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news you can trust I ** THURSDAY 24 september 2020 I vol. 19, no 657
Crude Oil $41.68
I
N300
FINANCIAL REPRESSION SERIES
Market
₦ 4,924,635.80 -1.87
Foreign Exchange
Buy
Sell
I&E FX Window CBN Official Rate as at September 22, 2020
ntb
www.
MTN Nigeria plc CP
FGN
Dangote Cement plc
Axxela Nsp-spv Funding 1 (Natural Gas) PowerCorp plc plc
Spot ($/N) 25-Feb-21 5-Mar-21 23-Jul-30 30-Apr-25 20-May-27 27-Feb-34 386.00 379.00
$-N 450.00 465.00 1m £-N 580.00 600.00 Currency Futures 389.54 €-N 515.00 545.00 ($/N)
g
Benchmark Sovereign & Corporate Bonds
0.00
0.00
0.00
-0.07
0.00
-0.12
1.71
4.63
9.00
7.77
8.70
11.08
2m
3m
6m
12m
36m
60m
498.32
590.10
392.38
395.23
403.75
420.81
*NTB - Nigerian Treasury Bills; *CP - Commercial Paper
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More funding options open for 41.5m SMEs amid COVID-19 scourge
Low yields dampen investment returns of Nigeria’s insurers M T Odinaka Anudu
BALA AUGIE
he sharp decline in yields on risk-free treasury instruments is dampening the investment returns of Nigeria’s insurers who are already struggling with the negative impact of the coronavirus pandemic. Insurers around the world tend to pack policyholders money in investment securities when
Continues on page 31
L-R: Douye Diri, Bayelsa State governor; Godwin Obaseki, Edo State governor, and Philip Shaibu,his deputy, during a courtesy visit to Government House,Yenagoa, yesterday.
ore opportunities to access credit have opened for Nigeria’s hard-hit micro, small and medium enterprises Continues on page 31
Inside
Dangote Cement pays over N1trn dividends in seven years P. 30
Tony Elumelu Named in “TIME 100” List of 100 Most Influential in the World 2020 P. A2
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RESEARCH&INSIGHT
In association with
A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)
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The debts stock of the country: Why Nigeria seeks external lenders ADEMOLA ASUNLOYE
T
he nation’s debt stock data as at the second quarter (Q2) of 2020 showed that the total public debt portfolio of the federal and state governments combined stood at N31.01 trillion as at June 30, 2020. This figure is a cumulation of both domestic debts and external debts, where the former (domestic debt) accounted for 63.35 per cent (N19.65 trillion) of the total debt portfolio, and the latter accounted for 36.65 per cent (N11.36 trillion). The debt stock data further revealed that the Federal Government of Nigeria (FGN) alone was responsible for N25.28 trillion of the total public debt portfolio. That is, 81.53 per cent of the country’s debt is attributed to the FGN, while the 36 states and the Federal Capital Territory (FCT) accounted for the remaining 18.47 per cent to the tune of N5.73 trillion. These debts whether externally or internally incurred by the FGN or the states (including the FCT) increased by a significant 20.60 per cent between Q2 2020 and the corresponding year. The continuous increase in the nation’s debts speaks volume on the type of budgets of the federal government and the state governments including the FCT—they are running on a deficit budget. A reason why the nation’s debt stock (external or
Source: NBS, BRIU
internal) continuously increases. Within this period, the total external debt was up by 36.5 per cent from N8.32 trillion in Q2 2019 to N11.36 trillion in Q2 2020. This growth is consequential to the growth in debts of both the FGN and the states (including the FCT). While the external debt stock of the FGN increased YoY by 40.1 per cent from N7.01 trillion in Q2 2019, states (including the FCT) ex-
ternal debts grew by 17.5 per cent from N1.31 trillion to N1.54 trillion in Q2 2019. The data further revealed that 86.46 per cent of the external debt stock in Q2 2020 were mainly incurred by the federal government to make up for its shortage of funds to finance projects: either capital or recurrent. Although Nigeria’s revenue mainly comes from oil and through taxation; more strategic and inten-
tional approaches on diversification will save the day. The increase in external debt was concurrent with total domestic debts as the total domestic debt stock increased by 13 per cent year-on-year (YoY) from N17.38 trillion to N19.65 trillion in Q2 2020. It is a given that the FGN borrows more and that is the reason its debt accounted for 78.67 per cent (or N15.46 trillion) of the total debts in Q2 2020;
Source: NBS, BRIU
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leaving the remaining 21. 33 per cent to the Nigerian states and the FCT, that is, an indebtedness of N4.19 trillion within the same period. This means that FGN debt stock represents 78.67 per cent of the total internal debts, while states (including FCT), the remaining 21.33 percent. While the FGN domestic or internal debts had increased by N2.04 trillion (15.2 per cent) between Q2 2020 and the corresponding year from N13.41 trillion, states internal debts including that of the FCT also increased by N223.48 billion (or 5.6 per cent) from N3.97 trillion within the same period. Why does the country continue to seek external lenders? Well, the economy needs money to run smoothly. The lenders of these monies are either commercial banks and/or private persons/ institutions with probably higher interest rate on a shorter-term loan compared to the foreign lenders—commercial, bilateral and multilateral (like the Eurobonds, Exim Bank of China, and International Monetary Fund (IMF) respectively, to mention each but few), that may present a lower interest rate and a longer loan term to these borrowers. Another reason could be the amount to be lent. The amount required could be so much that internal lenders may not be able to raise it and if they can, they may be unwillingly to lend it for a short term. However, the creditworthiness of the FGN and the state governments
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(including FCT) is a major determinant of how much credit that will be given. As of March 2020, Standard & Poor’s (P&S) credit rating for Nigeria stood at B- with stable outlook. Whereas in April, Fitch’s credit rating for Nigeria was reported at B with negative outlook. Either of these rates puts Nigeria as highly speculative, that is, at a high risk of loss when invested upon. So, the big question is, why did the external debt increase this much (36.5 per cent) compared to the 13 per cent increase in internal debts between Q2 2019 and 2020? Among other reasons is the emergence of COVID-19 which disrupted economic activities in the country as well as its consequence on the unprecedented shocks in the prices of crude oil, thereby impacting on the revenue of the country. Since business/trading activities crippled during this period with some which may never recover, then it leaves the borrowers (FGN and states) no option but to seek external help. For instance, around early Q2 2020, the IMF executive board alone approved $3.35 billion as emergency support for Nigeria to address the COVID-19 pandemic. Other external lenders made similar moves too. By and large, debts is a necessary means of financing projects in the economy, however, paying up these debts rather than just servicing the debts is of utmost importance to be creditworthy.
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The C-Curve: Rising, flattening or dipping? Oshiomhole; A self-inflicted injury
ik MUO
E
arly in August, The Nigeria Centre for Disease Control (NCDC) warned that the declining number of fresh cases did not signal a flattening of COVID-19 curve, identifying the woeful number of tests by the states. However, last week, (18/9/20), the boss of PTF-Coro, declared jubilantly that tremendous progress has been made and we are beginning to notice that the curve is flattening, while he advised vigilance and cautious optimism. The President of Nigerian Medical Association, Prof Ujah had asked: where is the evidence? On Monday, 21/9/20, when only 11 states submitted their test-figures, the NCDC repeated its earlier warning, asking us to avoid premature celebration. There are also reports that only Lagos, Ogun, Kano and FCT are doing serious testing. It appears that we have started behaving like those in a curveflattened environment. Lagos State, the unchallenged epicentre of the pandemic has opened up everything and everywhere and other states have also followed suit. Individuals have also forgotten about the new normal so soon. Students who returned to school keep all the protocols inside the classrooms but ignore them even within the school compound. As at 21/9/20, Nigeria has conducted just 480,000 tests, 0.25 percent of an estimated population of 200 million. In all sincerity, and keeping “mathemagics” aside, can a sample of .25 percent help us affirm the situation of things? Let the quants bother about this as we review the trend across the globe, where oga-coro is powering on ferociously, with a total figure of 30.3 million as at 21/9/20. It gets more interesting when we note that while it took 38 days to move from 5m-10m, (131579 daily) it took just 18 days to jump from 25m to 30m (277777daily)! The seven-day rolling average of new
cases is about 90000 in Asia, 60000 in Latin America and the Caribbean and 30000 in North America and about 10,000 in Africa. Even though God has been very kind to us in this regard, this scenario does not show any course for celebration. The UK is now facing a second wave of coro and has introduced the carrot and stick containment model. It has upgraded its coro-alert to Level 4, introduced a localised lockdown that would affect about 14 million people, and imposed serious punishment, including a £10,000 fine for quarantine violations and a stay-at-home allowance of £500 for the poor. They have also suspended the planned return of fans to the sports arena, due to commence in October. In France, new cases surpassed 10,000 daily (highest since the coroinvasion) and strict restrictions have been imposed on beach gathering and outdoor public events especially on the red zones. In Madrid social gathering has been limited to 6, with localised lockdown for risky neighbourhoods. Israel has also imposed a second National Lockdown on Friday (18/9). So, what is the status of this mysterious curve: rising, flattening or dipping? You can make up your mind from this brief review. But if it is rising all over the world, it is unrealistic to expect that it will flatten in Nigeria because we are a part of this interconnected world, when even chicken imported from Brazil has tested positive in China! And remember, international flights have resumed! So, I vote for cautious optimism! There are other interesting Coro developments. A new study is suggesting that Coro is ultimately likely to become a seasonal ailment like influenza. Consumers are also “rushing” an industrial bleach (chlorine dioxide solution) as a cure for “coro” and that is even after Archbishop Mark Grenon and his son, Joseph were arrested in Colombia for selling the bleach-cure. About 3500 people have contracted brucellosis, after a leak from a state-owned biopharmaceutical plant in China. Still on criminal entrepreneurship, Lola Kasali, 22, a Houstonian, has just been arraigned for defrauding the state coro fund on $2 million under the Paycheck Protection Program. In South-Africa, an over-active security official has shot and killed a citizen for failure to wear facemask in Africa at a shopping complex in Limpopo, on 17/9/20. In football, Ripdorf,
a German football team lost 37-0 to their local rivals after fielding only seven players who socially distanced throughout the game. Their request to postpone the game because their opponent’s coro-sacntity was in doubt was rejected. They would have abandoned the match but they did not want to pay a fine of €200 (£182). Ripdorf players avoided physical contacts with their opponents throughout the game and as such, the opponents kept scoring until they got tired of hitting the net Other matters: Oshiomhole’s selfinflicted injury The self-acclaimed political lion, Adams Oshiomole, has just been rubbished by a political lizard, which has just stripped him politically naked. On 9/7/20, I wrote inter alia “How can Oshiomole turn around to play the godfather or even dream of doing so? He who crowned himself the nemesis of godfathers, He who swore the step on toes and chop off those toes in the larger public interest; who promised NEVER to distract or interfere with whoever governs afterwards”! Anyway, it is not yet over but Ashiomhole has finished himself. That is what happens when ordinary people start playing god. When people wear the perquisites of office in their forehead, rather than behind, life becomes meaningless when it falls off. As for the September Election, I can only prophesy that one party must win. There is no way two of them can win! Maybe, I will make available my $1.8 million Champaign for the final celebration. And for Obaseki, this is just the end of the beginning and he should learn from the travails of his master (Other Matters: Like Naboth, like Obaseki; well, not exactly! BusinessDay, 9/7/20). A lot has been said (some serious, some jocular) about the social and political decimation of Oshiomhole and they are all in the market square. But the comments from two APCians, (who would soon migrate to PDP APGA, YPP) are noteworthy. A former publicist of nPDP, Mr Ezeh blamed the defeat of APC on Adam’s unpleasant carriage, incoherent disposition, sheer administrative incompetence, and gross leadership malady. The one and only Rochas Okorocha said that it was a vote against injustice and that even APC members voted Obaseki. That means that Adams is the
‘
But if it is rising all over the world, it is unrealistic to expect that it will flatten in Nigeria because we are a part of this interconnected world, when even chicken imported from Brazil has tested positive in China! And remember, international flights have resumed! So, I vote for cautious optimism!
Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye
Proposed CISIM bill dangerous to Nigeria’s capital market development
I
t was recently reported that a bill to repeal and replace the Act establishing Chartered Institute of Stockbrokers (CIS) effectively transmuting her to Chartered Institute of Securities and Investment Management (CISIM) is before the National Assembly again. Ordinarily, this would not have elicited concerns and may even have been applauded as the Institute, like any other, has a right to re-position her members. However, this proposed CISIM bill appears similar to the CISI bill that CIS tried unsuccessfully to enact through the 7th Assembly in 2013 and that is a cause for concern for the Capital Markets, Investment Industry and practitioners therein. The proposed CISIM bill’s explanatory memorandum signals the intention of CIS “to regulate and control the professional practice in the areas of Securities and Investments business in Nigeria.” CIS reportedly claimed the CISIM bill is to bring professionals practicing in securities and investment business in Nigeria under one umbrella for ease of
regulation, an objective that is neither desirable nor within her purview. Apparently, the proposed CISIM would be empowered to force all practitioners of Securities and Investment business in Nigeria to be her members, be the sole credentialing body, able to jail or fine otherwise qualified non-member practitioners, etc. The powers to regulate practitioners in the Financial Markets sometimes overlap and lie principally with the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) which registers Capital Market Operators who engage in Securities and Investment business in Nigeria and cannot be usurped by a private entity. Registered practitioners in the Capital Markets have diverse functions with specialized skillsets that exceed merely transacting in securities, belong to different credentialing bodies and/ or Self-Regulating Organisations. Apart from brokers, others include solicitors, reporting accountants, rating agencies, registrars, custo-
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dians, trustees, financial market dealers, asset managers, investment advisers etc. whose members cannot be regulated and certified by the proposed CISIM but by SEC and their respective professional bodies. The progress being recorded in the Financial Markets as spearheaded by the regulators and other stakeholders could be reversed if the proposed CISIM bill that failed to pass the 7th Assembly is left standing in its present form. It is likely to discourage discerning investors (foreign and local) from participating in the markets, stifle specialisations and plurality of functions and perspectives needed to foster further development of the market and further inhibit efficient operations of the markets, all of which are against the values that CFA Society Nigeria and other concerned industry stakeholders stand for. CFA Society Nigeria is a member society of the CFA Institute, the body that awards the prestigious CFA charter which is considered the gold standard globally in the investment
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purveyor of that injustice. It is one of the ironies of Nigerian strange political reality that while Eze-Iyamu (who was canonised by Adams in July) lost the election, all the poisonous jabs, barbs and darts are being thrown at Oshiomhole! Oshiohole claim to political “lionship” is laughable. As an APC Chair, he was sent parking by unknown, local ward executives and an ordinary deputy national secretary. As a political elder, he was sacked by the “unknown” political neophyte whom he “made” a governor the other day (made somebody governor in a democracy?). I don’t know whether he will rise again from the ashes of this social and political humiliation. But if he does, I will advise him to chew his wards at least thrice before uttering them. Obaseki didn’t have much to do during the campaign apart from repeating all the things Adams said in his favour and those he said against Iyamu and godfathers. He should also be wary of the crude arrogance and nothing-mega tendencies that come with power in Nigeria. In Igboland, the masquerade, the spirit-being that visits humans under special circumstances, is a very serious institution. It is abominable for anybody to desecrate a masquerade. However, it is unheard of for the person who carries the masquerade pouch (his native doctor) to desecrate the masquerade. That is what Adams, nwa Oshiomhole has just done. He attempted to destroy a masquerade which he institutionalised. And on top of that, he went home to dance and celebrate that odious act. That is why the gods were and are against him. I had predicted that Obaseki would not end like Naboth (see: Like Naboth, like Obaseki; well, not exactly! 9/7/20). You see, I am a prophet and those Obaseki followers should advise him to come and settle me for prophesying positively on his ‘head’ Now Obaseki is the one dancing. I will present him with that champaign (Tasteof Diamonds, @ $1.8m a bottle), if fawning protocol officers will give me access to him. I will then remind him of what I said in July and for Obaseki, this is just the end of the beginning and he should learn from the travails of his master. I have spoken
Sade Odunaiya
profession. Currently there are over 178,000 CFA charter-holders globally in over 151 countries that belong to 157 member societies across the globe. Our members work across various sectors of the Nigerian economy, particularly in the Financial Services Industry and also belong to several SROS and trade groups in the Nigeria Capital Market. The Society’s mission is “to lead the investment profession by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society”. The Society’s advocacy efforts are aimed at ensuring market integrity through fair markets, trustworthy industry, ethical profession and educated investors. She promotes investors’ rights and education and believes strongly that the longterm sustainability of the markets depends on their working for the ultimate benefit of investors.
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Parliamentarism can offer Nigeria an escape from bad governance and weak institutions (1)
CHRISTOPHER AKOR
I
n my public reflections, I have been consistent in pointing to Nigeria’s weak or pretend institutions as the leading cause of state dysfunction. In one of such reflections last month where I argued that our institutions are not up to scratch, an academic who has followed my writings closely gave a short but poignant response: “we know this. What’s the solution?” Although every criticism or analysis contains the seed for its own solution, today and next week, I will present what I consider the best constitutional arrangements that will give Nigeria a fair chance of developing and sustaining strong institutions, promote good governance and prevent the personalisation of power that has characterised Nigeria’s presidential democracy since 1979. Scholars of institutions have always balked at the idea of suggesting sure-proof ways of building strong institutions quickly. For most of them, building and operating state institutions is a long-term project even under ideal circumstances. That leaves new, fragile and conflictaffected states in a quandary and susceptible to strong man rule and personalisation of power that is particularly destructive for these nations and ultimately responsible for their poverty and underdevelopment. Despite this hesitation, years of research by scholars of comparative
politics and empirical evidences around the world, as summarised by John Gerring et al of Boston University, point to the fact that presidentialism tends to foster “a more personalised and free-floating style of leadership centred on individual politicians and smaller, less established organisational entities”, while “Parliamentarism fosters a politics that is highly predictable, institutionalized form of politics and policymaking in which participants are part of the establishment.” Researchers are also in total agreement that parliamentarism fosters a stronger political party system, which as the American Political Science Association (APSA) noted in 1950, is the linchpin of democratic accountability and effective governance. Drawing on these, Theodore Lowi in 1985 and Juan Linz in 1990 point to the key weakness of presidentialism, which is that it fosters a more personalised form of political behaviour in which presidents, legislators, interest group leaders and even bureaucrats, enjoy significant independence from the political party. In contrast, the key distinguishing factor of parliamentarism is its fostering of politics that is more institutionalised and centred, as it were, on political parties. What is more, John Gerring and his associates, in 2008, did an empirical study of presidential and parliamentary systems and concluded that based on evidence, “parliamentary systems offer significant advantages over presidential systems. In no case examined ... does parliamentary rule seem to detract from good governance. In most policy areas, particularly in the areas of economic and human development, parliamentary systems are associated with superior governance.” This should naturally suggest that new, fragile or conflicted states
desirous of building strong institutions should naturally opt for the parliamentary system of government that forces all actors to act within the confines of the party. But we know African leaders particularly dislike curbs and checks on their powers. For those colonised by the British, they have virtually all replaced the more collegiate Westminster parliamentary system bequeathed to them at independence with a more powerful presidential system that gives the president far greater powers than is naturally healthy for the development of institutions. This allows the president to personalise power, eliminate or render the party ineffective like in Uganda and Kenya, undermine and even destroy state institutions, clamp down on opponents and build an alternate administrative structure based purely on personal loyalty and patronage. In the case of Nigeria, the excuse to do away with the parliamentary system was the so-called conflict of personality and authority between the nominal and ceremonial president and the Chief Executive or Prime Minister during the first republic that was erroneously fingered as the cause of the collapse of the first republic and the subsequent plunge into a fratricidal civil war. Perhaps, scarred by the civil war, Nigeria’s largely elite and intelligential class taxed with the job of producing the 1979 constitution decided to jettison the more collegiate Westminster parliamentary model for the American-styled presidential system without regard to the implication of that model for institution building and good governance. Perhaps, if their only concern was the conflict of personality and authority between a ceremonial president and prime minister, they could have adopted the South African model that is at once
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If Nigerians are concerned about good governance and institution building to rein in the excesses of our leaders, the first reform that has to take place is to abolish the powerful presidential system and revert to a more collegiate parliamentary system
solidly parliamentary and presidential at the same time. The South African model retained all the features of a solid parliamentary system with a strong party system and a strong parliament where the president and leader of the ruling party is subjected to strict oversight and held accountable. It however addressed the concern of those like Leopold Senghor who argued that sharing power was un-African, and did away with the dual authority figure by providing for a president only who combines both functions of the ceremonial president and prime minister. But I suspect our ’49 Wise Men’ – the crème de la crème of Nigeria’s academics, lawyers and politicians, were attracted by what they erroneously saw as the “structural elegance” of the American-styled presidential system, which they argued was more compatible with African indigenous kingship/chieftaincy traditions. In essence, they knowingly set out to create a dictatorship president and made it in such a way that the president could do away or sidestep all the institutional restraints placed around him, personalise power, weaken or destroy the country’s fragile institutions and build his own power structure based on personal loyalty and patronage. In summary, if Nigerians are concerned about good governance and institution building to rein in the excesses of our leaders, the first reform that has to take place is to abolish the powerful presidential system and revert to a more collegiate parliamentary system that ensures a very strong party system and forces all actors to act within recognisable organisational structures that is robust enough to force accountability and prevent the personalisation of power. To be continued
Political bliss or tribulation: it shall come to pass
T
he political bliss or tribulation of politicians in Nigeria reminds me of ‘Humpty Dumpty’ who sat on a wall and never thought he could experience a fatal fall. He had a great fall that not even the king’s horses and all the king’s men could put him together again. That has been the fate of some prominent politicians in Nigeria who oscillate between bouts of tribulations and cycles of bliss. In tribulation, they fall on their faces looking sad, sore, and foolish having obtained political “jewels” from illegitimate means. I believe neither the All Progressive Congress (APC) nor the People’s Democratic Party (PDP), which they have converted to political fences on which they sit astride incongruously, can take away the tribulations from them because of being destitute of political ideologies. Success in any endeavour, including politics, is a covenant and not a promise. In covenant, there is an obligation to perform to have the promise. True democrats don’t seek to be important but aim to be relevant, especially in meeting the legitimate aspirations of the constituencies they represent. With relevance, any politician will be influential and then can win elections with a modicum of effort. As a matter of course, politicians ought to be lamps unto their people’s feet and should shine brighter and brighter to comfort others and not the other way. But unfortunately, many of the Nigerian noncourteous and hard-nosed politicians, some of whom are of high birth but low morals
and weak-willed, can ‘screw’ anything and anybody to submission, no matter how rancorous the situation. They are arrogant, aggressive, and violent, which spells doom for anyone who stands their way. They run the political affairs of this country as though they are masters of the universe. With a sense of manhood and social responsibility, they represent the hardening of the divide between all that had been closely knit in this country. They underestimate the power of sincerity and, to keep hold of their illicit and ungodly affairs, act contrary to trust, humanity, and even their religious and cultural belief. That today, many of them are becoming political ashes is the inevitable destiny of excessive desire to be close to and be violently in love with power. They have made themselves heartily disliked by arrogance, and the consequences speak for themselves. Following the Edo State gubernatorial election outcome, politicians should understand that leadership in any area of life is about influencing people positively and not just about winning in elections. One is a leader if people look up to him based on his incandescent quality of words and actions. If it is known that politicians care, the electorate will “run through the wall’ and cast their votes conscientiously. The electorate wants to see an exceptional ability in politicians to relate to the ordinary people- the out-of-school boys and girls hawking on the streets, the widows with no means of
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livelihood, the sick with no hope of recovery, and the aged with no companions. Then, the politicians will not need to sweat from every pore to achieve victory. Unfortunately, some of the ‘highly’ rated political leaders are oblivious that the electorate is getting more enlightened and sophisticated (vote-buying notwithstanding). The days of politically wandering off in random directions are over, and the funeral of political deceit has gone on too long, and the time for the burial is now. Therefore, it is dangerous for any politician to create a corrosive political atmosphere and still expect victory. Of course, success will be elusive, as evident in the fall from the ‘political grace’ of some once highly rated politicians in recent times. This is terrible and bad news. The bad news is bad news; it does not improve with time. The time has come for the wicked and unrighteous politicians to forsake their ways and return to God, who shall lovingly have mercy and abundantly pardon their political iniquities. The time has come to be positively visible and available to the people in whom the power to elect leaders resides. Therefore, it should not require any severe admonition to dissuade politicians from being arrogant, vicious, and greedy. Great and ‘democratic’ politicians should learn to prevent their mouths from spewing evil. Being deceivers, vain talkers, and unruly holds no credible path of life and the bitter taste in the mouth of many recently fallen politicians can attest to it. As noted by somebody, “if you
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Francis Iyoha
want to make a powerful impression, if you want to build a relationship with your people, if you want to stir emotions and generate energy in them, then surprise them, sit down with them, break bread with them, and share a meal” and not act like a demented hen. The path to a praiseworthy political future lies in developing some political attributes, including moral sensitivity, judgment, motivation, and action. Though the development of such attributes thrives more in environments where expectations align with ethical goals, the conduct and the outcome of the just concluded election in Edo State suggest that we can align with that which is good, noble, and edifying. Remember, whether it is political bliss or tribulation, it shall come to pass. Professor Iyoha is of the Department of Accounting, Covenant University. He wrote viafoiyoha@ican.org.ng
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Philip Shaibu: The ‘Obesere’ of Edo politics Leadership Shepherd with Babs
Babs OlugbemI
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or the first time in my writing career, especially on political issues, I pitched my tent with Obaseki/Shaibu ticket in the concluded Edo election. In my article titled, Philip Shaibu: the deputy man of the year, I was not shy to proclaim my admiration for a rare deputy governor and the way Obaseki, the Moses managed his relationship with the young Philip to achieve “torgba” (their campaign payoff meaning 4 times 4). The eleven years age difference proved to be an advantage. That was a radical departure from the beliefs and sentiments in this part of the world where age difference is often an intimidating factor. I took my position when I heard Babajide Kolade-Otitoju on TVC predicting Oshiomhole and his candidate to win the election. The defiant voice in me disagrees with his analysis though he had predicted other polls successfully. Must the godfathers always win? I decided to use my platform to express my views and stick my neck on the board for Obaseki. Obaseki was said to have performed very well, but the reasons for my imaginary vote for Obaseki are two-fold. The first is his determination to challenge the low-mighty former APC chairman and second is Philip Shaibu who refused the Oshiomhole’s carrots to become the governor and standby his master. If you think that is not exceptional, check Jigawa state where three deputy governors served
within eight years and over 22 states with past governors versus deputies’ dramas. My friend, namesake, and a UK’s based reader, Babajide Fatade, feared me for making my prediction public in favour of Shaibu. What if he does not win, and how will you handle the backlash from readers? As a creative writer, my role is to express my opinion, which will be a springboard for others to express their side of the story. It doesn’t matter if I am attacked or praised. In the game of the Babajides, Kolade-Otitoju’s position birthed my views, though I do not agree with his analysis. Fatade’s comments reminded me of the central point of creative writing. You do not have to be bothered about the reactions of the others; it cannot all go against you or for you. Luckily for me, I won with the people of Edo state who resisted the insult to be assaulted within a short period of four years. Godwin Obaseki needs to be giving governors and leaders’ lectures on relational intelligence. I proclaim him a chancellor in the science of relationship and relational intelligence. He needs to open the ingredients in the okro soup he gave Philip Shaibu. That ingredient will help Nigeria and leaders to work better in the best interest of our nation. And to my distant man of the year, Philip Shaibu, the new Obesere of Edo politics. Your name has been written in gold on September 20 (coincidentally on my birthday) for staying behind a supposed adversary in politics, for refusing to be deceived by the carrots but stood firmly by your people. Posterity will judge your comrade attitude rightly. Philip Shaibu is the Obesere of Edo politics. A new fuji musician named Abass Akande Obesere surfaced into the Fuji music scene in the early 90s. He destroyed the status quo with his unique music and creativity. To me, after Sikiru Ayinde Barrister, Obesere is the next dangerously creative fuji musician. He
can combine all manners of combinable lewd and uncommon-sense jargons to make jocular musical vibes. He came into the scene without mentors and with a different brand of fuji percussion. Above his creativity is his leadership quotient. He takes no-nonsense and always stands by the truth. He is still busy giving out credits instead attributing glory to himself. He openly attributed the origin of his famous name ‘Obesere’ to one of his band members. A name he adopted from his band member and that made him famous. Many leaders will conceal that information and go to their grave with that credit. You cannot use age or the first to come to harass Sidomania Obesere. If you do what is wrong against any fuji artiste, Obesere is the Chief Advocate of the Fuji Colony. He was a nemesis for Wasiu Ayinde for saying Late Sikiru Ayinde Barrister was not the founder of Fuji music. You might be asking why the comparison of Obesere with Edo election. ‘Wetin concern agbero with overload in the bus garage’? Obesere stands for creativity and positive disruption of the status quo in favour of the truth. That was what Philip Shaibu did by standing with Godwin Obaseki, the face, and the hope of Edo people against godfatherism. I knew from the campaign that Edo people would likely not be gullible as Oshiomhole did the campaign for his candidate while Obaseki was much more visible. The exchange of candidates between APC and PDP, the rise and fall of Oshiomhole and the ‘Obesereism’ of Obaseki/Shaibu team will be a good storyline for a creative Nollywood producer- Nollywood here is another story to tell. Philip Shaibu’s decision to stand by Obaseki is noble and standard for the Nigerian youths and leaders. Until we are bold and creative enough, we will not move forward. The political parasites are here to stay, and our gentleness cannot change the game. We must change our
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Godwin Obaseki needs to be giving governors and leaders’ lectures on relational intelligence. I proclaim him a chancellor in the science of relationship and relational intelligence. He needs to make open the ingredients in the okro soup he gave Philip Shaibu
paradigm and fight godfatherism that is not in the interest of the people. Now that the victory is here, there is work for Godwin Obaseki and Philip Shaibu. The victory is with quantifiable value. The gaps in the votes between Obaseki and Ize-Iyamu shifted from 66, 310 votes in 2016 to 84, 336 votes in 2020. This is an indicator of an increased number of people captured into the Edo state’s agenda and dividend net. The first work is to preserve and protect the unity of purpose that brought the victory. I trust Obaseki to answer to the name Obasekiwhich means “the Oba’s favour is more valuable than mere success in trade”. He should position Shaibu to be the best deputy Nigeria will ever produce with more impactful responsibility. There is an Obesere in Philip Shaibu that is bold and confident enough to serve the good people of Edo state. All the other stakeholders should be encouraged for a sacrifice of selfless services in education, youth empowerment, and infrastructural development for the people of Edo state. Edo people must see the benefits of the death of the godfathers for them not to return to Egypt. This election and the experience must be the hallmark of the institutionalisation of good governance based on performance and shared values in Edo state and the other parts of the country. We have started a journey in Edo state, the journey of political transformation that must be sustained even if it is from the Siamese twins on the same old horses as evidenced by the carpet crossing and lack of political ideology. Let the ideology that the Edo state election presents to us stand the test of time in our history by the consequent performance of Governor Obaseki. Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.
