workers and 80 surveillance rapid responders to support contact tracing; and (c) The Africa CDC to build its own internal capacity to oversee a continental response to the pandemic.

You mentioned that the partnership will see the delivery of 1 million test kits and deployment of 10,000 community health workers for COVID-19 response. Could you talk us through how this will work?

The Partnership to Accelerate COVID-19 Testing or PACT is anchored on the Africa Joint Continental Strategy for COVID-19. It is endorsed by the Bureau of Heads of State and Government of the African Union to help limit COVID-19 transmission in Africa.

PACT will strengthen the capacity to test, trace, and treat COVID-19 cases on the continent. Our partner, Africa CDC, is working with several partners and member states, Nigeria being one.

Apart from the delivery of 1 million test kits and deployment of 10,000 community health workers, what else are we expecting to see from this partnership?

Communities across the continent will benefit from PACT in a number of ways: (i) Pooled procurement, storage and distribution of diagnostics and other medical supplies; (ii) Testing of

Chidinma Lawanson

at least 10 million individuals; (iii) and the deployment of one million community workers and community healthcare workers.

Additional workers will enable COVID-19 contact tracing and the deployment of technology platforms that will enhance testing, epidemiological modelling, and critical health forecasting, to support re-opening and recovery of economies.

Why partnering with Africa Centres for Disease Control and Prevention only? Is the Foundation looking at bringing other major stakeholders onboard in the nearest future or even extending the partnership to country CDCs? Under the Mastercard Foundation COVID-19 Recovery and Resilience Program, we are stepping up our work on the continent to address the pandemic alongside partners and communities. We have initiatives underway in several countries and more being finalised as we speak. Our partnership with Africa CDC is but one of several partnerships we are already engaged in to support COVID-19 response. You can expect more partnerships to come.

How many countries in Africa will benefit from this partnership?

Is it tied to selected African countries where Mastercard Foundation has presence?

The goal of the continental strategy is to prevent severe illness and death from COVID-19 infection in African Union member states and minimise social disruption and the economic consequences of

COVID-19.

PACT aims to strengthen capacity to test for COVID-19 across Africa, with emphasis on countries that have only minimal capacity. This will ensure that at least 10 million Africans, who would have not been tested, get tested in the next six months.

The Foundation is executing this initiative through its COVID-19 Recovery and Resilience Program. Can you tell us more about this program and how it will benefit Nigeria?

The Mastercard Foundation created the COVID-19 Recovery and Resilience Program specifically to address immediate needs and longer-term socio-economic effects. In Africa, the Mastercard Foundation COVID-19 Recovery and Resilience Program will assist institutions and communities to withstand and respond to the short-term impacts of this pandemic.

The Program will also provide support to strengthen their resilience in the long run. Our hope is that with the right support they will be able to stay united and be at the forefront of reigniting their economies.

In Nigeria, in the short term, the Mastercard Foundation COVID-19 Recovery and Resilience Program will support first responders; create an MSME support program; support digital solutions; and support additional education initiatives.

In the medium-to-long term the Mastercard Foundation COVID-19 Recovery and Resilience Program will support small and medium enterprises (SMEs) as they re-tool their business models; support the educational sector; and support the digital economy.

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Wednesday 17 June 2020

BUSINESS DAY

cityfile Ogoni clean-up: Group calls for restructuring of HYPREP IDRIS UMAR MOMOH

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non-governmental organisation, Environmental Rights Action/ Friends of the Earth Nigeria (ERA/FoEN), has called for complete overhauling of the Hydrocarbon Pollution Remediation Project (HYPREP) for the realisation of the Ogoni clean-up exercise.

Godwin Uyi Ojo, executive director of the group made while addressing a press conference and launch of a global report on Ogoni clean-up, titled, “No clean up, No Justice” in Benin, Edo State.

Ojo said the call became necessary following the alleged lack of capacity by the agency to conduct a proper clean up of Ogoni land. According to him, for the clean up to succeed at a greater pace, we urge the Federal Government to urgently reorganise and overhaul HYPREP apparatus to ensure that it is able to

deliver a truly significant clean up in Ogoniland.

“Based on regular field monitoring and evidence at our disposal, we have come to the conclusion that the federal government environmental legacy project which is the clean-up of Ogoni, is failing and lagging behind because the Hydrocarbon Pollution Remediation Project (HYPREP) lacks the capacity to conduct a proper clean-up.

“HYPREP is not designed nor structured, to implement a project as complex and sizable as the Ogoniland clean-up”, he said.

Ojo, who also urged the Federal Government and Shell Petroleum Development Company (SPDC) to institute a N100 billion rehabilitation fund for the clean-up of the entire Niger Delta, however, called for the introduction of legislation to strengthen and make HYPREP truly independent, transparent and accountable.

Obaseki wants stiffer laws against rape, child abuse

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ife of the governor of Edo State, Betsy Obaseki has advocated for more potent laws to protect the girl-child in the face of rising incidence of rape and sexual abuse in the country.

Obaseki said she was also working with wives of other governors to ensure the implementation of tougher laws to punish perpetrators of all forms of gender-based violence.

She stated this while addressing members of Edo Women Development Initiative (EWDI) and Women’s Aid Collective (WACOL), during a peaceful protest to the Government House in Benin.

Obaseki assured the non-governmental organisations that governors’ wives were working together with Nigeria’s First Lady, Aisha Buhari, to address all forms of genderbased violence.

“We have also realised that rapists kill their victims; it is as a result of this that we, as governors’ wives, set up the Gender Violence Committee. We are working round the

clock to ensure violence against women and children is stamped out. We recently came up with a communiqué to the Nigeria Governors’ Forum and the forum adopted our communiqué, which made them declare a state of emergency on genderbased violence in the country,” she said.

Noting that a target has been set to reduce the incidence of gender-based violence to the barest minimum, she said, “Edo State is in the forefront of these efforts. We will do as much as we can to bring this scourge to its barest minimum. That is our primary goal. We are going to sustain the protests on a monthly basis until we are sure that there is a drastic reduction in sexual violence in our society.”

The coordinator of Child Protection Network, Stella Obehi Ojeme, said, “We are here to express our dismay over the high incidence of rape and defilement cases. We have come to say no to these crimes; we are tired of gory tales of all manners of violence against our women.” www.businessday.ng

When will the track laying work on the Lagos-Ibadan Standard Gauge Rail (SGR) project from Ebutte-Metta to Apapa Pic by Pius Okeosisi Seaport commence?

We lost all in Oba Market fire, traders lament IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

… beg for help

raders at the popular Oba Market in Benin City, Edo State, have cried out for help following Monday’s fire incident which destroyed goods worth millions of naira.

The market located in Oredo local government area, was completed by the Social Democratic Party (SDP) led government of former Governor John Odigie-Oyegun in the early 1990s.

The fire outbreak which reportedly started at 11:30 am, reduced half of the market to rubble.

Assorted goods, live animals- chicken and goats were burnt to ashes, not spar-

ing Hamburger Line where clothes and cosmetics are sold.

Although firefighters later put out the inferno, which cause was yet to be ascertained at the time of this report but extensive damage had already been done.

The incident happened a few days after the traders were directed to return from the makeshift market to their respective market places. The fire was brought under control by the combined efforts of firefightersfromtheNigerianPetroleum Development Company, Federal Fire Service, Nigerian Army School of Supply and Transportation, Benin, and Delta Fire Service, Oghara, Delta State.

A trader who is into cloth-

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ing materials, Edith Amayo said she couldn’t salvage any of her wares as her shop was completely burnt.

“They called me around 1am that the market was on fire. On getting here, I could not salvage any of my goods.

Edith, who felt dejected when she saw her commodities completely burnt, appealed to the government and well-meaning Nigerians, to provide assistance.

Another trader, who simply identified herself as Habiba, said she lost goods worth millions of naira. The trader, who deals in cosmetics, said the fire consumed all her wares. According to her, immediately they opened the

market last week, I decided to go to the market to stock my shops. Sadly, I have lost the only thing that I use to feed my family. I do not have anything in my store and all commodities burnt,” she lamented.

Speaking to newsmen, Karebo Samson, Assistant Controller General of the Federal Fire Service, said he received a distress call from the chief security officer attached to Government House in Benin and quickly swung into action.

“I had to call the men at the station and they got here very early. I cannot tell what caused the fire, we will send in our investigators so they can ascertain what actually caused the fire,” he said.

Army arrests fake soldier in Aba GODFREY OFURUM, Aba

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n unknown soldier has been arrested in Aba, the commercial hub of Abia State for extorting unsuspecting citizens, at Milverton Avenue, close to Aba main motor park.

Soldiers from Forward Operation Base (FOB), Aba, attached to 144 Battalion, Asa, under the 14 Brigade Command of the Nigerian Army, Ohafia, arrested the fake soldier on Sunday while on his extortionist mission.

Sources said the suspect was a regular night visitor to MilvertonAvenueandAbamotorpark, where he openly extorts money from hard drug dealers, prosti-

tutes and commercial drivers.

“Everybody knows him here. Even at the luxury bus park, in Milverton. They all believed he was a soldier. He usually comes on Army T-shirt and his body build up doesn’t look civilian at all, “Ekene Okparaeke, a commercial driver, who was once a victim, said.

“I have once seen him catch some of these drug dealers here and threaten to take them to the army barracks at Ngwa High School and at the end, he will leave them, after collecting money from them.

“You know Milverton has many miscreants, including street prostitutes around it.

He’ll come, slap people, beat people and threaten to call his colleagues and commander,

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who sent him, if they fail to cooperate with him. Almost everybody sees him as the middle-man for soldiers in their dirty deals around here with peddlers of hard drugs not knowing he’s fake.”

Anotherbusdriver,whogave his name as Sunny said the suspect deceived everybody about his identity, until on Sunday night,whenhemethiswaterloo.

“When I saw the soldiers beating him, I wished I joined them to beat him. Do you know how much this guy has collected from people here?

He doesn’t only collect from prostitutes and hard drugs dealers. He extorts whoever falls a victim to his antics.

“He goes after everyone he can intimidate and fabricate @Businessdayng

one offence or the other. He extorts money from bus drivers, like me that do night duty.

Since this COVID-19 issue came up, he often comes with one demand or the other.

“I’m not happy that people say he only collects money from drug dealers and prostitutes.

He also collects from innocent drivers as well. Even those who deal on local alcoholic drinks on the road side are not left out.

The guy is a crafty criminal.

“I know him, but I don’t know his name. I’m happy he has been exposed. He was able to fool everybody, because of the fear people have for soldiers here. To avoid problems, people now do whatever anybody in an army uniform wants”.

Wednesday 24 June 2020

BUSINESS DAY

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MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

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

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erminal operators under the aegis of the Seaport Terminal Operators Association of Nigeria (STOAN), have decried the high rate of manual examination of cargoes at the nation’s seaports, and asked the Nigeria Customs Service to deploy technology to drive the process.

Vicky Haastrup, chairman, who spoke in Lagos at the weekend, said manual examination of cargoes is not efficient and does not promote social distancing.

“We have a situation where people must visit the port physically to do Customs documentation and cargo examination before they can take delivery of their consignments. This is not safe at this time and it is also inefficient. The Nigeria Customs Service should do everything possible to install functional scanners at the port to reduce the high rate of physical examination of cargoes as well as human

contacts,” she said.

According to her, Customs should also make it possible for consignees to process their release documents and make necessary duty payments online without having to visit Customs commands.

“There is also need to reduce the number of govern-

ment agencies that participate in cargo examination at the port in addition to reducing the number of checks carried out on cleared cargos both inside and outside the port premises. Customs’ clearing process must become smart at this time,” Haastrup said.

The STOAN Chairman

also said that due to declining oil revenues, Nigeria must begin to make deliberate attempt to shift its balance of trade. “ Nig er ia must move quickly from being a net importer to a net exporter of food. Government will need to support farmers for better agricultural yields that

L-R: Vicky Haastrup, vice chairman, ENL Consortium; Emmanuel Olajide Adesoye, former NPA board chairman; Hadiza Bala Usman, MD, NPA; Margret Orakwusi, chairman, Ship Owners Forum, and Akin Ricketts, chairman, NPA Board, during the commissioning of two tug boats - MT Musawa and MT Ikoro-Ekiti by Nigerian Ports Authority in Apapa, Lagos recently.

Exporters need storage facilities, incentives, product packaging centre – NSC …As Shipper Council promotes export through advocacy programmes amaka Anagor-Ewuzie

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igerian commodity exporters want the Federal Government to establish at different geo political zones, centre for value addition and packaging of products before they can be exported, Nigerian Shippers’ Council (NSC) has said.

Speaking as a guest on Maritime Today a show on Lagos Traffic Radio 96.1FM, Lawal Samaila Abdullahi, a member of the governing board of the Council, said exporters want government to unify and harmonise international trade processes and procedures, as well as incentives to give them the financial strength needed to venture into export business.

“Exporters also need capacity building in terms of training. The most important expectation is the provision of storage facilities for

storing and drying of their products especially during raining season. This is why cocoa farmers are having problems because if their products are not properly dried, they may be damaged or even be rejected at the point of export,” said Abdullahi, who doubles as a member of Commodity and Establishment Committee of the Council.

According to him, the major role of Shippers Council as a regulatory agency, is overseeing import and export matters to ensure that aside from oil revenue, the nation can generate money from the export of non-oil commodities, which is why government has been creating incentives through many agencies to drive non-oil export.

He identified obstacles to export to include issues around logistics especially transporting farm produce from the farms to the port, lack of adequate information www.businessday.ng

concerning export, inadequate financial support to exporters, lack of needed infrastructure, and lack of collaboration among agencies in the export chain towards driving export.

“The Shippers Council through the Commodity Committee is supporting exporters, whom we identify as groups and associations.

The Council has been going round meeting with all these associations and encouraging those that have not to come together,” he said.

Continuing, he said: “ The Commodity Committee has been working to streamline one point agenda on commodity export like the NEXIM Bank, Nigerian Export Promotion Council, Federal Ministry of Agriculture and others.

Recently, the Federal Government has set aside a section in the Central Bank to support exporters.

