BusinessDay 25 Mar 2020

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news you can trust I ** wednesDAY 25 march 2020 I vol. 19, no 5267

CBN in watch-andsee, holds MPR at 13.5% as global uncertainty grows … Projects less output growth in 2020 HOPE MOSES-ASHIKE, BUMI BAILEY & GBEMI FAMINU

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he Central Bank of Nigeria (CBN) on Tuesday retained the Monetary Policy Rate (MPR), the benchmark interest rate, at 13.5 percent in a resolve to allow time for its most recent policy measures to permeate the economy.

Its policy measures are the six initial responses to combat the coronavirus pandemic, which include the reduction of interest rates on all its intervention funds from 9 percent to 5 percent per annum for one year, effective March 1, 2020; regulatory forbearance for deposit money banks, strengthening of its Loan to Deposit Ratio (LDR) policy; credit support for the healthcare industry and one-year extension of moratorium for all CBN’s inContinues on page 38

Inside

Reps introduce, pass Economic Stimulus Bill to reduce impact of coronavirus on economy P. 2 Ensuring that hunger does not kill more people than COVID-19 in Africa P. 39

₦2,672,814.93 +4.98

N300

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$-N 393.00 401.00 £-N 475.00 491.00 €-N 408.00 420.00

Crude Oil $ 27.49

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Spot ($/N)

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3M -0.55 2.31

NGUS feb 24 2021 385.25

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NGUS feb 22 2023 393.77

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NGUS feb 26 2025 402.69

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Coronavirus hits Nigeria’s seat of power amid poor health facilities Michael Ani & Segun Adams

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ith most of the world under lockdown and nowhere to go, Nigeria’s political elite would have put their

Abba Kyari, Bauchi governor among latest cases

faith in the country’s underfunded and underinvested healthcare system as high-ranking government officials and families become the latest coronavirus

cases.

President Muhammadu Buhari tested negative to the deadly coronavirus on Tuesday, but Abba Kyari, his chief of staff,

and Bala Mohammed, governor of Bauchi State, are the latest casualties as the number of reContinues on page 38

L-R: Sadiya Umar-Farouk, minister of humanitarian services, disaster management and social development; Boss Mustapha, secretary to the government of the federation, and Lai Mohammed, minister of information and culture, during the visit of the Presidential Task Force on COVID-19 committee to the Presidential Villa in Abuja, yesterday.

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news COVID-19: Lagos shuts non-food markets Thursday

... FCTA closes down markets, offices ... Imo, Delta cut down workforce JOSHUA BASSEY, ANTHONIA OBOKOH (Lagos), JAMES KWEN (Abuja), IGNATIUS CHUKWU (Port Harcourt), IDRIS UMAR MOMOH & MERCY ENOCH (Asaba)

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ro m Thu rs day, March 26, only markets and stores that sell food items, drugs, water, among other human essentials would be allowed to operate in Lagos State.

The Lagos State government said the closure of the markets was a further step to contain the spread of the coronavirus pandemic.

The order came as the number of suspected cases under watch in the state rose to 1,800. Actual confirmed cases of the coronavirus in the state as at Tuesday, March 24, stood at 28, with the possibil-

ity it might climb higher.

The Federal Capital Territory Administration (FCTA) also ordered closure of shops in the markets and neighbourhood centres in the FCT except those who sell essential commodities and medicines. Pharmacies and supermarkets selling essential products as well as bakeries are to remain open but abide by strictly by laiddown measures, according to Muhammad Bello, FCT minister.

FCTA has also begun the enforcement of the stay-athome policy for all its civil servants on grade level 01-12

till further notice.

It, however, explained that all workers from grade level 01-12 on essential duties such as water supply, fire service, security, medical services, environmental protection, emergency services, FEMA, and others are exempted from the stay-at-home policy.

Babajide Sanwo-Olu, the state governor, addressing journalists on the closure of markets at the Government House, Marina, said the decision was to halt person-to-person spread of the virus.

“All open markets and stores are directed to close, except for sellers of food and medicines, medical equipment and other essential

life-saving products. For those that fall into the aforementioned categories, it is imperative that they observe necessary precautionary measures of social distancing,” Sanwo-Olu said.

Sanwo-Ou said all public parks, including those in private and residential estates, swimming pools, gyms, beauty salons, and all such public places are expected to shut down at this time until further notice.

He urged all travel to and from Lagos, whether by air or by road, to be avoided at this time, in line with earlier directive by the Federal Government to the residents of Lagos and Abuja to stay home.

Oil majors cut $35bn capital spend over COVID-19, low oil prices … projects in Africa, Europe, America suffer most cuts ISAAC ANYAOGU

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n response to a virusinduced low oil demand, the world’s biggest oil companies are collectively slashing off an estimated $35bn in their capital expenditure for 2020 which could slow growth for many countries long after the pandemic is over.

One of the most capitalintensive industries with the highest levels of capital expenditure is the oil and gas sector, especially companies engaged in exploration. Last year, oil companies spent $497 billion on capex in 2019, according to data from the International Energy Association (IEA).

The raft of capital expenditure cuts this year indicates that national economies would be starved of longterm investments that allow businesses generate revenue for many years by adding or improving production facilities, boosting operational efficiency and increasing labour productivity.

“Large new projects will be put on hold and short-cycle discretionary investment will be dialled back to the bare minimum. Spend on projects under development and onstream will also be targeted. Exploration will be trimmed; operating and other fixed costs face

intense scrutiny,” said Mhairidh Evans, along with other analysts at Wood Mackenzie.

Chevron on Tuesday joined a growing list of oil producers who have taken a scissor to their budgets following the rage of the COVID-19 pandemic. Chevron is cutting capital expenditure by $4 billion which represents a 20 percent of its planned expenditure for 2020.

Royal Dutch Shell has said it would cut spending by $3 billion and $4 billion this year while cutting capital expenditure by $5 billion to $20 billion.

The cuts are expected to boost Shell’s cash generation by $8 billion to $9 billion on a beforetax basis. Shell will also suspend its planned share buyback.

American oil major ExxonMobil earlier budgeted between $30 billion and $33 billion for projects this year, sharply up from the $23 billion it spent in 2017. But it could cut 10 percent-12 percent from its outlays and reduce this year’s capital spending to between $28 billion and $29 billion, analysts say.

Total announced a “$30/b action plan”, under which it will cut more than $3 billion, or over 20 percent, mostly from its organic capex this year, taking its net investments to less than $15 billion.

Boko Haram kills 47 soldiers, injures many in ambush Godsgift Onyedinefu, Abuja

L-R: Ifeanyi Obialor, head, anti-corruption unit, ICPC; Isyaku Tilde, acting executive commissioner, operations, Securities and Exchange Commission (SEC), and Mary Uduk, acting director-general, SEC, during the inauguration ceremony Pic by Tunde Adeniyi of Anti-Corruption, Transparency Unit and Monitoring Unit of SEC in Abuja.

Reps introduce, pass Economic Stimulus Bill to reduce impact of coronavirus on economy … direct FG to convert Federal Government Colleges to isolation centres James Kwen, Abuja

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he House of Representatives on Tuesday introduced and passed for third reading a bill that seeks to provide a stimulus for the Nigerian economy amid the continued spread of the coronavirus that has been ravaging countries across the world.

Titled “Emergency Economic Stimulus Bill, 2020”, the draft law sponsored by the House leadership led by Speaker Femi Gbajabiamila and other members aims at providing temporary relief to companies and individuals to alleviate the adverse financial consequences of a slowdown in economic ac-

tivities caused by the coronavirus disease in the country.

The bill also has the objective to protect the employment status of Nigerians who might otherwise become unemployed as a consequence of management decision to retrench personnel in response to the prevailing economic realities.

Other objectives of the draft law include “to provide for a moratorium on mortgage obligations for individuals at a time of widespread economic uncertainty; to eliminate additional fiscal bottleneck on the importation of medical equipment, medicines, personal protection equipment and other www.businessday.ng

such medical necessities as may be required for the treatment and management of the Covid-19 disease in Nigeria, to ease the burden of importation and financial burden, thereby fostering easier access and reduction in the price; and to cater to the general financial wellbeing of Nigerians pending the eradication of this pandemic and a return to economic stability”.

Also during plenary on Tuesday, the House directed the Federal Ministry of Education to immediately make available hostels in the now-vacated Federal Government Colleges across the country for use as emergency care centres and iso-

lation units by the Federal Ministry of Health and the National Centre for Disease Control (NCDC), if it becomes necessary to do so, to manage high numbers of people requiring treatment from the COVID-19 disease.

The House mandated the Federal Ministry of Health and NCDC to immediately develop contingency plans for the establishment of emergency care facilities at the Federal Government Colleges, and insisted that these contingency plans should include cost estimates for the provision of equipment, material, medicines and other such requirements as may become necessary.

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o fewer than 47 soldiers of Operation Lafiya Dole fighting insurgency in Nigeria’s Northeast have been killed and several injured while fighting off an attack

by Boko Haram terrorists in Borno State.

The troops were ambushed by the insurgents during their clearanceandfightingpatroloperation to Gorgi area of the state between March 21 and 23, 2020, which led to the death of tens of soldiers and terrorists as well.

This was confirmed by John Enenche, coordinator, Directorate of Defence Media Operation, in Abuja on Tuesday.

“As you know, we are in a fluid conflict situation and our gallant troops are out there at the frontlines. However, during consolidation they were ambushed by elements of Boko Haram Terrorists (BHT).

Sadly, we suffered some casualties in the unfortunate attack,” Enenche said.

The coordinator, however, informed that the air component of Operation Lafiya Dole scrambled immediately and provided close air support to the ground troops, while the Intelligence Surveillance @Businessdayng

and Reconnaissance (ISR) platform as well as the fighter jets engaged the Boko Haram Terrorists killing some of the terrorists and immobilising a gun truck.

He added that some others who attempted to withdraw were also mopped up by the jets in follow-on attacks.

“The Defence Headquarters commiserates with the families of our fallen gallant heroes who paid the supreme price in the course of defending our fatherland,” Enenche said.

“We assure Nigerians that the Armed Forces and other security agencies, in furtherance of the objective of restoring peace and security in the Northeast and other parts of the country, will continue to sustain the offensive against the enemies of our nation,” he said.

Meanwhile, troops of Operation Whirl Stroke carried out cordon and search operation in Odogoke and Odejo communities in Agatu Local Government Area of Benue State to apprehend bandits following deadly clashes on March 23, 2020.

During the operation, the bandits fled from the area abandoning their weapons, Benard Onyeuko, acting director, Defence Media Operations, disclosed in a statement.

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Wednesday 25 March 2020

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news

NUPENG raises concern over safety of tanker drivers, others as Covid-19 spreads

Atiku/Bauchi governor contact: Aero says it disinfects aircraft before, after every flight

...says may be forced to give ‘harsh directives’ IFEOMA OKEKE in 72 hours Joshua Bassey

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s Nigeria records increased cases of the Covid-19 pandemic, the National Union of Petroleum and Natural Gas Workers (NUPENG) says the lives of its members including petroleum tanker drivers are at risk.

Nigeria as at the morning of Tuesday, March 24, confirmed 40 positive cases of Covid-19, with the possibility increase.

Against the background, the leadership of NUPENG says it may be forced to issue what it described as harsh but necessary directives to safeguard its members in the petroleum downstream sector.

Tanker drivers play a critical role in the petroleum supply chain as thousands of them drive long distances to lift imported and locally refined products from major depots for supply to different parts of the country. A withdrawal of their services often leads to product scarcity and puts the national economy in jeopardy.

Williams Akporeha and Afolabi Olawale, president and general secretary, respectively, in a joint statement issued on Tuesday, said the union was monitoring the unfolding situation with trepidation.

“At this crucial time, NU-

PENG is seriously monitoring the unfolding situation while also putting into account the safety and welfare of the vulnerable and integral segments of our membership which are of paramount concern to us.

“In the light of the above, the union may be forced to give some harsh but necessary and important directives with respect to the safety of these set of workers who are our members in the informal sector, and they include the Petroleum Tanker Drivers (PTD), Petrol Station Workers (PSW), Petroleum Depots Workers,Independent Marketers Employees, Oil and Gas Suppliers (OGS), Surface Tankers Kerosene Peddlers ( SUKATEP), Liquefied Petroleum Gas Retailers, (LPGAR), etc.”

The union said given the growing cases of the deadly global Coronavirus pandemic and the stay at home orders given by the federal and state governments, it was worried that its members were still out there, risking their lives while offering essential services.

The union, however, called on its to observe safety rules as recommended by the World Health Organisation (WHO) and the Nigerian health ministry while it watches the situation for the next 72 hours.

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ero Contractors has explained that it disinfects every aircraft before and after every flight, saying it had deployed all necessary measures aimed at combating the coronavirus since the outbreak.

A statement issued by the company and made ava i lab l e to j ou r na l i st s Tues day explaine d that throughout the period Atiku’s son was at the airport and on the flight, he wore his face masks and had limited contact with passengers.

The company added that apart from mandating all passengers and crew to use hand sanitizer, the owners of the terminal of operation, Murtala Mu hammed Airport terminal two (MMA2), also deploys several measures ranging from temperate checks to sanitisation of hands.

“We wish to state that since the past three weeks, the management of the MMA2 adopted strict measures to check every passenger that is processed from the terminal and this include use of sanitizer and temperature checks, and everyone whose temperature rises above safe level

is referred to Port Health Authority.

“On our own, we have also adopted safe measures to protect our passengers, we disinfect our aircraft before and after every flight, we also ensure our customers are given hand sanitizer prior to boarding and check their temperature. These steps are measures we have taken in accordance with international standards.

“Furthermore, the son of the former Vice President wore a face mask throughout the flight which is not unusual in the present circumstances and had limited contact in the flight with other passengers and crew,” the company’s statement said.

The airline went on to assure the travelling public and that it will continue to take every measure to ensure all its aircraft are safe from the pandemic, COVID-19.

“Please be assured we have and will always protect every passenger that flies with us from any kind of exposure to this dangerous virus. We are cooperating with relevant authorities towards taking necessary measures with other passengers on the mentioned flight,” it stated.

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Chevron reduces 2020 capital spending on account of COVID-19 by $4bn Olusola Bello

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hevron Corporation has announced several steps it is taking in response to market conditions occasioned by the ravaging COVID-19 Recent decreases in commodity prices, as a result of COVID-19 impacts on reduced demand and geopolitical pressures increasing supply, are expected to negatively impact the company’s future financial and operating results. Due to the rapidly changing environment, there continues to be uncertainty and unpredictability around the impact on it results, which could be material.

The steps taking include: reduction in 2020 capital spending plan by $4 billion, or 20 percent; Permian production guidance reduced by 20 percent; Suspends share repurchases, and actions to protect the dividend, prioritise long-term value, and support industry leading balance sheet.

The company is reducing its guidance for 2020 organic capital and exploratory spending by 20 percent to $16 billion. The reductions are expected to occur across the portfolio and are estimated as follows: $2 billion in upstream unconventionals, primarily in the Permian Basin; $700 million in upstream projects and exploration; $500 million in upstream base business spread broadly

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across our US and international assets, and $800 million in downstream and chemicals and other.

“With an industry leading balance sheet and a flexible capital program, we believe Chevron is resilient and positioned to withstand this challenging environment,” said Chevron Chairman and CEO Michael Wirth.