PWR webinar highlights direct relationship between gender diversity and company profitability
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he Professional Women Roundtable (PWR), a female leadership development, career planning and gender diversity consultancy operating across Africa, recently convened a webinar titled, “Women on Boards: The Business Case” to help companies listed on the Nigerian Stock Exchange achieve more gender-balanced boards as a pathway to increasing profits. The well attended virtual conference, which was moderated by Ivana Osagie, founder of PWR, was held to mark the launch of the PWR NSE Top 20 Gender Diversity Scorecard Edition 1.0. PWR is a pioneer that helps Nigerian organisations develop programs that maximise the benefits of gender diversity for increased business performance and profitability. It has a strong track record of helping women across different sectors and stages of their careers develop their leadership capacity, raise their talent visibility and increase their representation in the marketplace. Over the years, PWR has established a reputation for providing insightful data and custom research to investors and other institutions focused on gender diversity. Speakers at the webinar were Muhammadu Sanusi II, the 14th Emir of Kano, Oyinkan Adewale, a respected independent non-executive director whose board career spans more than two decades, Oscar N. Onyema, CEO, the Nigerian Stock Exchange and Avivah WittenbergCox, CEO, 20-First, a UK-based gender diversity consulting firm. The webinar outlined the business case for increasing the participation of women in leadership and on corporate boards. Furthermore, it proposed workable strategies for achieving this as an avenue for companies to tap the above benefits.
According to the speakers, some of the benefits of gender diversity on corporate boards include more effective risk management, improved investment efficiency, fewer financial reporting mistakes, reduction in fraud and curtailment of earnings manipulation. Citing research produced by Credit Suisse, a global investment bank, companies with higher female representation in top management and board-level positions have higher returns on equity, higher valuations and also higher payout ratios. Four strategies for increasing the representation of women on boards were put forward during the webinar. First, regulation would be needed to drive gender diversity at the top. For instance, the NSE could propose guidelines for companies looking to list on the exchange to ensure their
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boards meet prescribed gender balance targets. Where they do not, companies should provide reasons for the deviance and details of plans to correct the variance. This is similar to the CBN’s 30 percent female board representation regulation prescribed for commercial banks. Second, gender diversity targets should be integrated as an explicit board selection criterion. Additionally, companies sourcing board candidates should apply the same selection criteria to men and women as opposed to specifying narrower criteria when selecting female candidates as is the common practice. In broadening their selection funnel, boards must take into cognisance the fact that the responsibilities of directors include corporate governance, strategic and fiduciary oversight. Third, gender diversity sensibilities need to be internalised in company policy across board.
Ivana Osagie Changes in company policy and practices are required to ensure performance is judged based on outputs and results and not on the number of hours employees spend in the office. This will reduce the pressure to put in long hours and work late which puts women at a disadvantage. Companies should also build in the flexibility to allow women and men work from home when they need to. Finally, women-to-women mentoring will make the difference. Senior women should be intentional about supporting women lower down the ladder and helping them rise to senior positions too. Women who are already on boards should cultivate relationships with those aspiring to achieve the same in order to guide them and should also recommend them when openings occur. In conclusion, it is in the interest of any company looking to maximise financial returns and meet global standards, to make achieving a gender balanced board a business imperative. There are more than enough competent women available to enable this become a reality. Ultimately, it will be a win-win for all. Osagie, founder, The Professional Women Roundtable
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Thursday 24 September 2020
BUSINESS DAY
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Editorial Publisher/Editor-in-chief
Frank Aigbogun editor Patrick Atuanya
DEPUTY EDITORS John Osadolor, Abuja Tayo Fagbule NEWS EDITOR Osa Victor Obayagbona NEWS EDITOR (Online) Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)
Bashir Ibrahim Hassan
GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu
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The economic pains of Nigeria’s land border closure FG has other ways to boost local production, end smuggling
he federal government may have justified the closure of the land borders on the need to stop smuggling activities and illicit export of locally subsidised petrol to neighbouring countries while boosting local production. However, the impact of such policy on the households, businesses and the economy, at large, has been devastating. Now that Nigeria is on the verge of another recession, the worst maybe, the period provides the federal government another opportunity to rescind its decision to close the land borders for the benefit of all. It is obvious that the cost of the border closure outweighs its benefits. Following the closure of the borders in August 2019, Nigerians have suffered a huge spike in food prices, especially in rice which has become a staple dish in every household. The commodity which was once affordable has become expensive and a luxury for the average Nigerian. It is incredible, yet true, that the cost of preparing a pot of Jollof rice – a popular Nigerian delicacy – has now risen 78 percent against what it used to be 4
years ago, according to a research by SBMorgen. This is not only painful, but also unacceptable for an economy which harbours the poorest of humans and battles rising unemployment in an economy that is barely growing. Worsened by the pandemic, general price of commodities in Nigeria has accelerated consistently for 11 months to 12.82 percent in July 2020, eroding monthly the purchasing power of households. For a government that often claims to care for the welfare of Nigerians, the decision to close the land borders is rather a threat to welfare. What this means, to us, is that the 40.1 percent of Nigerians who live below the poverty line on N11,452.5 per month have to battle price hikes. Beyond the domestic impact of this policy, Nigeria’s immediate neighbours including Benin Republic, Niger, Chad and Cameroon as well as Ghana and Togo have been hit hard by this land closure. Many goods come in through the ports in Lagos and are transported by road throughout the region by hundreds of thousands of lorries. Now, with the closure of Nigeria’s land borders, most businesses in this space have lost billions of naira while some have had to shut down.
The border closure, in our view, goes against an existing agreement that guarantees free movement between the 15 members of the West African regional bloc, ECOWAS, and questions Nigeria’s commitment and readiness to implement the Africa continental free-trade agreement (AfCFTA), which is intended to boost trade between African countries. Though we understand that the decision to close the land borders originated from the need to end the re-export of rice from Benin to Nigeria, it should be recalled that, the country in 2013 imposed 70 percent tax on rice importation aimed not only to raise revenue, but also to encourage the local production of rice. But smugglers took advantage of the fact that it is cheaper to import rice to Nigeria’s neighbours. In 2014, Benin lowered its tariffs on rice imports from 35 percent to 7 percent while Cameroon erased it completely from 10 percent, hence providing an opportunity to smuggle rice into Nigeria to sell at a much higher profit margin. Be that as it may, we are of the opinion that, instead of an outright closure of the land borders, Nigeria could have sought a common external tariff, which would have made
re-exporting less profitable. We understand that Nigeria needs a way out from oil dependence and this can only come from economic diversification. One way is to seek out ways to boost local production of Agricultural produce and increase the share of other exportable goods against crude oil which accounts for over 90 percent of total export. However, protectionist policies will only hurt trade relations. Reducing import demand will only be achieved if domestic products can compete favourable with international products. We urge the FG to open up the land borders and focus on ways to boost local production of rice and other products to meet international standards. Only then will import demand reduce and share of non-oil export increase against oil exports and lessen pressure on the naira. We strongly believe that when Nigerians begin to get the same or better satisfaction from local rice, smuggling activities of foreign rice through Benin to Nigeria will seize as there won’t be a market for it anymore. Then and only then will Nigeria unlock the benefits of AfCFTA as opposed to allowing itself to be a dumping ground for foreign goods.
HEAD, HUMAN RESOURCES Adeola Obisesan
EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong
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Thursday 24 September 2020
BUSINESS DAY
COMPANIES&MARKETS Nigerian DisCos seen saving operational costs, time, money on Schneider Electric’s new solutions
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chneider Electric, a digital transformation, energy management and automation company, has launched new intelligent equipment to achieve a selfhealing grid and ensure efficient use of power in Nigeria. The new solutions would save electricity distribution companies (DisCos) significant operational costs, time and money, according to Ifeanyi Odoh, Schneider Electric’s head of Offer, Strategy and Business Development. Odoh, who this known during a one-day utility end user training organised in collaboration with Bolarmark Engineering Limited, said products which include the Smart Ringmaster (RTU T300 & SCADA), Pix Rof and Auto-Reclosers were launched to enable stakeholders in the power sector, most especially DisCos, to fix major faults in grid and restore power after disruption within minutes, using the “self-healing grid” solution with minimal human intervention.
“What we have done basically is to provide more intelligent and advanced equipment that enables systems to be smart grid ready and to be able to, at the basic level, restore service operation automatically within seconds needing less human intervention,” Odoh said. “As such, it reduces operational downtime of DisCos to less than a minute,” he said. The training, organised in partnership with Bolamark Engineering, had over 30 participants from about five electricity distribution companies and other stakeholders and was centred on improving the grid reliability and efficiency, getting DisCos to improve on System Average Interruption Duration Index (SAIDI) and System Average Frequency Index (SAFI); improving energy efficiency to minimize technical and non-technical loses and distributed energy resource integration to enhance grid stability and accommodate alternative sources of energy like solar, wind, gas,
among others. According to Odoh, the new solutions would save DisCos significant operational costs, time and money. With the aid of equipment such as the Ringmaster RMU, switchgears, transformers, transient or passive faults which occur 75 percent of the time, will be addressed. This will save downtime for DisCos. “Take, for example, you are driving and you knock down a pole, the system would isolate the line feeding that particular point as close as possible, localize the fault and restore power to the rest of the community not affected so that only that particular pole would then be localized or separated for manual intervention,” he said. Omobolanle Omotayo, head of Channel Marketing, Schneider Electric, stated that the solutions will benefit not just the DisCos but also consumers with the aid of smart devices such as efficient utility meters, sensors and release devices connected to software that can be read on mobile
devices, or on the web and managed remotely to reduce the face to face time. Moyosore Oyefuga, PAE and product manager for Schneider Electric, while speaking, noted that the new equipment will bring extra level of visibility on the network so DisCos can accurately improve their forecast and make more informed decisions. He stated that the equipment will help reduce the issue of load shedding by DisCos. “With the kind of automations we bring, some loads could be deferred if for any reason, DisCos realise that there is a little bit more demand than supply or vice versa,” Oyefuga said. Other speakers at the training include Adebayo Adeniran, tendering manager – Power System, and Oladapo Faworaja, prescription expert. Participants from Eko DisCo, Ikeja DisCo, Abuja DisCo, Ibadan DisCo, Lagos State Electricity Board, Viathan Utility and the Bolamark Engineering Team graced the event. L-R: Adeleye Adeleke, chief operating officer, FAE Lmited; Ismail Adewusi, post master general of the Federation, and Funlayo Bakare-Okeowo, managing director/ chief executive officer, FAE Limited, during a courtesy visit to the office of the Post Master General of the Federation, yesterday in Abuja, to discuss innovative packaging for Nigeria’s postal services.
African Consumer Care makes entry into Nigeria’s surface cleaning segment JOSEPHINE OKOJIE
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fr ican Consumer Care Limited (AFCC), a subsidiary of Dabur International Limited, has launched Dazzl Disinfectant floor cleaner to make an entry into the Nigerian fast-growing surface cleaning segment. The product is an allsurface cleaner plus disinfectant with a 99.9percent germ kill claim. The launch comes during a time when the demand for disinfectant household solutions are surging in Nigeria as COVID-19 health protocols requiring regular
…launches Dazzl disinfectant floor cleaner washing and disinfecting to curb the spread of the virus. Venkat R Reddy, head of business AFCC/Dabur West Africa mentioned in an event recently in Lagos Oke Arin market that Dabur is committed to bringing new innovation while evaluating the relevance and local consumer needs. “Dazzl being a disinfectant floor cleaner will also support the initiatives of the Federal and State Governments as well as the local communities for their current fight against Covid-19 situation,” he said. Dazzl can be used on
surfaces like mosaic, granite, marble, marbonite, kota and vitro ceramic to remove 99.9percent germs, dirt, and grimes. It also comes with long-lasting floral fragrance that keeps the environment smelling fresh. Dazzl is now available in all key hypermarkets, supermarkets, open markets as well in retail outlets across PAN Nigeria in 500ml, 1 litre pack sizes. For institution/heavy users, it is also available in a large 4.5 litre pack size. The launch was supp or te d by op en market consumer engagements
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in Lagos, which included brand detailing by the DJ, anchor and brand ambassadors, live floor cleaning demo with Dazzl Disinfectant, free sampling, and quiz among others. In Nigeria, AFCC is one of the most trusted and re pu t e d ma nu f a c tu r i ng companies, which has been successfully operating its business in Nigeria for the last 18years. Dabur Herbal Toothpaste, Odomos, Sani Fresh, Odonil, Medimax, and ORS Olive Oils are brand names, trusted by millions of Nigerian consumers.
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TYLgames enters partnership with 9mobile, MTN to offer consumers unique service DANIEL OBI
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new gaming platform named TYLgames has partnered with two telecommunication giants, MTN and 9monile to offer unique gaming proposition in the Nigeria’s lottery industry. TYLgames has turned the focus away from gaming, and now placing it in gamers’ hands the power to transform lives with each game they play hence the acronym “TYL”. T YLgames, a gaming (Lottery) platform that is designed to positively touch gamers lives one game at a time. The focus is on gamers rather than on the gaming platform; placing in their hands the power to transform their lives with each game they play hence the acronym “TYL”. TYL is an Instant Play, Instant Win, Instant Cashout game played on SMS, USSD, and Mobile Web platforms with the short code 33088. There are currently two games available to choose from, an instant numbers
game tagged “SHOKI” and “SHAFFLE” which is a daily raffle game. With N100 game cost, a player can win up to N100,000 instantly and up to N1,000,000 in 24 hours by dialing or texting to 33088 or *33088# for USSD respectively or log on to TYL brings financial relief to the masses by providing the avenue to win instant cash to cover day— to-day living costs. With just N100, a player can win and cash out a minimum of N1,000 instantly, several times a day. The best part of it is that a player can do this privately and confidentially, 24 hours of the day. To deliver a dynamic and a superior gaming experience, different from other available gaming or betting platforms in a transparent manner to the masses, Humber Lottery, promoter of TYLgames has collaborated with Telecommunication giants 9Mobile and MTN to touch as many lives, reinforce the brand’s authenticity, and to deliver its promises.
WorldRemit launches WorldRemit Transfer Tracker App ...App allows users to track and trace their funds BALA AUGIE
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orldRemit, a leading global digital payments company, has launched The WorldRemit Transfer Tracker mobile App for recipients of money transfers which allows them to track their remittances. The WorldRemit Transfer Tracker App is now available through the Google app store in Nigeria, India, Mexico and Colombia. It will also be free to download through the app store in 90 countries in iOS and Android later this month. Consumer research shows that financial insecurity is at an all-time high. WorldRemit is working tirelessly to increase transparency and support users by providing easy access to financial services. With WorldRemit’s proprietary technology, each user can now track the money they have been sent, giving them added peace of mind at a time when they need it most. Stephen Lovell, Chief Product Officer at WorldRemit said: “Whenever I have the chance to speak to our customers, they always remind me of the three reasons they choose our service – convenience, speed and safety. I’m delighted that we have @Businessdayng
launched a service exclusively for our customers who receive money from their family and friends. “Through developing the Transfer Tracker App, we hope to empower recipients of money transfers so that they can access their funds as conveniently and as safely as possible. This remains a guiding principle for us as we continue to provide an inclusive end-to-end money transfer service.” The Transfer Tracker App has a “track my money” feature, which allows recipients to see exactly where their funds are in real time for added peace of mind. According to the 2017 World Bank Global Findex database, there are 1.7 billion adults across the world who do not have a bank account, nor do they have an account with a mobile money provider. The majority of financially excluded people tend to live in rural areas or places with limited access to reliable transportation, which often means having to make long journeys into city centres. For those who rely on financial support from loved ones abroad, visiting cash pick up agents is often the only option available to them. WorldRemit is one of the first companies in the global
Thursday 24 September 2020
BUSINESS DAY
COMPANIES&MARKETS
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Business Event
ipNX, USTDA sign partnership deal to develop Nigeria’s ICT infrastructure ANTHONY NLEBEM
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ig er ia’s p i o neering information, communications and technology (ICT) company, ipNX and the United States Trade and Development Agency (USTDA) have signed a partnership deal that will further support the development of Nigeria’s ICT and broadband infrastructure and help ipNX expand its fibre-optic network to more than 200,000 residences in Lagos and other locations, including Abuja and Port Harcourt. A virtual signing ceremony that signalled the beginning of this far reaching relationship between the two parties was held on Thursday, September 17, 2020. Through this innovative initiative, the USTDA is supporting ipNX to promote inclusive, secure and sustainable connectivity across the nation. The agreements were made possible as a result of several engagements between the USTDA delegation to Nigeria and the leadership of ipNX; and will advance the goals of the recently updated Nigerian
Broadband Plan. At the Signing Ceremony, the Group Managing Director of ipNX, Ejovi Aror, had this to say: “We believe that world-class connectivity and broadband internet access will be pivotal to the digital transformation and socioeconomic development of Nigeria. We are very positive that this project will play a crucial role in making our belief a reality.” Aror added that with the emergence of the COVID-19 pandemic, the case for a vibrant ICT sector has never been stronger and the new partnership will bring ipNX a step closer to achieving its mission to continually leverage technology to create innovative solutions that help mankind thrive, while making a crucial impact to the lives of Nigerians across the country. These projects will support the development of Nigeria’s telecoms infrastructure and help to achieve the goals of the National Broadband Plan,” said the U.S. Ambassador to Nigeria, Ambassador Mary Beth Leonard. “The U.S. Government has committed significant resources to improving telecoms in-
frastructure in Nigeria and this support is crucial as we believe that investment in critical ICT projects will strengthen the resiliency outlined in Nigeria’s economic sustainability plan.” Also present at the virtual event, the Director, Technical Standards and Network Integrity of the Nigerian Communications Commission (NCC), Engr. Bako Wakil, who spoke on behalf of the Executive Vice Chairman of NCC, said: “The support this grant will provide to the telecommunications sector, in particular broadband, is in line with the National Digital Strategy and the National Broadband Plan. The NCC would like to congratulate ipNX as it shows the company’s integrity and commitment to be selected for this grant”. ipNX also revealed that it intends to continue to work with USTDA beyond the preliminary stage, to execute many more projects into the future that will bring about the digital transformation and socio-economic development of major cities in Nigeria in alignment with the National Digital Economy Policy and Strategy.
L-R: Abbagana. Abatcha, group technical and development director, Vitafoam Nig. Plc; Adeshola Adepoju, director general and chief executive officer, Forestry Research Institute of Nigeria, Federal Ministry of Environment; Mohammed Mohmood Abubakar, Minister of Environment; Bamidele Makanjuola, chairman, Vitafoam Nig. Plc, and Taiwo Adeniyi, group managing director, during the commissioning of Vitapur Systems House, Ikeja Lagos.
L-R: Cesar Robles, tech sales director; Tolu Adedeji, marketing director; Hugo Rocha, managing director; Natalia Serna, contact strategy and PMO manager; Carlos Coutinho, sales transformation and high end director; Eduardo Carceres, revenue/PPM manager, and Harry De Wet, logistics director, all of International Breweries Plc, in commemoration of Global Beer Responsibility Day
Access Bank emphasises need for private-public sector collaboration on SDGs
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n a recent interview on CNBC Africa’s ‘Closing Bell’, Access Bank’s head, Sustainability, Omobolanle Victor-Laniyan, discussed the key role of the private sector in the implementation of the United Nations 2030 Agenda for Sustainable Development Goals (SDGs). Emphasising the urgent need for private and public players to collaborate in order to meet up with the remaining 10 years timeline for the full implementation of the SDGs, Victor-Laniyan reiterated that it is an onerous task that cannot be expected to be borne alone by the public sector. “Achieving success in implementation requires a lot of financial investment. Research on the estimated cost of eradicating poverty globally pegs it at about $66bn per year. While the annual investment required to improve infrastructure; that’s clean water, power, transportation, and agriculture could total to about $7tn. That is a substantial
amount, the government alone cannot tackle the SDGs at the national level, businesses and private institutions have a key role to play,” Victor-Laniyan said. With Nigeria still navigating an economically crippling pandemic, the path to achieving the SDGs is currently facing several forms of systemic hindrances and other national threats such as terrorism and increased poverty levels. This development continues to cause a decline in the growth targeted by the United Nations but as experts have expressed, the situation can be steered towards change with increased participation and partnership from various actors from across the private and public sectors. Speaking on whether the private sector can respond differently from the public sector in addressing global crises, and more recently the raging global pandemic, Victor-Laniyan opined that, “ The private sector can behave differently. Issues around development offer www.businessday.ng
opportunities for private sector organisations that are innovative. Challenges require solutions, and as the private sector, we could provide those solutions. The private sector can profer these solutions by innovating appropriately across various SDG areas, such as building sustainable cities, climate-smart agriculture, clean energy, improved healthcare and so on. All of these require not only the dynamism but also the funding of the private sector working in very close partnership with governments and communities.” Victor-Laniyan went on to highlight what businesses stand to gain if they key into applying a Sustainability driven business approach stating that, “organizations that use the SDGs as an overarching framework in shaping and communicating their various strategies, goals and activities, obtain the unwritten the social license to operate and this ultimately leads to profitability.”
L-R: Rauf Aregbesola, minister of interior; Bashir Magashi, minister of defence, and Isa Pantami, minister of communications and digital economy, shortly after the 7th Inter-Ministerial Committee meeting on Nigeria’s Sixtieth (60th) Anniversary, in Abuja. NAN
Creation Energy, winner of the first edition of the series, being presented with their prize by Obi Kama, commissioner for science and technology, Enugu State (far left), and Arinze Chilo-Offiah, special adviser, SME Development and Investment Promotion/head, Enugu SME Centre, at the finals of the challenge in Enugu recently.
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Thursday 24 September 2020
BUSINESS DAY
Thursday 24 September 2020
BUSINESS DAY
CEO INTERVIEW
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Delivering affordable housing as a national priority – FMBN MD/CEO In this exclusive interview with BusinessDay’s GM, Northern Operations, Bashir Ibrahim Hassan, the Managing Director/CEO, Federal Mortgage Bank of Nigeria (FMBN), Arch. Ahmed Musa Dangiwa, addresses the issue of affordable housing and the various innovations that he has so far implemented to position the Bank to meet the challenges in the housing sector.