While listing some of the exportable commodities,

which include cocoa, rubber, wool, palm oil, yam, cotton, honey, ginger and garlic, Abdullahi, said that people complain of not having access to the CBN grant due to lack of knowledge.

“Such people are not properly informed on the procedure to follow to get these grants, and that is one of the things that the Council is doing by educating, mobilising and enlightening people to understand the processes of export.

Noting that exporters are also paying unnecessary taxes to security officials while moving their export goods to the Ports, he said the Shippers Council is facilitating the establishment of Inland Container Depots (ICD), which is equivalent to seaport located in the hinterland to enable exporters to easily move their produce from the farm to the nearest ICD, reduce bottleneck, unnecessary rent-seeking on the road and delays.

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will be attractive to the international market. Farmers also need to be supported in reducing wastages experienced during harvests and in the course of getting their produce to the market.

Funding and logistics support for the farmers is also of great importance at this time,” she further advised.

She called on government to simplify the cumbersome processes and unnecessary bureaucratic bottlenecks associated with documentation and processing of export cargoes at our ports.

“Terminal operators and the Nigerian Ports Authority (NPA) worked hard to keep the ports running during the Covid-19 lockdown because we are aware of the importance of seaports to the wellbeing of our people.

We knew the port had to remain open to ensure that there was no shortage of food, drugs and other essential supply to Nigerians,” Haastrup said.

She said: “The shipping sector is key in securing the continuity of economic activities, ensuring supply chains

to industries, transportation of essential goods, including energy and food supplies, and transportation of vital medical and protective equipment, and supplies, “It is imperative for the fight against COVID-19, the supply of essentials, as well as for increasing the chance of global economic recovery on the other side of the outbreak, that maritime and connected transport is allowed to continue. We are happy that the President and the NPA saw the merit in this argument and classified ports and shipping as essential services. I must also give kudos to NPA, Customs and terminal operators for ensuring that the ports operated optimally during this period,” she added.

In addition, she stated that terminal operators donated N700 million to the Federal Government to support the country’s effort to curtail the spread of coronavirus and supported the port community through massive awareness campaigns and the donation of various personal protective items.

Cross Border Traders seek collaboration with Shippers’ Council amaka Anagor-Ewuzie

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he African Association of Cross Border Trade has called for collaboration with the Nigerian Shippers’ Council (NSC) in the area of trade facilitation among ECOWAS countries, expansion and compilation of trade statistics on cross border trade.

Mohammed Abdullahi, president of the Nigerian chapter of West Africa Association of Cross Border Trade, Agro-forestry, Pastoral, Fisheries products and Food, made this request during a familiarisation visit to the Council’s headquarters in Lagos recently.

According to a statement by Rakiya Zubairu, head, Public Relations, the secretary of the association, Salami Nassiru, who elaborated on the @Businessdayng

purpose of the visit, said the visit was to formalise trade in West Africa, minimise smuggling as well as promote the trading of ECOWAS products and generate statistics of commodities traded in the sub-region.

Cajetan Agu, Council’s D i re c t o r o f C o n s u m e r Affairs Division, who received the delegation on behalf of Hassan Bello, executive secretary, assured them of Council’s readiness to partner with the Association, pointing out that the proposed areas of collaboration are in line with the Council’s mandate.

Agu said the two Border Information Centres at Seme-Krake border and Jibia-Maradi border were established by the Council to provide on-the-spot assistance like enlightenment and trade information to cross-border traders.

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Wednesday 24 June 2020

BUSINESS DAY

AGRIBUSINESS

In association with

ag@businessdayonline.com

COVID-19: FG plans to launch N471bn mass agricultural scheme to create jobs Josephine Okojie and Bunmi Bailey

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n a bid to revive the Nig e r ia n e co n o my that has been battered by the COVID-19 pandemic and low oil price, the Federal Government is planning to launch a mass agricultural scheme under the Economic Sustainability Plan to create jobs, increase local productivity, and stimulate growth.

The Economic Sustainability Plan aims to mitigate the effects of a deep recession while ensuring social stability and addressing long-standing economic vulnerabilities, the ESC document states.

Agriculture in Africa’s most populous country has long been touted as a remedy to the country’s oil dependency ow i n g t o i t s at t e n d a n t exponential gains by way of earnings, employment, and other spin-offs.

With the current economic downturn, the country is grappling with, there is a consensus across board that there is no better time to leverage the potential of the sector than now, not just to avert the predicted recession, but to fully diversify the economy and place it on the path of sustainable growth post-COVID-19.

But despite the potential of changing the fortunes of the Nigerian economy, the agricultural sector still grossly falls short of its potential.

Low scale technology use, ineffective credit model, and lack of competitiveness in the agricultural sector among others will hamper the federal government push to fast-track economic recovery postCOVID-19 through the sector.

Experts say the mass agricultural scheme will yield little or no result if the government fails to address lingering problems that have continued to limit productivity and have led to the collapse of previous programmes.

“No matter the number of programmes we create N i g e r i a ’s a g r i c u l t u r e will not foster growth and create jobs until will address the fundamental issues limiting productivity,” said Kolawole Adebayo,

Professor at the faculty of agricultural extension and rural development, Federal University of Agriculture, Abeokuta.

“We need to increase out mechanization use on our farms, run an effective credit model, improve our infrastructures and make our marketing structure more reliable to foster growth and attain food security,” Adebayo said.

He added that until Nigeria fix these lingering problems in its agricultural sector, the country will continue to waste resources and time without a substantial result.

Low level of agricultural mechanisation on farms across the countr y still persists, limiting the capacity of farmers to expand their

COVID-19: Rise in feed prices compounds poultry farmers’ woes SEYI JOHN SALAU

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oultry farmers in the country are beginning to count huge losses owing to the interstate lockdown and increase in the prices of poultry feeds.

The situation has driven many farmers into more debts and losses as the interstate lockdown limits access to the market, resulting in egg glut for farmers.

“Currently, so many poultry farms are experiencing egg gluts. It is no doubt the farmers are running heavy losses,” said Samuel Okwudiri, MD, Squdds Farm in Ibeju-Lekki, Lagos.

According to Okwudiri, there is no doubt that the glut and increase in feed prices are having an adverse effect and untold hardship on the farmers.

“As a result, many farmers are counting heavy losses on livestock and produce,” he stated.

The agric sector is one

of the critical sectors in the Nigerian economy owing to its numerous potentials.

Hence, the government issued a directive to security agencies to allow food/ agricultural produce to have access as essential service providers while the lockdown lasted.

However, many farmers, especially poultry farmers suffered some losses as security agencies made it difficult for players in the sector to have easy access to supply products across the states where they are needed as a result of the interstate lockdown.

“There have been confirmed incidences of seizure of vehicles conveying agro-produce across the states’ borders, especially poultry goods.

“O ne p oultr y far mer reportedly lost about N50 million when about 10 of his buses conveying day-old chicks to the eastern part of the country were seized,” said Joel Oduware, a local farmer as he decried the incessant seizure www.businessday.ng

of vehicles conveying agroproduce across state borders.

Okwudiri on his part stated that the difficulty in accessing the market will lead to loss of jobs in the sector and possible close-down of farms. He noted that it is important to point out that some of the large farms have taken facilities from banks to run their farms.

“It is no hard-fact that defaults and non-payment will arise and may eventually lead to closing down. It is in my humble opinion that the government can look into providing palliatives for the farmers to help mitigate the further effect of COVID-19,” said Okwudiri.

He opined that government can mitigate the level of damage in the sector by playing the role of off-taker across different farm produce across the country, which can then be distributed as food palliatives by the government both at the federal and state level to support the poor and needy in the area of food security.

cultivation areas, perform t i m e l y o p e rat i o n s, a n d achieve economies of scale in food production.

“How do we boost productivity, create jobs, and attain food sufficiency when we still farm with hoe and cutlass,” asked AfricanFarmer Mogaji, head, agribusiness group, Lagos Chamber of Commerce and Industry.

“It is not about bringing n e w p ro g ra m m e s, i t i s about addressing the issues preventing us from getting the results we desire,” Mogaji said.

Data from the UNs Food Agricultural Organisation (FAO) shows 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 (FAO)’s 1.5hp/ hectare recommended tractor density.

Although agr iculture accounts for over a quarter of the country’s GDP, Nigeria still spends a whopping $22.5 billion yearly on food imports.

As a result, the country is not food secure. Low yields per hectare and wastage levels remain high in farming areas, reducing supply to processing factories and markets, requiring them to keep importing supplies.

The net effect is limited job growth across the value chain from input production to market systems, and the continued use of limited foreign exchange earnings to import food.

Also, Nigeria loses billions of dollars annually in export opportunities from cocoa, cotton, groundnut, and oil palm. This is largely a consequence of declining production and low-value addition.

“We need to relook at our export crops. Where are we now in cocoa production? It used to be our largest export cash crop but not anymore, what happened?” asked Ayodeji Balogun, country Manager, AFEX Commodities Exchange Limited.

“There must be commercial farming and value addition to have a sector that can create new jobs. Our products must also be competitive,” he said.

According to FOA data, the country’s agricultural valueadded per capita has grown

at less than 1percent in the last two decades.

Despite the Buhari’s led government emphasis on the sector, it has faced significant underfunding for many years.

The federal and state governments have spent less than 2percent of their total budgets on agriculture, falling short of the 10percent Maputo Declaration which Nigeria is a signatory.

Credit to the sector has still remained low as banks are unwilling to lend to agricultural players.

Financing to the sector has been one-sided and at an annual average of N400billion, data from the National Bureau of Statistics (NBS) shows. But experts say the country will need an average of N2.5trillion financing to have an agricultural sector that thrives.

“There has to be a total review of the financing solution of agriculture. It cannot be a piecemeal that is only taking one side of the market. It has to be holistic,” Ayodeji who was earlier quoted said.

“Instead of banks to lend to the sector within their portfolios they just wait to take Anchor Borrowers Program facility to lend to the sector and such funds are not as efficient as the private sector funds,” he added.

The sector is currently hampered by a number of other issues, which include logistical challenges, land tenure problems, and input challenges that constrain productivity among others.

KASCO produces 20,000MT of fertiliser in 5 months Adeola Ajakaiye, Kano

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he Kano Agricultural Supply Company (KASCO) has produced over 20,000 metric tons of fertiliser in the first five months of 2020 and remitted the sum of N2.8billion to the NAIC-NPK Limited as part payment for the supply of raw materials under the special fertiliser production initiative, the organisation says.

Bala Inuwa, managing director of the company, who made this disclosure recently, stated that the remittance made, was different from the over N4 billion paid back to NAIC-NPK in 2019 production session.

Inuwa disclosed that last year the company processed over 50,000 metric tons of NPK20:10:10 without issues around quality and the security of raw-materials.

He noted that the issue concerning the alleged suspension of the production of the commodity started in the 2020 production season which took off on in March.

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“Since the beginning the production of the commodity this year, over 20,000 metric tons NPK20:10:10 have been produced, and sold and over N2.75 billion realized from the production have been remitted to the NAIC-NPK limited, which the managing director NSIA, Uche Orji is a living witness,” he said.

“KASCO is a household company in northern Nigeria, especially in the North West the quality of the company `s NPK 20:10:10 product is widely accepted among the farming community in the region which have made the company `s products a premium one among agro-dealers in the region”, he stated.

He denied the on-going alleged suspension of the production of NPK20:10:10 fertilizer brand in the plant, saying that the organisation has continued to produce the commodity.

“I am categorically confirming to you that there is nothing like suspension of the production in our plants. @Businessdayng

However, wish to confirm that we have a pending issue which is generating interest between the company and one of the collateral managers posted to the company from NAIC-NPK.” “It may interest you to know that the collateral managers are those employed by NAICNPK Limited and posted to our company under the fertilizer production initiative of the Federal Government which we are a partner,” he added.

Inuwa explained that the role of the collateral managers is to ensure that companies participating in the fertilizer production agreement comply with specified quality and ensure the security of rawmaterials being supply for production of NPK20:10:10.

The managing director added that in the northwest the quality of the company `s NPK 20:10:10 product is widely accepted among the farming community in the region, which made the company `s product premium among dealers in the region.

Wednesday 24 June 2020

BUSINESS DAY

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insurance today

E-mail: insurancetoday@businessdayonline.com

Meeting our claims obligation even during lockdown has raised consumer confidence on insurance - Tope Smart After two years in the saddle of leadership of the Nigerian Insurers Association (NIA) as chairman, Tope Smart, the MD/CEO of NEM Insurance Plc is set to relinquish power. In this interview with Modestus Anaesoronye shares his experience during his two year tenure, achievements, challenges and future of insurance industry.

You came into the leadership of NIA when the industry was under trial in terms of response to payment of claims, how much were you able to address this situation during your tenure? his issue has been largely addressed as I constituted a disciplinary committee and defaulting companies were invited to face the committee and errant members were given a deadline to pay their claims or face expulsion.

With this, the responses of our members have improved significantly.

With Covid-19 disrupting global businesses, what can the insurance market in Nigeria do differently to improve lives of policy holders and deepen insurance penetration?

Despite the pandemic and the lockdown, our members have continued to meet their claim obligations even during the lockdown as our members worked throughout the period albeit remotely. Our policy holders were quite impressed with this, and this action has given them more confidence in the Insurance Industry.

With the recognition of the Industry by the Federal Government, following your contribution to the fight against covid-19, what should the Industry do to fully maximize these benefits?

The Industry will continue to partner with Governments at various levels in the task of nation building. We will ensure that the benefits of insurance are made available to all the policy holders so that we can continue to perform our role as the bedrock of the economy.

NAICOM said it will come up with fresh guidelines on recapitalization after Covid-19.

However, some NIA members said they would have been better off with Tier Based. Is NIA likely going to request that the Tier Based Model be revisited in place of share capital increase, as a way of suggestion to NIACOM in the new guidelines?