He said given the decline in commodity prices, the company is taking actions expected to preserve cash, support our balance sheet strength, lower short-term production, and preserve longterm value.”

Cash capital and exploratory expenditures are expected to decrease by $3.3 billion to $10.5 billion in 2020.

Total capital and exploratory spending in the second half of 2020 is expected to be about $7 billion, an annual run rate 30 percent lower than the approved budget announced in December 2019.

Excluding 2020 asset sales and price related contractual effects, the company expects 2020 production to be roughly flat relative to 2019.

Chevron’s net production increases about 20,000 barrels of oil equivalent per day for each $10 movement lower in Brent oil prices due to contractual effects. Permian production by the end of the year is expected to be about 125,000 barrels of oil equivalent per day, or 20%, below prior guidance.

Wednesday 25 March 2020

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news

Coronavirus: Lenders prohibit customers entrance into banking hall HOPE MOSES-ASHIKE & OBINNA EMELIKE

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igerian banks are restricting access into banking hall by customers for fear of contact with coronavirus, which is rapidly spreading across the globe.

The banks, located at between Ikeja and Ojueledge, include First Bank of Nigeria, FCMB, GTBank, Fidelity Bank, Access Bank, Ecobank, Zenith Bank, among others.

Investigation shows that customers are queuing in large numbers outside the banks as they are being directed to go to the Automated Teller Machines (ATMs) for withdrawals.

… as First Bank deploys measures to protect employees, customers, others “We have been here since morning before they opened the bank. Our attempt to get in inside the banking hall was denied by the security men, instead we were directed to the ATM stand,” one of the customers at Zenith Bank, Mushin said.

Access Bank, in a note to customers, said, “We have put in place a robust business continuity management programme that will ensure minimal business disruption and mitigate any potential negative impact. We are preparing alternate locations for key functions to ensure continuity should there be any disruptions in our

primary locations. We are working hard to scale our IT systems to support the expected increase in mobility that would be required to operate efficiently and respond to our customer needs during this period”.

However, First Bank of Nigeria announced proactive measures taken to control the spread of the coronavirus pandemic.

According to Folake Ani-Mumuney, the bank’s group head, marketing and corporate communications, embedded in the bank’s corporate strategy is business continuity management that ensures the delivery of products, services

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and initiatives to its stakeholders and enabling the economy in the long-term with minimal impact.

“We have employed necessary measures to keep our employees, customers and the general public safe-guarded and sensitised on preventive steps to flatten the curve at the fastest possible rate.

These include the deployment of temperature measuring tools; hand sanitizers; face masks and adopting social distance, including utilising virtual meetings,” Ani-Mumuney said.

The bank has also cancelled its own and partnered planned events in the interim; suspended

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staff travels and have put measures in place to identify and communicate with staff who are arriving from affected countries to self-quarantine following the established protocols by the World Health Organisation and the government, she said.

“In addition, we have been amplifying all necessary official information from relevant health bodies and partners such as encouraging everyone to adhere to good hygiene practices which comprise regular cleaning of all surface areas – for example, tables, door handles – with disinfectants, consistent washing of hands as well as avoiding close

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contact with people and staying away from crowded environment,” she explained.

Encouraging the use of cashless transactions, she said, “We implore all our customers to embrace cashless transactions across our self-service platforms like *894# USSD banking services, FirstMobile, WhatsApp Banking, First Online for their needs like funds transfers, various bill payments, credit and internet data recharge and much more. In need of quick loans, these self-service platforms are also designed to meet their immediate needs through our FirstAdvance service”.

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Surviving COVID-19: Cost containment must guide everyone henceforth Small Business handbook

Emeka Osuji

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t has been a long year for us Nigerians, even when the year has hardly started. The year 2020 is one of a kind. I heard some people are sending humble appeals to God to take by this 2020 and give us another year. Many around the world, not just Nigerians, actually are wishing there was an opportunity for such a deal with God, to rescind a bad year and replace it with a good one. This year 2020 has actually seen more disasters in three months than so many did in twelve months. It brought with it a complex chain of events that presented differently to different people – to some a good lesson and opportunity to change; to others bad news.

As a year subsequent to one in which some elections were held, 2020 bore the brunt of some of the dirtiest things that are Nigerian politics and jurisprudence. Many, who lost elections the year before, suddenly woke up occupying the exalted offices they could not win at the ballot, by some yet to be resolved judicial/legislative abracadabra. This year also brought to a sudden end, the ambition of some Nigerian individuals to enter the Guinness Book of Records, as those with the largest number of names, aliases and name combinations – a feat our efficient election umpires and those that ought to prevent such ridicule failed to perform.

But that was the small part of the big events that have lined up. A deficit budget was made and while efforts were on to borrow and fill the hole; hell was let loose in the world oil market. Saudi Arabia and Russia began a production fight and prices began to tank towards a hitherto unimaginable $20 mark. Under the earth tremor that followed, even the president did not need a counsellor to chill his $28 million controversial loan ambition.

From that point on, Nigerians went into a tunnel of confusion as they waited for the budget to be reviewed to realistically reflect developments in the oil market. Then nature came and reviewed it for us.

Then suddenly came Coronavirus, COVID 19, the new killer virus now rampaging the whole wide world.

While this was going on the price of the county’s major foreign exchange earner, oil continued to go south, dropping to as low as below $27 per barrel.

In the midst of the confusion, the monetary authorities are taking a number of panic measures meant to achieve some unknown objective – the currency was “adjusted”, not devalued, to N370 per dollar. Many are still reading some tough books in Economics to fish out the fine differences between the two words. Many governments have asked workers to stay off work as COVID 19 rules the waves – in the poverty headquarters of the world. You must be in for some news.

The truth is that nobody is making any money today. In a few days, hunger, which was hanging around the corner, will take its proper place among the very same unfortunate members of the world’s poorest human enclave. I know that many of us have gone spiritual; and who wouldn’t, when giants and invincible like Bill Gates have long turned to prayer and

fast. Sadly, COVID 19 does not even allow for a fellowship of the brethren.

At times like these, when men can no longer trust in their skills, contacts and connections, the divine takes preeminence. At such times, it is usually no longer a matter of faith but a question of what works, and the spiritual part of us comes alive. I really and truly join my faith to those of all Nigerians who have since the crisis become more spiritual. I continue to hope and pray that your doubts and fears will disappear soon enough so you may return to your sinful way. God forbid.

As this crisis unfolds, certain things must happen if we are to go through the definitely trying times ahead with minimum damage. Those of us with the entrepreneurial mind set in Nigeria must be busy right now plotting the way forward for a softer landing.

So we must do some hard thinking.

When a country is described as an oil rich country many tend to think it means that the country has oil and therefore is rich. That confusion has to be cleared. An oil rich country is rich in oil but not necessarily rich in the sense of being wealthy. As things stand today, Nigeria is rich only in oil.

We may be an oil rich country, but only in the sense that we are endowed with a lot of oil. If oil remains the black gold then it is fine but if its price continues to fall as it is currently doing then the term “oil rich” becomes of no significance. Nigeria has lost much of her foreign exchange income to the fall in oil prices. We are now without any doubt a low income country.

Unfortunately, certain costs in our national and individual expenditure are sticky downwards as economists would say. They do not immediately accept the reality of a downward change. They are like wages, which once increased are hard to reduce.

Such costs continue to be high even

‘

We are about to enter into a phase of our national life when we must feel the full impact of the changes that have recently occurred in the world economy and by extension the Nigeria economy

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

A feeder to the nations

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ith most nations, there comes a time when their citizens say, “enough is enough; we will no longer tolerate or accept this”. But what do we as Nigerians do? We continue to bend over backwards to adjust and adapt. Negligence, incompetence and impunity must be recognised for what they are, failure. And we must begin to not only have a threshold to rubbish but also make it known. There’s simply not enough outrage for us to expect any meaningful change to take place. I say enough to, “this is Nigeria”.

Though an unmistakable feeling of pride wells up in me as an involuntary initial response, it rapidly yields to a sense of deep sorrow, when reminded once again that we have so many Nigerians doing tremendous things abroad; bringing great honour to the countries they represent; while the society they initially hail from, at least by blood, has all but become a global reference point for the ascendancy of mediocrity in the midst of abundant talent, a place where the sublime is condemned and the ridiculous condoned, a society where integrity is too inconvenient to matter, where knowledge has taken a back seat among the youth who seek to blow but don’t care to know, where known kleptomaniacs are awarded national honours and celebrated as heroes while those whose cross it is to fight for social justice are mocked and reviled by the very people they fight for.

Examples of successful “Nigerians” abroad abound. Is it Anthony Joshua, the Boxing World Heavyweight champion? How I wish I would not be repeatedly reminded of our loss and Britain’s gain, whenever he’s introduced as the “Nigerian born Brit” or “the Brit of Nigerian descent”. Neither term has ever failed to evoke two diametri-

cally opposing emotions in equal measure in me - one of pride of association and another of national shame. My instant reaction whenever I hear or read that, is, “there goes another one of our own, lost to a saner and better run nation”.

Would it not have been so much sweeter to hear him introduced as “The Nigerian Tornado”, “The Nigerian Woze Master” or for those of us old enough to have watched the old Western television series, Bonanza, “The Nigerian Dan Blocker”. Before you ask what the correlation between that television character and a demolition expert in the boxing ring is, I will tell you for free; absolutely nothing. I can’t help it; I just like the name because it sounds tough. Boys will always be boys so please, indulge me a little.

Those of us who at least have a passing interest in sports may also have heard of Giannis Antetokounmpo, popularly known as “The Greek freak”. This tongue-twister of a name is in fact the supposed Greek version of Sina Adetokunbo, the name he was born with. This huge basketball star has been quoted as saying he can’t wait to learn more about his roots in Lagos, Nigeria’s ever bustling commercial capital. To know how successful he is, Giannis was voted the Most Valuable Player in the US basketball ball league in 2019. Quoting an article, I read recently as I sought to know more about this rising phenomenon, it said, “Charles and Veronica Adetokunbo (Giannis’s parents) moved from Lagos to Greece in 1991 in hopes of a better future for themselves and their family after struggling to find employment”. An all too familiar story of Nigerians seeking greener pastures outside these shores.

Everyone wants to live in a society that brings to life their dreams and not one that has suffocated so many. It’s just so sad. Equally sad it was to

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learn that Charles Adetokunbo didn’t live long enough to fully witness or enjoy his son’s success. He died in 2017 at the age of just 54. What does however give me great joy though, was to read that Giannis’s parents did all they could to bring him and his siblings up the Nigerian way, by imbibing in them the virtues our culture had always been known for. Speaking to this, Giannis had this to say, “I grew up in a Nigerian home. Obviously, I was born in Greece and went to school in Greece. But at the end of the day when I go home, there is no Greek culture. It’s straight-up Nigerian culture. It’s about discipline, it’s about respecting your elders, having morals.”

His parents taught their children the virtues they and many other Nigerians were brought up with.

Until recent times, these values which appear to be quickly becoming extinct, were sacrosanct.

If I’m to start naming all the successful “Nigerians” abroad, we will literally be here all day, but do permit me to name a few in the entertainment industry. We have the likes of Seal, Lemar, Nas and the ageless Sade Adu, all huge global musical icons; Sophie Okonedo, the Oscar nominated British actress for the hard-hitting movie, Hotel Rwanda. Chiwetel Ejiofor, also a British Hollywood star and brother to Zain Asher, the presenter of CNN fame. There are just too many.

Don’t get me started with all the world-renowned university Professors and Scientists, many of whom are based in the US. It baffles the mind to know that one nation can boast of so many people topping their trade and yet the nation they essentially hail from, has for all intents and purposes, become a global backwater.

Any leader who genuinely has the interest of his nation at heart would feel utterly ashamed about this. “Itiju” would douse the urge to latch

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as incomes drop. This category of expenditure are like the fixed costs of a production facility that do not easily respond to falling sales. One of the realities and imperatives of 2016 is that we must find ways to deal with those costs and bring them into alignment with our earnings. Cost containment is therefore one of the key management solutions every family must implement in the coming months. Frivolous spending has come to an end; lavish birthday parties should be reserved for the rich as it is one of the stupid things rich people do, all over the world.

We are about to enter into a phase of our national life when we must feel the full impact of the changes that have recently occurred in the world economy and by extension the Nigeria economy. National revenue has taken a sharp and deep fall and so must national expenditure remains unmet.

With COVID 19 adding its own lashes, it means that we are entering into a period of economic contraction and if care is not taken we may experience a global recession. Public policy must therefore rise beyond the routine of income and expenditure dynamics to activate anti-depressive economic policies to counter the expected decline in consumer spending.

As we battle COVID 19, families and the small business community in Nigeria are enjoined to brace up for more frequent times of cashlessness.

There will be need for learning many new things that help us fit into the new nature of our smaller national and individual economies. When one cannot make fresh income, the wisest thing to do is to effectively manage the little one has. Cost containment is a form of revenue generation.

Character Matters with Daps

Dapo Akande himself unto a “long lost son” he had used his own hands to push away, just because he had now become a star. A feat, I may add, he had no hand whatsoever in bringing about. This is especially so, when his dear country still produces a multitude of such talent, that he has not lifted a finger to develop. But as we Nigerians often say, “shame no dey catch some people”.

The fear of Coronavirus is very quickly becoming the beginning of wisdom around the world, and it knows neither colour nor creed.

No doubt, several of our state governments, NCDC and the Federal Ministry of Health have done well so far to contain it but I heard something on the radio which I found a little disturbing. I heard that some who fear they may have contracted the virus decided on their own, that it would be better for them to self-isolate than subject themselves to the squalor which they believe the virus containment centre is likely to be.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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BUSINESS DAY

Wednesday 25 March 2020

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COVID-19 and a failure of leadership

Olanrewaju Rufai

I

t appears that Nigeria’s reprieve from the scourge of the raging novel coronavirus (COVID-19) pandemic might be coming to an end. As at the start of the current week, 36 cases have been confirmed across five states and the Federal Capital Territory, with many more cases likely to be confirmed in the coming days and weeks.

Unfortunately, despite having a three-month head start, and with the awareness that the nation’s weak health infrastructure would crumble under the strain of a full-blown outbreak of the pandemic, Nigeria failed to prepare adequately. Now, the nation is seemingly speeding toward a health and economic catastrophe. A sadly unfortunate situation which lays bare the leadership failure in Nigeria.

It would be wishful thinking to expect that the Nigerian healthcare system would be capable of dealing with a pandemic which has crippled the systems of developed nations such as Italy and Spain, and almost overwhelmed China. Decades of underinvestment and misappropriation of funds have ensured that Nigeria’s healthcare system has deteriorated into one of the worst in the world. A 2018 study in the

Lancet of global health care access and quality ranked Nigeria 142nd out of 195 countries.

Given an understanding of the nation’s precarious healthcare system, one would have expected that the nation’s leaders would have been more proactive in implementing measures aimed at preventing the spread of the virus to the nation, such as the restriction of flights from countries with high infection rates, restriction of citizens’ movement, adequate sensitisation of the citizenry etc., however this has hardly been the case.

Instead, what has perhaps been laid bare is the abysmal state of the nation’s leadership. In almost every other nation affected by the pandemic, including US, Canada, the UK, Germany and Ghana, these nations’ leaders have displayed varying degrees of leadership, consistently reaching out to citizens and residents with messages of reassurance and resilience. However, this has not been the case in Nigeria.