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give you a loan of more than 5 years. How many houses have you been able to provide for Nigerians? We have provided over 9,000 houses, and have provided mortgages worth more than N110 billion within the last three years. Apart from that, we have also created a micro finance loan which is given to individuals, especially to renovate their houses. The liberal conditions make them because all you need to do is just to provide two guarantors, and just fill he forms without collateral. For this reason, people in local government areas have keyed into that loan very easily and conveniently. They use the loan to purchase lands and construct houses in their locality. We have given over N42 billion loans to over 40,000 individuals across the country within the last three years. It has yielded a lot of results because people are attracted to it. So our own focus is on those who wish to renovate houses, build or renovate houses. What are the major challenges to affordable housing in Nigeria, and how can we bridge the housing deficit? There are many challenges, but the most important is that you must know that first and foremost before you build a house there has to be land, and these lands are owned by the state governments, and these state governments are not forth coming in ensuring that there is ease in the access to land. All the state governors have conditions for getting a land. Some government agencies take a lot of time to issue C of O. State governments have to ensure that they make access to land easy and they also have to make it easy for estate developers. Governments have to make sure that even if the lands are subsidized, there should be access roads into the land. Here in Abuja, we have many plots of land inside the bushes but no developer will go in there except there are access roads. So accessibility to land is very important. The next is access to finance, and this has become very tedious. You can’t blame developers for building expensive houses. First and foremost, they got the lands at very high
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Arch. Ahmed Musa Dangiwa
costs – as high as 25 to 30 percent. In banks they give construction finance at 25-30 percent interest rate, but here we give construction finance to developers at 10 percent, so we have reduced in such a way that constructions done by developers for FMBN subscribers are meant to be more affordable.
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Another challenge is infrastructure within the estates. To improve the situation, the federal government has to come on board on ensure that they strengthen institutions that are into affordable housing. For the likes of FMBN, there is the need for increased capitalization to at least N500 billion. That recapitalization will help a lot to ensure the availability of affordable houses to Nigerians. We have done and sent all the necessary documentation to minister who will take it to FEC for approval. Of the N500 billion, we are looking for N200 billion as equity contribution from government, while N300 billion will be sourced from investors who want to invest in FMBN. Even the N200 billion does not have to come at once; it can be in two tranches, because we know the government has other priorities. But the point needs to be stressed that housing is also a priority, because it is one of the social responsibilities of the government to ensure that citizens have access to houses. Are there lessons we should learn from other countries as regards how we deal with mortgage issues? Well, there are many lessons to learn. We should understand that there are no countries that have succeeded in providing affordable houses to its citizens without subsidy, which is very important to strengthen the institutions that are responsible for doing that. If institutions such as ours are not strengthened to function properly, it is going to be difficult for them. People used to say most developed countries are not giving free houses, but they ensure that there are
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institutions that cater for the housing needs. For the high-end users, who usually buy their own houses at market prices, they may not be concerned but for the
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We should understand that there are no countries that have succeeded in providing affordable houses to its citizens without subsidy, which is very important to strengthen the institutions that are responsible for doing that
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Could you take us through your vision and plan towards moving the FMBN forward since you assumed duties as Managing Director/CEO about 4years ago? MBN was established to provide affordable mortgage for Nigerians. The challenge was how to make affordable mortgage more accessible, and even if you have to provide mortgage there have to be underlining houses. Most of the houses I met were those built by developers, who sourced their funding basically from open markets at high interest rates and high cost of land, other costs which majorly increases the cost if houses. That is why you see that people looking for mortgage for houses are not forth coming because of affordability. Civil servants do not have affordability because of the low income they earn. So we had to enhance our construction panels in such a way that you will have to provide construction panel for developers, to give them affordable interest rates to create affordable houses and then we give mortgages. Then we later discovered that for the house that are there, a civil servant cannot pay 30 percent equity for a house. So we had to reduce the equity to 10 percent for a house that he has to buy for N10 million. The equity for houses between N5-10 million was reduced to 10 percent. But any mortgage that is below 5 percent is 0 percent, which means they don’t pay any equity. With that I was able to get more mortgage for Nigerians, especially the low and middle income earners, and some in the informal sector. I realized that some of the houses that banks have built are lying down somewhere because people can not access them due to their equities being too high. So we created another program called “Rent to Own”. With this, if you want to get any of the houses, you approach any of our offices in the states, who will give you the keys to enter as a tenant; while you are living as a tenant, you pay either monthly or annual rents until the house becomes yours. We also have the insurance portal, in the event that the house is destroyed by a storm, rain or other causes. Insurance will be there to cover you, which insurance also covers the eventuality of death. This insurance will pay up the house on behalf of the deceased family. We also have an initiative targeting individuals with certificates of occupancy (C of O) for lands. Instead of them buying houses, we can give them individual construction loans to build the houses at their own pace on any location the land is situated. All you need to do is just visit our offices where the land is located. We give you a form, you provide the plan approval, provide bill of quantities, and the C of O. The land is processed and money is given in 3 phases. First, we give 30 percent to start it; we give you 30 percent to roof it and the remaining 40 percent we give you to finish it up. Immediately you finish we start deducting. All our mortgages are meant to be affordable at single digits between 6-9 percent, which are easy to pay. It is convenient because you pay over a longer period of time. All these things you cannot get anywhere, because if you go to the open market, they give you loan at 25-30 percent. They cannot
low and middle income earners, mortgage is the most important and convenient way of owning a house. You find out that once you start working in the foreign land, they make it easy for you to access mortgages for you to pay over a period time and make sure you own a house. Which country is your best example? My best example is Malaysia, which has been able to achieve that. Their mortgage system works very well. So does Canada’s, which also has compulsory contributions by individuals from the day they start working. That is the only way to have a pool of funds to ensure that people have their own houses. What innovations have you come up with to ensure productivity in the institution? When we came on board we found out low morale at work for which many factors are responsible. There are people who are given housing loans, but you find out that their rental income is too low for even senior staff to own houses even on the outskirts of Abuja. So we had to make sure that their rental allowances are increased by 100 percent. And we discovered that most staff have stayed for 10 years without promotion. So we had to promote staff, to motivate them to do better. And we found out that in the bank, there were some staff that were employed as casual staff -- I met 276 of such casual staff, who were denied permanent employment by the previous leadership. They kept on picking and using people as casual staff, some of who were graduates, on a monthly salary of N40,000. I had to ensure that we set exams for them and absorb more than 50 percent of them into the system. For those with National Certificate of Education (NCE) and other lower certificates, will want to set exams for them and absorb them into the system. With that, there won’t be any casual staff around. Whoever is working should dedicate himself and work. What legacy do you want to leave behind? When I came on board I realized some abandoned projects. We have met with the departments handling the supervision and management of such projects. In view of our in-house expertise in construction finance, we are we can supervise projects. The bank is making sure that professionals do their jobs to ensure that we deliver value for money. We have also decentralized operations. We now ensure that when staffs retire from service their contributions are promptly refunded, unlike the practice in the past when the refund took two years to be made. Through decentralization, states now have the right to process and recommend for disbursement to head office, so they do the checks and balances and send to the head office. We have currently disbursed over N 31 billion since we came 3 years ago. In the past 25 years of the bank from (1992 to 2017), the disbursement was only N10 billion. One last thing we want to leave as a legacy is digitalization of the processes. Most of the operations were carried out manually. Before, you only had a passbook and when you contribute; you didn’t even know what you were contributing. There was no transparency, no accountability. However, we are ensuring now www.businessday.ng
that there is accountability and transparency. We are working to have short codes which customers can use at the comfort of their homes – e.g. just dial *219#. So, one of our legacies is digitalization of the operations of the bank. Another very important legacy I would leave behind is the 5year strategic development plan for the bank, developed to put the bank on track of prosperity to increase
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the contributors and contribution base astronomically through exploring the informal sector market that constitutes over 70 percent of the population. This document, developed by an international consultants (KPMG), was approved by our board that rebranded the bank with new vision, mission, and core values towards professionalizing the bank for effective and better service delivery.
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BUSINESS DAY
INSIGHT
African SMBs can get ready for the Post-COVID Market: Here’s how IFEYINWA AFE
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he World Economic Forum describes small and mediumsized businesses (SMBs) in Africa as “the bedrock of African economies” as they account for up to 80% of employment in some countries. The evolution of the COVID-19 crisis so far has demonstrated that small businesses are struggling to operate as normal. How can SMBs across Africa gain a competitive advantage in the post-pandemic world? It is not an easy question to answer. We know that the pandemic and the response to it has changed consumer behaviour and accelerated trends such as digital transformation. But with many countries still under or recovering from a lockdown, businesses have not yet had a chance to adapt to these changes. Enterprises are in the frustrating situation of being frozen in place; they can see what is happening and they want to respond. As we begin to imagine what life will look like when the various lockdown restrictions are uplifted in countries, these are some of the ways that SMBs can prepare for the new world: Embrace innovation to compete Small businesses are a vital part of economies: they create jobs and enable inclusive growth to participate alongside big businesses. According to McKinsey, SMBs across South Africa represent more than 98 per cent of businesses, employ between 50 and 60 per cent of the country’s workforce across all sectors. However, due to the pandemic up to 70% of SMB owners have had to reduce business spending and despite government efforts many businesses have also had to cut down on the workforce. In Uganda, micro and small businesses experienced a larger decline in business activity compared to larger companies. Small business owners need help in harnessing the power of technology so that they can continue operations and retain jobs. Africa is still relatively new to established technology in-
frastructure. A recent study by Forbes revealed that Africa’s tech hubs have grown to a new record of 643 across the continent, yet most of these hubs received less than $100 000 in funding. Digital transformation can help Africa’s SMBs maintain their business in today’s fast paced and ever-changing environment. While customers are experiencing their own fair share of challenges, it is important for SMBs to adopt digital technologies to deliver engaging experiences that will make life better for their customers - everywhere. Digital transformation can improve operations and combat the growing threat of disruption. Using digital technology such as Virtual and Augmented reality, mobile printing, and custom manufacturing via 3D printing, can help SMBs achieve operational efficiencies, boost productivity, and gain a competitive advantage. Today, Africa has a population of 1.3 billion people with 75 % of people under the age of 30. It is estimated that by 2050, the population will reach 2.5 billion people and the continent will have a workforce that is larger than those in China and India combined. These increasing dynamics and consumption-hungry young peowww.businessday.ng
ple are rapidly migrating from rural areas to African cities looking for jobs and prosperity. It is important for SMBs to adopt an agile strategy today to prepare for this changing target market – essentially by becoming digital at the core. This will increase efficiency, monetary opportunities and, improve market reach and insight into customer buying behaviour. Empower employees with skills of the future If SMBs are to take advantage of their strengths to win in a post-pandemic market which promises to be more competitive — than anything we have seen for some time. We must urgently address gaps and weaknesses, and that means giving business owners and staff the skills and competencies they need to help power business growth — and their own professional progress. So, what can African SMBs do now to start in the post-pandemic marketplace? Part of the answer is “smart upskilling”: this involves learning discrete tasks quickly, at a speed, usually using innovative remoteand digital-learning tools and platforms. In some instances, this can replace traditional forms of learning, for instance, comprehensive certifications.
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HP has been offering entrepreneurs around the world an opportunity to enhance their business and IT skills through the free online Learning Initiative for Entrepreneurs (LIFE) programme. HP LIFE is a programme of HP Foundation, and in 2018 pledged to empower 100 000 learners in Africa. HP LIFE is built on the belief that entrepreneurs are the backbone of the global economy. The online learning tool is focused on empowering entrepreneurs with business and IT courses, such as finding funding, IT for business success, or using energy efficiency to do more for less and even learning ‘how to build a userfriendly website to meet your business goals and effectively reach your target audience’. In Tunisia, where the current unemployment rate is at 16 percent, the HP Foundation with the United Nations Industrial Development Organization (UNIDO), USAID, and other partners launched a job-creation project, called “Mashrou3i,” (which in Arabic means, “my project”). The aim of the project was to foster a spirit of entrepreneurialism and offer tools that can support fledgeling business owners. In 2017, the program created 1,250 jobs and 160 start-up @Businessdayng
companies in Tunisia. Entrepreneurship and small businesses are significant for the growth and maintenance of local economies. A thriving and healthy local economy can provide communities, youth, and women with opportunities to empower others to grow, and in turn, create a positive cycle. Supporting SMBs also fosters local economies and keeps the money close to home. As we begin to open our borders and make way for new opportunities, it is important for African SMBs to take advantage of the available tools and resources to help them bounce back. Employees also need relevant training, as an empowered employee is productive and can assist the business and the continent to grow.
Ifeyinwa Afe, Central Africa & Managing Director – Nigeria, HP
Thursday 24 September 2020
BUSINESS DAY
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NBA calls on Malami to undo amendment of RPC …says it has brought ridicule to the association …as lawyers continue to express outrage over AGF’s action
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LB CORRESPONDENT he President of the Nigerian Bar Association (NBA), Olumide Akpata, has in a recent letter to the Attorney General of Federation (AGF), urged him to rescind an amendment he had purportedly made to the legal practitioners Rules of Professional Conduct (RPC), 2007 which eliminated the use of NBA stamp and seal on court processes. The amendment to the RPC, which according to the president, has brought unnecessary controversy and ridicule to the association, now gives room for non-lawyers to also submit court processes. It is to this end, that the NBA, in a letter dated September 15, 2020 to the honourable attorney general, pointed to the fact that the purported amendment appeared to have been done without following due process. The letter read in part: “Our position, Honourable Attorney-General, is that the Legal Practitioners Act (as amended) confers the power to issue or amend the RPC on the General Council of the bar (‘Bar Council’) albeit under your leadership. Consequently, the RPC or amendments thereto may only be enacted and
issued after they have been duly approved at a properly convened meeting of the Bar Council.” It continued, “I have been duly informed by NBA representatives on the Bar Council and other members of the Bar Council who have reached out to me, that to the best of their knowledge, no meeting of the Bar Council was convened to discuss any amendment to the RPC or to approve the Instrument. It therefore appears that the Instrument was enacted without proper authority.” In the letter, the NBA President also raised concerns over certain portions of the amended RPC which according to him, would now allow quacks take advantage of the profession. “Above and beyond the proper authority to amend the RPC, the purported deletion of some provisions of the RPC is also curious. A number of those provisions are aimed at checking the infiltration of quacks into the profession; protecting the turf and revenue of lawyers; improving professional standards through mandatory continuing professional development; and keeping track of the number of law offices operating in Nigeria at various branches of the NBA,” Akpata said. “It is therefore concerning that
Olumide Akpata
these provisions, many of which are forward-looking and seek to place the Nigerian legal profession at par with other self-regulatory professional associations around the world, will be targeted for deletion.” Akpata, who admitted that cer-
tain provisions of the RPC were unacceptable in modern practice and needed overhaul, urged the AGF to give the association time to make the necessary amendments. “My administration therefore intends to propose a series of amend-
ments to the RPC to bring it into conformity with the realities of modern legal practice for the benefit of Nigerian lawyers and the society,” he said. “To speed up the process, I will immediately be setting up a committee with the responsibility of thoroughly reviewing the RPC and making appropriate recommendations to the Bar Council through your good office. “Pending such holistic reforms to the RPC, I urge you to rescind the Instrument in the interest of the rule of law, the unity of the bar and the sanctity of the legal profession. “The NBA has been subjected to needless controversy and ridicule on the account of the Instrument, and this does not augur well for the sanctity of the profession, of which you are a key stakeholder.” The RPC is a body of rules which sets out the professional duties of lawyers in Nigeria, when dealing with clients, courts, and their colleagues. The said amendment by the AGF has continued to draw diverse reactions from lawyers across the country, including a lawsuit by a group of lawyers, seeking to strip the AGF of his title of senior advocate of Nigeria (SAN).
Kenya Chief Justice Advises President to Dissolve Parliament
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enya’s top judge on Monday September 21st 2020, advised President Uhuru Kenyatta to dissolve parliament for failing to enact legislation on gender quotas. Chief Justice David Maraga’s guidance didn’t impose a deadline, enabling the president to wait until his goverment’s mandate expires in 2022 to heed the advice. Under a new constitution adopted in 2010, Kenya had five years to enact legislation ensuring that no more than two-thirds of members of elective public
A hundred million bits of data
INSIDE and a few data protection terms you should know
bodies be of the same gender. Parliament “failed to enact the requisite legislation,” Maraga said in a statement emailed Monday from the capital, Nairobi. “It is my constitutional duty to advise you, the president of the Republic of Kenya, which I hereby do, to dissolve parliament.” In the event parliament isn’t dissolved, laws it passes in the wake of the chief justice’s advisory risk being challenged in court, said Dismas Mokua, a Nairobi-based political analyst. “Reading from the political mood today in Kenya, I doubt
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VAT On Building Leases; a review of the position before and after the Finance Act, 2019
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Medico-legal practice in Nigeria: balancing the rights and liabilities of patients
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whether the president will take the risk of dissolving parliament tomorrow,” Mokua said. “He will cause unnecessary tension in Kenya and he is trying to work on his legacy.” Kenya’s parliament currently consists of the National Assembly and the Senate. The former has 349 members, of which 47 are guaranteed for women who are elected by the nation’s counties. The latter has 67 senators, of whom 16 are women nominated by political parties according to their proportion of elected senators. -Bloomberg
NBA under Akpata to partner with Afe Babalola Multisystem Hospital, for the health needs of members
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Thursday 24 September 2020
BUSINESS DAY
YOUNG BUSINESSLAWYER
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A hundred million bits of data and a few data protection terms you should know
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n the pot that is 2020, the surviving commercial transactions have had to be done under immense economic heat, the pressure of the Covid-19 pandemic, fiscal uncertainty and myriad unexpected corporate restructurings. As if this were not sufficient bedlam, governments have been bullish (in some cases, rightly so) about the protection of certain public interests and have included government fiat into the mix of variables affecting these transactions. Across several jurisdictions, governments have come down hard on corporates in relation to several public interest issues ranging from mandatory employee retention, prohibition of redundancy claims, covid-19 related change management and data protection amongst others. One of the corporates to come under this intense government scrutiny is Tiktok which can be said to be the application (app) of the year, rising in relevance and value despite the pandemic. Available in over 150 countries, breaking several records as most downloaded application in app history, recording over 2 billion downloads worldwide, and upgrading its placement in the Top 20 ranking for apps globally; Tiktok, launched in 2017, is one of the wonders of the app world with its promoters listed amongst highly valued start-ups globally. Naturally, this meteoric rise has consequences and this time, the buzz word is data. As you may be aware, the billions of downloads and the up-
loads of content by its 800 million active users presents a massive data minefield. This is even more interesting where one considers the statistics which present its users are as largely young persons who may not necessarily appreciate the implications of the data trail that is created with every upload, share, like and transmission. Over the past few months, its digital dominance has been questioned and this has triggered reactions from certain governments including India and America. In June 2020, India banned the use of the app and the American government mandated that unless a deal was contracted with an American com-
pany to host the data pertaining to the 100 million Americans who use the app, amongst other conditions, a ban would be imposed. Under this fiat, the promoters were compelled to engage American tech giants including Oracle and Microsoft and a deal is in the works. These developments bring to fore the need for in-depth understanding of the world of data, its protection and critical legal issues now arising as countries begin to impose restrictions and draft legislation addressing data privacy and protection. Many of us are now required to include terms in commercial agreements which refer to data protection obligations and caveats. Where we
are not apprised of the core legal and commercial issues, we are disconnected from a very salient aspect of business and social interactions as they stand. More importantly, in a post-covid world, lack of knowledge of basic principles and implications arising from the control, processing and transmission of data could become a career handicap. Bringing it home to Nigeria, recent trends show an acceleration of data privacy and protection regulation with the introduction of the Nigerian Data Protection Regulations 2019 by the National Information Technology Development Agency (NITDA) and more recently, the proposed Data Protection Bill (2020) which is undergoing review by the legislature. Whether or not we are data privacy specialists, we should be able to recognise, use and understand these terms in their technical parlance. If you do not at this moment, know anything about the world of data, here are a few key terms: • Data: means any characters, symbols and units used in computing (binary) which may be stored or transmitted in the form of electronic signals in any format or any device; • Personal Data: unique identifiers pertaining to identifiable persons including names, particular descriptions. The primary subject of the extant data protection legislation is the control and processing of Personal Data. • Data mining: the process through which companies interpret and cull insights from data,
detect trends and convert data into useful information or business intelligence. Mined data can be used to power artificial intelligence. Under Nigerian law, the act of data mining amounts to Processing which is defined as any set of operations performed on personal data including collection, alteration, warehousing, erasure and transmission amongst others. • Data Privacy: This is the right that underpins all the interests that are sought to be protected under data protection laws. The essential context is that it is the right to be free from unauthorised surveillance, access, collection, use or transfer of data. I am sure that you may have been expecting a longer list; please hold the thought. The essence of this article is to pique your interest in the subject and hopefully set you on your way to exploring the world of data and growing your capacity in this regard. There will be sequels and you may pitch a tent here for just a bit longer as we delve in. Stay safe. OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@templars-law.com; yemiimmanuel@yahoo.com.
RIGHTSWATCH
Lagos police commissioner commits to upholding human rights T he Lagos State Commissioner of Police, Hakeem Odumosu has assured key stakeholders in the justice sector that his command will uphold the rights of suspects and detainees in police custody. Odumosu stated this while receiving a delegation of the Legal Aid Council of Nigeria; Nigerian Bar Association (NBA), Lagos Branch; Rule of Law and Anticorruption (ROLAC) programme of the British Council, and Rights Enforcement and Public Law Centre (REPLACE) who paid him an advocacy visit. Noting that criminal justice administration starts with policing, Odumosu assured the delegation of the cooperation of the command in promoting rule of law and access to justice, saying:
“It is a symbiotic relationship; be rest assured of our commitment. Everything the stakeholders are doing is towards making the society better.” On access to detainees by NBA Police Duty Solicitor Scheme (PDSS) volunteers, Odumosu assured the delegation of his support for the programme, noting that it “provides an enabling atmosphere for easy access to police facilities and suspects by designated members.” He however emphasized the need for proper conduct to ensure that the PDSS volunteers work in line with the mandate of the programme. To facilitate the work of the volunteers, the Lagos State police chief announced the appointment of the Officer-in-Charge of the Legal Unit, SP Yetunde Cardoso www.businessday.ng
L-R: Emeka Nwadioke; Oqua Efiom Etim, Deputy Commissioner of Police (Finance & Administration); Okey Ilofulunwa; Hakeem Odumosu; Mrs. Latifat Salau; Ajibola Ijimakinwa and Felicitas Aigbogun-Brai.
as the “Judicial Liaison Officer” for the command. He directed Cardoso to work with the delegation among other civil society groups “to promote prompt dispensation
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of justice in the state and to ensure that the Human Rights Desk of the command is active.” Odumosu assured that he would inaugurate the Force Or@Businessdayng
der 20 Advisory Committee once he receives a directive from the Inspector-General of Police, Mr. Muhammed Adamu, adding that the directive is crucial in order to ensure uniformity in composition of the committee. In her remarks, the leader of the delegation and Zonal Director of the Legal Aid Council (SouthWest), Mrs. Latifat Salau noted that both Force Order 20 and the Legal Aid Council Act empower the council to visit police detention centres in collaboration with non-governmental organisations. She emphasized that the PDSS programme enables lawyers to visit police detention centres “to look at the welfare of inmates, ensure that they do not spend
To be continued next week
Thursday 24 September 2020
BUSINESS DAY
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VAT On Building Leases; a review of the position before and after the Finance Act, 2019
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BEFORE THE ACT n terms of the Value Added Tax Act, VAT is “payable on the supply of all goods and services”. There was no definition of ‘goods’ or ‘services’ before the amendment to the VAT Act by the Finance Act, 2019. This created uncertainty as to the scope of transactions liable to VAT. The letting or leasing of a building was one area of uncertainty. Curiously, in its Information Circular No.: 9701 dated 1 January 1997 titled: “Detailed List of Items Exempted from Value Added Tax” (the “Circular”), the Federal Inland Revenue Service (the “FIRS”) exempted VAT on the letting/leasing of a building for residential purposes. The implication being that VAT was payable on the letting/leasing of a building for commercial purposes, and the FIRS required landlords/lessors of such a building to charge and remit VAT. This has led to disputes with taxpayers. J.W. Ellah, Sons & Company Limited, and Ess-Ay Holdings Limited, filed appeals at the Benin and Lagos Zones, respectively, of the Tax Appeal Tribunal (“TAT”) challenging the FIRS’ imposition of VAT on the letting/ leasing of buildings for commercial purposes. By a judgment delivered on 9 September 2020 in Appeal No.: TAT/SSZ/001/2019; J.W. Ellah, Sons & Co. Ltd. v FIRS, the Benin Zone of the TAT found that the
letting/leasing of a building for commercial purposes falls within the definition of ‘supply of goods’ under the VAT Act. In the circumstances, the Benin Zone of the TAT held that VAT was payable on the letting/leasing of a building for commercial purposes. However, in Appeal No.: TAT/ LZ/VAT/029/2019; Ess-Ay Holdings Ltd. v FIRS, the Lagos Zone of the TAT reached a contrary decision in a judgment delivered on 10 September 2020. The Lagos Zone of the TAT relied on the dictionary, statutory, and judicial definitions of goods and services in holding that the letting/leasing of a building does not constitute ‘goods’ or ‘services’ under the VAT Act. In relation to the Circular, the Lagos Zone of the TAT held that the Circular could not impose VAT on the letting/leasing of a building for commercial purposes. In reaching this conclu-
sion, the Lagos Zone of the TAT relied on the decision of the Court of Appeal in Halliburton (WA) Limited v FBIR ( All NTC 57), where the Court of Appeal held that a circular issued by the FIRS “is neither law nor regulation but merely information to the general public and in particular all taxpayers’ representatives or advisers and the staff of Revenue Services, containing what the FIRS considers to be its interpretation of the various Nigerian Tax Acts and thus constitute its opinion on a point of law with no legally binding effect. Given the conflicting judgements of the Benin and Lagos Zones of the TAT, it is unclear whether VAT is payable on the letting/leasing of a building for commercial purposes (in respect of transactions that occurred before the Finance Act, 2019). Until the Federal High Court upholds either of the judgments,
the uncertainty will continue because all the zones of the TAT have coordinate (equal) jurisdiction. AFTER THE ACT With the passage of the Finance Act, 2019, ‘goods’ have now been defined to include “any intangible product, asset or property over which a person has ownership or rights or from which he derives benefits and which can be transferred from one person to another excluding interest in land”. ‘Interest in land’ is, however, not defined by the VAT Act. The 10th Edition of the Black’s Law Dictionary defines the term ‘interest in the use and enjoyment of land’ as: “The ‘pleasure, comfort, and advantage that a person may derive from occupancy of land. The term includes not only the interests that a person may have for residential, agricultural, commercial, industrial, and other
JUSTICESECTOR Lagos high courts set to fully resume sitting, September 28
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he honourable Chief Judge (CJ) of Lagos State, Justice Kazeem Alogba, has disclosed that all Courts in Lagos State are to resume fully from Monday, the 28th day of September, 2020. The CJ made this disclosure, during the Lagos State Judiciary 2020/2021 Legal Year Summit which held virtually on Tuesday, 22nd day of September, 2020. In his remarks, Justice Alogba announced that, there would be strict adherence to the COVID-19 protocols, as the Courts resume.