The Tier based capital introduced by NAICOM was no doubt a very good model but it failed because of the way the model was implemented. Frankly speaking, I see it as a very good model that will enable operators play according to their different capacities. Also, the model is aspirational in nature. The fact that you are a tier 2 company today does not preclude you from aspiring to be a Tier 1 company which can be achieved if you bring in additional capital. Unfortunately, we can’t go back to it as NAICOM has moved from there to Minimum Paid Up Capital.

Customers are still complaining of poor service delivery. From the NIA view point, what should companies do?

Technology is one of the ways to improve service delivery. At our recent retreat, we advised our members to upscale their technology in order to improve service delivery.

What are the major achievements the Industry recorded in the last two years, while you were the chairman?

With all sense of modesty, the insurance industry has achieved a lot in the last two years.

I will attempt to highlight a few of them. For me, the greatest achievement is the recognition of the insurance sector by no less a person than

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Tope Smart

the President and Commander in Chief of the Armed Forces of Nigeria, President Muhammadu Buhari. This is the first time in the history of the Insurance Industry in Nigeria that our sector will get the attention and commendation of the No. 1 citizen of Nigeria. This is a big deal and we are building on this so that insurance industry can take its’ proper place in the configuration of the country. This is not a mean feat when you look at how the sector has been bastardized in the past. With this by the grace of God, I have achieved the “Insurance first” slogan of my agenda. Apart from this, other achievements are as follows: Our intervention with respect to COVID-19 came in two parts: We arranged a Life Insurance Cover for up to 5,000 health and frontline workers all over the Federation; We collaborated with other stake holders in the Industry and donated the sum of N500 million to the Federal Government to further contain the spread of Corona Virus.

As mentioned earlier, we worked tirelessly, towards the construction of NIA building and it has reached an advanced stage.; On recapitalization, we are in full support of the exercise and we embarked on various engagements with critical stakeholders such as NAICOM and Nigerian Stock Exchange (NSE). We used the opportunity of our engagement with NSE to solicit the support of Capital Market Operators for our members; Unfavourable Insurance Law: We pursued with renewed vigor, the tax law which was unfavourable to the Insurance Industry. We escalated the issue up to the National Assembly and thank God, the tax law has finally been amended through the year 2020 Finance Bill.

In the area of Corporate Social Responsibility, we carried out a renovation of the school hall of Baptist Junior Secondary School in Obanikoro. The school authorities were quite www.businessday.ng

delighted with us on this initiative.

In the area of professionalism, we are working with another arm of the Industry to develop a framework to ensure that the business of Insurance is done with utmost professionalism.

The implementation of this will soon start.

Promotion of Nigeria Insurance Industry Database (NIID) and Nigeria Insurance Industry Platform (NIIP). We developed these platforms to eradicate parallel markets from our environment.

The economy is projected to go into recession by the end of 2020. What measures should insurers adopt to cushion the impacts on their operations?

My advice is that this is the time to eliminate unreasonable expenses and conserve resources as much as possible in preparation for economic downturn. In addition, the risk management mechanism of each company must be activated in order to withstand the headwinds that may come.

What is the progress of NIA building?

We are making significant progress with regards to NIA building. But for the lockdown on account of COVID-19, the edifice would have reached about 80 percent completion by now.

Notwithstanding, our contractors have mobilized to site after the relaxation of the lockdown and work on the edifice is progressing.

What support is NIA offering members during this Covid-19 era to ensure they survive the recapitalization?

We have engaged our regulator (National Insurance Commission) to consider the disruption to the process of capitalisation on account of COVID-19. Through our engagement, NAICOM has amended the original recapitalization circular by extending and segmenting the process into two phases. Members now have

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up to 30th September, 2021 to comply with the new capital requirements.

The Insurance Industry has a new Commissioner. What three projects should he focus on to transform the market?

Once again, let me use this opportunity to congratulate the new Commissioner for Insurance, Sunday Thomas on his appointment as the Commissioner for Insurance. He is a thorough bred professional and a round peg in a round hole. For me, his priority should be market development. He should come up with strategies to develop the market. By so doing, we shall increase market penetration and also increase our contribution to the GDP. The second area is to focus on confidence building in the minds of the insuring public. Insurance Companies must meet their obligations as and when due.

Once this is done, members of the public will be motivated towards embracing insurance. Rules should be designed and companies who fail to play by the rules should be sanctioned.

The third area of focus should be on digital technology. Technological advancement at NAICOM and also at the level of operators should be a front burner issue for the Commission.

What would you say were the challenges encountered in the course of your tenure as NIA Chairman?

I faced a number of challenges during my tenure as Chairman. I will highlight a few of them. The first was getting every player to key into some laudable initiatives I considered very germane to the upliftment of the Industry.

Some of our members allowed their selfish motives to override the overall corporate interest of the Industry. Until we are able to promote corporate interest over our individual parochial interests, the industry may not be able to reach its full potentials.

The second one was having to sacrifice the interest of NEM because of my position as the Chairman of the Association. This I did in a number of ways but I have no regret whatsoever because each time I had to take these decisions, I was focused on the bigger picture.

Another challenge was that I had to share my time and devoted more time for the affairs of the Association. As a leader, you have to be there for your members. Most of the time, I had to sacrifice my time, energy and also resources in the overall interest of the Industry.

Share your best moments with us?

Despite all the challenges, I must admit that I enjoyed my time as Chairman of the Association. The fact that given the time limit, I was able to achieve some of my dreams for the Industry gave me so much joy. The intervention initiative of NIA/Industry for which the President personally acknowledged was one of the best moments of my Chairmanship. I received several calls from within and outside the Country on this landmark. Aside this, as Chairman, I had and enjoyed a very good relationship with our Regulator. By the grace of God, I was able to get a lot of concessions from the Commission for our members without any rancor. This gave me so much joy and fulfilment. I believe that these modest achievements I recorded have enabled me to take the Industry to a new level by the grace of God.

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Wednesday 24 June 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

NADDC keys into FG’s economic diversification, says DG MIKE OCHONMA Transport Editor

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irector general, National Automotive Design and Development Council (NADD C), Jelani Aliyu MFR said the agency has fallen in line with President Muhammadu Buhari’s led administration on economic diversification policy as the government made it a priority to diversify from the crude oil into agricultural, industry, mining and tourism sectors.

According to the NADDC director-general, ‘’When you talk about the industry, no other sector can play important role as the automotive sector, that is why we are excited and proud to be one of the 17 parastatals under the federal ministry of industry, trade and investment, saddled with responsibility of developing local automotive sector by implementing the National Automotive Industrial Development Plan (NAIDP) which has five key elements’’.

According to details made available to BusinessDay He stated that the five key components includes; investment promotion, infrastructural development, improvement of standard, skills as well as market development.

He further explained that with these key areas of NAIDP whose focus is to revive, develop and sustain local the automotive industry in terms of production of vehicles and its components in Nigeria.

So when NAIDP is mentioned, the important pillar is skills development. In his words, ‘’As you are aware the present administration is committed to lifting 100 million people out of poverty in the next ten (10) years and we can achieve that by creating jobs, building more Industries, getting people engaged in more productive lives.

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Jelani Aliyu

It is in pursuit of this federal government plan that the NADDC is building seven training centres in each geo- political zone of the country, so as to empower youth nationwide. ‘’We are far in that projects and some of these automotive training centres were already completed and are in the process of getting all the necessary equipment in place and those that have not been completed would be completed soon”. He added Jelani further said the NADDC is constructing three automotive hubs in Sokoto, Ondo and Owerri and these centres would be equipped with all the necessary equipment and highly professional staff who will be able to diagnose any vehicles, maintain or repair it, right there, “So with such projects, I can say that we have ten (10) very important projects that are contributing towards fulfilling President Muhammadu Buhari’s promise to lift 100 million Nigerians out of poverty in

the next ten years”.

Another key component of National Automotive Industrial Development Policy (NAIDP) will be investment promotion into the automotive sector. To meet this set objective, the Council is working with both local and international companies and other entities to set up assembly and production plants in Nigeria.

As a result of this initiative, billions of US dollars had been invested into the country while a number of automotive plants have been set up by automotive companies such as Honda, PAN Peugeot, Innoson, Nissan, ANAMMCO and Dangote Trucks that are assembling vehicles in the country.

Jelani renewed the commitment of the NADDC towards the continued promotion of that investment into automotive assembly. ‘’We are also talking with Volkswagen manufacturers with whom we have signed a Memorandum of Understanding

Toyota assure shareholders profitability amid pandemic MIKE OCHONMA

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oyota Motor Corporation CEO; Akio Toyoda has assured its shareholders at the Japanese automaker’s annual meeting that the automaker will remain profitable during the coronavirus pandemic, using lessons it learned during the global financial crisis more than a decade ago.

As part of efforts to assist to cash-strapped customers, Toyota is relaxing auto-loan payment deadlines and offering used rental cars instead of new ones, Japan sales chief Yasuhiko Sato said at the meeting.

The pandemic has dented profits as automakers around the world saw showrooms closed and shuttered factories, although they have started to reopen.

Toyota and other automakers have sought loans and credit lines from banks, saying that they will keep investing in development.

Although Japan has lifted its state of emergency, the outbreak has damaged the business of many smaller auto-industry players, with one Toyota supplier filing for bankruptcy last penultimate

Minister rules out immediate train service restart on Covid-19

week.

According to Toyota CEO; “If we don’t win, we wouldn’t be able to support this industry and country. We are different today from what we were during the financial crisis”.

Japan’s biggest automaker www.businessday.ng

won’t change its plan to produce 3 million cars annually in the country, according to Mitsuru Kawai, Toyota’s chief human resources officer. The company has halted some domestic factories from April through June.

Toyota has warned profit will tumble 80 percent to a nine-year low and targeted operating profit of 500 billion yen ($4.7 billion) for the fiscal year through March. The target is not a plan, but rather a minimum standard that it’ll have to meet, said Toyoda.

At the meeting held at Toyota’s headquarters in Nagoya, the company took precautionary measures to contain the virus’s spread. Staff checked temperatures of attendees, set up transparent partitions in front of speakers, and reduced the number of seats to about a third.

Some 360 shareholders joined the meeting, far less than the previous meeting where more than 5,500 people attended, after the automaker asked shareholders not to come.

The gathering ended after an hour and twenty minutes, the shortest annual shareholder meeting since 2000.

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(MoU). We are also discussing with other big international players to come into the Nigeria and produce vehicles locally” Jelani added.

Infrastructure development the director-general insists is another key component of NAIDP as the NADDC is working towards constructions of three automotive industrial parks in Kaduna, Ode-Omu and Nnewi.

These would be centralised locations with all the necessary infrastructures like electricity, water connectivity and other resources to make it easier for companies to come in and set up industrial facilities within these parks.

It would be a public private partnership (PPP) project initiative.

NADDC is working closely with the relevant stakeholders and is optimistic that these will be locations that will enhance and allow the agency to actualize its local content development target which would enable enhance the development of more components locally.

igeria’s minister of transportation, Rotimi Amaechi has ruled out imminent resumption of passenger train services until when it is appropriate to do so on the back of the coronavirus pandemic.

The minister was reacting to public concerns from train passengers, especially on the Abuja-Kaduna train as well as the Lagos-Ogun route as to when train services would resume.

From his verified twitter handle@ ChibuikeAmaechi last Saturday, the minister of transportation said; ‘’we’re not in a hurry to start train operations because of the danger of Covid19 spread. When we start, all health and safety protocols must

apply. You will not enter a train if you don’t adhere to our rules. The train will not move if passengers do not comply’’.

The minister said the federal government was being careful not to make the train operation an instrument for the spread of Covid-19 pandemic in the country.

He added that when government eventually reopens railway operations, commuters would be made to fully comply with the health protocols of the Presidential Task Force (PTF) on Covid-19 and the Nigeria Centre for Disease Control (NCDC).

BMW cuts jobs, ends self-driving project with Mercedes MIKE OCHONMA

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MW will slash 6,000 jobs this year and freeze a major selfdriving technology collaboration with rival Mercedes-Benz as the German luxury carmaker sees demand plunging because of the coronavirus pandemic.

The 6,000 positions make up a considerable chunk of BMW’s more than 120,000 worldwide, with the job cuts coming as the industry battles a demand trough and production setbacks from the coronavirus pandemic.

Meanwhile, BMW and Daimler-owned Mercedes “are putting their cooperation on development of next-generation technology for automated driving on hold,” the Munich and Stuttgart-based firms said in a joint statement.

The two groups had joined forces to catch up their American and Chinese competitors, including Tesla and Google, which have a head start But talks begun last year had showed that “in view of the expense involved in creating a @Businessdayng

shared technology platform, as well as current business and economic conditions, the timing is not right,” they said.

“Cooperation may be resumed at a later date,” the two firms added.

BMW had already announced in May that it would bulk up a costcutting programme to tackle the economic devastation of infection control measures introduced to fight the coronavirus.

“Further steps are needed to make the BMW Group more resilient to external influences and market fluctuations,” bosses said in a statement, adding that the company aims “to achieve planned workforce reductions through attrition and voluntary agreements”.

Wednesday 24 June 2020

BUSINESS DAY

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Wednesday 24 June 2020

BUSINESS DAY

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BUSINESS DAY

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Wednesday 24 June 2020

BUSINESS DAY

COMPANIES&MARKETS ENERGY

Ikeja Electric meters over 120,000 households OLUSOLA BELLO

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midst complaints buy electricity consummers of arbitrary tariff in the name of estimated billings and lack of access to meters, Ikeja Electric Plc (IE), said it has metered over one hundred and twenty thousand households between 2018 and June 2020.

This is in line with its commitment to bridge its metering gap.

In order to achieve the mandate of the Nigerian Electricity Regulatory Commission (NERC) to bridge the metering gap and reduce the incidence of estimated bills, the company claimed it has doubled its efforts to realise its objective of metering all its customers in the shortest possible time.

“The company plans to meter another 400,000 customers over the next two years. Apart from eradicating estimated billing, Ikeja Electric’s metering program has also provided jobs, directly and indirectly, for thousands of Lagosians and Nigerians in general, particularly during the lockdown,” Felix Ofulue, the company’s Head of Corporate Communications, disclosed.