Rather than lead from the front, President Muhammadu Buhari has chosen to not lead at all, only addressing the nation on Sunday evening.

In a delicate period characterized by uncertainty, fear and doubt, the nation’s leaders across various levels of government have done little to assuage these fears and doubts. This is symbolic of the void which has characterized the nation’s political leadership over several decades. The nation’s leaders across various levels of government continually fail to be proactive or act in the best interest of the electorate. At a time when the mantra world over is social distancing, the nation’s leaders have continued to attend social and religious events, not only endangering their own lives and those of their citizens, but also tacitly sending a message

of nonchalance and disregard for public health and safety to the citizenry.

In the face of a crisis which perhaps threatens the existence of the nation, our leaders have chosen to display their brazen selfishness, crass disregard for public safety and general unfitness for office.

Perhaps, the nation’s relative success with Ebola has created a false sense of security and invincibility.

However, it should be noted that Nigeria’s success with the containment of Ebola was only made possible by the courageous sacrifices of numerous Nigerian healthcare workers, some of whom paid the ultimate price. Hoping for a similar miracle in the face of COVID-19 would be bordering on self-deceit, considering the peculiarities of this novel virus vis a vis the realities of Nigeria. For instance, how can social distancing and self-isolation be enforced in a country where tens of people live together in dingy singleroom apartments with shared sanitation facilities?

If the nation’s first line of defence of early identification of infected individuals and tracing of their close contacts fails, Nigeria could be in for a devastating couple of months.

As for economic consequences, the outbreak has already caused severe economic and market dislocation across the globe and it is estimated that the damage caused by the pandemic to the global economy will surpass $2.7 trillion. The Nigerian economy has not remained immune to these global shocks. Last week, the Central Bank of Nigeria announced that the nation will migrate to a single exchange rate for the naira by collapsing the multiple exchange rate policy after several years of resistance.

In addition to the exchange rate

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In the face of a crisis which perhaps threatens the existence of the nation, our leaders have chosen to display their brazen selfishness, crass disregard for public safety and general unfitness for office

Rufai holds a first class degree in Management and Masters degrees in Management and Finance. He is a finance and strategy analyst and can be found on Twitter @LanreRufai_.

Why Nigeria needs to halt spread of Covid-19 (1)

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hat began with a handful of mysterious illness in a vast central China city has travelled the world, jumping from animals to humans and from obscurity to international headlines? First detected on the last day of 2019, the novel coronavirus has infected tens of thousands of people-within China’s borders and beyond them – and has killed more than 8,272. It has triggered unprecedented quarantines, stock market upheaval and dangerous conspiracy theories. Indeed, most cases are mild, but health officials say the virus’s spread through the United States appears inevitable.

As the country and its health-care system prepares, much is still unknown about the virus that causes the disease now named COVID-19.

There are many compelling reasons to conclude that SARS-CoV-2, the virus that causes COVID-19, is not nearly as deadly as is currently feared. But COVID-19 panic has set in nonetheless. You can’t find hand sanitizer in stores, and N300 face masks are being sold online for exorbitant prices, never mind that neither is the best way to protect against the virus (yes, just wash your hands). The public is behaving as if this epidemic is the next Spanish flu, which is frankly understandable given that initial reports have staked COVID-19 mortality at about 2–3 percent, quite similar to the 1918 pandemic that killed tens of millions of people.

Allow me to be the bearer of good news.

These frightening numbers are unlikely to hold. The true case fatality rate, known as CFR, of this virus is likely to be far lower than current reports suggest. Even some lower estimates, such as the 1 percent death rate

recently mentioned by the directors of the National Institutes of Health and the Centres for Disease Control and Prevention, likely substantially overstate the case. We shouldn’t be surprised that the numbers are inflated.

In past epidemics, initial CFRs were floridly exaggerated. For example, in the 2009 H1N1 pandemic some early estimates were 10 times greater than the eventual CFR, of 1.28 percent.

Epidemiologists think and quibble in terms of numerators and denominators—which patients were included when fractional estimates were calculated, which weren’t, were those decisions valid—and the results change a lot as a result. We are already seeing this.

In the early days of the crisis in Wuhan, China, the CFR was more than 4 percent. As the virus spread to other parts of Hubei, the number fell to 2 percent. As it spread through China, the reported CFR dropped further, to 0.2 to 0.4 percent. As testing begin to include more asymptomatic and mild cases, more realistic numbers are starting to surface. New reports from the World Health Organization (WHO) that estimate the global death rate of COVID-19 to be 3.4 percent, higher than previously believed, is not cause for further panic.

This number is subject to the same usual forces that we would normally expect to inaccurately embellish death rate statistics early in an epidemic. If anything, it underscores just how early we are in this.

But the most straightforward and compelling evidence that the true case fatality rate of SARS-CoV-2 is well under 1 percent comes not from statistical trends and methodological massage, but from data from the Diamond Princess cruise outbreak and subsequent

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quarantine off the coast of Japan. A quarantined boat is an ideal—if unfortunate—natural laboratory to study a virus. Many variables normally impossible to control are controlled.

We know that all but one patient boarded the boat without the virus. We know that the other passengers were healthy enough to travel. We know their whereabouts and exposures. While the numbers coming out of China are scary, we don’t know how many of those patients were already ill for other reasons. How many were already hospitalized for another lifethreatening illness and then caught the virus?

How many were completely healthy, caught the virus, and developed a critical illness? In the real world, we just don’t know.

Here’s the problem with looking at mortality numbers in a general setting: In China, 9 million people die per year, which comes out to 25,000 people every single day or around 1.5 million people over the past two months alone. A significant fraction of these deaths results from diseases like emphysema/COPD, lower respiratory infections, and cancers of the lung and airway whose symptoms are clinically indistinguishable from the nonspecific symptoms seen in severe COVID-19 cases. And, perhaps unsurprisingly, the death rate from COVID-19 in China spiked precisely among the same age groups in which these chronic diseases first become common. During the peak of the outbreak in China in January and early February, around 25 patients per day were dying with SARS-CoV-2. Most were older patients in whom the chronic diseases listed above are prevalent. Most deaths occurred in Hubei province, an area in which lung cancer and emphysema/COPD are

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adjustment, there exists the likelihood that the nation’s already high inflation rate could rise even further. Given that China accounts for about a quarter of Nigerian imports, greasing much of the country’s supply chain; and that the nation is reliant on China for raw materials, inputs and machinery utilized in local production, there is a significant possibility that the pandemic could induce an increase in the cost of local production or at least a significant reduction in the already limited local production capacity. The economic effect of this will also be an increase in the prices of goods and services, thus resulting in a rise in the inflation rate.

Furthermore, in order to curtail the spread of the virus, there might be a need to enforce a shutdown or restriction of movement. This inevitability will also have severe consequences for the economy. Overall, there is a significant possibility that another downturn in the nation’s economy induced by the COVID-19 pandemic could be imminent.

We are perhaps witnessing a pivotal moment in history which will upend social and economic status quos across the world while laying bare Nigeria’s dysfunctional leadership. Given that countries with poor leadership are even more vulnerable to the pandemic, these are worrying times to be a Nigerian.

How the government responds to this impending disaster will determine if the nation will survive this existential crisis. A failure of leadership will be disastrous, with epic consequences.

There is no doubt that the world as we know it will not remain the same after this pandemic. Neither will Nigeria.

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Ademola Orunbon significantly higher than national averages in China, a country where half of all men smoke.

How doctors were supposed to sort out which of those 25 out of 25,000 daily deaths were solely due to coronavirus, and which were more complicated? What we need to know is how many excess deaths this virus causes.

This is where the Diamond Princess data provides important insight. Of the 3,711 people on board, at least 705 have tested positive for the virus (which, considering the confines, conditions, and how contagious this virus appears to be, is surprisingly low). Of those, more than half are asymptomatic, while very few asymptomatic people were detected in China. This alone suggests a halving of the virus’s true fatality rate. On the Diamond Princess, six deaths have occurred among the passengers, constituting a case fatality rate of 0.85 percent. Unlike the data from China and elsewhere, where sorting out why a patient died is extremely difficult, we can assume that these are excess fatalities—they wouldn’t have occurred but for SARS-CoV-2. The most important insight is that all six fatalities occurred in patients who are more than 70 years old.

Not a single Diamond Princess patient under age 70 has died. If the numbers from reports out of China had held, the expected number of deaths in those under 70 should have been around four.

To be continued Orunbon, a journalist and public affairs analyst, writes in from Abeokuta, Ogun State, orunbonibrahimademola@ gmail.com or 08034493944 and 08029301122.

12

Wednesday 25 March 2020

BUSINESS DAY

Editorial Publisher/Editor-in-chief

Frank Aigbogun

Coronavirus crisis will test CBN’s balance sheet

editor Patrick Atuanya

Nigeria risks a debt service problem in the future

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

A

s Nigeria faces perhaps its biggest economic test in decades, the move by the Central Bank of Nigeria (CBN) to convert the N4.4 trillion the federal government owes it into securities shows how constrained the balance sheet of the CBN is.

Securitisation –­ the conversion of an asset, especially a loan as a means to raise cash by selling them to other investors – is one of the few options the central bank has to build the much needed buffer it lacks in these unprecedented times.

To put this in context, Nigeria is heavily susceptible to swings in crude oil prices and a low price favours her in no way.

Over 90 percent of Nigeria’s dollar earnings come from oil.

As at Monday, a barrel of crude oil was $25.91, way below the recently revised benchmark

price of $30, down from $57.

The external reserve has fallen to $35.9 billion.

The revenue challenge of the government isn’t new. Prior to the current collapse in oil prices it sought to grow non-oil revenue via an increase in value added tax. In the meantime, the CBN has always stepped forward as the lender of last resort. This habit has now proven to be a bad idea. It has left it unprepared for a far bigger fiscal problem. A corona-induced plunge in demand for oil which pushed prices into a free fall coupled with battle between Saudi Arabia and Russia. The price has dropped by 60.74 percent since 2020, falling to near 2003 levels.

Though the CBN may pull off its plan to securitise the debt the government owes there are risks.

The CBN is autonomous in name only, it’s not immune to political interference and likely to loan the government money when it comes calling again.

The strain on the government’s revenue won’t end soon. While the securitisation may clean the balance sheet of the apex bank, it could see the government’s debt service to revenue near 100 percent. As at today, the federal government’s debt service is over 61.4 percent of its revenue, higher than South Africa (13.7 percent), Egypt (54.5 percent), Ghana (44.2 percent), Kenya (34.8 percent) – the World Bank prescribes a debt service to revenue ratio of not more than 22.5 percent.

This is synonymous to a movethe-bad-apple-around policy. The bad apples are still there regardless of who is currently holding them. This will put the federal government in search for more revenue. With oil prices not making the oil source of revenue feasible to boost revenue, the non-oil source isn’t looking viable either as covid-19 slows down economic activities.

Although, allowing its offi-

cial exchange rate for the naira to weaken to a more marketreflective rate is a big boost for cash-strapped federal, state and local governments who could all do with more cash at an unstable time like this.

While this move will help cushion the negative impact of falling crude oil prices on revenues, the concern is whether at an exchange rate of N308 to a dollar is fair enough. Analysts say the rate may need to weaken a bit more to between N400 N450 for it to be market-reflective.

As the economic consequences of the pandemic manifest, it will test if the initial measures the CBN, with its limited buffer, can absorb the effects. As numbers infected with the coronavirus increases, the upheaval it will cause will demand a more creative response from the CBN; in the US, for instance, the central bank has gone all out with an unlimited bond buying programme.

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BUSINESS DAY

Wednesday 25 March 2020

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Egungun be careful na express you dey go RILWAN BALOGUN

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gungun is a generic name given to various kinds of Yoruba masquerades, traditionally believed to have connection with ancestor reverence.

They are visibly seen in masks of various native costumes whenever they appear amidst crowd. Some 19 years ago, a popular Fuji musician, Abass Akande Obesere, hit the music genre with an album titled “egungun be careful” I could recall, vividly, no sooner had the album hit the air, than the news rented the air that the formerly cross dresser artiste, Obesere, had been held incommunicado. It was however rumoured, though, that the reason for his hostage was simply to “deal” with him by the Ojes, who are the innate practitioners of egungun, thus, an action purportedly taken to caution the Fuji maestro.

Until of recent, when the title of the album resurfaced as a witty colloquialism in the social media circle, many had forgotten the main message passed by Obesere with the figurative title, which is simply a warning, caution or caveat to a person who wants to or has embarked on an action.

Just like every other citizen of this great country, I heard, with a set of ambivalent thoughts, the news of the dethronement of the emir of Kano, Muhammad Sanusi, as the 14th emir of the ancient city of Kano emirate, who up till then, bestrode the city like a colossus, since June 2014. The good, not because I wanted the exit of the emir, rather, it is sincerely because it was a forewarning that came into reality. The negative side, however, is the fact that, it is concatenation of political supremacy mixed with another brazen abuse of political power, propagating a system which until now,

irrefutably, was foreign to Africa, but gradually dislodging our indigenous values and surprisingly been placed above our long-practised cultural heritage. Of course, the fact that the emir was dethroned is not a call for the uncommon, it is on record that this has existed, virtually in many ancient communities indigenous to Nigeria.

Reiterating, scores of monarchs had been dethroned in the past, but more often than not, this has been associated with political undertones, rather than the uncouth lies alluded to it. The capacity, circumstance or reason(s) given for Sanusi’s dethronement calls for inflammatory suspicions and wide range of condemnations. The covetousness for political dominance, privation of fair hearing, and then, the hasty appointment of Sanusi’s cousin as the new emir, happening less than 24 hours after the “vendetta”, which personally, I tagged as a conspiracy within, leave room for more questions to ask than answers.

Unfortunately, the powers of monarchs have been reduced to the monopolistic power of the chief executive officers of states. When the news for mallam Sanusi Lamido’s dethronement puffed out like a myrrh-scented cigarette, some fundamental questions quickly arrested my inquisitive thought, on what could be the real reason for the dethronement of the cerebral emir.

According to the make-to-believe news, which the public was fed with, it was tacitly and amateurishly expressed that, what necessitated the sanction against the emir was his deliberate persistence in thumbing his nose against the state law and the constituted authority, which was considered as a recipe to breaking down of law and order. That, to the Kano government, was the torrid point where the egungun set on the journey of going to the express without the fear of being hound down by the government’s ruthless motor.

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The imbroglio is simply a caricature of abuse of political power, which depicts that, when the piper speaks against the undoing, infractions and corrupt practices of his principal that pays him, he is shamefully shown the way out

Without any room for a rigmarole, it would be stated, realistically that the dirty show of shame between the power-drunk governor Ganduje and the ever acerbic dethroned emir Sanusi Lamido is purely motivated by political ill-feeling. Nothing can be far from that naked fact. It is on record that the erstwhile emir has always been a vociferating voice for girl-child education, self-afflicting underdevelopment in the northern part of Nigeria, nepotism and undue favouritism to a section of the country at the detriment of the nation at large.

The imbroglio is simply a caricature of abuse of political power, which depicts that, when the piper speaks against the undoing, infractions and corrupt practices of his principal that pays him, he is shamefully shown the way out. No doubt, the whole saga of dethronement of emir Sanusi portrays the political sarcasm of the 80’s of “You Tarka me, I Darbo You”.