Justice Kazeem Alogba, Chief Judge of Lagos State www.businessday.ng
In addition, he stated that there shall be disinfection of the Courts prior to the resumption, noting that there would be a provision of sanitizers. Also, it was said that the use of facemasks within and in the Court premises is mandatory. The Chief Judge on Monday September 21st also led the judiciary to the Central Mosque, Lagos Island, and special du’a (prayers) for the judiciary and the nation. The special service commenced with 2 Rakats led by the Chief Imam of Lagos, Sheikh Sulaimon Abu-Nollah.
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purposes, but also interests in having the present-use value of the land unimpaired by changes in its physical condition”. Based on the foregoing definition, it could be argued that post Finance Act, 2019, the letting/ leasing of land or building, regardless of the purpose, is exempt from VAT. Interestingly, the Minister of Finance, in pursuance of her powers under section 38 of the VAT Act, issued the VAT (Modification) Order, 2020 to amend the Schedule to the VAT Act to, amongst others, exempt VAT on the letting/leasing of a building for residential purposes by persons other than corporate entities. The implication being that the letting/leasing of a building by a corporate entity or for commercial purposes would be liable to VAT. However, consideration must also be given to the argument that the VAT (Modification) Order, 2020) is ultra vires and of no effect based on the judgment of the Federal High Court in Suit No.: FHC/L/CS/1082/2019; HOMAL v A.G. Fed. & Anor., that the National Assembly cannot validly empower anybody to amend a schedule to an Act. Planning Points Until the courts make a clear statement regarding whether the exemption of VAT on ‘interest on land’ extends to the letting/leasing of a building, it would remain uncertain what a landlord/lessor should do.
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Thursday 24 September 2020
BUSINESS DAY
LEGAL INSIGHT Medico-legal practice in Nigeria: balancing the rights and liabilities of patients and medical practitioners MERCY AGBO
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he COVID 19 pandemic has put the world today on a standstill. Businesses and human activities have been put on hold for the life of mankind to be preserved. It is safe to say that health practitioners especially, medical doctors are at the forefront of this battle and there is need to preserve a continuous and friendly relationship between them and patients. It is established law that doctors owe a sacrosanct medical duty of care to their patients which requires a high degree of skill and competence; otherwise, liability for medical negligence may arise. However, given certain circumstances, it is not easily determinable when negligence is said to have arisen as instanced where due to the COVID 19 pandemic, most doctors may be scared and decide not to attend to sick persons especially those who show symptoms of the virus, where a patient dies in the course of being treated or out of improper diagnosis by the doctor or hospital. This article, therefore, tends to answer the posers: whether a medical doctor can refuse to treat a patient? Whether the patients have any right? Whether a medical doctor or a hospital can be liable for negligence? by focusing on the duties and responsibilities of medical practitioners’ vis a vis the rights of patients with a discuss on medical negligence, its elements and remedial actions that can be brought up in the case of a breach. Rights of Patients vis a vis Duties and Obligations of Medical Practitioners In Abatan V. Awudu, the Court of Appeal per Aderemi JCA, held that, the relationship between a doctor and his patient is one of trust and confidence; a relationship where one has the power and the duty to treat and restore the other to mental and physical well-being.” In defining who a medical practitioner is, Section 8 of the Medical and Dental Practitioners Act provides that he is one who has attended an approved course of training, the course was conducted at an institution so approved, or partly at one of such institution and partly at another or others, he holds a qualification so approved; and he holds a certificate of experience issued in pursuance of the Act. Happily, the patient’s bill of rights which was launched by the vice president, Yemi Osibanjo in July 2018, laid down the rights of patients to include the right to information, confidentiality, quality of care, dignity,
access to emergency care, visitation, right to refuse care, right to complaints. On the other hand, the duties and obligations of medical practitioners can be founded on Common law, statutory law, and Ethical obligations. At Common Law, the obligations arise in the Law of tort and contract. In Tort, the golden thread that runs through the relationship between a patient and medical personnel is the peremptory duty to treat the patient with reasonable care and skill while under the Law of Contract, the peremptory duty of care and skill forms an implied term of every doctor/patient relationship. A contract of medical service may contain express terms which may include an undertaking to achieve a specific result. To succeed in an action for breach of contract unlike in negligence cases, it suffices for the patient to prove the existence of a doctorpatient relationship; breach of the implied /express term of the contract- to treat, and injury arising from or in the course of treatment. Statutory Obligations The 1999 Constitution, under Section 33 and section 17(3)(d) provides for right to life and duty of the state to provide adequate health care and facilities respectively. The National Health Act (NHA), 2014, under Part 3, contains several Rights of health care users and the obligations of healthcare providers. Thirdly, The Medical and Dental Practitioners’ Act, which appears to be the main law regulating medical practitioners in Nigeria as their powers are derived therefrom, provides the requirements for registration, membership, and discipline of medical practitioners by the Medical and Dental Council of Nigeria. Also, the Code of Medical Ethics codified by The Medical and Dental Council of Nigeria (MDCN) in furtherance of its statutory functions as provided for in Section 1 (2) (c) of the Medical and Dental Practitioners Act, laid down the standards of acceptable medical and dental practice in Nigeria www.businessday.ng
especially under Rules 26 to 70. Furthermore, the African Charter on Human and Peoples’ Right (Ratification and Enforcement) Act, incorporated by Nigeria into its domestic law, is to the effect that all rights contained therein can be invoked in the court of competent jurisdiction, as enforceable rights and it includes the right to health and medical care under Article 16. Under the Criminal Code, the criminal liability of a medical practitioner for the negligent treatment of a patient is based on gross breach of duty which the medical practitioner owes the patient as provided under section 303. Also, there is negligence in cases of omission to perform a duty or carry out an act. Section 305A (2) further provides for liability for malicious breaking of a contract of service if such will endanger human life or cause serious bodily harm. In 2017, President Muhammadu Buhari signed into law the Compulsory Treatment and Care for Victims of Gunshot Act 2017 which comprises of 16 sections and provides that, every hospital in Nigeria whether public or private shall accept or receive for immediate and adequate treatment with or without police clearance any person with a gunshot wound, but are dutybound to report to the nearest police station within two hours of commencing treatment on the victim. Ethical Obligations The Hippocratic Oath has been universally adopted by Medical personnel who pledge to consecrate their lives to the service of humanity; that the interest of their patients shall be their first consideration, and to give utmost respect for human life right from conception. Also, the International Code of Medical Ethics 1949 contains the duties of physicians to patients, to the society, and to themselves. Can a doctor refuse to attend to a patient? Due to the Hippocratic Oath taken by medical practitioners, there is a widespread view that care of medical practitioners
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ought not to be limited only to the patients under their direct management but to be extended to any patient whom they come across in their professional environment and as such, a medical practitioner owes the duty to care for every patient found within the hospital premises whether or not he is on the management team of such patient. Generally, a doctor has the right not to attend to a sick person. The most obvious of these is if the doctor does not treat patients with the patient’s specific condition. For example, an individual suffering from a throat infection cannot realistically expect a gynaecologist to diagnose and treat his or her condition. Other reasons why a doctor can deny treatment are, where; the patient exhibits drugseeking behaviour, the patient is disruptive or otherwise difficult to handle, the doctor does not have a working relationship with the patient’s healthcare insurance provider, due to the doctor’s convictions, such as a doctor refusing to perform an abortion for religious reasons or refusing to prescribe narcotics for pain. However, in cases of emergency, doctors cannot refuse to treat patients. In emergencies, responding doctors and other healthcare providers are required to stabilize the patient’s condition regardless of the patient’s ability to pay for the treatment or provide proof of insurance. The patient cannot be released or transferred to another hospital until their condition has been stabilized. Once stabilized, the hospital can legally release the patient or refuse further care, so long as the refusal is not discriminatory or without good cause. Also, a doctor cannot deny medical care if he has commenced diagnosis or treatment on such a patient or if the patient is registered under his care unless for a good cause. There are times when a patient may be rightfully denied emergency medical care. Some of the most common reasons include where, the patient exhibits “drug-seeking behaviour as most emergency room doc@Businessdayng
tors and nurses are trained to identify those who likely have a drug problem, the patient is deluded, believing they are seriously ill when there is no real illness and where the patient displays destructive or dangerous behaviour while waiting to be seen. Therefore, doctors are not legally obliged to act as “good Samaritans”. However, once a doctor stops and either says that he is a doctor or starts to act as though he is a doctor, he has taken on a duty of care to that patient. This means that he is now potentially liable for negligence. What is Medical Negligence? Medical Negligence has been defined as the improper, unskilled, or negligent treatment of a patient by a physician, dentist, nurse, pharmacist, or other health care providers. It can also be defined as an act or omission (failure to act) by a medical professional that deviates from the accepted medical standard of care. Generally, only the person who has been a victim of the medical error can sue. However, where the patient has passed on, the next of kin of the patient can sue for compensation. If the patient is a child, the parents or the legal guardian of the child can sue. The victims of medical negligence can institute a legal claim under criminal law, civil law or a disciplinary action under the Medical and Dental Practitioners’ Act. Liability in Medical Negligence For a civil claim in medical negligence, all elements of the three-part tests must be proved. First, that the medical practitioner owed a duty of care to the patient - For a duty of care to exist, there must be a fiduciary relationship between the medical practitioner and the patient. There must be a doctor-patient relationship. This fiduciary relationship can also be formed impliedly without a formal consent by the patient if a person holds himself out as possessing special skill and knowledge and is consulted as possessing such skill and knowledge, by or on behalf of a patient as held by Lord Hewart CJ in R v Bateman. Second, the duty of care was breached - After a duty of care is established, the patient must then prove that the conduct of the medical practitioner amounts to a breach of the duty of care and that he acted below the standard of care expected of him in his professional capacity. The court uses the objective test and expects the standard of a reasonable man. Continues on page 23
Thursday 24 September 2020
BUSINESS DAY
TheBAR
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LegalBusiness
NBA under Akpata to partner with Afe Babalola Multisystem Hospital, for the health needs of members …insist views of young lawyers must be considered in decisions affecting the association
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s part of the efforts of the leadership of the Nigerian Bar Association (NBA) towards ensuring that the NBA works for its members and Nigeria at large, and in fulfilment of his promise to routinely interact with the membership of the Association, the NBA President, Olumide Akpata on Tuesday held an interactive session with legal practitioners in Nasarawa State. At the event, the first session of which was attended by the Executive Governor and Deputy Governor of Nasarawa State, the Attorney General of Nasarawa State, and the NBA Branch Chairmen of Lafia and Keffi Branches, the NBA President urged the executive arm of Government in Nasarawa State to pay attention to the Judiciary in the areas of financial autonomy, infrastructure of courts and judges’ welfare. During the interactive session which was only attended by the members of the NBA, several issues were thrown up by the members. These include, remuneration of lawyers (i.e. living
NBA President, Olumide Akpata (R) with other Body of Benchers at the recent call to bar ceremony in Abuja.
wage, terms of service/contract of employment; improved earning capacity for law firms, capacity building, etc.
With regards to the Institute for Continuing Legal Education (ICLE), the NBA President promised that a Centre for Commercial
Law Studies would be up and running before the end of the year. While on the issue of harassment of lawyers by security agencies,
Also speaking about the development of young lawyers, the leadership of the NBA reiterated the need to take into consideration, the views of young lawyers in decisions affecting the NBA as they constitute a critical demography within the Association. “We will also see that the NBA Women Forum works closely with other like-minded associations, such as the International Federation of Female Lawyers (FIDA) and the African Women Lawyers Association (AWLA), so that issues affecting women across the nation will be tackled with the seriousness it deserves and in a collaborative manner.” In closing, the NBA President pointed out that the essence of visiting various states and NBA branches across Nigeria was to discuss issues peculiar to different branches, in order to enable the NBA live up to its responsibilities to members of the legal profession and the society at large. To this end, the President is to continue his interactions with other NBA branches across all regions in the country.
Medico-legal practice in Nigeria: balancing the rights and liabilities... Huge Share Opportunity for Investors in Power Sector Continued from last Week
Continued from page 22
Finally, the patient suffered damages - the patient must prove that the injury or damages was not only caused by the defendant, but that it was also, a direct and not a remote consequence of the defendant’s action. On the other hand, a hospital will be vicariously liable if its staff is negligent in the performance of their duties. This is based on the general principle recognized in the case of Igbokwe V University College Hospital Board of Management, where Irwin J held that; a hospital authority is responsible for the acts or omission of the whole of its staff, whether they were physicians, doctors, nurses or other employees.” After a successful proof of negligence by the claimant, the court can grant adequate remedies such as damages which can be can be special; compensatory; aggravated or exemplary. Other remedies include injunction, specific restitution, and prohibition. A patient can seek redress under criminal law in the gravest of circumstances that shows such disregard for life as to amount to a crime against the State and the degree of negligence must be
above ordinary tortuous claims A complaint can be filed with the Medical and Dental Practitioners Disciplinary Tribunal established by Section 15 (1) of the Medical and Dental Practitioners Act. After investigations by the Medical and Dental Practitioners Investigation Panel and a prima facie case is established, such negligent doctor will be liable to Suspension for a period not exceeding six months; or having his name struck off the medical or dental register, as the case may be, or admonition. Another option available to patients is exploring any of the most used forms of alternative dispute resolution in resolving medical negligence cases which are Arbitration or Mediation. Defences A medical doctor sued or charged for negligence can raise a defence where; the claimant failed to prove Negligence, the injury was caused by another unforeseeable act (Novus actus interveniens), the patient contributed to the negligence, there were illegal actions by the patient or the claimant has expressly given his consent to take his chances of injury from a disclosed risk (Volunti non fit injuria).
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Conclusion & Recommendations It has been clearly established that a medical doctor is not dutybound to attend to any sick person who comes his way unless a duty of care has arisen and that doctors can be liable in cases of breach of such duty. Hence, unless a medical practitioner who has been trained to take care of COVID 19 patients or one working with the isolation centres where these cases are treated, a medical practitioner who may not have the requisite skill or who feels a need to protect himself to avoid contracting the virus may not be liable. However, where such a patient is one in an emergency situation, the doctor should be able to exercise reasonable caution to stabilize the patient before referral. Though, the health care system should be applauded for reforms and new legislations for a better health care system. However, it is still recommended that a lot of reforms still need to be done to preserve the health of patients and duties of medical practitioners. It is also recommended that doctors should be able to at least ask questions to patients who they think have symptoms of the virus in order to ascertain the true facts for proper referral.
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O
ne of the key challenges in the sector is the perception of sector monopoly by the distribution companies which has presented a significant barrier to financing and investing in the sector. Dr. Oni noted that a distribution license from a central federal authority does not grant exclusivity. He added, “Though it may seem unfair because of the initial investments, I’ve looked at the terms and conditions of licenses and I’m not even sure there’s such a term as monopoly in those terms or amongst those terms… maybe people could argue that distribution companies are natural monopolies of some sort. But if there was monopoly, you won’t have the IEDN, or these newer regulations. The privatization could have been done a bit differently, maybe government should have had more skin the game, or rather than pay money to immediately take over the assets, money could have been paid into an escrow account, with a five-year plan that matched that amount. Secondly, the subfranchising regime coming up, could be beneficial for distribution companies by providing room for collaboration.” Kukoyi agreed with Dr. Oni on the need for collaboration noting that any distribution company not considering collaborating will ultimately die or be taken over. She added that another issue in the sector is the significant trust deficit between the distribution companies, government, regula@Businessdayng
tors and customers. “From the government’s perspective, the private sector was invited to invest in the electricity sector, to put in investment and counting the years, the partnership hasn’t produced desired results. On their part, the distribution companies are saying that they entered the transaction on certain promises (e.g. a subsidy that will work for this time), but those expectations remain unmet. And for the customers, with all the policies and transactions, there is still no electricity.” Shasore, SAN added that another huge challenge in the sector is the government’s huge indebtedness to operators. Panellist agreed that there is a huge share opportunity in the industry for off-grid and renewable energy projects, and tech-support services for the sector such as payment systems. Sola Arifayan, in wrapping up the session noted the need for smarter regulations to eliminate regulatory interference on matters better handled by commercial players in the sector. He also emphasized the need for less reliance on the federal government as the Constitution provides for electric power regulation and investment by the state government. Concluding, he said, “where 200million Nigerians are underserved and up to 60% of the population is without access to electricity there is massive investment opportunity, however investors need to be somewhat clear on the part of the sector that they want to play and the rules that apply”.
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Thursday 24 September 2020
BUSINESS DAY
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Thursday 24 September 2020
BUSINESS DAY
25
BUSINESS INSIGHT How to bankrupt-proof your business during an economic downturn (Part 1) trepreneurs and Decision Makers should apply when faced with imminent headwinds of a downturn. Resilience, of course, is built over time however things happen; this article, therefore, focuses on interventions we can make in our businesses (or personal lives) when hit with a crisis. Before I close this piece, I would like to emphasize three (3) key outcomes that the principles I will be sharing in subsequent articles try to fulfill: 1. Conserve Cash 2. Conserve Cash 3. Conserve Cash. Evidence shows that most small businesses that go bankrupt do so not because they are unprofitable but because their current assets (essentially cash at hand) are unable to match their current liabilities (obligations).
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he World Health Organization (WHO), in December 2019, identified the outbreak of the Corona Virus in Wuhan, China. It declared the virus a “Public Health Emergency of International Concern” a month after, and a “pandemic” on 11 March 2020. The devastating impact of the virus, since then, has spread all over the world, distabilising economic systems, institutions & structures. I recently came across a rather disturbing McKinsey publication - in the United States of America, for example, about 2 million firms that are closed may be closed permanently because of the economic impact of COVID-19 with many more millions Small & Medium Enterprises (SME’s) struggling to survive. The economic impact of the virus is huge; the World Economic Forum (WEF), predicts that over 40% of jobs lost may never come back. That, of course, adversely impacts global per capita income, which has made its largest drop since 1870. The world is experiencing a downturn. Bankruptcy, in simple terms, is when the sales revenue from a going concern is unable to cover, what accountants call, current liabilities. Current liabilities include loan servicing, salaries, rent, fuel, etc. Although more commonly used when companies are unable to fulfill their day-to-day financial commitments, however, individu-
als can also go bankrupt. If you can’t pay your rent (or mortgage) or are unable to fulfill other financial commitments in the short term, then you are bankrupt. The fact is that businesses & individuals can be bankrupt at any time, however, SME data shows that most bankruptcy happens during economic recessions (or during downturns or pandemics such as the COVID-19 impact). During the Great Recession between 2007 – 2009, for example, bankruptcy, which is cyclical, increased by 74%.
Economic cycles are constant. Recession, since 1900, has occurred on average every 4 years, therefore, businesses that stay around long enough will experience recession – it’s just a matter of time. As revenue dips during downturns, bankruptcy is aggravated and accelerated. Recessions are exogenous, business survival, therefore, is a function of how resilient the business is during the economic downturn. This introductory article kicks off a series of follow-up articles, deep-diving into principles En-
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Recessions are exogenous, business survival, therefore, is a function of how resilient the business is during the economic downturn
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Akin Monehin
Your business should not be a statistic. Look out for Part 2 on Thursday 08 October 2020. About the Author:
Akin Monehin is a thought leader, writer, speaker and business strategist. He is privileged to have worked in leading organisations like British Airways, Virgin Atlantic & Nigeria LNG Ltd. He is a 2015 recipient, Choiseul Institut France’s Award of Top 100 African Business Leaders under 40 Years old and has worked in over 10 countries including French and Arabic speaking ones. He can be reached on akin. monehin@chicagobooth.edu Views expressed in this article are personal and do not represent the views of any institution.
NEWS
Enugu entrepreneurial development gains traction as SME Centre concludes first Hackathon series … Creation Energy emerges winner OBINNA EMELIKE
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he Enugu SME Centre has successfully concluded the first edition of its Hackathon Series, a quarterly series in partnership with the private sector to bring the ideas of the teeming youth of Enugu State to the limelight. The first series of the initiative, which started with online registration on July 7, 2020, with focus on project themes around agriculture, education, healthcare, small business tools and other use cases and services, brought together over 300 teams, which was screened down to 25 considered disruptive and later to Top 10 marked marketable. However, at the final stage of the challenge, which held at Hotel Sunshine, Enugu on September 11,
2020, the Top 10 projects were further pruned to top 3 by the judges, which included members from public and senior private sector executives from School of Enterprise Development, Lagos Business School, and Geneysis Tech Hub. The top three projects include Creation Energy, project that converts cassava waste to electricity; Teen Coding Hub, which teaches children and teens how to code, and Green Axis/Cosmos Automation, which recycles waste into raw materials for manufacturing firms/an automated irrigation system. At the end of the day, Creation Energy emerged the overall winner, while Teen Coding Hub and Green Axis/Cosmos Automation emerged first and second runners up, respectively. Explaining the criteria for choosing the top three projects and the www.businessday.ng
overall winner, the judges noted that the three first-class ideas, which have proven marketable and implementable concepts with investment potential were selected after the extensive pitching and judging process by the finalist and the judges respectfully. According to the judges, the top three ideas were all winners because the potential of their projects, especially at offering solutions to problems. The Top 3 would receive cash prizes, with the winner getting a $3,500 Business Support Grant from the Enugu SME Centre and its private sector partners that would include (but not limited) to mentorship, business advisory, product development, technical support, media publicity, digital marketing support, financial advisory services. Moreover, all the Top-10 finalists would be enlisted in the Tekedia
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Mini-MBA Program. Riding on the success of the first edition, the Enugu SME Centre is planning the 2ndedition of the series by December 2020 with a focus on financial services innovation. The Enugu SME Hackathon Series is organised by the Enugu SME Centre with focus on finding solutions to addressing the changes to the ways of life and business as a result of Covid-19 and the institutional change it has created in the global ecosystem. Most importantly, the series is in line with the developmental and youth empowerment vision of Ifeanyi Ugwuanyi, governor of Enugu State, who birthed a vision of the state becoming the economic epicentre of South-Eastern Nigeria. Meanwhile, Governor Ifeanyi Ugwuanyi further stated that the economic epicentre vision of his ad@Businessdayng
ministration was further boosted by the state’s enviable ranking as second State in Ease of Starting Business and third State in Ease of Doing Business in Nigeria in the 2018 World Bank Ease of Doing Business sub-national ranking, which has made corporates and businesses flocking the state to establish their presence. Ugwuanyi is desirous of lifting families from poverty by creating many employment opportunities, is committed to supporting the Hackathon Series because of its avowed ability to harness the untapped potentials of the state’s teeming youth and Enugu people at large. In furtherance of his commitment to the empowerment of Enugu youths and the people, the governor has relentlessly supported the Enugu SME Centre, the organisers of the Hackathon Series.
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Thursday 24 September 2020
BUSINESS DAY
Investor Helping you to build wealth & make wise decisions
Market capitalisation
NSE Premium Index
The NSE-Main Board
N13.351 trillion
2,225.19
N13.365 trillion
2,222.57
NSE All Share Index
Week open (11- 09–20)
25,591.95
Week close (18- 09–20)
25,572.57
Percentage change (WoW)
-0.08
Percentage change (YTD)
-4.73
-0.12 5.03
NSE ASeM Index
NSE 30 Index
NSE Banking Index
NSE Insurance Index NSE Consumer Goods Index
1,084.04
728.51
134.11
1,085.47
1,086.63 1,085.51
293.97
728.51
134.13
0.13 -5.76
0.00 -0.88
-0.10 -7.84
292.01
NSE Oil/Gas Index
NSE Lotus II
432.21
191.77
1,848.99
1,128.20
988.88
432.78
189.79
1,852.54
1,133.79
989.52
-0.67
0.01
0.13
-1.03
-18.17
6.60
-27.00
-27.00
NSE Ind. Goods Index
0.19 0.97
NSE Pension Index
0.50
0.06
5.41
-6.12
Here are analysts’ stock picks for the week Storeis by Iheanyi Nwachukwu
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tocks like GTBank, Zenith Bank, UBA, FBNHoldings, FCMB and Guinness are some of analysts’ top picks for the week. Also in the basket of stocks recommended for investors to buy include Flour Mills, Dangote Sugar, Lafarge Africa, Dangote Cement, Julius Berger, Presco, Seplat, Total and Ardova. Other stocks investors are urged to buy are Access Bank, Fidelity Bank, Nestle, PZ Cussons, Okomu Oil Palm and Mobil. Though, they made Hold case for stocks of Stanbic IBTC and Unilever. The “buy” rating is given to the stocks because analysts consider them highly undervalued, but with strong fundamentals. They are also said to have potential return in excess of or equal to 15percent which is expected to be realised between their current price and analysts’ target price. Also, “hold” rating is given to stocks considered correctly valued with little upside or downside, and where potential return between +5 and +14.99percent is expected to be realised between current price and analysts’ target price. In their top recommendation for the week, Lagos-based research analysts at Vetiva Capital and United Capital Plc asked investors to buy GTBank. Vetiva set a target price of N41.79 while United Capital expects GTBank to close the year at N31.9. The stock closed last week at N25.35. Vetiva also set Zenith Bank target price of N30.98, from N16.70 it closed last week, while United Capital which also rated the stock a buy set a target price of N22 at the end of the year. Guinness is also seen as a good buy by Vetiva with target price of N26.85 from last week close of
N13.55. United Capital target price for the stock is N14.9. Also, Vetiva analysts favour stocks like Dangote Sugar for a buy with a target price of N16.11, which implied upside potential compared to N12 it closed on September 18. United Capital target price for the stock is N18.6. Vetiva asked investors to buy Presco with a target price of N59.94 amid last week close at N49. United Capital sees Presco valued at N57 at the end of this year. Vetiva target price of N10.57 against N4.95 FBN Holdings close last week puts the stock on the analysts’ buy list. Also, United Capital see FBN Holdings rise to N6.5 at the end of the year. Flour Mills that closed last week at N19.80 is on Vetiva analysts buy list with a target price of N25.55. Likewise, analysts at United Capital expect the stock to reach N21.5 at the end of the year. Dangote Cement is also good to buy as it is currently undervalued according to Vetiva research analysts.