…Set to roll out over 400,000 in next two years According to him, metering of its customers under the Meter Asset Provider (MAP) scheme is ongoing, despite logistical challenges emanating from the Covid-19 pandemic. The company has also metered Maximum Demand (MD) customers in the network and conducts periodic recertifications of the

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s impact of the Covid-19 pandemic becomes more evident in the cash flow of businesses and their ability to pay workers, Sigma Pensions is looking at strategies to increase staff productivity despite challenges in the operating environment.

To this event, the Pension Fund Administrator will on Thursday hold a webinar to look at challenges in the pensions industry and ways to boosts staff productivity.

The webinar is poised to encourage their staffs on best practices in adapting to the new working environment, how to offer better services to their clients and educate on the general impact of the Covid-19 pandemic.

It will also focus on how the ongoing Pandemic has affected workplace relationship between employer and employees and in a similar vein, highlight how it has impacted returns on pension contributions.

With human resource

up to 100 percent while the metering of newly installed transformers after completion of the project is ongoing” he explained Ofulue urged customers who are yet to apply for meters, to take advantage of the Meter Asset Provider (MAP) scheme and apply through the IE portal map.ikejaelec-

Middle Lion Wesley Kafidiya, District Governor Presenting an Appreciation Award to Lion Ibrahim Abiodun, member Ikeja Metro Lions Club; 2nd right, Lion Blessing Umebali, Region 6 Chairperson; 3rd left, Lion John Oriazowan President, Ikeja Metro Lions Club; 1st left Lion Ahmed Olusi, Secretary Ikeja Metro Lions Club; 2nd left Lion Anigbo Ikechukwu, Club Committee Chairperson; and Lion Emmanuel Okoduwa all at the Region 6 Mark of Excellence Award held over the weekend.

Sigma Pension seeks to boost staff productivity as Covid-19 impacts revenue of businesses MODESTUS ANAESORONYE

meters in line with Regulatory procedures.

“In addition to consumer metering, Ikeja Electric has also metered all the 33kv /11kv feeders from the injection stations ensuring energy accountability across its delivery points. In addition, the local distribution transformers have also been metered

tric.com, using their Ikeja Electric’s account number on the bill to log into the portal and update their KYC (Know Your Customer) details.

He noted that Ikeja Electric has set up a debt resolution panel in the Six Business Units to address complaints on outstanding bills and other related issues to ensure reconciliation while customers are processing

personnel and pension desk officers expected to attend, the webinar will be held in two sessions discussing ‘the Impact of Covid-19 on Employer and Employee Relationships’ as well as ‘The Impact of the Covid–19 pandemic on pensions returns.’

Speakers expected at the webinar include Employee Industrial Relations Manager, Shell Petroleum Development Company, Steve Ojeh; head, Investment, Sigma Pensions, Pabina Yinkere and head, Business Development Division West, Sigma Pensions, Mabel George who would moderate both sessions.

Asides form the webinar, Sigma Pensions during the nationwide lockdown has rigorously educated youths on social media on the importance of having pension plan which was vastly engaging and well received by the youths and with their engagements, they recorded more interests in understanding the importance of having a reliable PFA such as Sigma Pensions.

the application for meter.

With regards to payment for meters, he stressed that “customers must always pay into the designated bank account provided by the MAP and they must always include their Application Reference Number (ARN) when making these payments”.

In the same vein, he also explained that with the upward review of meter prices by the Nigerian Electricity Regulatory Commission (NERC), the new price for Single Phase Meter is now (N48,263.37) Forty Eight Thousand, Two Hundred and Sixty Three Naira and Thirty Seven Kobo while Three Phase Meter is now (N89,069.33) Eighty Nine Thousand, Sixty Nine Naira and Thirty Three Kobo. All prices are inclusive of VAT and became effective from June 1, 2020.

However, customers who have paid before June 1, 2020 under the MAP scheme, but yet to be metered should forward their payment evidence stating Account Name, Application Reference Number (ARN) and IE Account Number to FinanceMap@ ikejaelctric.com for prompt confirmation.

Uber partners Mastercard for 120,000 free trips to front line workers in MEA, including Nigeria

DLM’s Helmsman Ayere Conferred Fellowship of Ghana’s Chartered Institute of Public Resources Management And Politics

JUMOKE AKIYODE-LAWANSON

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ith the steady increase of COVID-19 cases, global payments and Technology Company, Mastercard has committed 120,000 free trips and meals to those supporting communities across Middle East and Africa, which will be facilitated through ride hailing technology company, Uber.

Uber will utilize its technology and make available its wide network of drivers to ensure those who are supporting communities and the many frontline workers who need to be mobile, have a reliable and efficient way of getting around. Once qualifying workers have successfully signed up through Uber’s website, they can arrange transportation to and from their homes and to where they are needed, such as healthcare facilities or to feed the vulnerable. Uber has shared relevant health information with drivers to ensure they are well-informed in COVID-19 related safety protocols and have been provided with masks and sanitizer reimbursements.

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Mastercard says it is committed to helping people around the world navigate these challenging times. While ensuring that its network remains secure, resilient and reliable, Mastercard is also applying its technology, philanthropy, and data science expertise to rebuild healthy communities and ensure that economic growth is inclusive.

As millions of people across the world come together to support, feed and protect their communities, Mastercard is extending its support to help those who help others.

This strategic partnership between Mastercard and Uber spans across the region and the power of this partnership is evident in Uber’s latest partnership with the Ministry of Humanitarian Affairs, Disaster Management and Social Development to support the President’s COVID field team with rides in Nigeria. The partnership will also effectively mobilise transportation of needed food parcels to over 260 identified food banks, to bring necessary relief and support for up to 70,000 households via the foodbank distributions.

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roup CEO of DLM Capital Sonnie Ayere has been inducted into the 2020 fellowship hall of fame of the Chartered Institute of Public Resources Management And Politics (CIPRMP), Ghana, a fellowship testament to his exceptional role in Nigeria’s socio-economic development and his prudent management of National resources, the institute said.

The Advisory Board and Governing Council of the Institute on a recent country visit to Nigeria also presented Ayere an award of special recognition in the field of capital management and financial services.

“One of the important criteria for being inducted into the fellowship is the leadership integrity of the individual,” said Richards Kpoku- Aquarte, Executive Director, CIPRMP, Ghana. The institute said Ayere, now a senior fellow has never been found wanting in any financial malpractice or indictment which makes him a reference point and authority in his field.

CIPRMP has fellows across 14 African countries including @Businessdayng

Ghana and Senegal.

“DLM is known for doing structured finance products, securitization and other financial services that are not common in this country which has distinguished us among our peers,” Ayere said.

Ayere said in the last one year DLM Capital has shifted its focus to transactions that would have an impact on the society. This decision has led to an evolution of the company’s logo and brand mission.

“I dedicate this hard to my hardworking colleagues and the fact that we can work together to achieve the things we do,” said Ayere.

For his pan-Africanist role in covering the Ghanian financial market for the International Finance Corporation, among other feats in West Africa, Ayere had previously received the Dr Kwame Nkrumah Africa Leadership Award and the West Africa Nobles Forum Award.

“The fact that the recognition came all the way from an institution in Ghana speaks to the fact that Africa, in general, is becoming borderless and we becoming more united,” said Uche Ayere, Managing Director of Stephanie John and Associates.

Wednesday 25 June 2020

BUSINESS DAY

Business Event

L-R: Korede Omole, assistant head of sales; Lola Adedeji, general manager, and Temitope Adetiba , head of sales, all of Amber Drinks Limited ,during the launch of Amber Drink at trade parley in Lagos.

Bamidele Abiodun (l), first lady, Ogun State, presenting cash to a beneficiary to commemorate the 2020 International Widows day in Abeouta, Ogun State, yesterday

R-L: Olaoluwa Olabimtan, Ogun State Commissioner for Budget and Planning presenting some daily need products and donations to Clement Ajasa, Head Teacher, School for Children with Special Needs in Ilaro, Ogun State in commemoration of Governor Dapo Abiodun’s 60th Birthday recently.

Members of Rotary Club of Eko Altantic along with staff and pupils of Tinubu Methodist Primary School, Lagos.after the renovation and equipting the primary school by the Rotary Club of Eko Altantic. www.businessday.ng

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Wednesday 24 June 2020

BUSINESS DAY

news N397bn debt: AMCON says it did not order demolition of Ikoyi property ENDURANCE OKAFOR

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he Asset Management Corporation of Nigeria (AMCON) says it did not order the demolition of a certain property located at No. 27, Femi Okunnu Street, Ikoyi, Lagos as published a newspaper at the weekend.

AMCON, in a statement sent to BusinessDay, Tuesday, alleged that the publication “is a malicious misrepresentation of not just facts, but one fed the media by Mr. Babajide

Ahmed Kuru, MD/CEO, AMCON

Koku, a Senior Advocate of Nigeria (SAN), to mislead the Federal High Court, which is hearing the case”.

Saddled with the statutory responsibility, amongst others, of recovering nonperforming loans hitherto

disbursed by eligible financial institutions (banks) to their customers, AMCON said once it sells a property, its mandate does not include dictating to the buyer what to do with the acquired property.

“Therefore, it was misleading for Koku to claim that AMCON was in any way involved in the demolition of the Ikoyi property,” it said.

Explaining the issues around the Ikoyi property, AMCON said the referenced property at No. 27, Femi Okunnu Street, Ikoyi, Lagos State, is one of the many as-

sets hidden from AMCON by an obligor but which was eventually traced and sold as mandated by the AMCON Act (as amended) to recover for the country.

“Koku however did not disclose to Justice Faji that the property now belongs to Ehimome Properties Limited, a company a Corporate Affairs Commission (CAC) search revealed belongs to Mrs. Mary Ehimome Arumemi-Ikhide, Mr. Martin Arumemi-Ikhide and Dr. Margaret Omoemin

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Niyi Adebayo (m), minister of industry, trade and investment, with some officials of the ministry and representatives of China General Chamber of Commerce in Nigeria, during presentation of some protective clothing and thermometer units by the chamber to the ministry as a show of support in the fight against COVID-19 pandemic, in Abuja.

FG sees hope for economic recovery in mass housing, roads construction post COVID-19 … experts want private sector involvement CHUKA UROKO

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s part of strategies to save Nigeria’s oildependent economy from slipping into recession post pandemic, the Economic Sustainability Committee(ESC)hasrecommended some proactive measures, includingmasshousingandroads construction, where it says there is hope for economic recovery.

ESC, headed by Vice President Yemi Osinbajo, is an inter-ministerial committee to be responsible for general oversight of implementation of its recommendations and will be reporting to the president.

The inclusion of mass housing and roads construction among the proposed key projects is instructive. The committee believes, and rightly too, that these two key areas have the capacity to generate economic activities that will lead to creation of jobs needed now to revitalise the economy.

Besides an extensive public works and road construction programme that will be focusing on both major and rural roads, the committee also sees

hope in mass housing programme expected to deliver up to 300,000 homes annually.

The programme is expected to engage young professionals and artisans who form themselves into small and medium scale businesses within the construction industry. Such enterprises will use indigenous labour and materials working on dedicated housing sites.

Though building 300,000 housing units in a country that has a housing demand-supply gap estimated at 20 million units seems a single drop of water in an ocean, experts and stakeholders in the country’s housing sector welcome the idea as a good starting point. They also see investment opportunity coming. The experts converge on the capacity of both housing androadsconstructiontocreate jobs for different income classes in the real estate value chain.

“With the quantum of buildings and roads to be provided, more money will be in circulation and people will be gainfully employed. With more money in circulation and a slight reduction in the unemployment rate, this iniwww.businessday.ng

tiative will contribute its quota to rejuvenating the economy,” Gbenga Olaniyan, CEO, Estate Links Limited, said.

“Real estate plays an integral role in the economy as it provides shelter for people to rest and for businesses to operate from. Increase in construction activity will definitely have a multiplier effect on economic growth with its linkages to various industries and sectors such as cement, steel plants, furniture, sanitary ware, etc,” he said.

Building more houses and constructingmoreroadscanprovide a boost in the economy and for that to make a great change in the economy, Paul Onwuanibe, CEO, Landmark Africa Group, is of the view that detailed strategic plan will need to be put together regarding roads that need to be fixed and built.

He noted that for a country with a large population, a higher target should be set regarding housing creation, adding that building and fixing more roads along with housing will lead to more job creation.

Onwuanibe said the approach to economic revival

through roads construction was good, explaining that the economy needed reliable infrastructure to connect supply chains and efficiently move people, goods, and services across the country.

“This infrastructure will connect people to opportunities for employment along with healthcare and education, etc,” he said.

Olaniyan had raised concern over Nigeria’s history with unfinished projects, suggesting that firm contracts need to be drawn giving specific time-lines for delivery before funds are committed.

But the ESC seemed to have envisaged that as it assured of continuity of construction.

“For the construction of houses to continue uninterrupted across the country, the Federal Ministry of Works and Housing, CBN and the Family Homes Fund (under the Ministry of Finance) are making arrangements for purchase through cooperatives and for warehousing of completed houses which will then be mortgaged or let out on rent-to-own basis,” the committee assured.

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Analysts see record Nigeria corporate cash spend cut this year BALA AUGIE

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he chilling spending on new factory equipment by big Nigerian companies appears to have persisted through the first quarter, with warning from analysts that budget may slow further this year.

Capitalexpenditurefell12.74 percentforthefirstthreemonths to March 2020 to N347.75 billion, from N398.53 billion the previous year, judging from the financial statements of companies that have released earnings for the first quarter.

Analysts are of the view that the biggest Nigerian firms will slash their cash spending on the acquisition of property plants and equipment amid uncertainty caused by the coronavirus pandemic.

There could be deeper cut to capital budget than was seen during the 2016 economic downturn when the sharp drop of mid-2014 tipped the country into its worst recession in 25 years, according to the analysts.

Usually, confidence over the strength of demand tends to drive spending decisions whichcanimproveacompany’s productivity. That means during an economic boon, there is acceleration in factory activities.

Evenoilmajorsacquire morerig wells when oil prices are benign.