What does the removal of an emir has to do with masquerade, locally called egungun, dodo and mmanwu in the 3 major languages in Nigeria? Why the call of caution for it to be careful?

The reason for my adoption of this title is a sheer sarcasm and a satire as well, deployed to caution whoever holds the office of a traditional institution to be wary of enthusiastically engaging in criticising the power that be, for risk of vendetta or reappraisal of attacks.

For the revolutionist, who thinks the government has failed the nation, beloved, please tell him that his egungun be careful na express he dey go. For that crusader who is on a lone mission to liberating the downtrodden from the shackles of political desperadoes, please, do him good by ringing the bell of warning down to his auditory canals, that his egungun is going to the express, thus, should exercise every caution.

For that self-emboldened hero, who has assumed or wants to play the role of

the legendary Don Quizoe de La Manche, who feels the truth is for the betterment of the society, perhaps, even for the generations unborn, you may do him some good, by ringing down to his auditory canal a note of caution that his planned action is asinine as thumbing one’s nose to the python-long truck of the government ready to crush whoever speaks truth to its face.

Any traditional ruler, dabbling into the murky ocean of politics should be signaled that his revered royal regalia is calling the bluff of going close to a raging fire. In addition, to that political office holder, elected or appointed, who sees alignment with political hawks, gathering, whining and dining with the heists, whom are the power that be, should please be wary of the consequences of masquerading against the truth.

One may need to ask, whether this piece tries to advocate against voices that stand to speak the truth for the fear of one’s masquerade being jammed by the ferocious ruling government’s truck? The simple answer is NO! Rather, this is an exposition of the rulers’ innocuous intoxication withy power, inebriation at the expense of the good to the society.

In the pre-colonial times, many Southeast Asian nations were ruled by Sultans. In Indonesia, which is one of the world’s largest democracies with a long history of kings, Sultans were seen as a demi-gods, vicegerents, traditional office holders standing as the bastion of institution against any anti-people’s policies. In fact, in Indonesia, Sultans hold dual positions of being a monarch and unelected provincial governor.

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Balogun, a legal practitioner and public affairs analyst writes in from Lagos via: rilwanbalogun60@yahoo.com

Decommissioning of oil wells: Matters arising – bankruptcy, insolvency bill (1)

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D

ecommissioning” (or “abandonment”) means to plug an oil well, permanently dismantle associated oil installations and leave it in a safe and secure condition. Decommissioning is a form of environmental remediation. The failure to decommission wells is a prevalent environmental issue in oil-producing countries around the world. In Nigeria, the decommissioning issue is not as full-blown as it is in other oil-producing countries, perhaps due to the fact that most of oil fields in Nigeria are still in their productive phase and do not yet require decommissioning.

However, there are strong indications that the decommissioning problem in Nigeria is a ticking time bomb as there is a looming upsurge in the number of inactive wells that would be in need of decommissioning in no time. In 2015, the Federal Government (FG) acknowledged that Nigeria’s oil reserves would dry up in 25 to 30 years. Recently, the Department of Petroleum Resources (DPR) also acknowledged that Nigeria’s oil reserves will be completely depleted in 49 years. Expert studies also suggest that Nigeria is in its oil peak and majority of its oil wells are set to be depleted in a few years. Also, there has been significant decline in crude oil production from onshore wells to offshore wells.

The international oil companies are not only beginning to divest from onshore fields but are transferring their equity to local smaller companies which are without

financial portfolios strong enough to handle decommissioning.

Typically, oil companies may stop operations and production from an oil well due to a number of reasons including exhaustion of the well, expiration of licence, temporary suspension of operations with a view to resuming activities at a later date, or that the company simply no longer requires the well.

These wells, if not decommissioned, pose serious risks to public safety and the environment. Such risks include contamination to groundwater, marine/surface environments, and methane emissions which could pose explosion risks. especially when methane gas accumulates in inadequately ventilated areas.

The DPR has the power to direct oil companies to undertake decommissioning.

Issues arising from the bankruptcy & insolvency bill While there are regulatory and administrative mechanisms put in place to ensure decommissioning, there remain significant gaps in existing financial mechanisms. One of such gaps is the absence of adequate financial arrangements for decommissioning by bankrupt oil companies. In other words, where an oil company that is bankrupt is required to undertake decommissioning, how would such decommissioning liabilities rank in priority among other debts and liabilities of the company.

The implication of the inability of an oil company to discharge its decommissioning

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responsibilities due to bankruptcy is that the responsibility falls back to the government, since the government has the primary responsibility of protecting the environment. Such decommissioning would have to be funded by the government (using public funds i.e. taxpayers’ money and revenues), thereby violating the polluter pays principle – the principle that persons responsible for polluting the environment should be those held responsible for paying for damage occasioned by such pollution. In this situation, such decommissioning liabilities may be enforced by the government as a claim government in bankruptcy proceedings.

The Companies and Allied Matters Act (CAMA) and the Bankruptcy Act regulate bankruptcy and insolvency of companies and individuals respectively. Neither CAMA nor the Bankruptcy Act has an express provision on a company’s liability for environmental remediation should the company become bankrupt. There are also no stipulations as to how environmental remediation liabilities will rank in priority against other liabilities of a bankrupt company. However, the yet-tobe-assented Bankruptcy and Insolvency Bill (BIB) seeks to address this lacuna by making provisions on liability of a company for environmental remediation during bankruptcy.

This author believes, however, that the provisions of the BIB are inadequate in addressing the issue and would expose the Nigerian government to unnecessary financial burden.

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Unwana Udo The BIB stipulates that costs for remedying any environmental condition or damage are provable claims against a bankrupt company (Section 192).

This means that the government can claim the cost for decommissioning from a bankrupt company undergoing bankruptcy proceedings. However, the BIB provides that all provable claims by government are to rank as unsecured claims (Section 78). Unsecured claims (i.e. debts without security/collateral) are the least ranked in the order of priority of claims against a bankrupt company. The implication is that decommissioning liabilities would only be satisfied after every other liability of the bankrupt company has been discharged. Thus, where the assets of the bankrupt company are insufficient to discharge all its debts (which is almost always the case in bankruptcy proceedings), there will be no funds available for decommissioning, and government will have to bear the financial burden of such decommissioning.

Unwana Udo is a Nigerian Lawyer currently undertaking an LLM at Dalhousie University, Canada where he is researching on topical issues in environmental/climate change law. He can be reached on unwana.e.udo@gmail. com.

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14

Wednesday 25 March 2020

BUSINESS DAY

AGRIBUSINESS

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Farm extension services remain weak link in Nigeria’s agric value chain Josephine Okojie

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i g e r i a ’s a g r i c u l t u ra l extension service is proving to be the weak link in the country’s plan of revolutionising the sector.

Nigerian smallholder farmers have continued to lag behind their peers, owing to their inability to raise productivity due to the collapse of the country’s agric extension service delivery.

The inability of farmers to access vital information that is beneficial to them and inadequate dissemination of information by extension agents have reduced agricultural productivity in the country for decades.

Agricultural extension service is the application of scientific research and new knowledge to agricultural practices through farmers’ education.

The extension agents function as the link between farmers, research institutes and the government.

‘Since I started farming more than 10 years ago, extension agents have only visited my farmland twice,’ Samuel Sanondo, a farmer who farms 15 hectare of maize and yam in Donga local government area in Taraba State said.

“I still farm with the farming methods I learned from my father. The extension agent that is supposed to teach me new techniques has only visited my farm once,” Sanondo said.

Sanondo’s case is similar

to what smallholder farmers across the country experience with the delivery of extension services in Nigeria.

This agricultural extension services have been identified as an important part of the intended transformation of the agricultural sector.

E xperts say that the country’s agricultural sector will only become incomegenerating commercial activity when extension ser vices to farmers are restructured to be efficient and effective.

They have noted that lack of farmers’ education is the major challenge confronting Nigerian smallholder farmers, saying that farmers are yet to increase their yield per hectare because they lack the information on good farming practices.

The experts called on the government to revive

N i g e r i a’s a g r i c u l t u r a l extension service, saying it is the major way information is being disseminated to farmers mostly in the rural areas.

“We need to revive our farm extension services to educate far mers on good agric practices,” said AfricanFarmer Mogaji, headagribusiness group, Lagos Chamber of Commerce and Industry (LCCI).

Currently, farm extension service delivery in Nigeria is currently marred with lots of challenges ranging from poor funding, road infrastructures and aging agents as well as policy flip flop.

Low government funding for extension services has led to the unavailability of input materials needed to support farmers such as 4WD vehicles, farmer’s skills acquisition centres,

demonstration centres, demonstration kits and low morale exhibited by the extension workers.

According to experts, there exists a wide extension agent-to-farm ratio in Nigeria where it is estimated that there is one extension agent to 2,500 to 10,000 farm families depending on the state in the country.

For more than a decade, there has been no recruitment of extension agents in most states of the federation and this has reduced the number of extension agents; with many approaching retirement age.

“The issue of manpower is a very big problem. There has been no recruitment of extension agents in some states since the World Bank grant was exhausted in the 80’s,” Mohammed Khalid Othman, former director,

National Agr icultural Extension Research Liaison Services (NAERLS) told BusinessDay. “We have a situation where some states have one agent serving 2,000 farming families,” Othman said.

Othman noted that the country cannot improve farmers’ productivity when the ratio of extension agents given to farmers is as high as what we have currently in the country especially at a time where the government wants to diversify the economy through agriculture.

In trying to address the issue of limited extension agents, some states have resulted in picking cooperatives and association heads and educating them on the latest technologies and information necessary for the farmers in their communities who in turn are expected to pass the information to them under their cooperatives and associations.

But this initiative has failed as most of the heads of such associations who attend such training can hardly translate what was learned to other farmers upon return.

Meanwhile, research institutes in Nigeria have blamed the government for the gap that exists between the farmers, research institutes and extension service.

The government needs to address the problem with the delivery of extension services in other to boost farmers’ productivity, they say, calling for the government to make provision for bridging the

gap between the lab and the farms.

“When we come up with new technologies which should improve farmers’ productivity, it never gets to the farmers because the extension agents fail to transfer these technologies to them,” Celestine Ikuenobe, director of research, Nigerian In s t i t u t e f o r O i l Pa l m Research (NIFOR) said in a telephone interview with BusinessDay. “And this is the case b e caus e the extension workers are not just there.

The issue is because of the failed system and the gap created by the government,” he said.

Ikuenobe stated that the agents are not adequately funded and lack motivation.

He stressed the need for the government to address these issues of extension service delivery if the economy will be diversified through agriculture.

In view of this shortfall, experts underscore the need for private-sector participation in the funding and delivery of agricultural extension services so as to meet the needs of the farmers.

They argue that a g r i c u l t u ra l e x t e n s i o n services have been dominated by the Agricultural Development Programme in Nigeria for a long time.

The experts insist that the traditional extension ser vices, linked with production objectives and blanket recommendations, can no longer meet farmers’ expectations.

Coronavirus: Stakeholders applaud CBN’s interest rate reduction Josephine Okojie

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takeholders in t h e c o u n t r y ’s agricultural sector have applauded the Central Bank ’s on its recent interest rate reduction on intervention funds from nine to five percent as part of measures to support businesses hit

by COVID-19 outbreak in Nigeria.

The stakeholders say the step by the apex bank is the right step to help agribusinesses survive the difficult moment of the novel virus outbreak and low oil price. “ Th e f o o d s e c t o r i s the most critical for our

economy, especially at this time of low oil price and coronavirus outbreak,” said Ibrahim Kabiru, national president, All Farmers Association of Nigeria (AFAN).

“The CBN’s support is very crucial at this time and we commend them for the recent reduction of interest rate on intervention funds from nine to five percent,” Kabiru said.

He noted that the reduction will encourage farmers to grow more, thereby, boosting food supply.

Since December when the outbreak of the virus was reported in China, it has spread to over 166 www.businessday.ng

countries with over 341,000 cases and 14,700 deaths.

Nigeria, Africa’s most p o pu l ou s c ou nt r y ha s reported 36 cases of the coronavirus.

To c o n t a i n t h e p a n d e m i c , c i t i e s, a n d regions across Europe and Asia have been by and large shutdown, putting halt to economic activities and obstructing supply chain as well as trade between countries.

Many agribusinesses and farmers in Nigeria are feeling the heat as the export supply chain has been grounded on suspended freight.

In a move to protect them from the economic

disruptions amid the coronavirus spread, the c o u n t r y ’s a p e x b a n k announced a N50billion facility through the Nigeria Incentive –Based Risk Sharing System for Agricultural Lending (NIRSAL) microfinance bank for households and Small and Mediumsized Enterprises (SMEs) that have been hit by the COVID-19.

“It is a good initiative by the apex bank but we would want the reduced interest rate to remain the same even after the outbreak,” AfricanFarmer Mogaji, head-agribusiness group, Lagos Chamber of Commerce and Industry

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(LCCI) said in a phone response to questions.

“Agric is long term and whatever support the bank is providing must also be long term,” Mogaji who is also the chief executive officer of FarmCredit said.

However, as the apex bank continues to roll out palliative policies for the various businesses, there are questions around how the businesses will manage especially the MSMEs that engage actively in wholesale and retail trade.

T h e re a re c o n c e r n s about currency stability and disruption to global supply chains remains critical despite the slowdown in the spread of @Businessdayng

the disease in China which might improve the latter.

A national survey of MSMEs conducted by the National Bureau of Statistics (NBS) in 2017 shows that the country has 41.5 million MSMEs scattered across various sectors. The data also affirms that about 73 percent of these MSMEs fully engage in wholesale and retail trade activities with China as a principal partner.

Experts said this is a bleak period for many companies especially the MSMEs because no country has been able to arrest the virus neither does anyone know when it will be over.

Wednesday 25 March 2020

BUSINESS DAY

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AGRIBUSINESS ag@businessdayonline.com

Lagos to plant 230,000 trees to tackle climate change Josephine Okojie

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he Lagos state government has announced it plans to plant about 230,000 trees between now and the end of the year as part of its effort to tackle the effects of climate change in the state.

The state government also urged residents to imbibe a clean, improved a n d e n ha n c e d p o s i t i v e approach to a climatefriendly environment in order to encourage agroforestry.

Abisola Olusanya, special adviser to the governor on Agriculture, who made this known recently during the 2020 International Day of Fo r e s t , e x p l a i n e d t h a t these measures become i m p e ra t i v e i n o rd e r t o discourage tree felling as

well as prevent flooding in the state.

Olusanya noted that the underlying effects of climate change had over the year led to the loss of properties all over the world, stressing that the theme ‘Forests and

Biodiversity’ was aimed at promoting the love for the forest, underscoring the importance of education at all levels in achieving sustainable forest management and biodiversity conservation.

Expert calls for creation of Traditional Foods Research Centre SIKIRAT SHEHU, Ilorin

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n expert, Olayinka Ramota Kar im a professor of Home Economics and Food Science in the faculty of agriculture, University of Ilorin, has called for the establishment of a centre for Nigerian Traditional Foods Research and Development to serve as an outlet for a holistic approach on value addition to the traditional foods in the country.

Karim, who made the call recently while delivering the 195th Inaugural Lecture of the University, said that the proposed centre will disseminate and demonstrate the research findings of the universities and institutes periodically to the food processors for adoption towards adding value to the country’s agricultural food production.