The stock closed last week at N135 but the analysts target price for it is N198.15. United Capital also sees it as a good buy with target price of N 175 at year end. Vetiva stock picks continue UBA is also a good buy according to Vetiva analysts who set a target price of N9.34 from last week close of N6. Also, FCMB is a good buy amid a target price of N2.66 against N2.06 it closed on September 18. The “hold” rating for Stanbic IBTC arises from a target price of N42.2 compared to N39.10 it close last Friday. Lafarge Africa is currently undervalued and a good buy according to analysts who set a target price of N34.09 for the stock as against N13 it closed last Friday. The construction giant Julius Berger is another good buy with analysts target price of N32.06, though it closed last week at N15.50. Seplat is rated a buy with target price of N643.33; it closed at N385 per share last week. Total Nigeria is a good buy with the analysts target
price of N171.26; it closed at N80 per share last week. Ardova is another stock favoured with a buy by Vetiva analysts who set a target price of N29.26 for the stock from a low of N11.40 it closed last week. Analysts mixed sentiments trail equities this week The market opened this week on a positive note, though it recorded marginal gain. It had closed last week with record of mixed trading sentiment, with barging hunting activities in two sessions and profit taking in others. “Despite the overall positive performance of the market last week, we expect to see profit-taking on some recently appreciated stocks this week, especially in the first two trading sessions. This we believe will be driven by weak macroeconomic outlook in the short-to-medium term. Hence, we see sell pressure taking an edge for the week”, GTI research analysts said in their September 21 note. “We expect the market to remain soft in the near term, as the rising
cases of the Coronavirus pandemic in major cities around the world, coupled with the possibilities of another lock down continue to dampen investors’ confidence in risky assets,” Vetiva research analysts said in their September 21 note. “In the absence of a positive catalyst, and given the still uninspiring macro story, we guide investors to trade cautiously in the short term. However, we expect the market might benefit over the longer term on compelling valuations and as investors seek alpha-yielding opportunities in the face of negative real returns in the fixed income market”, said Cordros analysts in their weekly economic and market report. “A combination of bargain buying, and rotational trades sponsored by not-so-gloomy second-quarter results have largely supported the recovery in the equities market”, Meristem Research analysts said in their recent note. “The most recent data available on the NSE (July 2020) signals that domestic participation has largely dictated the direction of market performance, accounting for circa 66percent of total transaction volume (versus 34percent on the part of foreign investors). “We have reason to believe the trend has persisted through August and September supported by slower market momentum and decrease in average transaction volumes”, the analysts noted. “A s f a r a s va l u at i o n s g o, sentiments around the Nigerian market have improved. However, the market still trades at a significant discount to its peers. Although macroeconomic conditions remain fragile, we expect investor interests on fundamentally sound counters with significant upside potential to sustain the market performance,” Meristem added.
NSE highlights retail investment opportunities in today’s Nigerian capital market
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he Nigerian Stock Exchange (NSE) has expressed its commitment to redefining and improving investors’ overall experience in the Nigerian capital market, and ensuring that it remains modern, convenient and secure. This was highlighted at the inaugural edition of the Retail Investors’ Webinar hosted by The Exchange in collaboration with the Nigerian International Securities Limited (NISL) on Monday, 21 September 2020. The event, with the theme, Capital Market Investing in a
Digital Age, was supported by the Chartered Institute of Stockbrokers (CIS) and the Association of Securities Dealing Houses of Nigeria (ASHON). Speaking during the webinar, the Chief Executive Officer, NSE, Oscar N. Onyema said, “Investor participation is central to the growth and sustainable development of any economy. The Exchange is, therefore, committed to facilitating conversations that will expound on the retail investment opportunities available in the capital market and the channels through which they can be accessed. Today, our determination to develop the www.businessday.ng
market and strengthen investor confidence has birthed a number of technology driven solutions that allow investors to conveniently trade electronically in an increasing array of product offerings that includes Equities, Bonds, ETFs and other Collective Investment Schemes. We will, therefore, continue to take advantage of the vast opportunities to equip existing and potential investors with the necessary skills to effectively manage and grow the financial resources at their disposal.” On his part, the Managing Director, Nigerian International Securities Limited (NISL), Laolu Martins said,
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“NSE has consistently pioneered far-reaching innovations within the Nigerian capital market, positively driving market integrity, boosting both investor confidence and market participation.” He went on to highlight the efforts of the NISL to create wealth for investors via an appropriate mix of securities using well spelt out market research to help investors meet their financial objectives. In doing so, he provided an analysis of the investment instruments available on NSE including equities, bonds, REITS, Closed-Ended Funds, ETFs, etc. The event also featured a presentation on the importance of @Businessdayng
Market Data in making investment decisions by the Head, Market Services, NSE, Olufemi Balogun. It would be recalled that The Exchange recently released an upgrade to its X-DataPortal. The revamped portal has been designed to serve as a principal source for brokers, fund managers, research analysts, other professionals and non-professional participants like students and investors to get quality real-time and reference data reports for analysis, research and reporting purposes. Balogun encouraged investors at the webinar to access the information via https://dataportal.nse.com.ng.
Thursday 24 September 2020
BUSINESS DAY
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BUSINESS TRAVEL COVID-19, technology changes rapidly transforming aviation sector – DG NCAA Musa Nuhu is the director-general of the Nigeria Civil Aviation Authority (NCAA). In this interview, he speaks on how the authority is responding to the pandemic and plans for stabilising the aviation industry. How has COVID -19 affected your plan for the industry? had a meeting after my handover from the acting DG, and my discussion was on COVID-19. By then, it had not yet been declared a pandemic but we could see the trend coming. So we had started putting measures in place. First, we discussed how we were going to run the NCAA as an organisation and business continuity plans in place, and how our staff would be working with the development to ensure that whatever happened we would have people running the organisation regardless of the COVID challenge. We ensured we had somebody who would step in and we prepared to reduce the workforce coming. A lot of our staff would stay at home and we had enough number to run the organisation. Even before the government came out with the directives, we had already been working on that. Basically at that time, it was the issue of survival and plans had to be put in place because whatever plans we had, if we did not survive, our plans would be of no use. So, we had to survive, ensure the organisation survived, and put measures for the industry to survive. It certainly delayed our plans, but with the successful resumption of domestic flights now, you will all agree with me that the response from the public complying with the protocols has been excellent. We started the international flight operations, with time we are going to increase the number of flights coming in as things stabilise. We identified hitches and they were rectified, and we hope things will get much better going forward. We will see the organisation is in a good position to deal with challenges and the emerging challenges,
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Musa Nuhu
and as you are all aware, COVID-19 has changed the global industry. The rapid changes in technology are also changing the industry, not only aviation but also the ways businesses are conducted. So, we have to reposition ourselves to fit into that so that we can really effectively conduct our regulatory responsibilities. Would you really say the NCAA has autonomy? Yes, the NCAA has autonomy in terms of regulations, but the NCAA cannot totally remove itself from the Ministry of Aviation. The ministry is responsible for policy development for the industry and we implement
those policies through our regulations. So we must have a line of communication and consultations with the ministry. Also, if you look at the organisational structure of NCAA, we have the minister, the board and then the DG, so we cannot totally isolate ourselves from the ministry, but l can assure you in terms of implementing regulations and otherwise, NCAA is the only body that is doing that and we are doing that without any sort of interference from the ministry. There are some regulations that will be very difficult to implement without the political support of the ministry.
What is the economic health condition of the airlines? In the aviation industry, the profit margin is very minimal. If you make five percent profit margin in the business, you are considered to have done excellently well. However, with the Covid-19 and the difficulties, airlines’ financial positions are not the best. It is a global phenomenon and there are so many other issues that affect the financial health of airlines that are neither in the control of the Ministry of Aviation nor in the control of the civil aviation regulatory body. For instance, the provision of foreign exchange doesn’t come from us. If a country’s foreign earnings go down, the central bank prioritises, and you can understand due to the lack of maintenance organisations in Nigeria. Pilot recurrent training institutions in Nigeria have to go outside to do these and that entails a lot of foreign currencies. So it is not easy. Also is Jet A1, which is a major factor that airlines have been having difficulties with. So there are factors that affect the health of the airlines that are not in our direct control. The ministry has tried, it went to the central bank when this government came on board, Nigeria owed foreign airlines about $600 million in arrears, the minister through consultations was able to get that off our back and all the foreign airlines were paid. We visited the NNPC to see the kind of arrangement that could be made for the production of Jet A1. In addition, airlines go borrowing at a very high interest rate which we know is very high in Nigeria. If my profit margin is five percent, explain to me how I can break even and pay them and make profit if l take a loan at 20 percent. These are the micro and macro factors that affect the health
of the airlines. We try, through our economic regulations, to do the financial audits of the airlines and advise them where we see areas of economic difficulties and see how they can be tackled. One of the things we are doing is to really strengthen the function of the economic regulation through more training of the staff of the directorate. How is the NCAA doing to reduce bad treatment of Nigerian airlines abroad? The advice I will give the airlines is that if you are going to another country to negotiate your services, you should involve the regulatory body, the Ministry of Aviation and also your embassy in that country. If a private organisation negotiates with a government entity that is trying to protect its own airlines, it is going to run into difficulties, but if it involves Ministry of Aviation officials, NCAA officials and embassy officials, the country knows that if it makes things difficult for airlines, the other country will apply the same reciprocity measures to their airlines. That makes a big difference. A lot of airlines go and do the deal themselves. They should involve us, carry us along and brief us. We are here to help our airlines grow both domestically, regionally and internationally. I hear them talking about aero politics, yes, an airline from Nigeria wants to go and compete with an airline of another country on their route, of course, it will be difficult for you but when carrying NCAA officials along, it makes a difference. If you make unreasonable demands on my airlines, I will apply the same on your airlines coming into my country, so it is to their benefit of everyone to come out with good terms for all the airlines.
NAHCO takes delivery of N500m GSE, upgrades facility IFEOMA OKEKE
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According to Olatokunbo Adenike Fagbemi, group managing director and chief executive officer
of NAHCO, “Our plan is to make NAHCO customer- centric, and with this renovation as well as the ongoing
igerian Aviation Handling Company Plc (NAHCO Plc) has taken delivery of another set of ground support equipment valued at N500 million, as part of the N3.6 billion equipment proposed in 2019 for injection into the company to aid facility upgrade and enhanced service delivery. The latest delivery is the first of two sets being expected before the end of the first quarter of 2020. Beside the equipment, the company has also completed the renovation of the cargo complex, which houses the airlines, cargo agents, banks and other clients. www.businessday.ng
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equipment purchase, we are providing our clients conducive environment to operate from. We are also coming up with fresh innovations to offer our numerous clients better deals, and retain a minimum of 65 per cent market share in aviation ground handling business’’. Speaking on the latest deliveries, the GMD attributed the company’s current low run to Covid-19 pandemic which has adversely impacted its operations, saying that it would continue to strive for excellence at all times. “This is just part of the equipment being expected. Some more will be delivered in the coming days. The era of inadequate equipment is sure to be over soon.” Meanwhile, NAHCO’s five- year @Businessdayng
transformation plan is on course, though with significant slowdown, due to the closure of the airports caused by Covid-19. The company is, however, optimistic of scaling through the hurdles. NAHCO Plc is a Nigerian diversified enterprise with interests in aviation cargo, aircraft handling, passenger facilitation, crew transportation and aviation training. It currently serves several airlines across the major functional airports within Nigeria, and handles the largest chunk of domestic, foreign and cargo airlines. In 2005, NAHCO was privatised and listed on the Nigerian Stock Exchange in 2006. The company is now owned by over 80, 000 shareholders, as well as local and institutional investors.
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Thursday 24 September 2020
BUSINESS DAY
Onuwa Lucky Joseph Editor, (08023314782)
How about Kechi Okwuchi as your Brand Ambassador? Onuwa Lucky Joseph
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ear 2005 seemed like her beautiful beginnings and seeming upward trajectory had come to a screeching end. In a fiery inferno that engulfed the Sosoliso Airlines flight 1145 on December 10, 2011, she lost 59 of her schoolmates from Loyola Jesuit College, Abuja. En route Port Harcourt, that was the ill-fated flight that also saw the ‘premature’ heavenly ascent of Pastor Bimbo Odukoya as she died, after battling with the burns, one day later, on the 11th of December. I remember being at the Service of Songs for Pastor Bimbo which took place at the Police College, Ikeja. Her old classmates from, if I remember correctly, Aunty Ayo Girls High School, Ikoyi, Lagos, including Nollywood Diva, Joke Silva, took time out to celebrate her illustrious life. Pastor Kris Okotie, who had also been pastor to Bimbo and her husband, Taiwo Odukoya, was also there to celebrate her. It was a colossal loss, and untimely, but what would you say of the yet burgeoning lives, 59 of them from the same school, that perished in that one flight? A national tragedy, it was, and still is. However, from that burning plane, emerged two survivors, both of them women. The older one was Bunmi Amusan, Pastor Bimbo’s PA, and the other was Kechi Okwuchi, a 16 year old who, alongside her carefree schoolmates, was going home for the Christmas holidays. According to reports, a lightning bolt struck the plane which resulted in it going up in flames and coming down in a ball of fire. Kechi, after some initial treat-
Kechi Okwuchi before the crash
Kechi Okwuchi
ment in Nigeria, was quickly airlifted to Milpark Hospital, in Johannesburg, South Africa. She was thereafter taken to Shriners Hospitals for Children in Galveston, Texas, a network of 22 non-profit medical facilities across North America, where children with orthopaedic conditions, burns, spinal cord injuries, and cleft lip and palate are eligible for care and receive all services in a family-centered environment, regardless of the patients’ ability to pay. To Shell Nigeria belongs kudos for being the responsible organisation that covered the cost and logistics for these initial treatments. Kechi’s recovery and trajectory so far has made worthwhile that investment many times over. The plucky lady who has since undergone more than 100 reconstructive surgeries (which show all over her) is clearly a miracle; gone through hell and back and is still boisterous about life. She’s made peace with everything
that happened in the past, and is content with the life she now has. All she is about right now is how to make something deeply meaningful of her time here on earth. Her appearance on America’s Got Talent in 2017 made everyone, including the supremely cynical Simon Cowell, to take notice, stand up applaud her effulgent talent and guts. Her singing voice is really good and anyone who hasn’t watched it ought to make time out to YouTube her performances. It’s tough not to tear up just watching her display incredible poise, courage, and sheer talent. And while at it, her scars are in your face. She seeks neither pity nor sentimental affirmation. All she wants is to excel, having put in the work required to do that. Kechi is the embodiment of strong womanhood. No longer for her the traditional feminine preoccupation with appearance. She seeks, and succeeds, in projecting something deeper, more meaning-
Sterling Bank’s Work Study Programme should start a corporate trend Onuwa Lucky Joseph
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terling Bank, under the ‘sterling leadership’ it must be said, of Abubakar Suleiman, is doing things differently and in a way that reflects dynamism and an appreciation of the environment in which it is operating. The latest demonstration of that growing in-house corporate culture was showcased with the launch of the “Grow with Sterling Initiative” that’s being done in partnership with Nexford University, Washington DC, USA. What’s the ‘koko’ of the arrangement? Essentially that Sterling Bank would pay 65 per cent of the fees of secondary school leavers to enable them earn international undergraduate degrees under a maximum duration of three years while they are engaged by Sterling Bank to serve in specific capacities in a work-study arrangement. That is the sweet spot: they are engaged by Sterling Bank. So there’s some remuneration going on. But at the same time, the bank is subsidizing
Abubakar-Suleiman, CEO, Sterling Bank
their school fees by a whopping 65% and the arrangement also involves, among other benefits, a 20% tuition discount and free enrolment on online learning platforms. That much Temi Daley, the Bank’s Chief Human Resources Officer, volunteered in a signed statement, noting that “Grow with Sterling Initiative” is part of the Bank’s new-to-the-world opportunities for young Nigerians to have access to quality education at affordable cost while gaining cognate work experience. That is as it should be. Working while schooling is a generwww.businessday.ng
ally accepted way of easing young people into the work force; and they come in far from green. Even though some private universities in the country are doing a heck of a job, trying to ensure quality education in the most commodious of environments, what the Sterling initiative does is to create room for exposure so that our young folks can have the benefit of a different environment and a different way of doing things. We hope that other organisations would not just copy this initiative, but also look at how to work with tertiary schools, public or private, within the country towards achieving the same end result. The tweak might just be a short student exchange programme, or, forget the exchange; an arrangement that sees our scholars go abroad for some months or a year to experience something different even though they are essentially products of Nigeria, lock, stock and barrel. The Sterling initiative clearly veers off the beaten path. And others can only look to improve on that.
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ful. To be seen, scars and all, and appreciated for the hard work she puts in, which, no doubt was the reason she made a first class in Economics and was commencement speaker at the University of Saint Thomas in Houston Texas when she graduated in 2015. She is also, even while attending to many other things occasioned by her burgeoning fame, currently an MBA student in her alma mater. Because of the long detour her life took, she’s still trying to make up her mind about things she would like to do. While her singing talent is not in contest, she also says she would like to work in some mega institution like UNFPA, The World Bank, etc. She wants to do it all, if possible, no need circumscribing herself. She’ll just do the dabble and maybe find that she can do it all. Kechi Okwuchi has that remarkable sage presence that’s noticeable with wise young women who have been blessed with wisdom beyond their years, like you have with Chimamanda Adichie and Malala Yousafzai. But they don’t have her scars – over 65% of her body – even Malala doesn’t. Three years since her America’s Got Talent performance, and subsequent appearances in other places, plus the jagged reality of her life’s trajectory,(yes, pun fully intended), one would expect that by now, a Nigerian corporate organisation in need of an authentic brand ambassador would have snapped her up. But that has not been the case, at least that’s the presupposition of this write-up. We don’t know as yet if she is in discussion with any organisation for that role. To have Kechi as brand ambassador, as spokesperson, would bring so much to any organisation
that can ‘brave’ it. She brings so much authenticity and positivity which she radiates and articulates so persuasively. Maybe the reason it’s yet to happen is because she’s not ‘wholesome’ in a traditional way. And despite many a corporate’s protestation to the contrary, they still define women traditionally. They must look a certain way, and if there are flaws, they should cover them up. That’s why all of the makeup industry exists, isn’t it? But this Kechi person is just so in your face, her scars don’t scare her. She doesn’t cover up much. And she’s brilliant and confident and so full of spunk. Kechi ought to be the validation for all those entities shouting gender equality, for all those organisations that dish out politically correct blandishments about going beyond stereotypes. She is their opportunity to make a telling statement that goes beyond mere intent. For sure, she’ll make you uncomfortable, but she’ll also make your product remarkable and hopefully, unforgettable. Plus, the money that comes from the effort will help her other efforts as she navigates her way around the rest of her life. Kechi maybe 30, but she’s still our child. A few takeaways from some Kechi interviews: • Anybody can do whatever they set their mind to do • Believe in yourself more. Give yourself more credit • The only thing holding you back is yourself • My scars do not define who I am • My personality shines through whatever the vessel looks like • I like that I can be my authentic self • People should see me and feel better about themselves.
Union Bank supports 10 NGOs on behalf of its Customers
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nion Bank delivered again on its firm promise of using portions of proceeds from its UnionBetta savings product to support 10 charitable organisations. Launched in 2016, UnionBetta is a sub-account which allows Union Bank customers earn attractive interest rates for saving for as little as N5000 monthly. In return, the bank donates a percentage of the interest earned to select Non-Governmental Organisations (NGOs) on behalf of its customers. In selecting the recipients, priority was given to NGOs making impact in areas such as gender equality, education, talent development and agriculture which are key pillars of Union Bank’s citizenship efforts that align with Sustainable Development Goals (SDGs) 1,2,4, 5 and 11. This year, a total of One million, @Businessdayng
Seven Hundred Thousand Naira (N1.7m) was donated to 10 different charitable organisations to help support their activities. Some of the recipients include United Methodist Church of Nigeria Orphanage, Jalingo; Zinnok Initiative for Women & Children, Abia; Teens Dream Initiative, Kwara; and Lagos Food Bank Initiative. Others include Uduak Charles Diaries, Akwa-Ibom; Flexisaf Foundation, Abuja; and Adolescent Friendly Research Initiative & Care, Ekiti. The amount might sound small, but it shows clearly that it’s a grassroots effort; small monies ponied up to make a big impact in small organisations.
(Kindly send feedback to 08023314782 / csrmomentum@gmail.com)
Friday 25 September 2020
BUSINESS DAY
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INSIGHT Text of the press conference jointly addressed by the Hon. Minister of Information and Culture, Alhaji Lai Mohammed, and the Hon. Minister of Water Resources, Engr. Suleiman Adamu, on the National Water Resources Bill 2020, in Abuja on Tuesday, 22 Sept. 2020
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ood afternoon gentlemen of the press, and thank you for honouring our invitation to this press conference. I am sure you have all been following the controversy that has trailed the National Water Resources Bill 2020, which is currently making its way through the National Assembly. Critics have, among other things, accused the Federal Government of having a hidden agenda by pursuing the Bill. We will address the misgivings of the critics in the course of this press conference. But first, let’s talk about the Bill. Gentlemen, there is nothing new about the National Water Resources Bill. This is because it is an amalgamation of Water Resources Laws that have been in existence for a long time. These are: - Water Resources Act, Cap W2 LFN 2004 - The River Basin Development Authority Act, Cap R9 LFN 2004 - The Nigeria Hydrological Services Agency (Establishment) Act, Cap N1100A, LFN 2004 - National Water Resources Institute Act, Cap N83 LFN 2004. So, why are the laws being repackaged as the National Water Resources Bill 2020? The answer is that they are being re-enacted with necessary modifications to bring them in line with current global trends as well as best practices in Integrated Water Resources Management (IWRM). The overall objective of this amalgamation is the efficient management of the Water Resources Sector for the economic development of Nigeria and the well-being of its citizens. The Bill provides for professional and efficient management of all surface and ground water for the use of the people (i.e. for domestic and non-domestic use, irrigation, agricultural purposes, generation of hydro-electric energy, navigation, fisheries and recreation). The Bill will ensure that the nation’s water resources are protected, used, developed, conserved, managed and controlled in a sustainable manner for the benefit of all persons. Among other benefits, the Bill: - provides for the creation of an enabling environment for public and private sector investment - provides for capacity building processes to foster good governance - Establishes water use and licensing framework to ensure sustainable financing for Water Sector Development from tariffs. With the above stated lofty goals, one is then compelled to ask: why has the Bill generated so much controversy? The first thing to say is that many of those criticising the Bill have not even bothered to read its provisions, thus depending on secondhand information to reach their conclusions. Those who have read it have perhaps done so perfunctorily. We have therefore decided to look at the main arguments against the Bill by the critics and respond to them, with a view to clearing any misgiving and also enlightening Nigerians. a) Critics contend that with the Bill, the Federal Government is
Suleiman Adamu
Lai Mohammed
poised to take over the nation’s water resources by licensing and commercializing the use of water. Our Response: This is not the intention, because the current Water Resources Act, 2004 (made pursuant to the Constitution) already makes provision for this. This Bill is only trying to provide a framework for implementing that provision. The Regulatory provisions of the Bill require that commercial borehole drillers obtain a Licence. The Code of Practice for Water Well Drillers issued by the Standards Organization of Nigeria (SON) and the NWRI in 2010 already requires this. The Code provides Technical requirements that a driller must possess to undertake drilling as well as information on each such borehole to be provided to the national database. That Code however requires the License to be issued by the NWRI in Kaduna. This Bill provides for such Licenses to now be issued by the States, under delegation of the National regulator, the Water Resources Regulatory Commission. Please note that borehole regulation is an international standard for abstraction of large volumes of water. Most countries in Africa, and almost every developed country, regulates commercial abstraction. It is also important to note that there is no requirement for licensing domestic abstraction. Regulating abstraction of large volumes of water is necessary, because groundwater abstraction is an activity that has environmental and ecological impact. b) Critics contend that with the Bill, Nigerians will be prevented from access to potable water, hinging their argument on Section 75 which states that ‘’subject to the provisions of this Bill, no borehole driller, whether corporate or individual, shall commence borehole drilling business in Nigeria unless such driller has been issued a Water Well Driller’s licence by the Commission’’. Our Response: Why is a technically-competent driller afraid of www.businessday.ng
obtaining a Licence? It is a Licence to practice, just as a medical Licence or any other Licence to be obtained by people professing to have the technical competence to do something. Most collapsed boreholes are drilled by charlatans. It is therefore incumbent on the government to prevent this. On the provision of potable water, this is the responsibility of State governments. The National Policy for water resources prioritizes abstraction for water treatment in the allocation of water use. This means that abstraction quantities required by state water Boards are given priority in water allocation and the financing of infrastructure by the Federal government for water development. Boreholes are the same. Sections 76-79 of the Bill clearly provides that the States will undertake this regulation under a national framework provided by the regulator to ensure homogenous policy implementation. c) Critics contend that the Bill is illegal, citing the Supreme Court which held that the power of physical planning in any state of the Federation is exclusively vested in the state government and that the National Assembly lacks power to legislate on the physical planning outside the FCT. Our Response: Well, this is not a Physical Planning Bill. This Bill only relates to the management of water resources that crosses state boundaries. The Constitution already grants the Federal Legislature this responsibility (item 64, Exclusive Legislative List, CFRN 1999). The Water Resources Act, 2004 lists the water bodies to which the Act applies. This is maintained in the Bill. The interaction of the Federal government with the State is only as it concerns the management of the inter-state water that passes through the State. The Bill does not apply to water that is wholly within the boundaries of a State. The Bill also does not apply to Land. It clearly states that Land required by any of the institutions es-
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tablished in the Bill will be obtained in accordance with the Land Use Act (i.e with Governor’s consent). d) Critics contend that based on the Supreme Court ruling, the provision of the Bill seeking to confer power on the Federal Government to give approval or licence for digging boreholes in any pact of the country is illegal and unconstitutional. Our Response: Well, to the best of our knowledge, there is no court ruling on this. If there is, we are not aware that a case on borehole licensing has been decided by the Supreme Court. e) Critics contend that the Bill, when passed into law, will clip the wings of state and local government authorities, as well as individuals, from making use of the water in their backyards without permission from Abuja Our response: Communities on River Banks are guaranteed undisturbed use of water as stated in Section 3 of the Bill. Also, all occupiers of Land are guaranteed the right of abstraction for domestic and sustenance, whether by borehole or rivers. Section 3 reiterates the right of persons to continue to access water without charge for subsistence and preserves existing customary rights to water. (see Sections 1, 2, and 3 of the Bill). Section 2 of the Water Resources Act, 2004 is reproduced. This section protects the right of persons to use water for domestic purposes without charge and recognises the right of a holder of customary or statutory right of occupancy to access water for personal and household use but not for commercial purposes. f) Critics contend that the Bill is aimed at taking the resources of a certain part of the country for the use of herders. In other words, that the Federal Government is seeking to implement RUGA by subterfuge. Our Response: This is not the intent of the Bill and it is not even possible, as the Bill reiterates the fact that Land can only be acquired by any of the institutions established @Businessdayng
in accordance with the Land Use Act. Almost all the Institutions have State Representatives. The Regulatory Commission Board comprises representatives of the six-geo political regions. The State level basins management includes representatives of each state in the Basin. g) Finally, critics contend that the Bill is capable of triggering ‘water wars’ . Our Response: The misrepresentation of the contents and intent of the Bill is a real cause for concern. The framework for managing and regulating inter-state waters that is represented in the Water Resources Policy, 2016 and this Bill are similar (in some cases verbatim) with most international conventions and studies. It is the same as in South Africa, Ghana, Sierra Leone, Zimbabwe, and most developed Federal constitutions. ‘Water Wars’ are more likely to happen between countries, while internal conflicts on water occur typically between states in a country. So it is not correct to say the Bill is capable of triggering ‘water wars’. Plus, the Bill contains provisions that will ensure that internal conflict on water is averted. A possible source of internal conflict on water is if an upstream State decides to dam an inter-state water, thereby preventing it from following its natural course, thus affecting downstream users. On the contrary, the Bill is the only panacea to internal conflict on water. For example, River Niger passes several states before emptying into the Gulf of Guinea through the Delta. If any of the states dams it, that can trigger water conflict. The Bill has taken this into consideration. It provides, in Section 2 (3) for the Federal Government’s right to the use and management control of all surface water and groundwater affecting more than one state pursuant to the provisions of the Constitution of the Federal Republic of Nigeria 1999, as amended. Contrary to what is being perpetuated, water resources in a state that do not go beyond the particular state are not regulated by this Bill. Gentlemen, you can now see that many of those condemning the National Water Resources Bill 2020 either have not read it or do not understand its provisions. Also, we cannot rule out deliberate mischief by some of those who have been portraying the Bill as a new source of conflict. We are therefore using this opportunity to appeal to Nigerians to avail themselves of the provisions of the Bill to avoid being misled by those who have chosen to politicize it. We also want to state that the Bill is for the good of the nation, and has no hidden agenda whatsoever. Finally, when passed into law, the National Water Resources Bill 2020 will provide for the enhancement of the Nigeria Water Sector, in line with global best practices. I thank you for your kind attention.