“You would expect a change of business and investment plan on the back

of expectation of weaker demand for goods and services,” said Gbolahan Ologunro, equity research analyst at CSL Stockbrokers Limited.

“The outlook on how business operation will be is uncertain as Covid-19 disrupted the demand and supply side.

Companies that had plans to expand before the pandemic will have to suspend such plans,” Ologunro said.

The World Bank has projected that Nigeria, Africa’s largest economy, will shrink by 3.2 percent yoy in 2020.

According to the bank, this year’s contraction may be the worst in four decades due to the outbreak of COVID-19 and the associated lockdowns as well as the oil price collapse.

Brent crude oil fell from $70 per barrel at the dawn of 2020 to $20 per barrel as of April 22, 2020.

Nigeria’s GDP growth slowed in the first quarter of the year. According to the Q12020 GDP report published by the National Bureau of Statistics (NBS) in May, economic growth slowed to a nine-quarter low of 1.87 percent yoy from 2.55 percent yoy in Q4-2019 and 2.12 percent yoy in Q2-2019.

BasedonNBSdataoncapital importation for the first quarter (Q1) of 2020, the total amount of foreign investment inflows into the Nigerian economy declined by 31 percent year on year (y/y) to $5.85 billion in Q1, from $8.51 billion in Q1 2019.

Tecno loses record market share in Q1 as Nigeria’s smartphone market declines 13.6%

... feature phone shipments declined by 12.5% FRANK ELEANYA

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ranssion’s Tecno, Nigeria’s largest mobile phone brand, saw its smartphone market share decline by 3 percentage points to 45 percent in the first quarter of 2020. It is the first time the brand has lost so much since the first quarter of 2019 when it controlled 48 percent of the market. Before Q1 of 2020, Tecno’s numbers hovered between 48 percent and 49 percent.

Using its Worldwide Mobile Phone Tracker, the International Data Corporation (IDC) found that smartphone shipments declined 13.6 percent, with demand for both types of devices hit by cautious market sentiment in the wake of the COVID-19 pandemic.

The drop also affected the entire feature phone and smartphone markets as well.

The June report of the IDC showed that Nigeria’s feature market suffered a 12.5 percent quarter-on-quarter decline in shipments in Q1 2020.

Nigeria is one of the coun@Businessdayng

tries that the virus is exerting a heavy toll on their economies.

Households have seen their income drop drastically as members lose jobs, take pay cuts, or are furloughed.

The market also dragged because China, where the majority of the global phone manufacturers have their plants, was the epicentre of the virus and therefore had to lock down earlier than the rest of the world. The strict lockdown the country enforced led to many manufacturers failing to keep up with the demand for their products.

Nevertheless, the IDC says the pandemic isn’t entirely to blame for the decline in shipments. Nigeria declared lockdown late March. While the GDP per capita in Nigeria is at $2,400, the country’s middle class isn’t growing as expected, only peaking at 30 million people in a country of over about 200 million. With more people living below the middle-class range and within the poverty range, feature phones which are far cheaper continue to dominate the Nigerian market.

Wednesday 24 June 2020

BUSINESS DAY

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news Nigeria’s foreign reserves face further...

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which leads to more inter-

national borrowing to finance that consumption. With FX demand backlogs currently mounting amid dollar scarcity in the country, analysts say the FX reserve would come under pressure.

“One of the key things keeping our reserve at current levels is because the CBN is yet to resume intervening fully in the market,” said Boboye Olaolu, sub-Saharan Africa economist at CSL Stockbrokers Ltd. “If the CBN starts intervening in the market today, the reserve would be pressured.”

Olaolu said CBN’s monthly intervention in the market has averaged $2.7bn over the last three years. In the face of an estimated $7bn FX demand currently unmet, the resumption of sales activities will require the CBN drawing down its $36.166bn reserve.

The BoP figure mostly accounts for a period where the full impact of the coronavirus pandemic was yet to materialise, suggesting a steeper deficit in the second quarter, according to economists.

In Q1, Nigeria’s current account deficit shrank by $2bn to $4.88bn, helped by a smaller trade deficit, its largest component, despite a bigger deficit in services and income accounts.

However, oil and gas exports hit the lowest levels since the third quarter of 2017, two months after Nigeria exited the 2016 recession.

While overall trade declined, export and imports in the quarter slowed due to the impact of the coronavirus on international trade and domestic activities.

“At the moment there is an imbalance of payment that could persist till the end of the year unless oil price props up to $60 per barrel levels or there is a technical devaluation by the CBN to N400 from N360,” said Olaolu. “However, the dynamics has not changed at the moment. What played out in Q1 will most likely play out in Q2.”

Analysts expect Nigeria to report lower exports in Q2 on the heels of historic plunge in oil price that followed lower oil demand as a result of lockdowns and a price war between Russia and Saudi Arabia which depressed prices to near $20 per barrel.

Dollar inflow to the economy on the heels of lower crude oil sales forced the CBN to sell dollars N13.5 higher at N380.2/$ in the I&E windows and adjust the official exchange rate to 360/$ in March.

Nigeria also plans to unify the various exchange rates but economists say this will not be sufficient to improve its BoP crisis given that current account deficit, a problem before the COVID-19 pandemic, is due to the country’s fixed exchange rate regime.

A fixed, more appropri-

ately pegged, exchange rate regime means the naira is quoted much lower than its real market price. This causes demand to be much higher than supply, a gap the CBN has to fill by drawing from its FX reserve.

According to the CBN data, financial and capital account netted -$6.3bn in Q1 compared to $13.24bn in the fourth quarter of 2019 and $4.82bn in the first quarter of 2019.

As at April, foreign portfolio investment (FPI) declined by 15 percent while the dollar supply into the I&E window is at its lowest levels since the start of the year at least, according to FMDQ data.

Uche Uwaleke, a professor of finance and capital markets and chair, Banking and Finance Department, Nasarawa State University, Keffi, said persistent deficit trade balance hurts the country’s balance of payments, exerts pressure on the forex market and depletes external reserves as imports outweigh exports.

This situation, he said, is exacerbated by the vagaries in the international market for crude oil which is the country’s major source of foreign exchange. Brent on Tuesday climbed to a threemonth high of $44 on stronger demand.

Against this backdrop, it is vital that the recent IMF loan is utilised to fill the hole in the country’s BoP while seizing the opportunity of the three years moratorium offered by the Fund to develop multiple sources of forex with a focus on agriculture as well as reduce the level of imports via an aggressive implementation of import substitution policy.

In its April 2020 World Economic Outlook, the International Monetary Fund (IMF) predicted Nigeria’s current account balance to further contract to -3.3 percent in 2020 from -3.8 percent in 2019 and -2.5 percent in 2021.

“The pace of economic recovery remains slow, as declining real incomes and weak investment continue to weigh on economic activity. Inflation – driven by higher food prices – has risen, marking the end of the disinflationary trend seen in 2019. External vulnerabilities are increasing, reflecting a higher current account deficit and declining reserves that remain highly vulnerable to capital flow reversals. The exchange rate has remained stable, helped by steady sales of foreign exchange in various windows,” Amine Mati, IMF senior resident representative and mission chief for Nigeria, stated in the February 2020 Article IV document.

Nigeria’s external reserves declined to $36.31 billion as at June 18, 2020 from $36.59 billion as of May 29, 2020, data from the CBN indicated. www.businessday.ng

L-R: Umar Danbatta, executive vice chairman, Nigerian Communications Commission (NCC); Obinna Ogba, senate committee on communications; Isa Pantami, minister of communications and digital economy, and Adeolu Akande, chairman of the board of commissioners of NCC, at the unveiling of a five-year Strategic Management Plan (SMP) of NCC, aimed at creating a seamless strategy to actualise digital economy in the country, in Abuja, yesterday.

States gave FG control over their DisCos...

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were required and both

tiers of government contributed capital. Therefore, their contributions in the various DisCos morphed into a split in their share ownership: state governments 27.27 percent, and Federal Government 72.73 percent.

“These investments were pre-privatisation and during privatisation, the understanding, I believe, was that the Federal Government would initially hold their (states’) shares on their behalf,” said Ayodele Oni, energy lawyer and partner at Bloomfield law firm.

Based on this decision, the shares of both tiers of government are managed by the Bureau of Public Enterprises (BPE) which seats on the board of the DisCos. It is a federal agency and reports only to the president through relevant ministries and departments.

An April 11, 2018 letter from the Nigerian Electricity Regulatory Commission (NERC) to the Bureau of Public Enterprise with reference number NERC/03/FMS/ RFRA/1/18/0013, signed by Sanni Garba, vice chairman of NERC, providing an update on the valuation of state government investments in the electricity distribution companies (DisCos) confirms state participation in the ownership of the DisCos. The letter following the directive of the National Council on Privatisation provides a

comprehensive update on investment of state governments in successor DisCos. From March 1, 2005 to December 31, 2010, state governments invested N79.9 billion.

From January 1, 2011 to October 31, 2013, state governments invested an additional N31.4 billion, bringing their total investment in the DisCos to N111.3 billion.

The Federal Government’s investment in the DisCos was valued at N295.8 billion, which brings the total investment of both tiers of government to N407.1 billion upon privatisation of the sector in 2013.

The letter detailed investments by each state government which was verified by the relevant DisCo. For example, from March 1, 2005 to December 1, 2010, the Lagos State government invested N1,503,722,404.02 and had a 4.2 percent stake in Eko DisCo. Between 2011 and 2013, the Lagos State government increased its investment to N18 billion, raising its equity to 5 percent, while the Federal Government held 35 percent.

Four states – Abuja, Nasarawa, Niger, and Kogi – contributed to the stakes in Abuja DisCo along with the Federal Government. Abuja had 11.2 percent contributing 5.4 billion, Nasarawa with 3.2 percent stake contributed N1.5 billion, Niger State with 8.3 percent contributed N4 billion, and Kogi State with 4.2 percent stake contributed N2 billion.

This revelation is instruc-

N397bn debt: AMCON says it did not...

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Okonkwo (wife, son and daughter of the main promoter of Rockson Engineering Company Limited) as shareholders and directors of Ehimome Properties Limited,” it said.

A M C O N f u r t h e r e x-

plained that Sir Joseph I. Akinola Arumemi-Johnson and members of his immediate family own four companies that are indebted to AMCON to the tune of over N397 billion, which the corporation bought over from various Nigerian

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tive at this time considering that the Federal Government has rejected what it said was an attempt to unilaterally change ownership of the DisCos without the endorsement of the stakeholders after a government panel recommended that states’ stakes in the DisCos be excised from those of the Federal Government.

In November, the Federal Government set up an ad-hoc committee headed by Nasir El-Rufai, governor of Kaduna State, to review the ownership of the DisCos. Following over N1.3 trillion in bailouts to the sector, the government was seeking a way to recapitalise the DisCos. The El-Rufai committee recommended that the 27.27 percent state government equity in the DisCos should be removed from the control of the Federal Government and managed by the states while the government retains its 72 percent.

To resolve governance issues in the power sector, the committee recommended that the board composition of DisCos should be expanded to include representation from states and local governments.

The Federal Government has rejected these recommendations, claiming that the panel was giving broad powers to state governments to the detriment of other stakeholders.

In a letter addressed to El-Rufai and NERC chairman and published by another newspaper, Ibrahim Gambari, chief of staff to the President Muhammadu Buhari, said

state governments, under the auspices of the National Economic Council, cannot unilaterally change the ownership of DisCos without the endorsement of other shareholders, the Federal Government and private investors, through the appropriate board resolution.

The letter directed that NERC review and, where applicable, develop an implementation plan for the regulatory actions suggested in the reports from the NERC Committee and Power Working Groups, that quarterly updates on implementation by all actors be provided to the president, and that NEC through the vice president should also be briefed quarterly.

It further directed that to ascertain the fair shareholding of all electricity distribution companies, NERC should submit, upon completion, its forensic audit and Regulatory Asset Valuation report, and revised shareholding structures as of December 31, 2019, with the accompanying board resolutions for the president’s consideration.

But the shares of state governments, being minority shareholders, might not get them a seat on the DisCos’ board, said Chuks Nwani, a Lagos-based energy lawyer.

The El-Rufai committee also recommended a forensic audit of the bank accounts of the DisCos, a decision the DisCos have gone to court to stop on the concern that the Federal Government will dilute their stakes in the DisCos over their debts.

banks.

It said the companies include Arik Air Limited with debt of over N248 billion; Rockson Engineering Company Limited with over N136 billion; Ojemai Farms Limited with over N11 billion, as well as Ojemai Investments Limited indebted to the tune of over N2 billion.

“The negative impact of

this humongous debt to the Nigerian economy, which these companies and their promoters have refused to pay back are better imagined if the federal government did not set up AMCON to go after people like this who are bent on destroying the economy of the Federal Republic of Nigeria,” AMCON said.

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Wednesday 24 June 2020

BUSINESS DAY

news

Minister directs reconstituted NBET board to prime de-risking role in power industry HARRISON EDEH, Abuja

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he Federal Government of Nigeria has urged the recently reconstituted Board of Nigerian Bulk Electricity Trading Company (NBET) to prioritise its de-risking role in the power industry while ensuring efficiency of various value chains in the power industry.

The inauguration of the re-constituted Board of NBET which took place in Abuja has been necessitated by the challenges of the power sector, particularly the challenges of NBET in achieving its mandate, Zainab Ahmed, minister of finance, budget and national planning, said in a statement issued on Monday.

Speaking on understanding the role of NBET, she said: “We have all come to better understand the role of NBET as the manager and administrator of the electricity pool in the Nigerian electricity supply industry (NESI), and how it buys electricity from the generating companies (GenCos) including Independent Power Producers (IPP’s) under Power Purchase Agreements (PPAs) and resells it to the distribution companies (DisCos) via vesting contracts.

“The role of NBET in the stabilisation of the power sector cannot be overemphasised as it plays a key role in the generation of market confidence through well-negotiated and well aligned contracts with fair risk allocation that protects market participants from credit and systemic risks. NBET stands as a derisking agent in the power industry as it acts as a credit-worthy off-taker of power procured from Gencos in

the absence of bi-lateral contracts between Gencos and Discos.”