Pointing out that food production does not seem to be a challenge in the country, “appropriate processing and handling are the problems.”

She, however, stressed the need for all government food production policies to be accompanied by pragmatic food processing issues that are capable of adding value to our agricultural food production.

“The foods of today and tomorrow have been carefully designed to alleviate the problems associated with hidden hunger that are responsible for dietary-related

diseases and of course a short life span,” Karim said.

“You are what you eat and what you eat determines your life span and to eat is a necessity, but to eat intelligently is an act,” she added.

She recommended that more funds should be made available for bottom-top research that can address the traditional food processing technologies not only for the production of good foods but also for the enhancement of the national development.

She equally, called on Universities and Research Institutes as a matter of priority endeavour to embark on innovative and problemsolving studies that have community impacts rather than research that are only meant for publication and self-development. “ The new processing te ch n o l o g i e s a n d va l u e addition methods should be developed to be as close as possible to the existing traditional ones that can easily be adopted and that will not undermine the cultural, social, religious and gender factors that are associated with traditional food processing technologies,” she said.

Karim also advocated active industry-academic linkage, which should be strengthened through proper dissemination of research findings that can boost food pro cessing system, and nutritional security.

According to her, gown www.businessday.ng

and town relationships should not be seen as annual and university programme but rather be encouraged to be from departments where research findings from the undergraduate projects that have community impacts are disseminated to the public.

The inaugural lecturer, therefore, called for the encourag em ent of fo o d processors in order to interact freely with the universities and adopt proven technologies and innovations on the country’s traditional food systems.

“They should not perceive upgraded traditional te ch n o l o g i e s a n d va l u e addition measures to traditional foods as foreign technologies or processes to replace the cultural heritage,” she said.

“They should rather embrace the technologies as opportunities to improve the production, nutrition, safety and overall quality of traditional food products and more importantly as a logical way for assurance of Food and Nutrition Security in Nigeria.”

Karim, while expressing t h e n e e d f o r l a rg e a n d international scale food industries to venture into production of Nigeriantype-foods, also advised consumers to accept valueadded traditional foods and stop regarding them as foods for the elite or superstore goods but foods that are of better nutritional, safety and organoleptic properties.

“The importance of today’s celebration cannot be overemphasized especially against the background of the effects of climate change resulting from the destruction of our forests which in turn have

killed millions, displaced millions and have led to the loss of properties and structures worth billions o f d o l l a r s a l l ov e r t h e world,” Olusanya said in a statement.

She explained that climate change effects, which include water stress, flooding, earthquake, earth movement, flash flooding, erosion of different types and degrees were due to the uncontrolled removal of forests leading to 13 million hectares of forests been destroyed annually.

A c c o r d i n g t o h e r, d e f o re s t at i o n a c c o u nt s for about 20 percent of the global greenhouse gas emissions that contribute to climate change regardless of the importance of forests which are the most biological- diverse ecosystems on land.

She opined that over

1.6billion global population including more than 2,000 indigenous people depend on forests for livelihoods, medicines, fuel, food, and shelter.

Olusanya says that Lagos currently has over 600,000 hectares of agricultural land b eing bastardize d by surface miners leading to the fear that the host communities may be submerged.

The special adviser stressed that presently, the efforts at reforestation cannot be said to be proportional to the rate of exploitation which put the country at risk of losing its entire forest cover which might lead to the continued experience of changing climate patterns occasioned by the continued emissions of green gases that would have been sequestrated by the forests.

How to invest in plantain, banana plantation OLUMAKINDE ONI

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he food crisis in Africa and Nigeria, i n p a r t i c u l a r, i s not unconnected with our inability to tap the abundantly available resources at our disposal to solve our food problems.

Plantain and bananas are another set of food crops, which can be easily grown profitably in the country.

The botany of plantains and Bananas do not differ except that the storage of carbohydrates in the fruit of plantains is in the form of starch while it is sugar in bananas.

It has been identified that the establishment of plantain and banana plantation is another means of livelihood for Nigerians, hence the need for this write-up.

Project justification and marketing potential The establishment of such a project will increase food production in the country.

This will help in combating hunger and malnutrition in the country. It will also help in improving the livelihoods of rural dwellers through the creation of job opportunities.

The crops have huge consumption rates and also serve as raw materials to the food and beverage industry and the poultry industry.

This shows that the market is very large both locally and internationally for the crops.

Establishment of the project will on the aggregate improve Nigeria’s economy. It

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will have a multiplier effect on the economy by providing job opportunities for labourers, the market women, the industrial users and help in improving the economic wellbeing of the promoters.

Production technology To embark on this project, there is the need for a suitable land that has the following characteristics: humid low land, deep and well-drained fertile soils, optimum temperature of 27oc and welldistributed rainfall of about 2,000mm per annum.

It must be noted that the site for the project should be visited by experts to ascertain their suitability or otherwise.

After land procurement, we do the land preparation either mechanically or by slashing. This is followed by the purchase of suckers (the planting materials).

Planting is done by digging holes of about 45cm wide and deep after which the suckers are placed in the holes. The spacing between crops should be about 3m.

After planting, herbicide can be applied to control w e e d grow th. Cultural practices involve fertilizer application at six months interval, pruning, and regular weeding. Pruning involves the removal of unwanted suckers to allow the selected ones to develop well and produce desirable bunches. It takes about 18 months for the crops to mature.

Financial requirements To establish the plantation 10 Acre land can be used for a start. All projections therefore @Businessdayng

are based on 10 Acres.

N Pre-Investments 100,000 Land Acquisition and preparation 2,000,000 Suckers (10,000) at N200 each 2,000,000 Planting 250,000 Herbicides and other inputs

250,000 Employment of farm-hands

240,000 Miscellaneous Expenses and other

250,000 Cultural practices ____ TOTAL N5, 090,000

========= Revenue projection Under good management, one sucker planted initially will produce one bunch of plantain and banana per annum. This gives a total of 10,000 bunches per annum. A bunch of plantain will sell for a minimum of N1, 000.

This gives us total revenue of N10 million per annum starting from the 18th month after planting. The cost of maintenance per annum is estimated at N1,000,000.

Promoters will no doubt have over N8 million as profit every year. Plantain plantations can last for a very long time if it is well maintained.

This is surely a good means of livelihood for Nigerians.

The project is recommended without any reservation.

Serious-minded investors can be guided to successfully establish the project. The author can be contacted through e-mail: olumakindeoni2@yahoo. com.

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Wednesday 25 March 2020

BUSINESS DAY

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Thursday 26 March 2020

BUSINESS DAY

cityfile

Covid-19: Dunamis Church donates equipment to Abuja Hospital JAMES KWEN, Abuja

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unamis International Gospel Centre has donated assorted precautionary kits to the Federal Capital Territory Administration (FCTA) to check the spread of Coronavirus in the nation’s capital.

The safety kits donated include 20 cartons of hand sanitiser, four cartons of hand gloves, and seven packets of face mask.

Senior Pastor of Dunamis, Paul Eneche while presenting the items to the FCT minister of state, Ramatu Tijjani-Aliyu, on Tuesday, said the donation was in line with the teachings of Jesus Christ, emphasising that the devastation caused by the Coronavirus should not be left for government.

Eneche said the church recognises the efforts made by government at all levels in the battle against the Covid-19, hence the need to assist in whatever capacity to overcome pandemic.

“As a church we want to be on the same page with government in line with the teachings of our Lord

Jesus Christ, who made life meaningful for the common man. We are not just going to pray and trust in God to save us, but we must come out to support the constituted authorities”.

Receiving the kits on behalf of the FCT administration, Tijjani-Aliyu observed that Nigeria has overcome difficult situations in the past and would overcome this time.

Tijjani-Aliyu, who commended Dunamis Church for showing leadership quality, said the nation was passing through a difficult period that calls for concerted efforts of all to overcome. The minister thanked the church for the gesture and called on other religious and corporate bodies to do same as government was doing everything possible to overcome the situation.

The church had also donated medical equipment and materials to Primary Care Centre, Lugbe in Abuja Municipal Area Council (AMAC).

The items include eight hospital beds and mattresses, two height measuring sticks, one examination couch, two diagnostics sets among other.

Fake employment syndicate smashed in Bauchi

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auchi State government says it has arrested 10 civil servants who issued fake employment letters to 120 applicants in the state.

Th e sy n d i cat e ha d duped the applicants of over N3.2 million, the State Head of Service, Abubakar Ma’aji, said while parading the suspects.

According to him, the 10 civil servants serve in the state ministries of health and works.

Ma’aji added that the fake appointment letters into various positions in the two ministries were issued between 2017 and 2019.

He explained that the syndicate capitalised on the appointment window approved by former governor, Muhammed Abubakar, for absorption of 1149 medical students into the health sector.

Ma’aji said the activities of the suspects were blown open following

public outcry that in spite of a government embargo on employment, they had continued to recruit personnel under the guise of “Replacement”.

“I then directed all heads of MDAs to investigate the matter and based on that the state ministries of Health and Works uncovered the said syndicate.

“The syndicate even applied and obtained Personal Sub-head Numbers (PSN) from the treasury department for the fake appointments, but were discovered to be same with some of the genuine students that were employed by the government.

“It was discovered that the names of those given fake appointment letters were not in the government approved lists, hence a committee was setup under one Ibrahim Gambaki, director of finance and administration in the ministry of health to further investigate the matter,” he said. www.businessday.ng

Officials of Lagos State Task Force Monitoring Team on Enforcement and Campaign Against Social and Public Gathering to Curb the Spread of Deadly Corona Virus sealing up Shisha Lounge (Night Club) in Lagos on Monday Night. NAN

Lagos orders 60% loading capacity in public buses … compulsory disinfection of boats JOSHUA BASSEY

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s a further measure to contain the spread of the Covid-19 (Coronavirus) pandemic within the public transportation pace, the Lagos State government has ordered buses and cabs to maintain 60 percent loading capacity in compliance with the World Health Organisation’s (WHO) social distancing order.

Frederic Oladeinde, the state commissioner for transportation, who issued the directive, said this also applies to water transportation.

In this wise, the commuter buses popularly known as Danfo must compulsorily reduce their loading capacity from 14 to 8 passengers to avoid easy contact and spread of the virus.

Oladeinde said the Abandoned Vehicles and Parks Monitoring Committee would monitor operations of garages and parks, while the police would enforce the directive against violators. He warned that any driver caught flouting the regulated 60 percent loading capacity would face the wrath of the law.

“In compliance with the social distancing order as a way of preventing easy

contact with corona deadly virus, all transport companies/operators are expected to sanitise their parks and garages regularly. They must also ensure that passengers are not more than 2 per line in a bus; no standing in any bus is allowed no matter how short the distance, violators of these guidelines will face the law’’ Oladeinde said.

Oladeinde said that a directive had been issued to the Lagos State Water Ways Authority (LASWA) and all relevant stakeholders in water transportation business, including boat operators to henceforth ensure that their boats and life jackets

are thoroughly disinfected before embarking on any operation.

All passengers in water transportation, he said, are compulsorily required to sanitise themselves by washing their hands with soap and water before boarding, while boat operators must use temperature monitors to test the temperature level of each passenger before embarking on a trip.

He said the state government was leaving no stone unturned in preventing the spread of the deadly virus, urging the residents to cooperate so as to fight the virus to a standstill.

Ekiti: 2 septuagenarians, others to die by hanging

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n Ekiti High Court sitting in Ado Ekiti has sentenced two septuagenarians and four others to death by hanging for the murder of one Sola Adeniyi.

The six persons were: Oniyelu Olu, 63; Folorunso Oluwatoba, 65; Peter Ajayi, 73; Tijani Arowolo, 80 (who died during the pendency of the suit); Dolamu Olaide, 29; John Ojo, 77 and Lateef Arowolo, 45.

The death penalty was pronounced on the convicted persons by Justice Lekan Ogunmoye. Ogunmoye held that the prosecution had successfully established a prima facie case of conspiracy, attempted murder and murder

against the convicts.

According to charges, the offences run contrary to Sections 516 of the Criminal Code Law, Cap. C16, Section 320 of the Criminal Code Law, Cap. C16 and Section 316 of the Criminal Code Law, all Laws of Ekiti State, 2012.

The prosecutor, Oluwakemi Daniel, told the court that the offences were committed on or about February 7, 2017 at Ilupeju Ekiti.

She said that the convicts conspired to murder one Sola Adeniyi, 27 and also attempted to murder a commercial motorcyclist, Ojo Olaoluwa, 22.

The prosecutor said that Olaoluwa gave evidence that

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when the second accused person (Folorunso Oluwatoba) stopped him on that fateful day he was about to mount the motorcycle, he noticed blood dropping from his bag.

“Olaoluwa asked Oluwatoba to open the bag because of police check point ahead but he told him that it was grass cutter that was inside the bag and that he could not open the bag.

“When it was perceived that the content might be incriminating, he took to his heels and shot Olaoluwa from the back,” she said.

To proof her case, the prosecutor called five witnesses and tendered some exhibits which included confessional @Businessdayng

statements made to the police by the accused persons.

Other exhibits were photographs of the severed body of the deceased, medical report from Ekiti State University Teaching Hospital (EKSUTH), Dane gun, locally-made single barrel and one cartridge.

On conspiracy and attempted murder, all the accused persons were sentenced to five years imprisonment each, except the second accused person who was sentenced to 10 years.

All the accused persons spoke in their own defence through their lawyers, C. O. Omokhafe, S. A. Longe, Busuyi Ayorinde and E. K. Adetifa and they called no witness.

Wednesday 25 March 2020

BUSINESS DAY

COMPANIES & MARKETS

17

COMPANY NEWS ANALYSIS INSIGHT

EQUITIES

Foreign outflow on equities market surges 12.6% as investors take flight amid virus concern OLUFIKAYO OWOEYE

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he Nigerian equities market tumbled sharply in last month as surge in coronavirus cases globally weakened investors’ appetite prompting a massive sell-off as investors run for cover.

According to foreign portfolio investment report released by the Nigerian Stock Exchange for the month of February, total transactions in the month at the nation’s bourse decreased by 36.93percent from N235.46 billion in January 2019 to N148.50 billion in February 2020.

The performance of the current month when compared to the performance in the same period February 2019 of the prior year revealed that total transactions decreased by 21.04percent.

In February 2020, the total value of transactions executed

by Domestic investors outperformed transactions executed

by Foreign investors by circa

4percent. Further breakdown of the total transactions executed between the current and prior month January 2020 revealed that total domestic transactions decreased by 53.27percent from N165.14

billion in January to N77.16 billion in February 2020.

However, total foreign transactions increased marginally by 1.46percent from N70.31 billion to N71.34 billion between January and Febru-

ary 2020.

The value of domestic transactions executed by Institutional investors outperformed Retail investors by 24percent. A comparison of domestic transactions in the

current and prior month January 2020 revealed that retail transactions decreased by 63.81percent from N81.67 billion in January 2020 to N29.56 billion in February 2020.

Similarly, the institutional

composition of the domestic market decreased by 42.97percent from N83.47 billion in January 2020 to N47.60 billion in February 2020.

Trend over a thirteen-year period shows domestic transactions decreased by 72.30percent from N3.556t in 2007 to N985bn in 2019 whilst foreign transactions increased by 53.08percent from N616bn to N943bn over the same period.