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Thursday 24 September 2020
BUSINESS DAY
news
ANAP raises concern over breach of public gathering protocols at Emir of Zazzau’s funeral FRANK ELEANYA
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na p Fo u n d at i o n COVID-19 Think Tank has flagged the breach of protocol for public gatherings at the burial ceremony of Emir of Zazzau, Shehu Idris. The ceremony witnessed huge crowds that thronged the palace of the emir who passed away on Monday, September 21, 2020. According to Anap Think Tank, while the outpouring of emotion as evidenced by the huge crowds was understandable, there was clear evidence that the public health rules were not followed. The Think Tank says the breach was an indication that the Kaduna State government did not make adequate provisions to efficiently mitigate the risks of such an assembly despite the state’s efforts to reduce the spread of the Covid-19 pandemic in recent times. “If in a state where genuine efforts have been made to limit the spread of the disease in the community this dangerous event nevertheless occurred, then it highlights further the key importance of the authorities’ preparedness,” the Foundation said. Anap Think Tank said there was a need for the Presidential Task Force on COVID-19 (PTF) to urgently address and put in place clear strategies to prevent such a recurrence. It also noted that incidences of social events where Covid-19 protocols were flagrantly disregarded were on the rise across the country. “We call on the PTF, the Kaduna State government, and all concerned, especially civic,
political, and religious leaders to take active steps to safely manage the crowds that are even now trooping daily to the palace for condolence visits. As we watch the world slip in varying degrees into a steep second wave of infection, this is not the time for Nigeria to relax in her efforts at controlling disease spread,” the Foundation said. One area of change it recommended was in behaviour change communication. To bring about the change, authorities would need to leverage channels such as radio jingles, posters, cartoons, and information in lorry parks. The campaign would also have to be sustained to make any reasonable impact on people. The Think Tank also canvassed the involvement of security and law enforcement personnel who would be given regular re-training and clear guidelines on how best to anticipate and manage large social gatherings. “Nigeria is beginning to relax its lockdown further as schools resume, and public places of entertainment and worship have re-opened to different extents. This is the time to ensure that in those places and in those gatherings appropriate protocols are strictly adhered to. Covid-19 still has no cure. Behaviour change communication (BCC) remains our strongest weapon against Covid-19. We raise this issue now as the PTF’s continuous silence on this matter of large gatherings, such as witnessed in Zaria, is inappropriate given the need for their continued clear leadership at this present time,” they said.
Ogun goes online with options for land use charges ... offers 50% discount on payments made on digital platforms Jumoke Akiyode-Lawanson
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gun State government has offered property owners and residents willing to make online payments on amenity charges up to 50 percent discount. The Dapo Abiodun-led administration says it has made payment of the Land Use and Amenities Charges very convenient, with its payment online via https://pay. luac.ogunstate.gov.ng or by using the REMITA platform at government’s stipulated channels or at any commercial bank nationwide. According to a press statement made available to BusinessDay, all Ogun State government demand notices now come with a unique payment code, which is all that is required to effect online payment on its portal or at any commercial bank nationwide. “The demand notices also have a QR Code for validation of the bill from the Ogun State
government,” officials say. The press statement states that non-compliance will result in sanctions on the affected properties in accordance with the provisions of the law. The state government further notes, “Payments made between now and September 30, 2020, attract a 50-percent discount, payments made between October 1 and October 31, 2020, attract a 25-percent discount, while payments made between November 1 and November 30, 2020 attract a discount of 10 percent.” The state government also warns that the Land Use and Amenities Charge has no accredited agents and only payments made using the bills payment code and on the REMITA platform will enjoy the applicable discounts. The officials equally say “electronic copy of your current demand notice can be obtained via email at luac@ ogunstate.gov.ng or by calling 0700 77 77 44 44.” www.businessday.ng
A breach of protocol for public gatherings at the burial ceremony of late Emir of Zazzau, Shehu Idris.
Here are 8 cases Bill Gates makes for global health recovery Temitayo Ayetoto
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he health sector is no doubt the hardest hit by the coronavirus crisis. It has shaken weak foundations of health systems across the world and exposed the weaknesses of even the best hospitals at weathering a storm. As Bill and Melinda Gates Foundation puts it, the damage done is clear but health structures across the world must take actions that matter in the next few months. According to the 2020 Goalkeepers report, “Progress is possible but not inevitable.” Consequently, the Foundation has made a case for actions to be taken in the following key areas of health indicators.
Maternal mortality Indirectly, Covid-19 will cause more women than men to suffer and die, largely because the pandemic has disrupted health care before, during, and immediately after childbirth. Preventable, treatable complications such as severe bleeding, infection, and high blood pressure cause the vast majority of maternal deaths. Many health care workers, who used to manage these emergencies, including experienced nurse-midwives, are being diverted to Covid-19 wards. Meanwhile, pregnant women and new mothers must weigh the benefits of visiting a clinic—where they may not have received high-quality care in the past, against the risk
of exposure to Covid-19. Some are deciding to deliver at home or skip new born care visits as a result. Expert maternal care is the definition of an essential service. Unlike some other services, it cannot be safely postponed and caught up later. A pregnant woman is pregnant now and delivers her baby when she delivers. It is imperative that health systems have all the resources they need to ensure that she can do so safely and with dignity. Under-5 mortality Current data suggest that children are less likely to have severe disease from coronavirus infection than older adults. However, as coverage for routine immunisations decreases and case management for pneumonia and diarrhoea have been interrupted due to
the pandemic, children are increasingly vulnerable. Models predict that acute malnutrition will increase dramatically, which will make it harder for children to fight off infectious diseases. These consequences of the pandemic emphasise the need to figure out how to prevent secondary and tertiary crises. Yet even now, lifesaving innovation continues. Vaccines exist to protect against many causes of pneumonia, the leading infectious killer of young children. But they can be expensive—they account for about half the budget of Gavi, the Vaccine Alliance. Several months ago, however, the World Health Organisation prequalified a new pneumo-
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Dangote Cement pays over N1trn dividends in seven years ODINALA ANUDU
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frica’s largest cem e nt ma nu f a cturer, Dangote Cement, has grown the wealth of its shareholders, paying over N 1 trillion as dividends in the past seven years. According to Guillaume Moyen, group chief financial officer, Dangote Cement is focused on growing the Nigerian economy. A breakdown of the seven-year dividend history gleaned from the company’s financial statements indicates that N51.1 billion was paid in 2013, N119.3 billion in 2014, N102.2 billion in 2015, N136.3 billion in 2016, N144.8 billion in 2017, N178.9 billion in 2018, and N272.6 billion in 2019. Moyen, who disclosed this during a virtual Facts Behind the figures and Facts Behind Sustainability Report by the company to capital market stakeholders at the Nigerian Stock Exchange
(NSE), said Dangote Cement had a sustained focus on helping the Nigerian economy and doing what it could to benefit the economy. He said, “Arguably, our biggest achievement to date is taking Nigeria from being a big importer of cement to being self-sufficient, and now an exporter. We are developing road infrastructure and durable concrete roads, which are a major economic catalyst and hugely beneficial for the country’s transport sector. “We began our operations in Nigeria and have been expanding into other countries over the years. Since 2011, we have been enjoying robust volume growth; to be more specific; we have been growing at a compound annual growth rate of 13.4 percent. “The company has an outstanding financial profile and has achieved excellent financial performance during this period. If we look
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at the last seven years, you will see that our EBITDA has increased by a CAGR of 9 percent. We have paid over N1 trillion in dividends to shareholders in the last seven years. As Africa’s largest cement manufacturer, we will continue to prioritise giving value to investors and other stakeholders.” In his presentation, Michel Puchercos, group CEO, Dangote Cement, said amid the Covid-19 challenges, the company placed an emphasis on the health and safety of team members, customers, suppliers, and communities at large as a core value. “We have implemented several rigorous protocols in all our operations across the continent to support public health policies and ensure the highest level of protection of our stakeholders. “In addition, we are closely monitoring all markets according to the guidance provided by the authorities in each country to prevent @Businessdayng
and mitigate adverse effects of the pandemic. In this context, we continue to provide superior services and deliver high quality products to our customers,” Puchercos said. He stated that as Africa’s largest cement manufacturer, they take their role of social responsibility seriously and had taken deliberate steps to deploy resources to help their communities overcome hardships in this crisis. “We have spent $1.9 million in response to Covid-19 to ensure the safety and protection of our people, customers and communities. In Cameroon, we donated PPEs, thermometers and many more to the Ministry of Public Health and major hospitals in Douala. In Ethiopia we made cash donations to the government plus various donations including face masks, hand sanitizers and water supply. These are just a few examples,” he said.
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News More funding options open for 41.5m SMEs... Continued from page 1
(MSMEs) to recalibrate their operations and plan for recovery amid coronavirus scourge.
However, the 41.5 million MSMEs must have good credit history, excellent book-keeping, structured documentation, adequate technology to drive the business and credibility, according to Tunde Popoola, managing director/ CEO, CRC Credit Bureau. “Banks are looking at your cash flow, audited accounts, and they are looking at whether you have the technology to drive your business, and if you have a good credit history,” he said on Wednesday at a webinar tagged ‘Exploring Access to Finance Opportunities in a Pandemic World’ organised by the Lagos Chamber of Commerce and Industry (LCCI) in collaboration with the Credit Bureau Association of Nigeria (CBAN). The Federal Government’s MSME Survival Fund portal (survivalfund.ng) was opened on Monday to provide payroll support for 500 vulnerable MSMEs, business registration assistance to 250,000 new businesses and general grant support for 100,000 businesses. The Central Bank of Nigeria (CBN) had earlier launched a N50-billon Targeted Credit Facility for service providers in the health, trading, households and MSMEs hit by the pandemic. About 3,256 MSMEs were among the first batch of businesses that accessed the facility, said Abubakar Kure, managing director, Nigeria Incentivebased Risk Sharing System for Agricultural Lending (NIRSAL), in May. About N10.5 billion out of central bank’s N100 billion for the health sector had been disbursed by late May, CBN governor, Godwin Emefiele said. There are also other funding options for small businesses, which have been made easily accessible as the Nigerian economy dips. Apart from the Anchor Borrowers Fund for farmers and processors, Nigeria has the Non-Oil Export Stimulation Facility set up by the CBN and domiciled in banks; CBN’s Real Sector Support Facility; CBN’s Youth Enterprise Development Programme, and University-Based Poultry Revival Fund. Others are Commercial Agriculture Credit Scheme, CBN’s Creative Industry Financing Initiative domiciled in banks, Bank of Industry’s (BoI) Bottom of Pyramid Fund, BoI’s Youth Entrepreneurship Support, Solar Energy Fund and Nollyfund. MSMEs also have the opportunity to tap equity and debt financing. According to Popoola, ear-
lier cited, Nigerian banks had upped their game in credit financing since 2008, with credit to businesses rising 231 percent since then, from N8 trillion to N27 trillion. He urged small businesses who earlier borrowed from banks to restructure their loans to avoid default driven by the pandemic. Ja m e e l a h S h a r r i e f f Ayedun, managing director/ CEO, CreditRegistry, said due to Covid-19 pandemic, MSMEs must take loan restructuring seriously rather than run away from it, as doing otherwise would affect their ability to attract investors and access future credit. “When investors want to invest, they do not just look at credit history, but they also look at individuals behind the business,” she said. She explained that small businesses must take their credit ratings and history seriously to have access to future credit opportunities and solidify their reputations in and outside their domains. Nigeria’s small businesses, however, complain of lack of cheap and long-term funds that will enable them expand. Fewer than 2 million MSMEs had access to credit out of 41.5 million entities, according to a report covering 2013 to 2017 done in 2019 by the National Bureau of Statistics (MSMEs) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). PwC Nigeria, in a new report, estimated annual financial gap for Nigerian MSMEs at N617.3 billion. MSMEs contribute 50 percent to Nigeria’s GDP and accounts for 86.3 percent of jobs (59.6m jobs in 2017), according to the report. The CBN on Tuesday reduced the Monetary Policy Rate (MPR), which is a benchmark interest rate, to 11.5 percent from 12.5 percent, a move expected to make more credit available. But Jon Tudy Kachikwu, former chairman, LCCI SME Group, said in a recent interview with BusinessDay that the real problem was that many MSMEs were unable to access the funds because banks were often reluctant to lend to small businesses and demanded unnecessary documentations. Oladimeji Peters, acting managing, FirstCentral Credit Bureau and CBAN chairman, explained, however, that it was easier for people to spend borrowed funds recklessly, but cautioned that defaults could hamper chances of accessing future credit and investments. He explained that investors would run away from a business whose credit ratings were low, stressing the need to build strong credibility and reputation. www.businessday.ng
R-L: Oiza Asimo, marketing executive, BusinessDay; Jean Claude Jallon, managing director, Northern Cables Company (NOCACO); John Osadolor, director, northern operations, BusinessDay, and Kassim Muhammad, manager, sales and marketing, NOCACO, during BusinessDay team visit to the company in Kaduna.
Low yields dampen investment returns... Continued from page 1
yields are favourable to compensate for underwriting losses brought on by spiralling claims and underwriting expenses.
However, the negative real interest rate on risk-free assets in Nigeria has made things complicated for insurers who are hard pressed to find investable assets with returns higher than inflation, according to two chief executive officers of leading insurance companies in Nigeria. “The negative real return on risk-free investment assets has affected the insurance industry in no small way, as it has put pressure on our investment income,” one of the CEOs says during an exclusive interview with BusinessDay. “It means we have to work harder to deploy policyholders’ money efficiently, and that is very difficult given the current state of the market,” the second CEO states. Interest rates in the fixed income market crashed last year following the central bank’s decision to ban some companies and investors from
its Open Market Operations (OMO) market. Nigeria’s latest Treasury bill auctions show that Nigeria’s 364-day has reduced from a peak of 22 percent in 2017 to 3.75 percent. The concerns of CEO and analysts are that the unfavourable investment environment means insurers could experience dividend income reduction for some of the assets in their portfolio. That could lead to a sharp decline in profit for the insurers and lower returns to shareholders. In 2019, the largest insurers in Africa’s largest economy realised a combined N342.91 billion in investment income, an increase of 13 percent compared to 2018, according to data gathered by BusinessDay. There was a 46.46-percent expansion in investment income in 2017 financial year, when the yields on short-term government securities were around 18 percent and 22 percent. The economic slowdown emanating from the pandemic is also driving interest rates even lower and increasing credit risk exposures from businesses facing possible
Here are 8 cases Bill Gates makes for global... Continued from page 30
nia vaccine that costs only $6 for a three-dose regimen instead of $9. And thanks to increased investment due to Covid-19, more health care facilities are providing access to oxygen to treat respiratory conditions; this will help save the lives of many children infected with pneumonia. HIV Current evidence shows that people living with HIV are at increased risk of death due to Covid-19. But the indirect effects of the pandemic are also worrying. Disruptions to health services could mean people do not get antiretroviral therapy (ART), which would result in more deaths and more infections (because viral loads are higher in untreated patients, they are more likely to transmit to others). So far, this worst-case scenario has not happened, although some countries are
struggling to maintain services. One innovation that seems to be helping is multi-month dispensing—a simple approach that helps people fit treatment into their lives and keeps them out of overburdened clinics. Even after Covid-19 is under control, this will be a more effective, efficient way to dispense ART. Tuberculosis Before Covid-19, there were already 3 million “missing cases” of TB: people with active TB who did not know it and were passing the disease to others while going untreated themselves. Now, that number will grow even larger as people either cannot go to health facilities for diagnosis or choose not to go to avoid the possibility of exposure to Covid-19. For similar reasons, people who know they have TB may not go in for treatment. Our fear is that this expanded pool of undiagnosed infections will
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default, according to analysts at Pricewaterhousecoopers (PwC). “This raises the possibility of regulators asking for extraordinary solvency tests to ensure insurers can withstand the immediate and knock-on impacts,” say the analysts. The expected economic downturn this year coupled with the low interest rate environment are two of the biggest obstacles in the way of insurers and other sectors that make up the entire economy this year. The economy contracted by a record 6.1 percent in the second quarter of 2020, as the virus took a toll on economic activity. While the economy may have fared better in the third quarter, it still faces the risk of sliding into a second recession in four years. A recession will subsequently result in lower disposable income for the average Nigerian and thereby, lead to poor renewal and uptake rates for insurance policies. Commercial and retail customers are looking to cut down on spending as they have seen their income streams beaten down as the virus spreads. In terms of reach, the Nigeri-
an insurance industry continues to lag peers with low insurance penetration (Gross Premium Written/GDP) of 0.34 percent in 2019 compared with South Africa (13.4%), Morocco (3.9%), Kenya (2.3%) and Egypt (0.6%). The industry is reeling from poor regulations, lack of trust in the claims process, religious beliefs, and economic downturn. To avoid liquidity crisis and surmount the current macroeconomic headwinds, analysts say insurers will have to be cost efficient and focus more on cash management. “Broader fallouts from the pandemic in terms of lower demand and investment returns, deterioration in the credit quality of fixed income securities and increased mortality rates from the virus could pressure earnings, reserves and profitability of the life insurance sector in 2020,” analysts at Afrinvest Securities Limited, note. “For the non-life sector, a rise in Covid-19 related claims, premium rebates and lower interest rates could offset the increased demand for pandemic-related policies and reduce profitability,” the analysts say further.
lead to a long-term increase in the number of TB cases around the world. As they come out of Covid-19, countries are going to have to make case-finding and funding for TB a major priority. Malaria Malaria is unforgiving: As long as it exists, it will kill the most vulnerable and take advantage of emergencies. That is why the Gates Foundation’s malaria strategy is geared toward eradicating the disease. Even under ordinary circumstances, both the malaria parasite and the mosquitoes that transmit it develop resistance to the drugs and insecticides used to fight them. “We invest in modelling and surveillance technologies designed to help countries tailor strategies for deploying malaria tools so that they drive down ongoing, high-level transmission as much as possible,” the Foundation stated, noting that these same tools are also critical for epidemic preparedness and response. Family planning
Before Covid-19, there was good news about this indicator. In West Africa, for instance, where progress had been slow, the number of women using contraceptives more than doubled between 2011 and 2020. One solution is to shift toward a model of self-care that equips women and families with the expertise, tools, and confidence to plan without having to rely on the health care system. This can include specific interventions like selfinjectable contraceptives or platforms like telemedicine, but it is broader than that. Selfcare is deeply rooted in women’s needs and can promote access to family planning and other essential health services. Universal health coverage The Universal Health Coverage (UHC) Effective Coverage Index produced by IHME includes 23 indicators that, together, are a shortcut for thinking about whether people in a country have access to essential health services.
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Thursday 24 September 2020
BUSINESS DAY
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Thursday 24 September 2020
BUSINESS DAY
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Five implications on Nigeria’s economy as MPC trims MPR by 100bp ENDURANCE OKAFOR
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From left: Godswill Akpabio, minister of Niger Delta Affairs; Babatunde Fashola, minister of Works and Housing, and Timipre Silva, minister of State for Petroleum Resources, during a virtual meeting of the Federal Executive Council at the Presidential Villa, Abuja. NAN
Buhari to forward revised petroleum industry bill to lawmakers DIPO OLADEHINDE
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fter initially rejecting an oil sector reform bill passed by the previous set of lawmakers two years ago, saying it whittled down his powers as Petroleum minister, President Muhammadu Buhari is forwarding the long-awaited bill to lawmakers and consideration could start early next week. Foreign news service Reuters reported Wednesday that the national assembly has already chosen teams of members who will work most closely on individual portions of the bill. Excerpts of the bill seen by Reuters, includes provisions that would streamline oil and gas royalties, boost
the amount of money companies pay to local communities and for environmental clean-ups and alter the dispute resolution process between companies and the government. It also includes measures to push companies to develop gas discoveries and prescribes a framework for gas tariffs and delivery. “The senate and the legislature have a good relationship which will enable the speedy passage of the PIB unlike the previous administrations,” Niyi Awodeyi, CEO at Subterra Energy Resources Limited, said. In August, TImipre Sylva, the minister of state for Petroleum Resources said that the Federal Government is re-introducing a revised version of the Petroleum Industry Bill to the National As-
Tony Elumelu named in ‘TIME 100’ list of 100 most influential people in the world 2020 ..one of 3 Nigerians on the list BUNMI BAILEY
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IME has named Tony O. Elumelu, one of Africa’s leading investors and philanthropists, in the 2020 TIME100, the annual list of the 100 most influential people in the world. The list, now in its 17th year, recognises the activism, innovation, and achievement of the world’s most influential individuals. Elumelu, who is one of only four Africans on the 2020 list, is recognised for his track record of business turnaround and value creation, and economic empowerment of young Africans. Tony Elumelu is the Founder and Chairman of Heirs Holdings, his family-owned investment company, committed to improving lives and transforming Africa through
long-term investments in strategic sectors of the African economy, including financial services, hospitality, power, energy, and healthcare. He is the chairman of top pan-African financial services group, the United Bank for Africa (UBA), which operates in 20 countries in Africa, the United Kingdom, France, and is the only African bank with a commercial deposit taking licence in the United States. The bank provides corporate, commercial, SME and consumer banking services to more than 21 million customers globally. Elumelu also chairs Nigeria’s largest quoted conglomerate, Transcorp, whose subsidiaries include Transcorp Power, one of the leading generators of electricity in Nigeria, and Transcorp Hotels Plc, Nigeria’s foremost hospitality brand. www.businessday.ng
sembly within the next two weeks. Sylva also said that the new PIB has merged the various aspects of the bills including fiscal, administration, governance and host community aspects into one bill which would be considered together for passage. The minister further said that in order to prevent previous delays in the passage of the bill, the government has embarked on broad consultation with stakeholders to arrive at a bill that would not be encumbered in the national assembly. However, the bill had not left the presidency since then. The two-decade-old oil bill had suffered needless delay. The governance aspect was passed by the 8th national assembly but President Buhari refused to
assent the bill. Both the Senate and the House of Representatives must approve it before Buhari can sign it into law. For most stakeholders, there is no telling when the PIB will become law this year. But it is clear that the uncertainty over the bill has been a major drag on the industry over the years, significantly limiting its ability to attract both local and foreign capital at a time when many other countries are scrambling to exploit their oil and gas resources. Although Nigeria is Africa’s biggest oil producer and boasts the secondlargest proven oil reserves and the largest gas reserves, it lags several other continental producers in terms of progressive policies and reforms.
n a bid to salvage Nigeria’s economy from the negative impact of Covid-19, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) trimmed its benchmark lending rate on Tuesday by 100 basis points to 11.5 percent. According to the central bank governor, Godwin Emefiele, 60 percent of the 10 members of the monetary policy committee voted to lower the rate to 11.5 percent from 12.5 perecnt, the second cut this year. Meanwhile, the asymmetric corridor, which is the cost at which lenders borrow, was also adjusted by the committee to 100 basis points as they reduced deposits to 700 basis points. The decision, according to the MPC, is to push deposit money banks to increase lending. While the rate cut by MPC is aimed at stimulating growth in Africa’s largest economy, a 10-analyst poll by BusinessDay shows it will have five implications on the following key variables
Unlikely to spur GDP growth Likely to enter its second recession in the third quarter of 2020, analysts believe the rate cut by MPC is less likely to boost Nigeria’s GDP growth rate which has been crawling behind its population growth rate since 2015. “The reduction in interest-rate is unlikely to spur recovery amid pressure on the external account and galloping inflation,” analysts at United Capital said. Badly hit by the double challenge of COVID-19 and lower crude price, Nigeria’s first contraction in three years at -6.1 percent in the second quarter of 2020 puts the largest economy in Africa in a stagflated state. …hands over 51 SUVs, houses to judges The condition which is when 50 cars were handed described by slow, declin JOSHUA BASSEY over to magistrates in the state. ing or contracting economic “The judiciary is the bed- growth and relatively high agos, Nigeria’s commer- rock of our society, and our unemployment, or economcial and economic play- judges need all the support ing host to an estimated they can get to effectively per- ic stagnation, which is at the 21 million people, needs a vi- form their duties. In line with same time accompanied by brant judiciary system to drive this, we have devised a thor- rising prices (i.e. inflation) tips development, the state gover- ough process to overhaul our Nigeria into top six most misernor, Babajide Sanw-Olu has judiciary in such a way that able countries globally. submitted. justice is dispensed without Positive for banks Sanwo-Olu made the sub- fear or favour. The recent decision by the mission in Ikeja on Wednesday “There will be no dividends while handing over 51 Sport of democracy for the people if MPC is positive for banks as Utility Vehicles (SUVs) and there is no active, independ- return on their deposits is exeight houses to judges of the ent, impartial and incorrupt- pected to decline, this is likely Lagos State High Court, saying ible judiciary. We will continue to feed into lower cost of funds that no arm of the state govern- to provide the necessary train- for the lenders, particularly for ment would be deprived of ing and infrastructure required those with a huge customer tools to perform its statutory to ensure that the integrity of base. duties. He said it was necessary the judiciary is not eroded,” he While the rate cut will help to support the state judiciary to added. the banks’ net interest income enable it flow along with global The governor, therefore, analysts believe the banks trends in justice delivery and urged members judiciary to with daily liquidity shortfalls administration. co-operate with the executive It was the second time arm by showing highest form will be able to ride on the rate within one year that Sanwo- of dedication to their statutory cute to access funds cheaply Olu would give official vehicles duties, reminding them of the at the CBN’s lending windows. to members of the Lagos State crucial role the judiciary plays judiciary, as a similar event in the building of a just and Negative for exchange rate took place in October, 2019 unified society. With the rate cut, the return
Lagos needs vibrant judiciary to drive development, says Sanwo-Olu
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on investment in real terms widened further as inflation reached 29 month-high of 13.22 percent in August. According to analysts, a wider negative return will discourage foreign investors and hence, reduce dollar inflow. For the first time in more than four years, foreign investors avoided staking their monies in Nigerian bonds, after a move to ration dollars heightened investors’ fear in the economy. No foreigner invested in Nigerian bonds in the second quarter of 2020. “A wider negative real interest is negative for foreign capital flows and the FX rate as foreign investors are likely to transfer their funds to markets with attractive risk-return profile,” a Lagosbased market analyst said. Meanwhile, Nigeria’s recent dollar shortage which pushed the CBN to devalue the naira twice this year was fuelled by the drop in the production and price of oil and consequently led to the steep drop in the gross domestic product in at least 10 years. Lower rates on investments/savings deposits With the rate cut, the CBN’s recently adjusted saving rate, set at 10 percent of MPR, will be revised from 1.25 percent per annum to 1.15 percent. “Savers who have to earn below inflation rate return on their savings would see the value of their money eroded. Thus, by the time repayments are made, the purchasing power of the saved money would be lower which implies lower income, lower demand and lower output,” Ayorinde Akinloye, a Research Analyst at CSL Stockbrokers Limited said. Also, the rates on Government fixed income instrument which has already hit their low record levels are will be heightened as Bond yields are likely to reduce further. Positive for equities market With extra pressure on money and bond market yields, analysts expect the rate cut to further spur domestic investors’ participation. “Also, listed companies’ ability to access cheap capital at the fixed income market should also help lessen pressures on their bottom-line over the coming years,” analysts any United Capital explained. According to Oscar Onyema, CEO of the Nigerian Stock Exchange (NSE), domestic investors have accounted for almost 60 percent of the trading activities in 2020 compared to the average of 51 percent in the last four years. “The low yield environment has positioned the equities market as a credible investment option for domestic institutional and retail investors,” Onyema said.