The contractual obligations and guarantees NBET issues and manages, according to her, are therefore of strategic importance for the repositioning of the sector and delivering of benefits to Nigerians for which NBET was established.

Ahmed, who is the Chairman of the Board, said: “The reconstitution of the board therefore took consideration of the current stage of evolution of the restructured electricity sector, the complexities the sector currently faces, multi-disciplinary skills of prospective Board members especially in finance and investment, electricity generation, system operations of deregulated electricity markets, administrative law, as well as economic regulation of network utilities, amongst other factors.”

Urging everyone present to note the importance of the assignment, she also said: “It is important that we bring our skills and experiences to bear in this critical assignment.

“It is important that we build NBET to become that defensive wall against potential payment defaults, till generation companies and distribution companies are able to enter into power purchase agreements on bilateral basis.

NBET has to be able to successfully fulfil its role in the management and administration of financial flows in the sector, the promotion of a contract-based market that allocates risks efficiently to parties responsible for them and the formulation of policies for efficient system settlement,” she said.

Access Bank excites female SMEs across Africa with Womenpreneur Pitch-A-Ton second edition HOPE MOSES-ASHIKE

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s part of its promise to continuously provide financial and business skills to female entrepreneurs, Access Bank plc has unveiled the second edition of its Womenpreneur Pitch-a-ton programme.

The Womenpreneur Pitcha-ton Africa 2020 Campaign is designed to provide femaleowned businesses across Africa an opportunity to access finance and world-class business training as well as mentoring opportunities. This programme has been designed to create an enabling environment for female entrepreneurs to grow their businesses.

Speaking at the launch of the second edition of this initiative, Ayona Trimnell, group head, W Initiative, said, “Access Bank has been a leading advocate for women’s economic empowerment in Nigeria and this is the key motivation for the ‘W’ Initiative, which caters to the women economy particularly in the areas of capacity building and creating networking opportunities for women.”

The Pitch-a-ton is an expansion of the Womenpreneur Business Workshop, under the Bank’s women proposition, the W Initiative, Trimnell stated, saying, “We launched the Pitch-a-ton initiative last year in line with our value proposition as the No. 1 Bank of Choice for women in Nigeria, and we got a tremendous amount of applications with innovative business ideas.

“This year, we want to do more and we want to reach out to more female entrepreneurs not just in Nigeria but across Africa. “As a responsible financial institution

with huge presence in other African countries, we want to give the same opportunity to other female entrepreneurs in Ghana, Rwanda and Zambia as well as Sierra Leone, Gambia, & Congo to apply and participate in this year’s edition of the programme.

The Womenpreneur Pitch-aton Africa 2020 will provide up to N9 million financial grants and a unique capacity building program aimed at empowering women entrepreneurs. The programme is designed as a three-month period incorporating pitching sessions and 8 weeks of mini-MBA training in collaboration with the IFC. Interested persons from Nigeria, Ghana, Zambia and Rwanda as well as with extension to Sierra Leone, Gambia, and Congo who meet the criteria are required to fill an online application. The 500 candidates selected from this pool will then send in a sixty seconds video pitch, which will be screened by a credible panel of business experts to select 50 finalists.

As part of the graduation requirements, the 50 finalists will pitch their businesses, infusing learnings from the mini-MBA and will stand an opportunity to win financial grants up to N5 million.

As a leading commercial bank in Nigeria, Access Bank has made significant investments aimed at enhancing growth in the Small and Medium-size Enterprise sector. The Bank is also a major advocate for women in business through innovative offerings like the W Power Loan, a discounted financing at 15% interest per annum, for women to grow their business as well as other Business Support Services. www.businessday.ng

L-R: Wahab Alawiye-King, chairman, Lagos State Universal Basic Education Board (SUBEB)/former member of the House of Representatives; Babajide Sanwo-Olu, governor, Lagos State, and Obafemi Hamzat, deputy governor, during a special parliamentary session for late senator Bayo Oshinowo, held at the chambers of Lagos State House of Assembly, Alausa, Ikeja, yesterday.

FG restores LADOL’s 25-year land lease, resolves dispute with NPA AMAKA ANAGOR-EWUZIE

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he Federal Government of Nigeria has intervened in the dispute between the Nigerian Ports Authority (NPA) and LADOL Free Zone, and has fully restored the 25 years land lease agreement it has with LADOL. A statement signed by Ladi Jadesimi, chairman of LADOL, published on national dailies, seen by BusinessDay, stated that all stakeholders were advised to comply with the Federal Government’s final directive, geared towards resolving the dispute, restoring investor confidence to the industry and bringing NPA’s actions in conformity with extant laws and Federal Government policy on Local Content.

Jadesimi stated that LADOL received notification that the presidential approval issued in 2018 granting Global Resource Management Limited a 25-year lease covering the entire area of the Free Zone, was valid and

subsisting.

“The LADOL Free Zone is whole and intact, and all enterprises, visitors, stakeholders and others in the Zone should adhere to the rules and regulations of the Zone. This decision shows due recognition and understanding for the spirit in which LADOL Group’s shareholders, both private and public, have been investing in developing the Zone out of a disused swampy area since 2004,” he said.

According to Jadesimi, the timely intervention has saved jobs, protected huge private and public investments and highlighted a deep commitment to the local content policy.

“LADOL remains committed to helping to make Nigeria the industrial hub for West Africa. Our shareholders remain undeterred in their long-term commitment to making investments that will turn the Zone into a Sustainable Industrial Special Economic Zone which will be a blueprint for sustain-

able industrialisation of Africa,” he assured.

LADOL remains a law abiding corporate citizen and is looking forward to continuing its strategic partnerships with the Nigerian Content Development and Monitoring Board, the NPA, the Nigeria Export Processing Zones Authority, all the agencies in the Zone and its stakeholders, he however stated.

Stating that the investment continues today, in line with the policies of the Federal Government and in support of the economy of Nigeria, he thanked the employees, stakeholders, and customers for their loyalty, patience and support, and for keeping faith with them throughout this period.

Recall that the NPA revoked the lease of the land at Tarkwa Bay, near Light House Beach in Lagos via a letter dated November 14, 2019, and addressed to the managing director of Messrs Global Resources Management Limited (GRML), the parent

company of LADOL. The NPA letter signed by Yusuf Ahmed, general manager in charge of Land and Asset Administration, alleged that LADOL executed a sublease dated September 13, 2013 with Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria) without the required approval or recourse to the Lessor.

Based on this allegation, NPA terminated its lease agreement with LADOL before going ahead to lease the 11.24 hectares to Samsung Heavy Industries Nigeria Limited (SHIN) in a fresh agreement of $219,230,700.00 per year to save SHIN’s fabrication and integration yard for which it borrowed $270 million to build.

Having allocated 11.24 hectares for SHIN, NPA also granted a fresh lease under new terms to LADOL for 5.7574 hectares of developed land and 69,2874 hectares of undeveloped land for five years with effect from November 14, 2019.

EFCC re-arrests John Yusuf for N32.8bn pension fraud

Invoice factoring: An alternative source of funding for SMEs

Innocent Odoh, Abuja

inning at Business during COVID 19 was the theme of Nigeria British Chambers of Commerce (NBCC) webinar sponsored by Factoring and Supply Chain Finance Limited, a premier receivables finance company in Nigeria.

In his comments, the CEO of the firm, Lanre Bakare, shed light on the numerous benefits of Receivables Financing in such a time as this, noting that Receivables Financing presents an alternative to the mainstream financing options, especially for SMEs. “Since the inception of the pandemic, we have seen a disruption in supply chain and a continuous depreciation of the naira. Receivables Financing will serve as an intervention to keep SMEs in business, cushion the adverse effects of the pandemic and

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perativesoftheEconomic and Financial Crimes Commission (EFCC) have re-arrested a former assistant director in the Federal Civil Service, John Yakubu Yusuf, who has been on the run since 2018, after Court of Appeal, Abuja Division, sentenced him to six years imprisonment and a fine of N22.9 billion, for conniving with five other suspects to steal N32.8 billion Police Pension Fund.

A statement issued on Monday by the head of media and publicity of the EFCC, Dele Oyewale, noted that based on the re-arrest, Justice Baba Yusuf of the FCT High Court on Monday, June 22, 2020, issued a remand order that would enable John Yusuf serve his six years jail term in Kuje Correctional Service, Abuja.

Yusuf is one of the six federal civil servants facing prosecu-

tion for allegedly stealing N32.8 billion Police Pension Fund.

He was initially convicted and sentenced to two years imprisonment with an option of fine of N750,000 by a Federal Capital Territory High Court presided over by Justice Abubakar Talba, in a plea-bargain arrangement.

The conviction, considered to be a slap on the wrist, sparked national and international outrage.

The EFCC, dissatisfied with the judgment of the trial court, approached the appellate court to set aside the judgment. Ruling on the substantive matter, the justices of the Court of Appeal held unanimously that the three counts involving Yusuf (Counts 17, 18 and 19) clearly stated the amounts he converted for his personal use. He pleaded guilty to the three counts and thereby admitted to the conversion of an aggregate sum of about N24 billion to his personal use.

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@Businessdayng

protect fragile businesses,” according to Bakare.

“Early payment is better than borrowing” he says.

SMEs contribute not less than 48% of GDP, 90% of businesses and 84% of employment being created in the economy. SMEs with credible counterparties should have a platform where they can discount their invoices to stay afloat in a time like this.

“The greatest financial relief anyone including the government can give SMEs in a time like this is a funding window that will accelerate the payment of over-due Invoices and their account receivables,” Bakare noted.

Factoring and Supply Chain Finance Limited is a PanAfrican Capital Holdings Company with a special focus on Receivables Financing, Invoice Factoring, Supply Chain Finance and a wide range of Trade Services.

Wednesday 24 June 2020

BUSINESS DAY

news MultiChoice invests N800bn in Nigerian economy in 5 years - Accenture report Daniel Obi & SEYI JOHN SALAU

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igeria’s video entertainment provider, MultiChoice Nigeria, recently commissioned Accenture, a top accounting and consulting firm in Nigeria, to measure the socio-economic impact of its business in Nigeria between 2015 and 2019.

A statement quoting the report states that MultiChoice Nigeria had contributed an estimated $2.1 billion (about N800bn) to the Nigerian economy within the period under review.

Accenture estimated that the company had specifically spent over $428 million in developing local creative talent, as a result of sourcing and producing local content for DStv, GOtv, M-Net, SuperSport, and Africa Magic, and investing in building local production infrastructure.

This investment has greatly helped to support the Nigerian movie industry, ensuring that Nollywood movies are available across Africa and the rest of the world.

According to the statement, Adewunmi Ogunsanya, chairman of MultiChoice Nigeria, says, “The report illustrates MultiChoice Nigeria’s total econom-

ic impact in Nigeria, including direct, indirect and encouraged influence on the country’s GDP. The statistics provide further information on the considerable positive socio-economic impact that our operations have made in the development of the communities in which we operate.”

Also speaking on the report, John Ugbe, CEO, MultiChoice Nigeria, notes, “As Nigeria’s leading video entertainment provider that delivers great entertainment to our customers, we understand that we have a responsibility to provide socioeconomic value through our core business activities. This Socio-Economic Impact Assessment report aims to quantify and articulate the contribution we have made to the Nigerian economy during the Financial Year 2015/16 to 2018/19.”

Through their business operations, investments in technology, local infrastructure, Corporate Social Investment (CSI) initiatives and local partnerships, MultiChoice Nigeria has enriched an estimated two million lives each year through initiatives such as MultiChoice Resource Centres, MultiChoice Talent Factory, GOtv Boxing, Sickle Cell Foundation, the Let’s Play initiative, among others.

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Nigeria’s hope of boosting gas supply for power generation suffers setback again …as gas pipeline project completion date shifts to December 2020 Olusola Bello

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igeria’s hope of boosting gas supply for power generation has suffered setback again as the completion date for Obiafu-Obrikom to Oben (OB3) gas pipeline project meant to transport gas to boost power generation and other industrial developments in the country has been postponed because of technical hitches, BusinessDay investigation reveals.

The likely dates for the completion of the project are either December this year or first quarter of 2021. The project was initially slated for completion in 2017, according to officials of the Nigerian National Petroleum Corporation (NNPC) and Nestoil.

At different stages, the project has experienced technical hitch-

es that have consistently delayed efforts to transport stranded gas from the Eastern part of the Niger Delta to the Western part of the region, where it is meant to serve mostly power plants that would use it to generate electricity.

Also, some investments that would have been made by other oil companies, which are supposed to key into the pipeline for the evacuation of their gas, have also been stalled. For instance, a company like Seplat had signed a final investment decision (FID) on a gas project in anticipation that it gas would be transported through the pipeline, but this has not happened.

In previous years, the company handling the project, Nestoil Limited, had blamed heavy floods experienced in the country in last years as being responsible for it not making much progress on the project.

The latest challenge for the

completion of the project has to do with the crossing of River Niger.

Chukweluoka Umeh, executive director, Nestoil Limited, told BusinessDay that it was the only company in Nigeria that had “open hole underneath a 62-inch diameter horizontal directional drilling (HDD) hole, a span of 1.9 kilometres with the pipe going 40 meters below the water bed.”

There are different layers of soil formations such as top sand, clay sand, hard sand and small stones, which have made it almost impossible for horizontal directional drilling (HDD) to take place, he said.

To overcome this challenge, he said, a ‘Direct Pipe Facility’ is needed and there is no company in the country that has the facility.

He however told BusinessDay that with the NNPC intervention, a company named HDD

Thailand had been approached to work with Nestoil so that the pipeline could cross the bed of River Niger.

The gas pipeline project was awarded to two companies, Oilserv Limited and Nestoil Limited. While Oilserv has completed its own segment of the pipeline construction since last year, Nestoil is still battling on how to get its own segment completed.

Nestoil officials often allege that the terrain of their own slot of the project has been most difficult, blaming heavy floods experienced in the country as being responsible for it not making much progress as it should be.