Total domestic transactions accounted for about 51percent of the total transactions carried out in 2019, whilst foreign transactions accounted for about 49percet of the total transactions in the same period. Coronavirus has been spreading rapidly across the world, affecting more than 160 countries and claiming more than 13,000 lives. There are now more than 307,000 confirmed cases - most outside China where the virus originated. The rise in the number of daily confirmed cases internationally has led the World Health Organization (WHO) to declare the spread of coronavirus a global pandemic.

Companies shift AGMs as coronavirus effect bites harder OLUFIKAYO OWOEYE

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ollowing the ban on public gathering of more than 20 persons by the Lagos State government as part of measures to curtail the spread of coronavirus, the Nigeria Stock Exchange has released guidance for quoted companies planning their Annual General Meeting According to the exchange, following the outbreak of the Novel Coronavirus (COVID-19) and pursuant to the provisions of Rule 19.1: Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules), The Nigerian Stock Exchange (The Exchange) wishes to advise all listed companies that plan to hold their Annual General Meetings (AGM) to put in place adequate precautionary measures to ensure the safety of all stakeholders at the meetings.

“Issuers are therefore advised to utilize the windows

…NSE issues circular on conduct of AGM provided by these rules as may be appropriate while planning their AGMs, in appropriate cases, compa-

nies may have recourse to Section 213(1)(b) of CAMA which permits the Corporate Affairs Commission

to extend the time within which an AGM may be held by a period not exceeding three (3) months,” the state-

ment said.

So far, five companies have announced the postponement of their Annual

L-R: Dupe Akinsiun, head leadership and capabilities centre of expertise, Coca-Cola Hellenic Bottling Company Nigeria; Tokunboh George-Taylor, managing director, Hill+Knowlton Strategies Nigeria; Temitope Fagbemi, student representative, Pan-Atlantic University; Funmi Omo, managing director, African Alliance Insurance, and Osayi Alile, CEO Aspire Coronation Trust Foundation at the Meet the Experts Series organized by Pan-Atlantic University recently to commemorate the 2020 International Women’s Day in Lagos. www.businessday.ng

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General Meetings scheduled for this week.

In a notice sent to the exchange, United Capital announced the postponement of its AGM slated to hold on Tuesday March 24.

According to the company, this is coming on the heels of the recent development around novel COVID-19 and the need to follow the guidelines provided by the World Health Organisation.

“A new date for the meeting would be communicated in due course,” the statement said.

African Prudential has also announced the suspension of its AGM earlier scheduled to hold on Monday 23 March till further notice.

Transnational Corporation of Nigeria has also announced the postponement of its AGM scheduled to hold on Wednesday, 25 March 2020, till further notice. Companies that have also announced the suspension include United Bank for Africa and Transcorp Hotels.

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Wednesday 25 March 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

AVIATION

Delta Air expects quarterly revenue to tank by $10 billion, cut flights by 70percent OLUFIKAYO OWOEYE

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elta Air Line says it expects its secondquarter revenue to fall by $10 billion, representing an 80percent reduction compared with a year earlier, as the coronavirus hurts travel demand.

According to the U.Sbased airline, it has beefed up its cash position during the crisis, with a $2.6 billion secured credit facility and was drawing down $3 billion under its existing

credit facilities.

Ed Bastian, Chief Executive Officer, Delta Air said the global travel industry has been upended as tourists stay indoors to stop spread of the highly contagious virus, with some estimates pegging revenue losses for the business travel sector at about $820 billion.

“We are currently burning roughly $50 million in cash each day,” said in a memo to employees.

Delta has already said it will park more than 600 jets, cut corporate pay by as much as 50percent and

scale back its flying by more than 70percent until demand begins to recover.

“Given the underlying damage the virus has created to the overall economy, that demand recovery will take an extended period once the virus is contained,” Bastian said in a memo to employees.

Credit quality of airlines could worsen if the health crisis runs beyond June 2020, forcing them to cut capacity between 40percent to 75percent or more in the second quarter, Moody’s warned in a note earlier on Friday.

L-R: Mazen Mroue, chief operating officer, MTN Nigeria; Lynda Saint-Nwafor, executive, chief enterprise business officer, MTN Nigeria, and Olubayo Adekanmbi, executive, chief transformation officer, MTN Nigeria, at the launch of the Prudential Zenith Life Mobile Payment Service in partnership with MTN Nigeria in Lagos.

BANKING

Union Bank starts Flexiwork as coronavirus spread forces companies to consider remote working OLUFIKAYO OWOEYE

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nion Bank of Nigeria has activated Flexiwork, a new work plan that allows some staff to work remotely as the country continues to struggle with the spread of the Coronavirus.

The new plan, which takes effect on Monday, March 23 is a flexible work routine where some staff will stay at home, while staff in critical functions and services will be required to show up in the banks.

According to the management, staff in critical departments like operations, technology, branch services, retail services, and security would be required to con-

tinue work as usual.

“This action will enable employees to limit exposure by sheltering at home while allowing employees in critical functions to work safely within our offices.

“While we will be working remotely, we are expected to continue to provide the highest level of support to our colleagues to ensure we maintain service standards for our customers,” the statement said.

Also, the bank will over the next month, hold all meetings with over 5 participants via teleconferencing, apply revised health and safety protocols and suspend visitors to its offices particularly at the Headquarters, Oba Akran, Ilupeju, and

Alausa.

The bank also announced the cancellation of all events till April 15, including the Alpher Masterclass earlier scheduled to hold on Tuesday, March 24, 2020.

In a mail to its customers, the bank said,” due to the recent coronavirus outbreak, we regret to inform you that the Alpher Masterclass scheduled to hole on March 24, 2020, has been postponed. A new date will be communicated in due course.

“We aim to help women on their respective journeys of greatness whether your aim is to start or expand your business, meet new people, build new partnerships or develop a capacity for growth; lpher is here to enable your success”.

Parah Family Foundation postpones 3rd annual fertility conference over COVID-19 SEGUN ADAMS

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he 3rd annual Fertility conference of the Parah Family Foundation (PFF) is working with its partners and Key stakeholders to identify a future date for its 3rd annual fertility conference, after postponing the event in line with safety measures to curb the spread of COVID-19, the non-profit has said.

The event was previously scheduled to hold on Saturday, 21st march, 2020 but had to be moved in compliance with the fed-

eral and state government’s precautionary regulations to prohibit gathering of persons over fifty (50) and a preventive move against Covid -19 spread which is now a global pandemic.

The Convener, PFF, Dayo Odukoya, said on Friday that Parah Family Foundation values the health and safety of all participants which is its highest Priority. “The foundation PFF apologizes for the Inconveniences caused all registered person she said the purchased tickets remains valid for the conference at a future date to be communicated later” said Odukoya. www.businessday.ng

Parah Family Foundation is a non-governmental organisation which was established in June 2011 under part C of the Companies and Allied Matter Act and was birthed by the visioner following her family’s experience of fertility issues for about 8 years.

The foundation’s primary objective is to share vital information, enlighten and provide the relevant support system for families undergoing infertility challenge. PFF driving force is to eradicate ignorance, the misguided myths and social stigma associated with delayed fertility in our society.

L-R: 1st Vice President, Association for Fertility and Reproductive Health, Adewunmi Adeyemi-Bero; Board Member, Parah Family Foundation, Tosin Odukoya; Visioner, PFF, Princess Dayo Odukoya; Chairman, Health Facility Monitoring and Accreditation Agency, Yemisi Solanke-Koya; Board Member, PFF, Isioma Olugbenga, and Past President, Association for Fertility and Reproductive, Faye Iketubosin, at the 3rd Annual Para Family Foundation Fertility press conference in Lagos.

L-R: Funso Oni, spare parts manager, Massilia Motors; Adekunle Jaiyesimi, DMD CFAO Motors; Mike Edwards, brand ambassador, Mitsubishi Motors; Thomas Pelletier, managing director, Massilia Motors/country delegate CFAO Group in Nigeria; Funmi Abiola, head marketing and communications, Massilia Motors, and Hakeem Sanusi, marketing officer, Massilia Motors at the Role Swap Day at Mitsubishi Motors Nigeria.

Charles Nwodo Jnr (r), executive chairman, XL Africa Group Limited; Sylvester William (m), managing director, XL Security and Protection Services Limited, and Olumide Ajibawo, country representative for International Standard Organisation , at the presentation ceremony of ISO 9001;2015 Quality Management System Certificate to XL Security & Protection Services Limited.

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@Businessdayng

Monday 09 March 2020

BUSINESS DAY

COMPANIES&MARKETS OIL & GAS

Low production costs, gas investments driving Seplat’s profitability - CEO OLUSOLA BELLO

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eplat Petroleum Development Company say it will remain very profitable even at lower oil prices given its low production costs and strong investments in gas.

The Chief Executive Officer of the company, Austin Avuru, said this to the investment community and analysts upon the release of Seplat’s audited results for the financial year ended 31 December 2019 on Monday.

Avuru said: “As we enter a challenging phase for the global economy, Seplat will benefit from being a resilient company built on the solid foundations of prudent financial management and the careful mitigation of risk. We have previously been tested by crisis. We successfully navigated the twin challenges of the 2014/2015 oil price shock, which was immediately followed by the 16-month Trans Forcados shut-in, which drastically reduced our liquids production.

“Thanks to our flexibility in managing cash flows we emerged a stronger and betterfunded company, ready to take advantage of new opportunities. Compared to those difficult periods, today’s Seplat has more cash on its balance sheet and is even more robust and diversified thanks to our continuing investments in gas, with its long-term contracts and independence from oil price volatility. We are a lowcost producer and will continue to manage our finances

prudently. “ With the recent addition of Eland and the availability of new pipelines, our oil business is broadening and derisking its production fields and routes to market to assure even greater security of revenues in the future. In the coming year we will focus our investment only on the highest-returning projects, whilst carefully balancing our future needs with prevailing market realities. The challenges before us may be significant, but we are confident that the resilience and discipline of our business will help us consolidate our position as Nigeria’s leading independent oil and gas producer.”

Seplat recorded a revenue of US$698 million with total capital expenditure of US$125 million, US$114 million on oil and gas assets.

Cash flow from operations stood at US$338 million; cash at bank US$333 million and Final dividend maintained at US$0.05 per share.

Speaking on the operational cost he said a low unit cost of production of US$6.20/boe and with working interest production of 46,498 boepd in line with 2019 revised guidance of 45,000 – 48,000 boepd,coupled with liquids production of 23,935 bopd and a gas production of 131 MMscfd , the company is good to go• With the final investment decision (FID) taken for 300MMscfd ANOH gas processing facility, he said first gas now expected Q4 2021 The landmark acquisition of Eland Oil & Gas PLC will Increase Seplat’s WI liquids production by 9Kbopd, in-

creases WI 2P liquids reserves by 36MMbbls • Loan due from Elcrest to Eland of US$414 million at year end; loan maturity 31 December 2024 adds upside potential from unappraised discoveries e.g. Amobe, plus new export routes Eland achieved a record day’s WI liquids production of 17 kbopd on 17 March 2020.

As regards the outlook for the company, he said it is expected that production hit between 47-57 kboepd (inc.

Eland 6-10kbopd) for full year, subject to market conditions • 1.5MMbbls/quarter hedged at US$45/bbl from Q1 to Q3 2020 . With significant cash balance available and Low cost of production these would enable profitability at levels below current oil price • 2020 expected capex of US$100 million; US$50 million of which spent in YTD. The company will manage 2020 drilling programme to suit market conditions and preserve liquidity, minimum three wells The company’s chief executive said that with the emergence of the COVID-19 pandemic in the first quarter of 2020, as well as pressure on oil prices in March, the firm has placed a premium on solid financial management that focuses upon low-cost production, robust cash management, a strong balance sheet and focused investment in high-return projects for sustainable future growth.

“The business is hedged against low oil prices and a significant proportion of our revenues now come from gas,

FINANCIAL SERVICES

Agusto & Co. Assigns A-(f)’ rating to Cordros Money Market Fund SEYI JOHN

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igeria’s first credit Rating Agency and a pan African leader in credit reports, Agusto & Co. limited whose strong credibility presence and ratings are globally accepted in Nigeria, and across the globe has just assigned an “A- (f )” rating to Cordros Money Market Fund.

The rating assigned to Cordros Money Market Fund (“Cordros MMF” or “the Fund”) reflects the Fund’s adequate investment and risk management processes. In the review period (February 2019 –

January 2020), the Fund had good credit quality of underlying investments (minimum ‘Bbb’ rating) and maintained low exposure to interest rate risk by adhering to the 90-day WAM limit.

However, Cordros MMF’s exposure to credit risk was moderate with a significant portion of the Fund’s net assets skewed towards the minimum acceptable rating of ‘Bbb’.

Nonetheless, we note that the Fund Manager has an effective internal credit appraisal model that supports the assessment of potential counterparties.

We therefore consider the Fund’s exposure to credit risk moderate. www.businessday.ng

Cordros MMF’s net assets grew by 57% over the review period with moderate concentration risk on its asset holding base. In addition, the Fund’s operations are supported by the Symplus software and the bespoke CORDFLOW software of the Fund Manager, which is sufficient for Cordros MMF’s level of activities.

We therefore affirm the ‘A-(f )’ rating assigned to Cordros MMF. The rating expires on 28 February 2021. Funds rated ‘A-(f )’ are deemed to have low to moderate exposure to downside risk (impairment of net asset value) in the medium term. https://www.facebook.com/businessdayng

@Businessdayng

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Wednesday 25 March 2020

BUSINESS DAY

cityfile

Oke-Afa High School in Ejigbo Area of Lagos State under lock and key in compliance with State Government directive that schools be closed to contain the spread of Corona Virus in Lagos on Monday.

Man kills brother-in-law, kidnaps own sister in Zamfara

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he police in Zamfara have ar reste d one Sani Boka in Gummi local government area of the state for allegedly killing his brother-in-law and kidnapping his own sister.

Usman Nagogo, the Commissioner of Police in charge of Zamfara, who paraded the suspect in Gusau, said the suspect has confessed to the crime.

According to Nagogo, the suspect was recognised by his sister during the operation and told the police that he was among those who kidnapped her and her partner.

“This disclosure led to the arrest of the suspect

and other members of his gang who specialised in kidnapping and armed robbery,” he said.

The police chief said that the gang broke into the house of one Umar Ibrahim at the neighbouring Dan-Awo village on March 1, 2020, killed Umar and kidnapped the two wives of the deceased over whom they later collected N1.8 million as ransom before releasing the women.

“Sani Boka who was also a friend to the deceased along with members of the gang had also during the attack made away with the sum of N200,000,” the police said.

Nagogo who gave the names of the other alleged

gang members as Kabiru Lawali, Kabiru Sani, Sani Umar, Abubakar Yakubu and Aminu Abubakar, said that some of the kidnappers now reside among their victims and charged residents to be wary.

Similarly, the CP said, the police had on March 3, arrested a gang of three including Usman Bala, Umar Abubakar and Kabiru Abdullahi who specialised as bandits’ informants.

He said the suspects had written letters to three prominent persons the village of Nasarawa threatening to burn down the village if the prominent individuals failed to pay them the sum of N100 million.

Nagogo said the gang

was arrested through a mobile phone they used in contacting the district head of Nasarawa, Aminu Bello, who alerted the police of the development.

He said the police arrested another gang of two suspects, Badamasi Aminu and Rabiu Ibrahim who posed as spirits and direct their unsuspecting victims to give them Nigerian naira while they would make them US Dollar rich.