Thursday 24 September 2020
BUSINESS DAY
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Appointment of judges: Court says Buhari contravenes constitution FELIX OMOHOMHION, Abuja
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Federal High Court in Abuja, Wednesday, told President Muhammadu Buhari, that he acted in contravention of the constitution in sending names of 11 judges to the Senate for confirmation. In a judgement, Justice Inyang Ekwo said the President was not empowered by the constitution to forward 11 persons nominated for appointment as judges of the High Court of the Federal Capital Territory (FCT) to the Senate for screening and confirmation. Justice Ekwo held that President Buhari acted in contravention of the provision of section 256 (2) of the constitution when he forwarded the recommended names, sent to him by the National Judicial Council
(NJC), to the Senate. Olajimeji Felix Ekengba had sued the President, the Attorney General of the Federation, the Senate, President of the Senate, the Clerk of the Senate, the Chief Justice of Nigeria and the NJC, asking the court to declare the forwarding of the names of the judges to the Senate as illegal. In the suit marked: FHC/ ABJ/CS/733/2020, Ekengba argued that the President cannot abdicate his duties to the Senate. Ekwo agreed with him, saying the only instance where the President can forward NJC’s recommendation to the Senate, in respect of appointment of high court judges, is when it relates to the appointment of a head of court, like the chief judge. The judge, however, held that the fact that President Buhari contravened the provision of section 256(2) of
the constitution did not affect the swearing-in of the judges. The judge said: “The issue is straightforward. It is whether the first defendant (the President of the Federal Republic of Nigeria) acted in compliance with the provision of section 256 (2) of the 1999 constitution (as amended) to have sent the names of the 11 persons recommended for appointment as judges of the High Court of the Federal Capital Territory, Abuja to the Senate for confirmation. “Looking at the provision of section 256 (2) of the 1999 constitution (as amended), I find that there is no power or authority, express or implied, given to the first defendant (the President of the Federal Republic of Nigeria) to send names of persons recommended to him for appointment as judges to the Senate for screening.
Illegal levies, taxes affecting C/River’s economy MIKE ABANG, Calabar
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mmah Isong, chairman of Cross River State Anti-tax Agency, warned that anybody caught sabotaging the antitax agency will face the full weight of the law irrespective of social status or political leaning. He appealed to politicians to stop sponsoring touts to molest the poorest of the poor through the imposition of multiple levies, adding that illegal taxation was impacting negatively on the economy of Cross River, with thousands of businessmen relocating to other states. Isong, who is also the national publicity secretary of the Pentecostal Fellowship of Nigeria (PFN) and presiding Bishop of Christian Central Chapel Int’l (CCCI), stated this on Wednesday at an interactive session with journalists
in Calabar, the state capital. According to him, checks showed that powerful politicians were behind increasing illegal taxation in the state. He observed that the state would benefit more if everyone joins forces with Governor Ben Ayade to eradicate incidences of illegal levies and taxes. “You can see why the governor appointed only pastors and clergymen to handle the anti-tax fight. It never dawned on us what we were brought into until we hit the ground running. We have come to discover that it is ‘Mr Otu’s goat that ate Mr Otu’s yam.’ The touts on the streets oppressing and beating up old market women because of collection of levies are people’s workers. “They are being sent to those revenue points by people, particularly politicians. The agents are
placed in those places as rewards for electoral victories. That explains why activities of illegal taxes and levies surge immediately after elections. “The governor has also come to discover that the powerful political class are behind illegal taxation in the state. The narrative is that those guys on the streets perpetrating this act are chips of the old block.” Speaking further, Isong said: “Since we started arresting those violators of anti-tax law, we have been receiving calls from the big and mighty for us to softpedal. What we are going to do is that we will hold unto the cubs until the mother lion comes out, but we do hope they’ll repent. I appeal to those sponsoring those illegal tax agents to cooperate with the state government and stop such acts for the interest of the economy of the state.”
Delta reopens primary, secondary schools Sept. 28 …as nursery, primary 3 pupils to resume 2021 MERCY ENOCH, Asaba
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he Delta State government has given the nod to primary and secondary schools in the state to resume classes from Monday, April 28, 2020, to the 2019/2020 academic session as well as the commencement the 2020/2021 new academic session. However, pupils from nursery to primary three will resume in 2021. The state government in a statement by the commissioner for basic and secondary education, Patrick Ukah, on Wednesday, indicated that JSS 1 and 2 students as well as their counterparts in SS 1 and SS 2 will resume on Monday,
September 28, 2020, to enable them commence their second term examinations till October 9. The commissioner said that primary 4 and 5 pupils would resume on October 5 in order for them to write their second term examinations which will also be concluded on October 9. The statement further noted that the second term examinations will be waived for pupils in primary 1 to 3, while boarding students will resume on Sunday, September 27. Ukah said that the resumption date for first term 2020/2021 academic session for all pupils and students in primary and secondary schools is on Monday, October 12 and will terminate on www.businessday.ng
December 18, 2020, while the date for the resumption for second term is January 4, 2021, and will end on March 31, 2021. According to him, third term will commence from April 12 and end on August 13, 2021. The long duration for the term is to give sufficient time to cover rolled over content from the last session, inter-house sports, and mid-term break which are not applicable to other terms. He explained that the resumption for all nursery/ pre-primary KG 1 to 3 pupils have been deferred to January 2021 and advised parents and guardians to avail themselves of the resumption dates to prepare their children and wards. https://www.facebook.com/businessdayng
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BUSINESS DAY
NEWS
How Nigeria’s health financing deficit could shape up Helium Health’s loans TEMITAYO AYETOTO
H
ealth financing deficit in Nigeria could begin to shape up on Helium Health’s foray into raising quick loans to save staggering hospitals and those looking to raise the bar. The health technology solutions company will leverage artificial intelligence to gather ample data on hospitals’ operational performance and create a unique lending system that can enable qualified hospitals to access N10 million collateral free-loan in less than 24 hours. This solution means that hospitals will have at their behest the financial backing to acquire more equipment, attract more experienced talent, scale up pharmaceutical inventory and manage more patients. “Healthcare providers need funding to keep functioning while preparing for the anticipated increase in chronic
disease burden. Injecting additional funding into hospital operations can make a significant difference,” Adegoke Olubusi, Helium Health’s chief executive said in a statement provided to BusinessDay. “HeliumCredit is a timely source of financial assistance to healthcare facilities that have faced financial fallouts or falling revenue, want to scale, or need to upgrade their equipment or processes.” Amid a growing rate of COVID-19 infection in May, private medical practice was almost halted to a grind as patients with non-emergency cases deserted hospitals. Hospitals lacked the bravery to attend to even the few patients who approached them because the additional cost that kitting health workers with personal protective equipment brought was a brunt too heavy to bear for many. Some hospitals in fact considered shutting operations in what highlights the frail and
light-weight nature of some hospitals in terms of weathering a pandemic storm. “No one is giving us palliatives like PPEs to be bold to even attend to those who brave it and come. No testing kits. So we are exposed and patients are turned back when you are not sure of what they are suffering from,” a healthcare provider in Lagos told BusinessDay during in May. Many healthcare facilities have continued to face dwindling revenue as a result of the pandemic and require buffers such as this to stay afloat. Private healthcare facilities deliver care to about 60 per cent of the population and serve as the first point of call to 80 per cent of people. But 57 percent of these hospitals often fail to raise funding from external sources due to lack of comprehensive data on their operations. The challenge often leaves them with under-resourced, bootstrapped healthcare facilities, filled with under-trained and under-com-
pensated health workers. These culminate into poor delivery for patients, pushing them to the brink terminal situations in illequipped hospital wards. Ifeoluwa Olokode, Helium Health’s head of partnerships said the initiative’s target is to achieve the sort of acceleration that digitisation has given the financial sector in health sector as well. “One of the major challenges is limited financing and it’s because there is no transparency about how these hospitals operate. You know how the digitization of the financial sector basically accelerated the sector, we want to do the same with the health sector. The foundation of getting data is digitizing the records,” she said. The credit system is just one of Helium’s Health means of diversifying its health portfolio. Its main product is the Helium Provider Management Suite which provides a digital infrastructure for medical records and an online consultation platform.
L-R: Hilda Ozor, ICAN council member; Onome Joy Adewuyi, ICAN president; Luke Onuoha, deputy vice-chancellor, Adeleke University Ede, and Michael Arimanwa, rector, Federal Polytechnic, Nekede at the signing of mutual cooperation agreement with ICAN, in Lagos.
NEMA raises the alarm over impending flooding in Abia GODFREY OFURUM, Aba
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he National Emergency Management Agency (NEMA) has advised Abia State government to take measures against impending flooding, which may wreak havoc in some parts of the state before the end of 2020. Umar Abdulaziz, team leader, NEMA delegation for Imo and Abia States, gave the advice Wednesday, during an advocacy visit to Governor Okezie Ikpeazu at the Government House, Umuahia. Recall that the Nigeria Meteorological Agency (NIMET) in January, declared some local government areas in Imo and Abia, as highly probable flood risk areas in 2020. Abdulaziz told the governor to brace up to the challenge, by immediately putting up machinery in place to mitigate flooding in the state. He listed Umu-Nneochi local government area as highly probable flood risk location in 2020, while Osisioma-Ngwa, Isiala-Ngwa North and Ukwa West local governments were
probable areas. Also included on the list are Ukwa-East, Umuahia-North, Umuahia-South, and Obingwa local government areas. “We are here on a specific mission to deliver the early warning message, as directed by director-general, NEMA, Muhammad Muhammad, for your government to take swift action against impending flooding”. He urged the Ikpeazu to direct the State Emergency Management Agency (SEMA), local government authorities, and other stakeholders, to brace up and be prepared for the likely disaster. Abdulaziz also urged the state government to encourage SEMA to initiate public enlightenment campaign, targeting the vulnerable communities. He added that other measures, which should be taken by the government was preparation of high grounds for possible accommodation of internally displaced persons of vulnerable communities. He also advised the government to stock SEMA’s warehouses to enable quick supply of food and non-food items to IDPs prior to NEMA’s intervention. www.businessday.ng
ACCA, CIPM partner to create new business leaders CHUKA UROKO
C
onsistent with the new focus and language of business, the Association of Certified Chartered Accountants (ACCA) and Chartered Institute of Personnel Management (CIPM) have entered into partnership to share values, professional expertise and to create new business leaders. A memorandum of understanding (MoU) to that effect was signed in Lagos recently with officials of the two bodies underscoring to collaborate to better the people, business and economy. The two bodies believe that since business is ever dynamic, the language which business speaks has to be dynamic and, if these changes are taking place, it means professional bodies which embody both business and the language, must be dynamic. In her remarks at the MoU signing event, Titilayo Akisanya, CIPM’s vice president described the partnership as a marriage of the HR and Accounting (finan-
cial reporting) profession that will be creating new business leaders. The HR guru hoped that the cross-pollination of the two professions in building capacity and capability would create business professionals in the Nigerian, West African and African market as a whole. “An HR professional should be able to understand how money is made; everybody must know the numbers; this partnership is about the future of work; it is about unleashing leaders into the country,” she said, adding, “People should be given the opportunity to cross professions.” Disclosing that HR was about helping to achieve business fundamentals, Akinsanya also noted that transferability of professions-finance to HR and vice versa-was the way to keep the business world going. According to him, the MoU signing event was really significant, explaining that, by that event, “HR professionals understanding finance and accounting as it is known in today’s world will be better business leaders and business managers.”
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First oil at Ogbele field: 15 years after BUNMI BAILEY
O
wing to Covid-19 protocols, there was no clinking of glasses recently as leading indigenous upstream oil and gas firm, Niger Delta Exploration and Production (NDEP) commemorated the 15th year anniversary of oil production from its Ogbele Marginal field in Rivers State. The historic import of the event, however, was such that the company organised a Zoom event with about 150 persons in attendance to mark the milestone. The attendees included present and past staff and directors of the company, community stakeholders, and friends of the company. Coincidentally, the event was held on the same day the company achieved first oil from Ogbele on August 28, 2005, effectively kick-starting what has been a remarkable story of resilience, indigenous technical savvy, and corporate success. “It is a milestone I am proud of, such as we achieved together as a company,” Layi Fatona, managing director of NDEP, said at the event, noting, “We did not get here by chance. We got here because we believed it could be done. We shared the common dream that first, an indigenous oil company was possible. Next, we put in much work to make it happen.” It certainly was not easy to make it happen, especially at inception. A former chairman of NDEP, Ogbueshi Ben Osuno, who was also at the event, recalled some of the initial challenges the company faced as an indigenous upstream oil and gas pioneer. These included securing presidential approval to operate the field, attracting investors to fund the field development project as well as getting “a drilling company to work with us even after agreeing to pay a higher sum for the job,” he said. NDEP persevered and their achievement of first oil from the Ogbele Marginal field on that date 15 years ago began the process of their evolution into a diversified corporation with interests spanning oil and gas exploration and production, refinery operations and thriving operations in other countries in Africa including South Sudan and Uganda. “NDEP is seen as a major accomplishment because we have grown from being a single well company into a crude oil and gas producing, processing, refining, and exporting company,” Osuno said. Another former chairman of the company Board of Directors, Goodie Ibru, who also spoke at the event, congratulated the current chairman of the Board of NDEP, Ladi Jadesimi, the other directors, management and @Businessdayng
staff of the company for its successes to date. “The remarkable thing about NDEP,” Ibru said, “is that it is not just producing crude oil and exporting, it is adding value to the Nigerian economy. It has become an integrated oil and gas company. It has a mini refinery; it has a gas plant, and this translates to the creation of job opportunities for the youths. “It’s doing a lot to create opportunities for young people, creating wealth and also keeping part of the wealth within the country instead of just sending crude oil abroad and importing refined products.” Commending the company for their contributions towards the development of their host communities, a community leader, Kipoye Gogo from Otari Host Community, said three key factors were responsible for the harmonious relationship NDEP had enjoyed with its Host Communities - fulfilled promises by the company, commitment to agreements and accessibility. Another community leader, Napoleon Ukalikpe, said Niger Delta Petroleum Resources (NDPR), an NDEP subsidiary, “employs our youths in Ogbele community, they have built schools, sank boreholes and provided electricity to our communities and they are still doing more today as we speak. “ Various speakers at the event extolled the pioneering roles of one of the company’s founders and former group managing director of the Nigerian National Petroleum Corporation (NNPC), the late Aret Adams, in the founding and successful take-off of the NDEP. Since the first production of crude oil from its Ogbele Marginal field in 2005, NDEP has since recovered over 19 million barrels, and over 90 billion Standard cubic feet (B Scf) of gas. The company has also evolved into a foremost integrated energy company with thriving interests in various aspects of Nigeria’s oil and gas value chain and in emerging business operations and opportunities in other African countries including South Sudan. Aside from its status as a leader and pioneer in developing marginal oil fields in Nigeria, NDEP also pioneered a Corporate Social Responsibility model in Nigeria that has been instrumental to the smooth relationship it has enjoyed from its Host Communities since inception. Soon after the commencement of production from the Ogbele field, the company established a Community Development Trust in 2006, which is funded through a dedicated 5 percent of their net profit specifically for Corporate Social Investment in the Host Communities.
Thursday 24 September 2020
BUSINESS DAY
A5
POLITICS & POLICY
The place of Wike in Obaseki’s victory Zebulon Agomuo
I
n the days when David brought down Goliath, the Philistine warrior, the whole country of Israel went wild with jubilation. The scripture captures it thus: “As they were coming home, when David returned from killing the Philistine, the women came out of all the towns of Israel, singing and dancing, to meet King Saul, with tambourines, with songs of joy, and with musical instruments. And the women sang to one another as they made merry; Saul has killed his thousands, and David his tens of thousands.” The killing of Goliath by David was unexpected. The Philistine warrior had taunted Israel and the God of Israel to no end. The Philistine warlord was so arrogant and pompous that the heart of even the strongest man in Israel failed him when they heard Goliath’s swelling words. But the reproach ended with the miraculous defeat of the strongest and fiercest foe, Goliath the Gittite. By the same token, there was an overwhelming joy and celebration last Sunday following the victory of Governor Godwin Obaseki of Edo State at the gubernatorial election that took place on Saturday, September 19, 2020. All manner of songs have been sung. A lot of music has been made out of the election and its outcome. Obaseki has been eulogised. Nyesom Wike, governor of Rivers State, has been dressed in many flowering tunes. And the beat goes on. Before the exercise, apprehension was high and optimism was slim that Obaseki was going to return as governor, not with the armada of opposition mounted chiefly by Adams
Wike
Oshiomhole, a former governor of Edo State, and some other strong interests within and outside the state. Chief among those that gave Obaseki the strong emotional backing to stand eyeball to eyeball with those who tried to intimidate him during the election is Wike. Since after the Edo election, Wike’s rating has so much appreciated in the estimation of many Nigerians, so much that many people are openly saying that he is a good match for the APC; whatever that means. Some people are born rugged. Some others became rugged by virtue of their environment. Governor Wike appears to belong to the later group. He got toughened by the rugged political
environment he found himself. On his political trajectory, Wike has fought very hard battles. The Ikwerre-born politician and lawyer from Rumuepirikom in Obio-Akpor, Rivers State, has seen and fought many political battles. He has also won all. From when he defeated Dakuku Peterside of the All Progressives Congress (APC) in the 2015, all through the journeys from the Election Tribunal to other courts, and his re-election in 2019, after the Supreme Court ruled out APC from participating in all the elections in the state last year, Wike has stamped himself as a political machine to reckon with in Nigeria. While many Nigerians expected a serious battle at the gubernatorial election in 2019, there was not even an arrow shot from the fiercest opponent, APC, as members of the broom party instead engaged themselves in internal wrangling that denied them appearance on the Independent National Electoral Commission’s (INEC) ballot. Wike’s past records were the major reason for the high hopes in many places when he was named chairman of the PDP Campaign Council for Edo election. Each time he addressed the PDP faithful in Edo, His words were like a booster; he gave them the assurances that the election was going to be different this time around. On Friday, September 18, 2020, when he addressed the PDP leaders and community in Edo, he urged them never to go home after casting their votes, but to maintain a safe distance. He warned against total trust of the agencies concerned with the election. Wike has been in the game for many years and appears to have known the rigging tactics of politicians; so, he decided to match them force-for-force. It’s a case of cunning man dies,
cunning man buries him. The presence of Wike in Edo gave the assurance that it was not going to be business as usual. And it also appeared that those who may have planned to be funny during the exercise knew the Rivers State governor was around; they behaved themselves. It has been said over and over again that the rigging that determines a winner in an election is usually done, not at the polling booths but from the voting centres to the collation centres, where some outlandish ballots are usually smuggled in. Wike showed his red eyes and rose to the occasion, when it was said that a collation officer had disappeared with the result of a local government area. He urged INEC to keep to its promise of conducting a transparent election. While urging the people of the state to defend their votes up to the collation centre, Wike also called on security operatives to prevent breaches during collation of results. “We have results from about 2,000 polling units from the various wards and from the intelligence we have gathered, I do believe that INEC will keep to that promise of being transparent,” he said. “You have noticed the pattern from 16 of the 18 local governments. But it was shocking to us that the returning officer for Orhionmwon, after the wards and local government have been collated, came to the state and before we knew it, he disappeared,” Wike said angrily. “Remember, I said yesterday (Saturday), INEC should not try to declare this election as inconclusive. We will not accept it because everyone knows who has won this election.” The refrain in town is the Macedonian call, “Come over to Ondo and help us.” But the question is, can the Wike magic work in the sunshine state?
Edo poll: Obaseki thanks Diri, Bayelsa people …Says, ‘Victory unifies South-South’
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do State Governor, Godwin Obaseki has expressed gratitude to his Bayelsa State counterpart, Douye Diri, and the people of the state for their support which made his re-election possible in last Saturday’s governorship election. Governor Obaseki, who said he remains grateful to Senator Diri, described his victory in the election as a unifying factor for the South-South region of Nigeria. Speaking in Yenagoa on Tuesday night at a state dinner in his honour, Obaseki said the victory, which has brought all the states in the South-South under one party, will foster rapid socio-economic development in the region. Governor Diri’s spokesman, Daniel Alabrah in a press statement, quoted Obaseki as commending President Muhammadu Buhari for ensuring a level playing field in the poll and expressed the optimism that the outcome will rub off positively on future elections in the country and allow the will of the people to prevail at all times. “We drove here tonight from Asaba as part of our tour to come and say thank you. To come and appreciate His Excellency, Governor Diri and the people of Bayelsa State for what you have done for us; for the contributions you made to ensure that we emerge victorious in last Saturday’s election. We did not want to keep it late just to let you know how truly grateful we are. “Senator Diri said he didn’t do much, just prayers. But that was more than enough. You did more than prayers. You visited us, you contributed, you gave us support, you prayed. These are all the things that came together to
give us victory. “This victory is what we call unity victory. It has united us in Edo as one people. It has united us in Bendel as one sub-region and it is uniting us in the South-South as one region.
As a region, we have all it takes to be greater than many countries in Africa but the starting point is cooperation.” Earlier, Governor Diri described Obaseki’s re-election as triumph for democracy in Nige-
Bayelsa State Governor, Douye Diri (l) with his Edo counterpart, Godwin Obaseki, at Government House, Yenagoa, during the latter’s courtesy visit on Wednesday
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ria, saying it was a litmus test that the country passed creditably. He noted that the Edo governor’s victory was significant to people of the state as it proved that power comes only from God and not man. He lauded Obaseki for his tenacity just as he praised the people of Edo for standing by their governor. He said by so doing, they had set a standard for others to follow. “My brother governor was disqualified by his former party, which claimed he did not have a certificate. The irony was so strong that those of us watching from the sides were asking if the party was serious that a sitting does not have the qualification to contest an election or that it was going to go like what happened in Lagos. “This (your victory) would not have been possible if you had chickened out of that race. You took the bull by the horn. You had the support of your people and you had the support of your party that gave you the umbrella when it was raining. “May I use this opportunity to congratulate all the people of Edo State and members of the Peoples Democratic Party in Edo. This victory is not for Edo people alone. This is a victory for Nigeria.” Diri berated those who played the role of God while expressing gratitude to the almighty for allowing the will of the people to prevail. He expressed the optimism that the SouthSouth would remain a PDP stronghold and the party would transform the fortunes of the region.
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A6
Thursday 24 September 2020
BUSINESS DAY
ENERGYREPORT Oil & Gas
Power
Renewables
Environment
Shell reiterates commitment to Nigeria’s quest for energy sufficiency, power generation … as it inaugurates COB for 300 millionscf Assa North gas project olusola Bello
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hell Petroleum Development Company (SPDC) has reiterates its commitment to the Assa North Gas Project and to making it an exemplary one, particularly in Nigeria’s quest for energy sufficiency, for power generation and industrialization”, he said. The company stated this when a cluster board development for the gas project was inaugurated by the Rivers State and Shell Petroleum Development Company of Nigeria Limited (SPDC), at Egi/Igburu for pipeline communities to SPDC’s Assa North Gas project, which has a capacity for 300 million standard cubic feet of gas per day and the potential to be one of the largest domestic gas projects in Nigeria when completed. At the inauguration, Igo Weli, SPDC general manager external relations, said: “The Global Memorandum
of Understanding (GMoU), that you signed today, sets the framework for long-term partnership between SPDC JV and the Egi/Igburu Cluster. The GMoU runs on the principle of community-led development. Today, SPDC JV commits to providing funding to help you realise your community development
aspirations.” The State Commissioner for Chieftaincy and Community Affairs, Barrister Elloka Tasie-Amadi, at the ceremony, urged the Comrade Orikoha Ekwueme-led newly elected officials of the CDB to use the opportunity of leadership to make positive impacts that will improve
Siemens reaffirms support for Nigeria industrialisation as it clocks 50 years olusola Bello
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iemens Energy has reaffirmed its support for Nigeria in achieving its potential in the energy space that would enhance her indusrialisation According to Christian Bruch, President and Global CEO Siemens Energy, he said, an example of this commitment is the company’s current engagement with the government on the Presidential Power Initiative (PPI), which will provide the people of Nigeria with reliable, affordable and more sustainable energy. His statement is coming on the heel of celebration of the 50th year anniversary of the company in Nigeria. He said: “It has been a most fulfilling journey for us as a company and we are proud to be celebrating 50 years. One of our focused objectives at Siemens was to ensure that Nigeria continues to maintain a leading position in Africa’s dynamic and knowledgebased economy.” He said fifty years down the line, this goal remains the Olusola Bello, Team lead,
top priority of the company as demonstrated through it suite of offerings which have been well adapted for the modernization, construction, and financing of Nigeria’s critical infrastructure. “Siemens Energy is proud to have reached this landmark anniversary with Siemens Nigeria. Our success has been, and continues to be, driven by the commitment of our employees, our partners and our customers,” he said. Onyeche Tifase, managing directors, Siemens Energy Nigeria, while reflecting on the last five decades of the company in Nigeria, said: “Fifty years down the line, this goal remains our top priority as demonstrated through our suite of offerings which have been well adapted for the modernization, construction, and financing of Nigeria’s critical infrastructure. Leveraging our history of ingenuity and a passion for engineering, we adopted our approach to the Nigerian market, working with various stakeholders to improve the lives of Nigerians today and in the future. As evidenced by our widely
Graphics: Joel Samson.
mentation of programmes and projects to meet their needs. The GMOU is a proven winning approach introduced in 2006, adopted across SPDC’s operational areas and provides a secure five-year funding for communities to implement development projects of their choice. With the inauguration of the Egi/Igburu CDB, SPDC now has 40 active GMoUs in Abia, Bayelsa, Delta, Imo and Rivers States. Since 2006, SPDC JV has disbursed a total of $252 million to communities through these GMoUs. The Assa North/Ohaji South gas project is a joint venture project involving the SPDC, the NNPC, Total E&P Nigeria Limited, and Nigerian Agip Oil Company, and will result in a new SPDC gas processing plant. The development will help the federal government deliver on its ambition to provide enough gas for domestic consumption, power generation and gasbased ammonia and urea fertilizers for farmers.