At the moment Nestoil and NNPC are trying to mobilise but this also has to depend on COVID-19 because the specialised equipment are going to be brought from outside the country.

COVID-19: Minister rules out immediate train service restart MIKE OCHONMA

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igeria’s minister of transportation, Rotimi Amaechi, has ruled out imminent resumption of passenger train services until when it is appropriate to do so on the back of the coronavirus (COVID-19) pandemic.

The minister last weekend reacted to public concerns from train passengers, especially on the Abuja-Kaduna route as well as the Lagos-Ogun route as to when train services would resume.

From his verified twitter handle @ChibuikeAmaechi last Saturday, he said, “We’re not in a hurry to start train operations because of the danger of Covid-19 spread. When we start, all

health and safety protocols must apply. You will not enter a train if you don’t adhere to our rules. The train will not move if passengers do not comply.”

The minister said the Federal Government was being careful not to make the train operation an instrument for the spread of Covid-19 pandemic in the country.

When government eventually re-opens railway operations, commuters would be made to fully comply with the health protocols of the Presidential Task Force (PTF) on Covid-19 and the Nigeria Centre for Disease Control (NCDC), he said.

Nigeria Railway Corporation (NRC) had announced the suspension of train services in the wake of the outbreak of coronavirus in the country last March.

Wealth Creation summit to empower Nigerians with tools for sustainable wealth, financial wellbeing IFEOMA OKEKE

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his year’s Global Wealth Creation Summit is expected to empower Nigerians with practical principles, and tools for sustainable wealth and financial wellbeing.

Oladipupo Clement, convener and a global investor and wealth creation/retention coach, says Nigeria sits on enormous natural and human resources and has the potential to be a super socio-economic power of the world, yet the majority of its population live below poverty line.

Clement says this anomaly has been decoded by The Global Wealth Creation Summit 2020 and would be presented in a twoday virtual conference themed “Unlocking the Wealth Code of Naija” on June 26-27, 2020, at 6pm (WAT).

Speaking on the upcoming summit, the convener said, “This conference is unique in its pertinent offering; coming at the most crucial time in our world economy. The excellence and quality of this conference was in the selection of our panel of speakers, which boasts an array of world-renowned administrators, entrepreneurs, social and economic influencers, industry leaders, religious leaders, and humanitarians.”

The speakers are - wealth creation expert, Olumide Emmanuel; cash flow entrepreneur, Tade Cash; leadership expert, Niyi Adesanya; digital entrepreneur, Olatunde Samson; founder of Ruff ‘n’ Tumble, Adenike Ogunlesi, and wealth manager, Damilola Hassan.

Clement is also the CEO of LIFEPAGE Group, a Real Estate Investment Company.

www.businessday.ng

L-R: Ayoyinka Ogunsanwo, head of innovation; Kehinde Salami, MD/CEO; Simisola Salami, and Dayo Tinuoye, GM manufacturing, all of Troli International Limited, during the launch of the company’s new product, Pepperetti Sauce, in Lagos.

Ogoni clean-up: Rights activists raise alarm over poor clean-up ... say more people will die from polluted water Francis Sadhere, Warri

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ational coordinator of Centre for Peace and Environmental Justice (CEPEJ), Sheriff Mulade, on Tuesday raised an alarm over alleged poor clean-up process in Ogoni land in Rivers by Shell Petroleum Development Company (SPDC) and order international oil companies (IOCs).

The CEPEJ national coordinator also took a swipe on Shell and the other oil multinationals over what he described as “failure in meeting global environment best practices and standards for remediation.”

Mulade, who spoke with BusinessDay in Warri, expressed shock that Shell and other IOCs that carried out the cleaning, remediation and restoration work on the Ogoni land could not even meet the minimum Nigerian standard or their own specified standard of operations.

He warned that more people were expected to die in

Ogoni land as most of the spill sites, which the oil companies claimed to have cleaned up, were still highly polluted, stressing that there were evidences of oil films showing the dumping of contaminated soil in unlined pits.

He said, “There are evidences of water being coated with hydrocarbons more than 1000 times the level allowed by Nigeria’s drinking water standards.”

He therefore called on the Federal Government to speed up the clean-up, remediation and restoration of the degraded Ogoni land caused by oil and gas exploration activities by multinational oil companies about 40 years ago.

He also called for collaboration among the Federal, Rivers State governments and communities, federal and state environmental agencies, as well as CSOs and NGOs towards working out modalities to remediate and restore the degraded Ogoni environment for safe habitation.

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Mobihealth International wins Sanofi AfricaTech Healthcare challenge TEMITOPE AYETOTO

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obihealth International, Africa’s first fully integrated telehealth start-up leveraging technology in harnessing diaspora and local doctors and medical service providers through a secure electronic medical record and video software, has been announced as the winner of the “How to help healthcare systems leapfrog from manual to smart logistics solutions at point of care” Category of the 2020 Sanofi AfricaTech Healthcare Challenge.

The announcement was made at an online ceremony held in Paris on June 11, 2020. Funmi Adewara, CEO of Mobihealth International, expressed her joy on the selection of Mobihealth International as the winner of the award.

It is an honour to win and be recognized as a solution provider committed to attainment of Universal Health Coverage (UHC) in line with the United Nation’s Sustainable Development Goals three (SDG-3).

This award is dedicated to Nigeria and to every African out there who desires quality healthcare,” Adewara said.

According to her, “Africa has a disproportionate disease burden com@Businessdayng

pared to its population. This results from the poor access to healthcare occasioned by shortage of doctors, poor healthcare infrastructure, exposure to counterfeit medicines and high cost of treatment- and all these in a continent where ninety-five per cent of the people lack health insurance.

“Our intervention of integrated telehealth in the health sector is to bring about an increased access to quality and affordable healthcare to Africans who are in need of it and technology is making that possible in a scalable and secure way.” Partnership with Sanofi, a reputable global Pharmaceutical player, will help to drive adoption and provide us the support we need to scale up our solutions especially to resource poor settings.”

While Adewara thanked the organisers and judges for finding the company worthy of the award, she further informed that Mobihealth International’s intervention is tailored to meet the global healthcare needs and address multiple pain points of shortage of doctors, brain drain, poor/ lack of healthcare infrastructures, limited access to private/public health insurance, capital flight from medical tourism, exposure to counterfeit medicines, unqualified personnel and high cost of treatments.

Wednesday 24 June 2020

FT

BUSINESS DAY

34

FINANCIAL TIMES

World Business Newspaper

Eurozone business downturn slows as virus restrictions ease

Uptick in services and manufacturing sentiment surveys fuels hope that worst is over VALENTINA ROMEI AND MARTIN ARNOLD

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he downturn in European business activity slowed markedly in June as restrictions to contain the coronavirus crisis were eased, according to a closely watched survey that added to signs of a recovery in the region’s economy.

Businesses reported stronger signs of normalisation than expected in both the services and manufacturing sectors as curbs linked to the pandemic were lifted and consumption resumed.

The IHS Markit flash composite purchasing managers’ index for the eurozone, a gauge of private sector activity, rose to 47.5 in June, up from 31.9 in May. Yet the reading is still below the 50 mark, which indicates a majority of businesses reported a contraction in activity compared with the previous month.

“Output and demand are still falling but no longer collapsing,” said Chris Williamson, chief business economist at IHS Markit.

“While second-quarter GDP is still likely to have dropped at an unprecedented rate, the rise in the PMI adds to expectations that the lifting of lockdown restrictions will help bring the downturn to an end as we head into the summer.”

June’s uptick in sentiment reflects the easing of the lockdown;

People sit outside a Parisian café. French cafés and restaurants have begun to reopen after the coronavirus lockdown, helping boost business activity © AP

the proportion of businesses that said activity had improved compared with the previous month increased from May. But the sentiment surveys are not a measure of the extent to which economic activity has recovered relative to the pre-virus level and, while they signal how broad-based the recovery is, they cannot measure its pace.

“Today’s PMI numbers provide further evidence of what initially looks like a textbook V-shaped recovery,” said Carsten Brzeski, economist at ING. But, he warned, “higher unemployment, companies going bust, as well as plans to further cut back on staff and falling

orders, suggest that the current V-shaped recovery could quickly run out of steam”.

Real-time indicators of economic activity, such as heavy goods vehicle traffic on toll roads, electricity use and footfall in shops, have all bounced back strongly across Europe in recent weeks as virus-related restrictions have been loosened. But some social distancing rules remain and overall business and consumer activity is still below pre-pandemic levels.

The European Central Bank expects the eurozone economy to contract by 13 per cent in the second quarter of this year and, despite

starting to recover in the second half, it does not expect a return to its pre-pandemic level until 2023.

The eurozone PMI index for manufacturing rose to 46.9 in June from 39.4 in May, while the index for services climbed to 47.3, up from 30.5. The downturn in output was linked to a fourth consecutive monthly deterioration of inflows of new business, and job losses continued although at a slower pace, IHS Markit found.

The eurozone’s two largest economies reported better than expected improvements in sentiment. Germany’s composite PMI increased to 45.8 and France broke the 50 mark to reach 51.3.

The UK also reported a greater improvement in sentiment than analysts had expected. The IHS Markit/Cips interim UK PMI for services rose to 47 in June from 29 in May — well above the 40 expected by economists polled by Reuters.

The PMI for manufacturing jumped to 50.1, from 40.7.

“While acknowledging the fact that sentiment has recovered remarkably quickly, we continue to stress that it’s difficult to fully convert these numbers into realised growth numbers,” said Marcus Widén, economist at SEB. “The large rise in the French numbers should also be viewed in light of the previous large drop during the spring, [a] larger monthly drop equals a larger monthly gain,” he added.

On Tuesday Germany’s top economic advisers slashed their growth forecast, warning the economy would contract by 6.5 per cent this year and not return to its pre-pandemic level until 2022. The Council of Economic Experts said the country would experience its biggest postwar recession, but it would be a milder downturn than many other large European countries.

“During the financial crisis, it took until the first quarter of 2011 before the economic level from early 2008 was reached again,” the council said. “It is difficult to estimate when a full return to a new normality will take place.”

Global stocks lifted by signs of fledgling economic recovery Rise in European PMIs seen as indication of revival in business activity JOSHUA OLIVER AND DANIEL SHANE

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lobal stocks pushed higher on Tuesday as signs of a recovery in business activity in Europe raised investors’ hopes for a rapid economic rebound.

On Wall Street, the S&P 500 and Nasdaq each rose 0.8 per cent in early trading. European stocks were on course for their best day in a week, as the regional Stoxx 600 index and London’s FTSE 100 both added 1.2 per cent. Germany’s Dax was the best performer, gaining 2.4 per cent.

Surveys of business executives in Europe’s three largest economies suggested they were markedly more upbeat in June than in the previous months.

“PMI numbers provide further evidence of what initially looks like a textbook V-shaped recovery,” said Carsten Brzeski, chief eurozone economist at ING. However, he warned that the rally could be shortlived amid concerns about corporate debt levels and high unemployment.

The French, German and UK purchasing managers’ indices for

Waiters work at a café in Paris. The French purchasing managers’ index for June rose more than economists had expected © AFP via Getty Images

June all rose more than economists had expected as restrictions on activity continued to be lifted. In Germany and the UK, the closely watched gauge of business activity remained in contraction at 45.8 and 47.6, but hit its highest level since the coronavirus pandemic began. France’s composite PMI indicated a return to growth in activity at 51.3. Overall figures for the eurozone also beat forecasts at 47.5.

The improvement in the UK’s PMI reading “was much stronger www.businessday.ng

than expected” and taken with positive retail sales data last week, suggest “the initial rebound in activity as restrictions are eased is likely to be quite strong”, said Cathal Kennedy, an economist at RBC Capital Markets.

Ahead of the release, analysts at Deutsche Bank urged caution in interpreting PMIs as the regional economy recovers from very low levels of activity during lockdowns. The data “can prove rather volatile when you have the sort of economic dislocation we’ve seen

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since the shutdowns”, they said.

The gains in Europe followed a volatile overnight session. Stocks swung sharply after President Donald Trump rebutted comments by his trade adviser that suggested the US could tear up its preliminary deal with China.

Markets initially fell after Peter Navarro, Mr Trump’s chief trade adviser, told Fox News that the so-called phase one trade deal between the US and China was “over”. But Washington was quick to retract the comments. Shortly after Mr Navarro’s interview, Mr Trump wrote on Twitter that the trade agreement with China was “fully intact”. In a statement, Mr Navarro said he had “been taken wildly out of context” when talking to Fox News.

The prospect of increased friction between the world’s top two economies at one juncture prompted S&P 500 stock futures to drop 1.3 per cent.

Tokyo’s Topix benchmark gained 0.5 per cent, while Hong Kong’s Hang Seng index climbed 1.6 per cent.

Investor optimism over the prospect of a global economic @Businessdayng

recovery has been challenged by a resurgence in Covid-19 cases in the US and China, as well as parts of Europe and the Americas.

Germany on Tuesday reimposed a localised lockdown following an outbreak of coronavirus at a meat processing factory in the western city of Gütersloh.

The US on Monday reported more than 25,000 new cases for the fifth straight day, with Arizona, California, Florida, Georgia and Texas among the hotspots. Investors have also had to contend with a rise in infections in Germany.

However, Larry Kudlow, the White House’s top economic adviser, insisted on Monday that the US would not suffer a “second wave” of the pandemic, and dismissed rising case counts as “just hotspots”.

The yields on US government bonds gained as investors moved out of the debt, in a sign of rising confidence in the bond market.

The yield on the US 10-year Treasury, which moves in the opposite direction to prices, rose 0.013 percentage points to 0.7168.

Oil prices were flat, with Brent crude at $43 a barrel.

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Wednesday 24 June 2020

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

How the stock market rally is feeding on itself

Technical factors have propelled the rebound in equities, just as they did the sell-off ROBIN WIGGLESWORTH

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he emergence of brash retail traders who think stocks only go up has been one easy explanation for the surprisingly strong market recovery since March.

Some analysts, however, argue the rebound has more to do with the same technical factors that exacerbated the initial bear market — the rise of volatility-sensitive investors and the increasing influence of derivatives on financial markets.