He said the suspects were arrested when they tried to collect the drop money at a filling station in Gusau.

Nagogo said that all the suspects would be charged to court as soon as investigations were concluded.

Ilorin: Fuel marketers defy new price regime, sell N145 per litre SIKIRAT SHEHU with agency report

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n spite of the Federal Government’s reduction in pump price of petrol to N125.00 per litre, some independent petroleum marketers in llorin, the Kwara capital, still sell at between N143 and N145.

The Federal G overnment last week announced a reduction in price of petrol following the drop in the price of crude oil to 24 dollars per barrel in the international market.

The drop in the crude

price in international market from over 55 dollars per barrel is due to the global COVID-19 pandemic that started in Wuhan province in China in December 2019, but which had spread to other continents with several hundreds of deaths recorded.

While major petroleum marketers had effected the new price regime, majority of independent marketers had yet to adjust their fuel pumps to reflect the new price of the commodity in Kwara State.

Mufutau lshola, a car owner, described the acwww.businessday.ng

tion of independent marketers as unpatriotic and flagrant disobedience to the directive of the Federal Government.

Some of the filling stations yet to adjust their pump price are located on Wara road, Sobi road and Airport road in Ilorin as well as Eiyenkorin, suburb of the state capital.

A manager of one of the filling stations, explained that the delay in adjustment of the pump price was because they were yet to exhaust the old stock.

Efforts to speak with the chairman of the independent Petroleum Mar-

keters Association of Nigeria (lPMAN) in Kwara, Okanlawon Olanrewaju, on the issue proved futile as he failed to pick calls made to his cell phone.

The operations controller of the Department of Petroleum Resources (DPR) in Kwara Yusuf Sule, however, described the disobedience of some independent marketers as unacceptable.

He said the department would further intensify its enforcement measures to ensure that all filling stations in the state complied with the new pump price of N125 per litre.

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Activities paralysed in Lagos courts

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ctivities have paralysed in courts in Lagos as clerks and other support staff stay home following a directive by the Governor Babajide sanwo-Olu that workers on grade levels 01 to 12 should work from home as a strategy to check the spread of Coronavirus in the state.

Checks show that although, litigants, prosecutors, legal counsel, magistrates and judges were on ground, clerks were not available to handle files.

At the Ebute Meta Chief Magistrate Court complex, on Monday, overnight cases had to be taken back to police stations on the instruction of the chief magistrate, who said that investigating police officers should return the following day to handle criminal cases.

At the Ikeja Magistrate Court (Samuel Ilori Court House, Ogba), the situation was the same as most court clerks fall in the category of workers allowed by the governor to stay back at home.

Some magistrates were

seen leaving offices since they could not handle cases without the support staff.

Few workers – who are above Grade Level 12 and above – were on ground but could not handle clerks’ duties.

Some prosecutors and legal counsel were seen in the court complex.

Litigants, whose cases were scheduled for hearing left on Monday without getting new dates for hearing of the cases because of nonavailability of court clerks.

Security guards were checking people’s temperature before allowing them into the premises.

At the Ikeja High Court Complex, members of the public were barred from courtrooms as directed by the Lagos State Government to curb further spread of the COVID-19 pandemic.

Only lawyers were allowed into courtrooms in consonance with the state government’s distancing rules.

Many judges were unable to sit as court clerks and other support staff on Grade Level 01 to 12 did not come to work.

Covid-19: Feminik Logistics distributes sanitisers, masks to Lagosians Daniel Obi

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s part of the ongoing efforts to contain the deadly Coronavirus pandemic in the country, Feminik Logistics, has distributed free hygienic tools including hand sanitisers, face masks and soaps Lagosians.

The outreach was also the company’s way of engaging with the public as part of its corporate social responsibility.

Speaking on this, Adetoro Fowoshere, group managing director, Feminik Logistics said “we have contact with @Businessdayng

people daily, from our drivers to our workers at the airport, we move cargo and a lot of people at the cargo office do not have time to watch TV or listen to the radio.

“So we needed to sensitise them about COVID-19 so they know it’s real and with the hand sanitisers, soap and face masks, they can observe basic hygiene habits because 20 seconds of hand wash and use of sanitiser can save lives.”

Staff and executives of the companyvisited top spots in Lagoswhichincludethecargosection of the local airport, Aromire Junction off Adeniyi Jones and Allen roundabout Ikeja.

Wednesday 25 March 2020

BUSINESS DAY

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TRANSPORTation Motoring

RailBusiness

ModernTravel

Roads

Hyundai Kona leads EV race into Nigeria MIKE OCHONMA Transport Editor

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limate change is for real. The changes in global temperature and weather patterns seen today are caused by human activity. They are happening much faster than the natural climate variations of the past.

World over, industries have started recognizing this and are making the switch towards sustainable means of doing business and adopting technology with less environmental impact.

Responding to the problem, therefore, auto users around the world are, speedily, replacing internal combustion engine-powered vehicles with Electric Vehicles (EVs), which generate no pollutant. Like dry season wild fire, the revolution is moving with speed.

BusinessDay was told that from all indications, before end of this year 2020, the country would officially join the rest of the world in embracing electric cars from Stallion Motors, Nigeria’s leading auto assembler and franchisee of nine global brands including Hyundai.

Recently Anant Badjatya, the company’s chief executive officer hinted of company’s plan to officially launch into the Hyundai Kona electric vehicle into Nigerian market.

It is regarded by European motoring journalists as world’s number one.

“Well-meaning and concerned people globally are urgently making moves to save our dear planet,” explained Badjatya. “After operating successfully in Nigeria for over five decades, the least our company could give back to the country and by extension, the world is

MIKE OCHONMA

T to be a leading pilot in steering the nation to the direction of clean energy use and reduction of emission.

According to Badjatya, “Not being dissuaded by the nation’s infrastructural challenges, one of our plans for this year is to introduce into the country Electric Vehicle (EV) and, in no distant future, embark on attitude change campaign for a clean environment in conjugation with Hyundai’’.

Versatile and powerful, the Hyundai Kona Electric will be the first All-Electric SUV in Nigeria. Its power packed performance will provide a thrilling driving experience with high acceleration over long distances.

Driving range for Kona Electric is 482 km with an acceleration of (0-100kms) in 9.7 secs.

The ease of charging is unmatched as it can be plugged and charged at home or at work and cfor 9.35 hrs for a full battery capacity.

With five years of battery warranty and vehicle warranty, Kona promises to change the way people think about going electric, eve as it moves to make history as first EV to in

Nigeria with local manufacturing.

While putting finishing touches to the National Automotive Industry Development Plan (NAIDP) for passage into law, the federal government of Nigeria, February 2019, laid bare interest in EV technology by assigning University of Nigeria, Nsuka (UNN), University of Lagos, Usman Dan Fodio University and Metrological Institute for design and production of a made-in-Nigeria electric car. In July 2019, University of Nigeria Nsukka (UNN) announced the completion of an EV built with 80 percent local content.

Jelani Aliyu, the directorgeneral of National Automotive Design and Development Council (NADDC), did not only commend the institution for the achievement, but also expressed President Muhammadu Buhari administration’s resolve to support any company willing to invest in local manufacturing of electric vehicles.

At an annual event of the Nigeria Auto Journalists Association held recently in Lagos, Aliyu described the EV technol-

ogy as good news for Nigeria.

“To tap from the trend,” Aliyu explained, “We have met and discussed with both electric vehicle and charging station manufacturers in China and Germany towards the pilot program.”

It would also be recalled that Nigerian government, not long ago, signed a memorandum of understanding (MOU) with Volkswagen, Europe’s largest auto manufacturer and leading investor in electric vehicles, to produce vehicles in Nigeria.

Currently, Nigerian electricity consumers resident in accommodation categorised under R1 are charged only N4 per kilowatt. That implies, when Hyundai Kona goes on sale in Nigeria, its owner would spend only N316 (N4x79kWat) to get a full charge, if the car is plugged onto public power supply.

Apart from initial cost of purchase, EVs attract minimal running cost. Among the global that have signed onto it includes Microsoft co-founder, Bill Gates, that has acquired his very first Porsche Taycan wlwctric car; the one that Stallion Group plans to launch in Nigeria soon after Hyundai Kona.

JLR confirms suspension of production at UK facilities MIKE OCHONMA

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n light of the ongoing coronavirus situation, Jaguar Land Rover (JLR) has confirmed that it will temporarily suspend production at its UK manufacturing facilities over the course of next week. The company’s intention is to resume in the week of 20 April, subject to review of the rapidlychanging circumstances.

As a responsible business, Ja g u a r L a n d R ov e r i s o p erating in line with advice f ro m t h e N H S a n d Pu b l i c Health England to minimise

Toyota stops production at French factory over Covid-19

the spread of the coronavirus, whilst implementing plans to safeguard its business continuity. The company will work www.businessday.ng

towards an orderly return to production once conditions permit.

Currently, JLR’s manufac-

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turing plants in Brazil and India continues operating.

The company’s joint venture plant in China reopened four weeks ago, as life begins to get back to normal in the country.

Although the company’s focus must be on its business and responsibilities to employees, the automaker is doing whatever it can to support its communities through the current situation.

The company’s thoughts are with those directly affected by COVID-19 and with the healthcare professionals, whose role in combating this virus is appreciated by all. @Businessdayng

oyota Europe has halted the production at its factory the Yaris small hatchback, Toyota’s best-selling model in Europe. The model is built at the automaker’s factory in Valenciennes, northern France to comply with the country’s lockdown measures designed to stop the spread of the coronavirus, the company said.

BusinessDay learnt that the plant would be shut for an “undetermined period,” Toyota said in an emailed statement. Other automakers with factories in France, including Renault Group and PSA Group, started closing their factories in the last Monday.

The plant builds the Yaris small car, Toyota’s best-selling model in Europe. The company sold 211,714 last year in the region, according to data from market analyst JATO Dynamics Valenciennes plant is gearing up to launch a replacement model later this year and is also preparing to build a small SUV

based on the Yaris platform. The factory opened in 2001 and employs about 4,500 people, including temporary workers.

Toyota said it was also shutting operations at its Toyota Caetano plant in Ovar, Portugal, where it builds the Land Cruiser in low volumes for export outside of Europe. While other plants would be shut for two weeks, other European plants in Kolin, Czech Republic, and Burnaston, England will continue to operate, the company said.

With some administrative, payroll and engineering staff kept on at Valenciennes, the project teams directing the launch of the new Yaris at the plant will also remain at work.

Toyota recently moved to three shifts at Valenciennes in preparation for the he new small SUV’s introduction, which is scheduled to take place early next year.

It had expected to increase production close to the plant’s capacity of 300,000 with the new, yet unnamed car, the company has said. Toyota had planned to display the new car at the Geneva auto show, but delayed the reveal after the show was canceled due to the threat of coronavirus.

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Wednesday 25 March 2020

BUSINESS DAY

TRANSPORTation Motoring

RailBusiness

ModernTravel

Roads

Reactions trail NRC’s resumption of train services …Barely 24 hours of suspension

COVID-19: Eight million Lagos commuters at risk over-compliance by transport unions, bus drivers n estimated e ig ht m i l l i o n daily commuters with commercial buses in Lagos metropolis are at high risk of contacting the raging coronavirus pandemic as many commercial bus operators have completely flouted the Lagos state government directives to transport unions in the state on safety measures to avoid further spread of the disease.

As part of the preventive measures to further curb the spread of COVID-19 pandemic as outlined by the state government, the ministry of transportation (MoT) last week held a sen-

tion of sanitisers sounds strange to the operators.

Only last Monday, the Lagos state government ordered all bus drivers and conductors to wear masks and gloves while driving, as part of efforts to curb the spread of the coronavirus disease.

The ministry of transportation said this in a statement in which it outlined various preventive guidelines for all public transport operators.Beyond wearing gloves and masks, drivers have been asked to sanitize their parks and garages.

Commercial bus operators have also been asked to make alcohol-based sanitizers available for themselves and passengers, as well as thermometers to check the

sitization meeting with executives of major stakeholders in the transport business including the National Union of Road Transport Workers ( NURTW), and the Road Transport Employers Association of Nigeria (RTEAN).

The meeting which was held at the state secretariat Alausa Ikeja was aimed at educating the stakeholders in the public transportation on the need to join hands with the government in public awareness campaign against the spread of the deadly Corona virus At the meeting, Olanrewaju Elegushi, commissioner for home affairs, urged them to fully engage their members on preventive measures already in place to forestall further spread of the virus.

Elegushi told union leaders to encourage their members on regular handwashing with soaps, application of hand sanitizers and most importantly reduction in the numbers of passengers in their buses in their daily transport routine.

BusinessDay transport reporter who used a commercial bus to work last Monday can authoritatively report that passengers were still cramped inside the commercial buses, even as hand washing and applica-

temperature of each passenger before boarding.

The government has also stated that all commercial buses including the yellow buses a.k.a (Danfo) should avoid loading passengers to full capacity but should keep it at 60 percent capacity, while also ensuring that there is enough space of at least 2m or 5ft between passengers.

State government also a n n ou n c e d t hat t h e re should be no standing in all BRT and LBSL bus operations and all air conditioning system in public transport is put off. All buses should be at 60 percent capacity and not 100 percent (i.e danfo and other commercial buses.

In a statement signed by Frederic Oladein commissioner for transportation.

“Passengers are also expected to report any operator/company that does not comply with these guidelines to the monitoring officer at sight or write to the ministry, stating the vehicle registration number, park and time”.

However, investigations show that all the Lagos state directives aimed at ensuring public safety among commuters only exists on paper as these commercial bus operators are only concerned with bus fares paid to them by commuters.

MIKE OCHONMA

A NRC cautions commuters against sitting on train roof

MIKE OCHONMA

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ixed reactions have greeted the Nigerian Railway Corp o r a t i o n ’s (NRC) resumption of passenger train services announcement barely 24 hours the corporation announced that the services will be shut last Monday following the spread of the coronavirus desease.

While a cross section of train passengers say the earlier move to shut-down services was commendable in the interest of public safety and that no consideration for revenue generation by the NRC is

worth the life of any Nigerian, they also wondered why the management of NRC decided to make a U-turn under a very short interval of its earlier notice pronouncement.

Other passengers who spoke to our reporter on phone expressed worry over the directive by the NRC that all train passengers are to provide full details of their names, addresses, date of birth and means of identification.

Their worry stems from the fact that before now, reliance and authenticity of available data from the corporation, if any, is doubtful as a result of lack of proper documentation of passenger manifests in the

face of ticket racketeering and over-crowding of passengers inside the coaches.

Last weekend, the public relations department of NRC said the corporation is suspending train services as a result has the coronavirus pandemic nationwide, but after a review of its decision said it will resume services, but with list of conditions.

Yakub Mahmood in a follow-up statement titled; ‘Passenger Train Services To Continue’ dated March 22, 2020, the NRC said henceforth, all passengers are to provide full details of their names, addresses, date of birth and means of identification.

The Nigerian Railway Corporation (NRC) had on Saturday announced the termination of all train services across the country from Monday 23 March 2020, in order to curb the spread of Coronavirus in the country.

According to a statement signed by Yakub Mahmood, the NRC deputy director for Public Relations, further information on train services will be made available to train passengers over time: “The Board and Management of the Nigerian Railway Corporation (NRC) have decided to stop all passenger trains operation as from Monday 23rd of March 2020.