Five start-up companies get NCDMB’s US$50,000, for Product Devt olusola Bello
acclaimed track record in Nigeria, we have stood for innovation, growth and development.” Siemens Energy has been involved in several notable projects in Nigeria, successfully collaborating with local organizations to develop, operate, maintain and service high-tech equipment and solutions across Power, Oil & Gas, Construction, Manufacturing, and other sectors. Most recently, the company partnered with the Federal Government of Nigeria on the Presidential Power Initiative (PPI) aimed at upgrading the electricity grid network and increasing operational capacity from 4,500 megawatts (MW) currently, to 25,000 MW through a series of projects spanning three phases. This project will establish the foundation for the objective of growing Nigeria’s GDP and boosting economic productivity by providing reliable power supply for millions of Nigerians, job creation for thousands as well as the generation of new opportunities for small and medium enterprises (SMEs) across the country.
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living standards in their communities. He said, “The state government is always available to support you. Always speak with your people, including the Community Trust Committees (which were also newly inaugurated). Adequate communication will ensure the buy-in of all your stakeholders”.
He decried those who see leadership as opportunity for self-seeking gains. “Leadership is more of sacrifice; not an opportunity for personal benefit”, The Commissioner s Relations Manager for Projects and Opportunities,. said. Banji Adekoya ,SPDC External Relations Relations, Manager for Projects and Opportunities who represented Igo Weli at the ceremony asked the CDB to “be prudent and implement projects and programmes that will deliver maximum benefits to the Egi/ Igburu communities. Note that government, SPDC JV and the communities that you represent will hold you accountable for the judicious utilisation of the development funds.” On its part, the new CDB said it is committed to use S P D C ’s aw a rd - w i n n i n g GMoU agreement, which is a community-led sustainable development and interface management model that puts the communities in the driving seat in setting development priorities and imple-
F
ive innovative teams have been selected as the winners of the Nigerian Oil and Gas Technology (NOGTECH) Hackathon sponsored by the Nigerian Content Development and Monitoring Board (NCDMB). The teams are Fuel Intellisense, Homefort Energy, Gricd Mote, Kiakia Gas and Airsynq and their projects were picked as the most innovative and bankable by judges, after the 15 semifinalists made presentations on their innovations. The three-day Hackathon started on Thursday with the teams having detailed engagement with industry experts, mentors and entrepreneurs. Each of the five winning teams was given a cheque of US$10,000 equity-free grant and they will proceed to participate in a 3-month incubation programme during which they will get workspace, expert mentors, global partners and market access to the nation’s oil and gas industry, ensuring they become commercial and investor-ready.
Simbi Kesiye Wabote, Executive Secretary of NCDMB, announced at the closing of the programme in Lagos that the Board will support the five firms in their product development phase, drawing from the US$50million Nigerian Content Research & Development Intervention Fund. The Board’s support he said, will go into helping the companies get patents for their innovations and produce prototypes, supporting them to conduct field trials, business start-up as well as provide industry linkages. He however confirmed that the Board’s funding would depend on the success of the product incubation phase, stressing that “the goal is to fund bankable businesses, not charities.” He explained that the sponsorship of the NOGTECH Hackathon is within the Board’s mandate, hinting that section 70 of the Nigerian Oil and Gas Industry Content Development Act empowers “the Board to engage in targeted capacity and capability development interventions and conduct studies, research, investigation, workshops and trainings aimed at
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advancing the development of Nigerian Content.” He stated that the Board announced the initiative through a webinar it organized in May 2020, during the height of COVID-19 lockdown, because it saw the opportunity to create a platform for local creation of digital technologies to solve problems for the Nigerian society. The Board was also keen to stimulate the participants to channel their intelligence and become successful entrepreneurs, he said. Wabote counselled the five winning teams to be clear about their vision and strategy and retain their passion, stressing that their motivation should not be on making quick financial gains, rather on innovating solutions, making a difference and contributing to the society. According to him, “All the greatest inventors, particularly in the technology space did not start by looking for money as the objective. They started because they wanted to make a difference and create a change. The prize money is not the key factor. It was meant to bring people together.”
Thursday 24 September 2020
BUSINESS DAY
A7
Live @ The Exchanges Market Statistics as at Wednesday 23 September 2020
Top Gainers/Losers as at Wednesday 23 September 2020 LOSERS
GAINERS Company
Opening
Closing
Change
Company
ASI (Points)
Opening
Closing
Change
N2.68
N2.5
-0.18
DEALS (Numbers) VOLUME (Numbers)
SEPLAT
N385
N400
15
NB
N42
N43.5
1.5
BOCGAS
N4.36
N4.25
-0.11
MTNN
N123
N123.9
0.9
AFRIPRUD
N4.45
N4.35
-0.1
MOBIL
N192.5
N193.1
0.6
NPFMCRFBK
N1.3
N1.22
-0.08
FLOURMILL
N19.65
N20
0.35
CUSTODIAN
N4.85
N4.8
-0.05
ETERNA
VALUE (N billion) MARKET CAP (N Trn)
25,783.02 3,793.00 414,161,428.00 6.280 13.474
Global market indicators FTSE 100 Index 5,899.26GBP +69.80+1.20%
Nikkei 225 23,346.49JPY -13.81-0.06%
S&P 500 Index 3,295.48USD -20.09-0.61%
Deutsche Boerse AG German Stock Index DAX 12,642.97EUR +48.58+0.39%
Generic 1st ‘DM’ Future 27,076.00USD -67.00-0.25%
Shanghai Stock Exchange Composite Index 3,279.71CNY +5.41+0.17%
Large cap stocks lift Nigeria’s market further high Iheanyi Nwachukwu
N
igeria’s stock m a r k e t moved further into the positive territory at the close of trading session on Wednesday September 23. The market’s benchmark performance indicator went up by +0.50percent while the market capitalisation increased by N67billion, both recording their third consecutive gain this week. The market rallied as investors were seen in-
creasing their equity stake in some largely capitalised counters like Seplat Petrole-
um Development Company Plc, Nigerian Breweriers Plc, MTNN Plc, Mobil Oil
Nigeria Plc, and Flour Mills Nigeria Plc. Seplat stocks rallied
most at the close of remote trading session, moving from N385 to N400, up by N15 or 3.90percent. It was followed by Nigerian Breweries Plc which rose from N42 to N43.5, adding N1.5 or 3.57percent. Also on the top advancer list is MTNN which increased from N123 to N123.9, after adding 90kobo or 0.73percent. The share price of Mobil Oil Nigeria Plc also rallied from N192.5 to N193.1, adding 60kobo or 0.31percent; while Flour Mills Nigeria Plc followed from N19.65 to N20, adding 35kobo or 1.78percent. The Nigerian Stock Exchange (NSE) All Share
Index (ASI) increased by 0.50percent to 25,783.02 points, from preceding day’s low of 25,654.90 points. The stock market’s negative return year-todate (YtD) decreased to - 3.95percent. The stock market capitalisation increased by N67billion to N13.474trillion, from preceding trading day low of N13.407trillion. In 3,793 deals, investors exchanged 414,161,428 units valued at N6.280billion. Actively traded stocks include Sterling Bank, FBN Holdings, Access Bank, Zenith Bank and MTNN.
Market Review:
Nigeria’s Fixed Income, Currency markets turnover drops by N8.95trn year-on-year …down by N4.46trn month-on-month Iheanyi Nwachukwu
T
he turnover in Nigeria’s Fixed Income and Currency (FIC) markets for the month ended August 31, 2020 was N14.26trillion. This indicating a month-onmonth (MoM) decrease of 23.82percent (N4.46trillion) from the turnover recorded in July 2020 (N18.72trillion), and a year-on-year (YoY) decrease of 38.56percent (N8.95trillion) from the turnover recorded in August 2019 (N23.21trillion), according to the FMDQ Securities Exchange recent report. FMDQ put the yearto-date (YtD) turnover as at August 31, 2020 at circa N150.25trillion, representing a YoY decrease of 5.38percent (N8.54trillion) on the YtD turnover of N158.79trn recorded as at August 31, 2019. OMO bills and Foreign Exchange transactions were the highest contributors to the FIC markets in August 2020, jointly accounting for 53.58percent of the total FIC market turnover.
Foreign Exchange (FX) Market Total FX market turnover in August 2020 was $9.76billion (N3.76trn), representing a MoM decrease of 9.80percent ($1.06billion) from the turnover recorded in July 2020 $10.82bn (N4.20trillion). Analysis of FX market turnover indicates that FX Derivatives decreased MoM by 7.96percent ($0.61billion) while FX Spot turnover decreased by 14.24percent ($0.45billion) in August 2020 as the current liquidity challenges in the FX market persisted. In the OTC FX Futures market, the near month contract (NGUS AUG 26 2020) with a total outstanding notional value of $1.58billion matured and was settled, whilst a new long-term (60-month) contract, NGUS AUG 27 2025 was introduced at a rate of $/N590.10. The total notional value (NV) of open OTC FX Futures contracts as at August 31, 2020 stood at circa $12.34billion, representing a 2.76percent ($0.35billion) decrease on the NV of open contracts as at July 29, 2020 (c.$12.69bn), and continuwww.businessday.ng
ing the downward trend in the NV of open contracts since May 2020. However, the total NV of OTC FX Futures contracts traded since inception crossed the $50billion mark, reaching $50.09billion as at August 31, 2020. The Central Bank of Nigeria (CBN) Official Spot US$/N exchange rate closed at an average of $/ N380.43 in August 2020, representing a 0.86percent ($/N3.24) decrease in exchange rate from $/N377.19 recorded in July 2020. At the Investors’ and Exporters’ (I&E) FX Window, the Naira appreciated against the US Dollar, gaining 0.31percent ($/N1.22) to close at an average of $/ N386.26 in August 2020 from $/N387.48 recorded in July 2020. Conversely, in the parallel market, the Naira depreciated against the US Dollar losing 1.63percent ($/N7.62) to close at an average of $/N475.29 in August 2020 from $/N467.67 recorded in July 2020. Fixed Income (FI) Market (T.bills, OMO bills and FGN Bonds) In the primary market, average discount rates for the 91-day, 182-day and
364-day T.bills decreased MoM by 23 basis points (bps), 35bps and 18bps to 1.20percent, 1.39percent and 3.20percent respectively in August 2020. Similarly, the discount rates for OMO bills decreased MoM by an average of 6bps to close at a range of 4.90percent 8.94percent in August 2020. In the primary market for sovereign bonds, the marginal rates for the 10-year FGN Bond issued increased by 70bpsto 6.70percent in August 2020 whilst those of the 15-year, 25-year and 30year FGN Bonds decreased by 15bps, 5bps and 5bpsto 9.35percent, 9.75percent and 9.90percent respectively in August 2020, compared to the marginal rates for issuances in July 2020. The total value of T.bills and OMO bills outstanding as at August 31, 2020 decreased MoM by 2.13percent (N0.06trillion) and 4.93percent (N0.44trillin) to N2.76trillion and N8.49trillion respectively, whilst the total value of FGN Bonds outstanding as at August 31, 2020 increased MoM by 1.16percent (N0.12trillion) to N10.43trillion, indicating a
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circa N0.08trillion MoM increase in local public debt to circa N13.56trillion as at August 31, 2020. Turnover for T.bills increased by 36.25percent (N0.29trillion) to N1.09trillion, resulting in an increase in trading intensity to 0.40 in August 2020 from 0.29 in July 2020. Conversely, OMO bills turnover decreased MoM by 23.92percent (N1.22trillion) to N3.88trillion in August 2020, resulting in the decrease in trading intensity to 0.44 (0.57 in July 2020), while FGN Bonds turnover decreased MoM by 3.70percent (N0.09trillion) to N2.34trillion, resulting in a marginal decrease in its trading intensity to 0.23 (0.24 in July 2020). In August 2020, OMO bills within the >6M – 12M maturity bucket was the most traded across all tenors in the Fixed Income market, accounting for 26.23percent (N1.92trillion) of the total Fixed Income market turnover. T.bills within the >3M – 6M maturity bucket was the most traded across shortterm tenors, accounting for 5.60percent (N0.41trillion) @Businessdayng
of the total Fixed Income market turnover, whilst FGN Bonds within the >20Y – 30Y maturity bucket was the most traded across medium to long term tenors, accounting for 15.57percent (N1.14trillion) of the total Fixed Income market turnover. Weighted average yields on short-term and medium-term maturities increased MoM by 3.98percent and 1.59percent respectively in August 2020, while the weighted average yields on longterm maturities decreased by 0.99percent. Additionally, inflation-adjusted yields remained negative across the short, medium and long-term tenors in August 2020. Money Market [Repurchase Agreements (Repos)/Buy-Backs and Unsecured Placements/ Takings Total turnover in the Money Market segment decreased MoM and YoY by 48.70percent (N3trillion) and 9.97percent (N0.35trillion) respectively to a total of N3.16trillion in August 2020.
A8
Thursday 24 September 2020
BUSINESS DAY
Markets + Finance
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Stanbic IBTC Holdings delivers robust returns to shareholders than peers BALA AUGIE
S
tanbic IBTC Holdings Plc is pretty much undoubtedly a big fish in a small pound, and it is high time the regulator elevate it to an ocean where it can comfortable swim underneath the blue sea with fellow sharks. This is because the small and mid-sized lender, over the years, has been delivering robust returns to shareholders, which means it has a superior return on equity (ROE) to peer rivals. A higher ROE is taken as the management’s ability to generate better income from equity. Abhishek Basumallick, Founder, Intelsense, said, “ROE is one of the most important parameters to look at the quality of a business. A company that continues to have a strong ROE on a consistent basis means it can generate significantly high return on capital over long periods of time under different circumstances.” The chart below shows Stanbic
Non-interest income increased by 27.16 percent to N69.79 billion in the period under review as against N54.85 billion the previous year. The growth in noninterest revenue was largely underpinned by a 94.65 percent surge in fixed income securities to N34.26 billion as June 2020. A reduction in cost and contributions from fixed income securities added impetus to the bottom line as net profit margin increased to 35.71 percent in June 2020 from 30.87 percent the previous year.
the lockdown measures put in the place by government to curb the spread of the virus paralyzed economic activities across the country and customers were unable to pay interest on money borrowed. Analysis of the financial statement of these banks shows combined bad loans surged 112.15 percent to N119.06 billion as at June 2020, according to data gathered by BusinessDay. Analysts have said impairment losses could surge on the back of guidelines prescribed by IFRS 9. Stanbic IBTC supports its cli-
However, Stanbic IBTC Holdings and other banks in Africa’s largest economy are operating in harsh regulatory environment while the coronavirus pandemic has added a new layer of risk. An effort to boost economic growth in Africa’s most populous country, the central bank hiked the minimum loans to deposit ratio to 65 percent from 60 percent. Analysts have warned that forcing banks under the current macroeconomic condition could stoke non-performing loans (NPLs) and undermine profitability. That’s triple whammy for companies that are reeling from a decline in fixed income securities that led to a decline in interest income and net interest income. The non-performing loan ratio of the Nigerian banking sector dropped to 6.6 per cent at the end of April 2020 from 11 per cent in April 2019, according to the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele. The largest banks witnessed rising impairment on loans as
ents businesses and aspiration as gross loans and advances increased by 8.28 percent to N579.48 billion as at June 2020 from N535.17 billion the previous year. The lender’s loans and deposit averaged 66 percent as At June 2020, which is above the regulatory benchmark. Fitch, the global ratings firms, retained AAA rating of StanbicIBTC and its banking subsidiary, which reflects the strongest capacity for timely payment of financial commitments “Overall, we think that 2020 will once again test the resilience of the Nigerian banking sector,” said analysts at United Capital Limited. In terms of asset quality, we expect NPLs to increase significantly due to substantial exposure to some the hardest hit sectors, especially oil & gas, manufacturing, and trade &general commerce. Also, in the consumer lending space, we expect a significant level of defaults as unemployment levels rise and salary cuts have become the order of the day.
Yinka Sanni, chief executive, Stanbic IBTC Holdings Plc
IBTC generated ROE of 26.30 percent as at June 2020, which is pretty clearly higher than rivals Fidelity Bank, (12.90 percent); First City Monument Bank, (9.40 percent);
Sterling, (8.72 percent); Union Bank, (8.42 percent); Wema, (5.42 percent), and Unity Bank, (-0.74 percent). Interestingly, Stanbic IBTC has also used the resources of its in generating higher profit than all big banks except Guaranty Trust Bank Plc. For instance FirstBank Holdings, Access Bank, Zenith Bank, and United Bank for Africa (UBA), all have ROEs of 11.80 percent, 15.30 percent, 23.30 percent, and 12.10 percent. Amid a punitive regulatory environment and coronavirus induced headwinds, Stanbic IBTC was able to record double digit growth in profit. For instance, net income for the first six month through June 2020 spiked by 24.71 percent to N45.20 billion as against N36.24 billion the previous year. This confidently makes Stanbic IBTC the largest Tier 2 lender by profit. See charts. The growth at the bottom line was largely driven by reduction in cost and contributions from trading income that helped compensate for receding interest income. Total operating expenses were down 3.06 percent to N48.53 billion as at June 2020 even amid inflationary pressure, as the lender continues to contain cost while increasing profit as cost to income ratio fell to 45.20 percent in June 2020 from 53.20 percent as June 2019.
BD MARKETS + FINANCE Analyst: BALA AUGIE www.businessday.ng
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BUSINESS DAY Thursday 24 September 2019 www.businessday.ng
How policy inconsistencies hamper Nigeria’s industrial targets Odinaka Anudu
F
or more than four decades, Nigeria’s industrial policies have been d a ng e rou s l y i n c o n sistent. And investors, economy and consumers have been the helpless victims. Just recently, the Central Bank of Nigeria (CBN) restricted maize importers from accessing foreign exchange from the official market—which indubitably represented a technical ban. But few weeks after, the apex bank approved four companies to import 260,000 metric tons of maize. Though the policy itself was criticised severally by analysts for being protectionist especially in the face of supply shortages, it signifies policy inconsistency to farmers and agro investors who were already making plans to leverage the luscious opportunity. In the past, several industrial policies have been reversed midway, eroding the gains that could have been obtained. The Export Expansion Grant (EEG), for instance, was targeted at raising the competitiveness of Nigerian products at the global market. But as of 2013, the grant had been suspended six times. The grant was done using what was called Negotiable Credit Duty Certificates (NDCCs), whereby those certificates served as receipts for exporters. Because of the policy, many firms borrowed from banks to process their exports with the hope that the government would, as promised, give them incentives via the NDCC. But the government in 2013 suddenly suspended it. The EEG is not a Nigerian thing. It is the tool used by China to dominate the export world. Several other countries are providing it to their exporters to make them competitive and their products cheaper. About 269 companies have received their grants, but 38 companies have been left in the lurch. Even the payments were those of 200-2016. In fact, for many firms, the EEG is as good as dead because it is now. Consider the Automotive Policy, which was sincerely meant to enable Nigeria make its own cars at cheaper rates. Today, the policy is not implemented totally, though government officials make it seem otherwise. The 2013 National Automotive Policy imposed 35 percent levy and 35 percent duty on imported vehicles, amounting to a total of 70 percent. Even with 70 percent fees paid on imported vehicles, importers of damaged or ‘accidented’ vehicles officially enjoy a rebate of 30 percent. What this has done is to encourage the importation of rickety vehicles, which make up 70 percent of imported cars today. The age of most imported used cars in Nigeria is 15 years, whereas that of Algeria, Angola, Chad, Mauritius and Seychelles is three, according to a research done by PwC. This has kept most car assemblers out of business. So, the policy
is not encouraging assembly plants but boosting import of rickety vehicles into the country. There are many more examples in the steel, tomato and other sectors. In 2016, a tomato policy was made to help the country produce sufficient fresh tomatoes and build concentrate plants. Today, the contents of that document seem to have been forgotten because several assumptions about tomato production were wrong in the first place. Nigeria has never been short of industrial policies. After Independence, the then Nigerian government came up with the Import Substitution Policy, with a view to reducing over-dependence on imports, creating a high number of local jobs and saving the foreign exchange. This was seen as a fantastic policy targeted at transforming the country from an agrarian to an industrial economy. Without bias, economic historians aver that the British colonialists merely paid attention to agriculture, which was supplying them with essential raw materials needed in their overseas factories. But on the flip side, this launched Nigeria into the global market as a strong agro nation. As of 1960s, Nigeria was world’s biggest producer of palm oil, accounting for 45 percent of global output. The country was also a major exporter of cocoa and rubber to the rest of the world. However, the Import Substitution Policy crashed because early policy makers, like the current ones, believed that protectionism was a cure-all for the country’s fledgling economy. An apparently young country pursuing an industrialisation mission thought it wise to start barring importation even when some of its industries would need foreign raw materials. Inevitably, this policy died a natural death and was replaced with the indigenisation policy. This later policy, also known as the Nigerian Enterprises Promotion Decree, was meant to transfer ownership of
firms operated by foreigners to Nigerians. Foreign firms were limited to certain businesses to allow locals to thrive and set up industries. More so, it was pursued as part of the then government’s development plan of 1970-1974. More than 1,000 hitherto foreign-owned firms were handed over to the locals. This policy attracted a lot of criticisms and was marred by corruption. Many Nigerians became suddenly rich and bought shares of several enterprises through the back door. Some fronted for foreigners who were still silently controlling the businesses. However, it was a major set-back because of poor management and obvious lack of local skills to run those enterprises. Chibuzo Ogbuagu, a former assistant professor of Political Science at the University of Pennsylvania,
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Countries use data and science to drive their industrial policy trajectories. Nigeria sometimes uses the same metrics. But the difference is that Nigeria’s are often tainted with politics, ‘who-is-involved’ syndrome, ethnicity, regional and other primordial considerations
Philadelphia, the United States, postulated that the policy was merely predicated upon the feeling of economic and political nationalism and that economic efficiency might have been compromised because of a strong surge of nationalism. It was later amended in 1977 to limit the number of companies an individual could have control over and streamline the type of businesses that would be done by foreigners. It must be admitted, however, that these two policies, which coincided with Nigeria’s first and second development plans, raised a bar for Nigerians and encouraged the rise of several industries and supporting infrastructure. Such industries like Ajaokuta Steel Complex, Aluminium Smelter, Delta Steel and many textile and palm oil firms sprang up within this period, making Nigeria an industrial giant. Kainji Dam and Ughelli Thermal Plant, among other infrastructure projects, also sprang up during this period. Two development plans preceded the Structural Adjustment Programme (SAP) introduced by the self-acclaimed civilian president, Ibrahim Babangida. But before SAP, the foundation laid earlier had been shaking, as crude oil had become the new darling. Even with oil glut and fluctuations in the crude oil market, policy makers and leaders had committed less money to research and development, while allowing companies to die due to high production costs and interest rate. The SAP liberalised trade, and encouraged privatisation and exports. But it also ushered in unbridled importation of cheap and sub-standard products. In a liberal market, players must be fair. But this was lacking as local manufacturers could not compete partly because of high cost of production and influx of cheap goods. Also, there was no protection for infant industries which, like children, needed protection.
The result of an off and on policy flip-flops was that manufacturing growth rate fell from 11 to 3.5 percent in 2009 while capacity utilisation in industries followed the same trajectory, falling from 70 to 34 percent, according to the Central Bank of Nigeria Bulletin. As the cost of production was rising, the government introduced Cargo Tracking Note, raising production costs higher. The Manufacturers Association of Nigeria (MAN) said in 2009 that 839 firms shut down that year. Within this period, policies on automotive industry, palm oil, rubber, cocoa and other non-oil export products were never implemented religiously. Here is the policy part. These firms shut down because governments after governments had fluctuating import and export policies. Import duties were unilaterally relaxed or lowered by some regimes without due consultations with all the stakeholders. Export policies were inconsistent. The Goodluck Jonathan administration had genuine technocrats willing to industrialise Nigeria, though some players took advantage of loopholes in the policies to make money. But the 2013 National Industrial Revolution Plan (NIRP) represents Nigeria’s most comprehensive industrial policy since Independence. Where is that policy, prepared by experts from reputable global and local institutions, including UNIDO? Like others before it, major sections of that policy have been abandoned and left in the shelves by the current Muhammadu Buhari administration. Assuming that investors banked their investments on that policy, what happens to those humongous investments? In essence, the major reason for policy inconsistencies in Nigeria is that they are not usually wellthought-out. Tomato Policy, for example, failed to factor in challenges around tomato quality and market changes that could result in sudden price changes. The issue of concentrate was also not wellthought-out, as an imposition of heavy import duty on a product the country was not producing yet was inappropriate. In terms of maize, Nigeria produces 10.5 million metric tons (MT) per annum with a demand of 15 million metric tons, leaving a supply-demand gap of 4.5 million MT annually, data from the Federal Ministry of Agriculture state. The data were ignored, despite that maize serves as food crop and cash crop. It serves as an input to several food companies and for hard-hit poultry farmers. Due to the usual lack of consultation, part of the policy was inevitably reversed. Countries use data and science to drive their industrial policy trajectories. Nigeria sometimes uses the same metrics. But the difference is that Nigeria’s are often tainted with politics, ‘who-is-involved’ syndrome, ethnicity, regional and other primordial considerations. This cannot guarantee industrial success.
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