“Positioning played a huge role in the extent of the sell-off, and has been a big part of the rally as well,” said Bankim Chadha, chief global strategist at Deutsche Bank.

Markets have long been characterised by “procyclical” forces that magnify peaks and troughs.

Investors are naturally flightier at times of turmoil, and become more bullish as markets rise. But volatility is now embedded into virtually all risk management tools.

When turbulence rises, traders are forced to ditch positions, and when it falls they get the green light to dive back in.

There has also been rapid growth in recent years in investment strategies that are even more closely tied to the level of volatility. These include trend-following hedge funds, risk parity funds that allocate to a wide array of assets weighted according to their volatility, and managed volatility products sold by insurance companies.

Low bond yields have also nur-

While the rise of day traders has helped the market rise, volatility-sensitive investors are also exacerbating peaks and troughs © FT montage

tured the growth of derivativesbased strategies, where investors look to secure extra streams of income by selling potential market gains through call options, or protect against calamities through put options. On the other side of these transactions are banks and other investors that want to generate returns by buying the upside or selling protection against falls.

“One of the lessons of the past decade is that long periods of low yields have a lot of side-effects, and this is one of the costliest,” said Luca Paolini, a strategist at Pictet Asset Management. “Financial engineering does nothing to help the economy long-term.”

When markets are particularly choppy, rising volatility can force banks to hedge their exposure to these derivatives by selling their stocks in already falling markets.

Many analysts say that the price swings in March were made more severe by volatility-sensitive funds ratcheting back their positions, and bank trading desks hedging their options exposures.

When volatility falls, however, the dynamics are reversed — which some say may be a factor in the strength and speed of the market recovery. The Vix index of equity-market volatility, sometimes called Wall Street’s “fear gauge”, has slumped from a high of over 80 in

mid-March to about 32 this week, though it is still above its long-term average of about 20.

That reduction in turbulence has spurred trend-following hedge funds to cover short positions and buy stocks again, analysts note.

Risk parity funds tend to move more slowly, but managed-volatility funds have added up to $20bn to their equity exposures in the past two weeks, after the longest stretch of daily increases in allocation since October 2019, according to Deutsche Bank.

A recent surge in options trading — driven in part by gung-ho day-traders — has also likely contributed to the rally. Goldman

Sachs estimates that at about $5tn, the open interest of options is now about a fifth of the S&P 500’s overall market capitalisation, compared to an average of 14 per cent of the US benchmark index in 2013-2017.

Moreover, about 20 per cent of all S&P 500 options traded since the beginning of April have had a maturity of less than 24 hours, up from 3-5 per cent in 2011-16, according to Goldman Sachs.

This can have an impact on the actual equity market, akin to the tail wagging the dog. Options with a closer maturity are generally more sensitive to changes in prices. For example, when an investor buys a call option maturing the next day, the counterparty in the trade may be forced to buy the underlying stock to hedge its exposure as it rises closer to the strike price.

Not everyone is convinced that technical factors such as these have played a big role in the rapid revival since March. One volatility-focused hedge fund manager stressed that the effects of such factors tend to be greater when markets are tumbling.

However, Mr Chadha points out that stock market liquidity — a term used to describe how easily assets can be bought and sold — is still relatively low, so even modest increases in equity exposures can have an outsized impact on prices.

Given how many volatilitysensitive strategies still have small weightings in stocks, and are likely to ramp them up in coming weeks, he reckons the rally has further to run. “The risk is that the recovery is a lot stronger than people expect,” he said.

Ex-Wirecard chief Markus Braun arrested Former head of scandal-hit German fintech company released from custody on a €5m bail OLAF STORBECK AND DAN MCCRUM

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irecard’s former chief executive Markus Braun has been arrested on suspicion of false accounting and market manipulation, Munich prosecutors said on Tuesday morning.

The prosecutors are accusing Mr Braun of artificially inflating Wirecard’s balance sheet and the company’s revenue in an attempt to make the company look more attractive for investors and clients.

The prosecutors suspect Mr Braun did this in conjunction with others. A spokeswoman for the Munich prosecutors’ office told the Financial Times that the company’s former management board was under investigation.

An Austrian citizen, Mr Braun reported himself to Munich pros-

Markus Braun reported himself to Munich prosecutors on Monday evening © Wirecard

ecutors on Monday evening, travelling to the German city from his home city of Vienna after a judge issued an arrest warrant for the 50-year-old.

A Munich judge on Tuesday afternoon released Mr Braun from custody on a €5m bail. The former CEO will have to report to police on a weekly basis. www.businessday.ng

A lawyer for Mr Braun did not respond to a request for comment.

The arrest comes after Wirecard on Monday warned that €1.9bn of cash on its balance sheet probably does “not exist” and disclosed that it had previously mischaracterised its biggest source of profits.

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The company added yesterday it was trying to work out “whether, in which manner and to what extent such business has actually been conducted for the benefit of the company”. It withdrew its most recent financial results and said other years’ accounts may be inaccurate.

Shortly before his resignation last Friday, Mr Braun told investors that Wirecard might have become the victim of a case of “fraud of considerable proportions”.

Shares in Wirecard have plummeted more than 80 per cent since the company postponed the publication of its annual results last Thursday.

Until Mr Braun resigned, he was the longest-serving chief executive of a Dax company, and one of its richest, thanks to a 7 per cent stake in the group he ran from 2002. At its peak in the summer of 2018, Wirecard was worth more than €24bn on the @Businessdayng

stock market.

The former KPMG consultant turned Wirecard into one of Europe’s hottest investments. When Wirecard replaced Commerzbank in the Dax 30 index in 2018 Mr Braun was, on paper, a billionaire and was regarded by many within Germany as a visionary technologist.

Mr Braun promised Wirecard would be at the forefront of a world where notes and coins were obsolete. He adopted the black turtleneck uniform favoured by Steve Jobs at Apple and Elizabeth Holmes at Theranos, the disgraced blood-testing company.

Much of what Mr Braun said is now in question. In 2017, for example, he told investors that Wirecard was using the latest artificial intelligence technology to analyse data. But according to documents seen by the FT, staff were instead cobbling together spreadsheets of customer information.

Thebigread

BUSINESS DAY Wednesday 24 June 2020 www.businessday.ng

Coronavirus: Sweden starts to debate its public health experiment The Nordic country has tried to stay as open as possible but with rising deaths its policy faces growing scrutiny Richard Milne in Gothenburg

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he two sides of Sweden’s against-the-grain coronavirus strategy are visible from a small square in north-eastern Gothenburg.

On one side lies Gerashus care home, where more than a quarter of residents have died in the past three months, most of them from Covid-19. At the peak of the outbreak, two-thirds of its staff were absent.

On the other side of the square is a bustling tram stop where dozens of people wait to head into the centre of Sweden’s second city and children come from a primary school. A steady stream of customers head into a convenience store to collect online shopping parcels or buy lottery tickets. Nobody wears a mask but most keep a metre’s distance from each other.

“Life is the same really. There are people coming in all the time. You don’t think too much about corona.

Everybody is going about their normal lives,” says 58-year-old Adrian, working in the store from behind a Plexiglas counter.

As the only EU country not to adopt a harsh lockdown, this lighttouch coronavirus strategy has sparked enormous international attention — especially from rightwing populists who believe the virus has been overhyped.

Sweden has chosen to focus on public health in the broadest sense, aiming to keep as much of society open as possible, including restaurants, schools and fitness centres as well as its borders.

The Scandinavian country of 10m people has relied on voluntary recommendations for social distancing and homeworking in its effort to flatten the curve enough to allow its healthcare system to keep functioning.

But a far higher death toll per capita than its Nordic neighbours has led Norway, Denmark and Finland — all of whom locked down — to open their borders to each other but keep them closed to Sweden.

Swedes appear bewildered by the sudden scrutiny they are under. There is a widespread feeling that their decision to keep schools open for children up to the age of 16 was a wise one, but also that they have failed to protect their most vulnerable in care homes such as Gerashus.

Many Swedes were initially reassured that its response to the crisis had been led by healthcare experts, not politicians, fuelling a belief that it acted rationally as other countries responded emotionally. But the stubbornly high death toll — 102 new deaths were announced on Wednesday, more than Norway has had in the past two months cumulatively — has led to sharper domestic criticism of officials, including Anders Teg-

nell, the state epidemiologist who crafted Sweden’s approach.

The result is that everything is now up for discussion and the debate about whether Sweden’s approach has been right or wrong is just starting inside the country.

Leif Dotevall, communicable disease control officer in the region around Gothenburg, argues many people may be viewing Sweden’s strategy through the prism of whether they believe in lockdowns or not, rather than the overall health impact. “It makes the analysis right now skewed: you are so obsessed by your idea of the strategy and that emotional analysis makes you blind to the whole picture,” he adds.

But Elisabet Lann, the Gothenburg city councillor responsible for elderly care and a member of the opposition Christian Democrats who is sceptical about the government strategy, says 200 years of peace and neutrality have left Sweden slow to react. The response has been cloaked in a self-image of a country that believes it behaves calmly while others are impetuous.

“We don’t like to be irrational because of feelings, or be frightened to make irrational moves,” she says.

“We look at other countries as more impulsive.”

‘We are open’ Situated on Sweden’s west coast, Gothenburg is home to some of the country’s biggest companies — from Volvo Cars and truckmaker Volvo AB to ball bearings manufacturer SKF and healthcare group Molnlycke. It is also home to some of the country’s most deprived

areas such as Bergsjon, the northeastern suburb where Gerashus is situated and where unemployment before the coronavirus crisis was almost three times that for the city as a whole.

Vastra Gotaland, the region of 1.6m people that includes Gothenburg, has had 649 Covid-19 deaths so far — more than the 598 in Denmark, 326 in Finland or 242 in Norway, all of whom have more than triple the population. Sweden as a whole has suffered 5,053 deaths.

Henrik Tornqvist, a priest in Bergsjon, is one of those who has marked the change since March: he used to perform three or four funerals a month, now he does the same number each week. Up to 1,000 people a week used to attend homework groups, lunches and services at the church. “We are open but we don’t have a normal life,” he adds. He restarted services for the Midsummer holiday on Sunday but with a congregation reduced from the usual 120 to 30.

Maria Ottensten, the head priest for north-eastern Gothenburg, says of Sweden’s strategy: “We can keep going this way. It’s boring but we can keep it going. Closing everything down, you can’t do it for very long.”

Close by is one of the symbols of the Swedish strategy’s success: the primary school. Children up to 16 have gone to school throughout the crisis. Locals hail the policy for helping with children’s mental health as well as allowing parents to keep on working. “I like playing with my friends, and not being in-

‘‘

As the only EU country not to adopt a harsh lockdown, this light-touch coronavirus strategy has sparked enormous international attention — especially from rightwing populists who believe the virus has been overhyped

side all day,” says one teenager playing basketball outside the school.

In the centre of Gothenburg, a class of nine and 10-year-olds from the French school has stopped in front of a statue of King Charles IX. Stefan, one of the teachers, says of the decision to keep schools open: “I think it’s been good. I’m not afraid of getting corona from them.

If we close down the school, society will collapse because you need to have someone home.”

Gitte Caous is the director for the district of Eastern Gothenburg, which includes Bergsjon, and she emphasises that health is about more than purely preventing deaths. “A country doesn’t just consist of elderly people. It also consists of children, companies that could go bankrupt etc. Take suicides — people take their lives because they have been socially isolated,” she says.

Not all schools in Sweden have been open. It closed down those for over-16s as well as universities, judging that they could cope better with distance-learning and reduce the pressure on public transport from older students who often have to travel further.

Camilla Alenas, headteacher at SKF’s Technical College which has 96 students, says the past three months have been challenging.

“We have seen we need to work on mental health. The students haven’t said, ‘Oh, I need help’ like they used to,” she says, adding that the school has had to help some poorer pupils gain access to the internet. She is worried about those graduating: “It’s a bad time to go into the job market.”

‘This is a bit too normal’ Truckmaker Volvo underscored this by announcing more than 4,000 job cuts last week. The hit to Sweden’s economy from coronavirus will be sizeable, raising the question over whether it is more influenced by the lack of a lockdown or by the spread of the virus. SEB, one of Sweden’s biggest banks, now forecasts gross domestic product will decline 5 per cent this year, similar to its estimate for Norway and worse than Denmark’s latest guidance of a 4 per cent contrac-

tion. Unemployment in Sweden could hit 12 per cent, according to SEB, well above its financial crisis peak and almost double its preCovid rate. But Sweden’s economy is expected to do far better than the European countries most affected by coronavirus, such as the UK, France, Italy and Spain.

Hakan Samuelsson, chief executive of Volvo Cars based in western Gothenburg, says its Europe sales fell 50 per cent in May but June is likely to be “much better”. He now expects a V-shaped recovery. “It will hurt the economy.

But we can’t isolate this. We can’t close down our economy or our company and wait for a vaccine to come,” he says.

He adds that many talk about Covid-19 deaths but few discuss how many die each day from alcohol abuse or suicide. “A bad economy where people lose their income will cause social problems.

Politicians need to recognise that closing down the economy will have negative effects,” he says.

The evidence from shops and cafés in Gothenburg that have stayed open throughout the pandemic is more mixed. A waiter at Cappuccino, a café in the city centre, says: “It’s generally been quieter but now the days are warmer it’s the same. It’s back to usual — it’s kind of strange.” In the evening, bars nearby are packed and young men are drinking beer while playing crazy golf. “I’m scared this is a bit too normal,” says one woman, trying to get her newborn baby to sleep in a pram.

In Bergsjon, where wages are lower and unemployment higher, shops are suffering more — a sign that a lack of a lockdown is not enough to keep the economy going when people are afraid of the virus. At Tintin’s hair salon, one of the hairdressers says business has more than halved. “We hope it comes back but people are scared.

There’s a lot of infection here. We are afraid soon it could be like Italy,” he says. The woman behind the counter at Horsed Beauty, a local clothes shop, adds: “It’s slow.

There are not so many people because of corona.”

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