Inisde-out Roll Royce’s super rich digital luxury world MIKE OCHONMA

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olls Royce Motor Cars is introducing Whispers; a very innovative application from the digital house of Rolls Royce aimed at bringing something new to the door steps of that smaller segment of the super rich in the society.

Whispers apps are completely unique. It is a digital gateway to a fascinating world beyond, where the exceptional and the extraordinary come together and are tailored to meet the demands and tastes of our eclectic and highly valued community of clients.

Torsten Müller-Ötvös, chief executive officer, Rolls-Royce Motor Cars stated that “Whispers offers transformative experiences, rare and desirable products, whimsical treasures and exclusive Rolls-Royce previews that are curated by Rolls-Royce and delivered directly to the fingertips of our global community’’.

Rolls-Royce patrons are a unique subset of society - entrepreneurs, visionaries, and heads of state, royalty, founders and the brightest stars of the entertainment industry.

These clients are global citizens, connoisseurs, patrons of the arts, philanthro-

pists, collectors of fine and exquisite items; individuals untethered by common constraints such as time and money. These individuals have complete confidence in Rolls-Royce’s ability to delight and inspire them.

However, due to their highly mobile international lifestyles, they have been seeking a means to have more regular personal involvement with the marque, more experiences, more access, and more immersion in the luxury world open to Rolls-Royce as the world’s leading luxury brand.

This is Whispers. A digital House of Rolls-Royce Whispers acts as an entrepôt to a world that Rolls-Royce intimately and uniquely un-

derstands a digital gateway to a curated world of luxury.

Over two years ago, under a cloak of secrecy, Whispers was launched to a select group of globally distributed clients. A test-phase followed and after garnering a positive response, Rolls-Royce continued to evolve and adapt Whispers in close collaboration with its users.

Today, Whispers is fully deployed in the United Kingdom, Europe, the Middle East and the United States.

Membership is limited to owners of a new Rolls-Royce motor car.

Through Whispers, RollsRoyce offers, to the delight of its clients, access to an amazing and sometimes whimsical collection of luxury offer-

ings, transformative experiences, exclusive Rolls-Royce previews, inspiring articles and thought pieces, undiscovered destinations and perhaps most importantly, the ability to securely contact and privately commune with some of the world’s greatest minds.

Abiona Babarinde, general manager, marketing & corporate communications for the Coscharis Motorsowned Rolls-Royce Motor Cars Lagos said that Whispers is an exclusive, digital home for Rolls-Royce clients around the world.

Constantly adapting and refreshing to always ensure that its content remains current, relevant and in-line with the client’s interests, Whispers draws together many of the world’s most affluent and interesting people, some of which like private life, curated, inspiring and lovely.

It is truly the most exclusive members club in the world.

Rolls-Royce Motor Cars Lagos owned by Coscharis Motors plc is the exclusive franchise owner for RollsRoyce vehicles sales and service in Nigeria with showrooms and workshops located both in Lagos and Abuja, Nigeria’s seat of power and political capital.

Wednesday 25 March 2020

BUSINESS DAY

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insurance today

E-mail: insurancetoday@businessdayonline.com

Abule-Ado fire disaster: Insurance as enduring solution to disasters Modestus Anaesoronye

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L-R: Olalekan A. Adelakun, guest speaker; Abiola Longe, guest speaker; Humphrey Ozegbe , head, Human Capital, Linkage Assurance Plc; Oluwaseun Ajila, chief internal auditor, Linkage Assurance Plc; Rajiv Sharma, guest speaker; Imo Imo, head, Strategy & Business Development, Linkage Assurance Plc; Joyce Ojemudia, GM, Marketing, Linkage Assurance Plc; Anthony Saiki, DGM, Oil & Gas Marketing, Linkage Assurance Plc); Modupe Marc-Dawodu, guest speaker during the celebration of International Women’s Day organized by Linkage Assurance Plc in Lagos.

Insurance recapitalisation threatened by Coronavirus Modestus Anaesoronye

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f the coronavirus pandemic ravaging the global economy is not contained within the next two months, fears are that the ongoing recapitalisation in the nation’s insurance industry might suffer some set back.

The reason is that major meetings that could give go ahead to pursue the exercise, including Extra Ordinary General Meetings, board meetings and conferences are being cancelled as a result of the pandemic.

All of these may delay the exercise and affect companies wishing to raise funds from different sources.

Fears are also that operators may ask for extension of time if the pandemic affects their time table and ability to conclude the exercise before

the deadline of December 31, 2020.

Few weeks back, some CEO’s who commented on the development were worried that that this might mean so much for the industry.

“I am worried about the current fall in oil price, as well as coronavirus, and hope it does not lead to another recession, because if it does, then we will have problems in the ongoing recapitalisation exercise, an Insurance CEO said.

“We are headed for another recession; this is my biggest worry now, another insurance CEO. Insurance industry in Nigeria is going through a recapitalisation exercise that will require operators shore up their paid-up share capital to as much as 300 percent.

The exercise, which commenced on 20th May

2019 and to end on 31 December 2020, requires that life companies increase their paid-up share capital from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsurance companies from N10 billion to N20 billion.

Swiss Re Institute had stated a week agao that it’s expecting to see a global recession in 2020 as the coronavirus outbreak continues to cause major disruption around the world, putting pressure on already weak economic resilience.

Swiss Re analysts noted that the recession will likely be mild in a historical context, although economic growth will likely decelerate quite abruptly in Japan and the Eurozone, including in Italy,

France and Germany.

“We expect a global recession with economic risks having intensified abruptly,” said Jérôme Haegeli, group chief economist at Swiss Re. “Fact is: the coronavirus is hitting the global economy when economic resilience is already weak to start with.”

The US and China are forecast to remain more resilient, although the risk of both a US recession and a China hard landing has risen to a very high 40 percent.

Swiss Re also foresees further monetary easing, but said that central bank action will need to be coordinated with forceful fiscal expansion to be effective.

It noted that few fiscal measures have been proposed thus far outside of Asia, with coordination among the G7 countries most likely if the situation deteriorates further.

he Nigerian Council of Registered Insurance Brokers has described as unfortunate the recent fire disaster that occurred at Abule Ado in Lagos State during which 20 lives were lost and properties estimated at billions of naira were destroyed.

The Council also said the incident also provided an auspicious platform to underscore the pivotal place of insurance in risk mitigation and control.

Bola Onigbogi, president of the NCRIB said the fire incident which was reportedly caused by an explosion of the NNPC gas pipeline in the area is another disaster and we sympathize with those who lost their loved ones to the unfortunate incident.

Onigbogi opined that “at a time like this, the heart of our Council and the entire members go after those who lost their beloved families and valuables in the inferno. She said the incident also provided an auspicious platform to underscore the pivotal place of Insurance in risk mitigation and control, particularly through Insurance”.

The NCRIB president applauded the Governor, Babajide Sanwo-Olu for setting up a N2billion naira relief fund to address emergency

needs in the Abule-Ado Area.

This is highly commendable by the Governor.

However, insurance is a business setup for other businesses to thrive. A payment of little premium to Insurance Industry could have taken off the burden from the state Government.

According to Onigbogi, in other climes Insurance normally provide succor to people in the event of adversity occasioned by loss of lives and properties such as the case at hand. However, we are yet to embrace Insurance and give it priority in our nation.

She further noted that it has often been the case that government will have to provide succor to victims of disasters, which actually should not have been if Insurance was given its pride of place.

The Council used this opportunity to canvas that deliberate efforts should be made on the part of government to encourage the embrace of Insurance by the generality of the people for its enormous benefits to national economy and social stabilization.

“For instance, the humongous amounts often doled out as bailouts to victims of disasters could have been preserved and utilized by government for other pressing needs in the society, noted Onigbogi.

FBNInsurance settles N9.92bn claims in 2019 Modestus Anaesoronye

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BNInsurance in the 2019 financial year paid claims amounting N9.92 billion as against N4.31billion paid in 2018, given its believe that prompt settlement of customer’s claims is key to

the success of the business.

And this, has also continually boost customers’ confidence and trust in the company.

Val Ojumah, managing director/CEO of FBNInsurance, said, “As a responsive and reliable insurer that keeps its promises, we promptly paid claims to our clients to the tune of N9.92 billion which is a www.businessday.ng

Val Ojumah, managing director/ CEO of FBNInsurance Limited

130 percent increase from N4.31billion paid in 2018.

Our strategy remains providing financial security for our esteemed customers and as always, we will not fail to exceed our customers’ and stakeholders’ expectations.”

Commenting on the company’s commitment to customers’ satisfaction at the 5th Customer Fo-

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rum organised by the insurer in Uyo, a customer who pleaded anonymity said, “FBNInsurance is one insurer I am proud to be associated with because of their commitment in ensuring customer’s satisfaction and happiness. I can boldly say I have no regrets buying insurance policies from this reputable insur@Businessdayng

ance company, FBNInsurance. With them, I go to sleep without worries.”

Recall that FBNInsurance recently won the 2019 Best Life Insurance Company in Nigeria Award at the World Finance Award held in London. BNInsurance Limited is an FBNHoldings Company associated with the Sanlam Group of South Africa.

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Wednesday 25 March 2020

BUSINESS DAY

insurance today E-mail: insurancetoday@businessdayonline.com

Uninsured and vulnerable: How the coronavirus pandemic is hitting the world’s poor Modestus Anaesoronye

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icroinsurance provides a degree of protection for the worlds most low-income and vulnerable populations, but we already know that inclusive insurance penetration rates are alarmingly low in developing economies.

The current coronavirus pandemic will only make things worse for them.

Most obviously, health insurance can help with hospital bills, medicines or cash to replace lost income. In Kenya, after initial reports that some health policies - which typically exclude pandemics - would not cover coronavirus-related medical costs, the government’s Insurance Regulatory Authority has stepped in to ensure payments will be made.

Indian insurers have gone out of their way to reassure life policyholders that nominees of individuals who die from coronavirus will get the sum assured, even though many life products exclude coronavirus on the grounds that it is not classified as a ‘critical illness’.

“Lots of policies have had exclusions placed in them in the last 10 years due to experience with flu-type outbreaks,” says Michelle Crorie, a partner at law firm Clyde & Co. If enforced, exclusions are unlikely to improve trust in insurance, which is often cited as a key barrier to scaling up penetration in developing markets. Not everyone is pessimistic, however. Juan Paolo Roxas, head of the Philippines Insurance Commission microinsurance division, believes the coronavirus pandemic could actually help Filipinos become more aware of the importance of insurance cover. “I think more people will be inclined and be aware that insurance is actually there and helping us,” says Roxas.

Jonathan Batangan of Philippines insurance brokers Cebuana Lhuillier thinks the pandemic could provide an opportunity to create new products to provide cover against coronavirus. However, with many countries

L-R: Samuel Ekanem, NMRC; Gboyega Sadiq, UBA; Uduak Nelson Udoh, FirstBan; Aina Amah, Providus Bank; Yinka Tiamiyu, Access Bank, ; Hamda Ambah, MD/ CEO, FSDH MB; Dare Akinnuoye, FSDH; Adekunle Onitiri, Wema Bank; Felix Igbinosa, Ecobank; Prince Akamadu, Heritage Bank, at the 45th Quarterly General Meeting of the Association of Chief Audit Executives of Banks held in Lagos recently

encouraging ‘social distancing’ and selfisolation, distributing and accessing inclusive insurance products through mobile network operators (MNOs) and online – as well as supporting clients with information – will become even more important.

Should the worst happen, a life policy perhaps bundled with a microfinance product - will provide some financial cushioning.

Funeral cover will help defray what in some cultures can be an onerous financial burden. Yet with so few low-income individuals and families covered, the personal economic impact could push many of them back into debt and deep poverty.

The economic fall-out for micro, small and medium enterprises (MSMEs), and for the millions of low-income people who are informally employed, will be significant.

According to the Asia Business Review, business interruption (BI) insurance typically protects against losses caused by physical damage such as fire or flood - but it is unclear whether this will extend to the presence of coronavirus. In addition, micro BI insurance for low-income businesses is still in its infancy, and needs urgently to be scaled up. As with other types of microinsurance, the vulnerable are those that need it most and the sums insured are relatively

small. Insurers themselves will be hard hit: “The main losers will be firms with large whole of life books but low levels of reinsurance, and there is likely to be a large amount of sum at risk for policyholders in their 50s and 60s,” notes the Review.

Africa is particularly vulnerable. At the time of writing, infection rates across Africa are lower than in other developing regions.

While this is possibly due to existing containment measures for dealing with other infectious diseases such as ebola, capacity to roll out testing is limited and the potential for widespread transmission remains. Source: Microinsurance Network.

e

Linkage Assurance women seeks greater opportunities for more relevance

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Modestus Anaesoronye

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s the world marks the International Women’s Day this March, seeking empowerment for the feminine gender, female staff of Linkage Assurance Plc has underscored the importance of harnessing the potential and hidden abilities that rest with the women fold.

They noted that if the hidden abilities can be explored without being undermined by sentiments that women are the weaker gender, the feminine gender could

add so much value to the economy and society at large.

Speaking on the theme ‘Each for Equal’ as part of the activities to mark the women’s day, Joyce Ojemudia, GM, Marketing, Linkage Assurance called on the women staff to take advantage of the event and array of expert speakers brought together to redefine their career and launch themselves into higher responsibility in their professions.

Ojemudia also noted that it is important that women set goals, be focused, have clear vision, be committed to their visions, and take action.

“I will advice that we get your certifiwww.businessday.ng

cations and have mentors whom you can look up to for guidance and advice.”

The speakers, while agreeing that women are disadvantaged in a number of ways including managing career and family, they emphasized the importance of women overcoming these to make success in their career by exhibiting superior knowledge, by virtue of what they deposit or invest in their brain.

They also agreed that women should invest in every aspect of their life while also mastering the art of impression management, as that will give them the opportunity to be considered along their male counterparts for any position.

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On the theme of the conference, the speakers said it was app and necessary to stimulate women to know that they are not inferior to men, and could achieve so much if the pursue their goals conscientiously.

Among the speakers at the event held at Lilygate Hotel, Lekki includes- Modupe Marc-Dawodu who spoke on the topic ‘The Challenges Facing the 21st Century Women’; Rajiv Sharma, Management Leadership Skills; Lekan Adelakun, ‘Dynamics of Women’s Health and Stress Management’; and Abi Longe who also spoke on ‘Productivity and Performance to Achieve Corporate Goals’.

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Wednesday 25 March 2020

BUSINESS DAY

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Wednesday 25 March 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Over 63 tank farms in Apapa threaten lives, create traffic congestion - Haastrup …Says Apapa sitting on ‘a keg of gunpowder’ amaka Anagor-Ewuzie

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here are over 63 tank farms currently located in Apapa that are posing serious threat to lives, businesses, infrastructure and property within the port environment, says Vicky Haastrup, chairman of Seaport Terminal Operators Association of Nigeria (STOAN).

Speaking in Lagos last week during the Maritime Industry Reception dinner held in honour of Bashir Jamoh, newly appointed director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), Haastrup said that Apapa is currently sitting on a keg of gunpowder, given the presence of those tank farms within the port environment.

According to her, it was really sad to learn that so many people died on Sunday March 15, 2020 over

the gas explosion that happened at Abule-Ado in Ojo area of Lagos.

“When you look at the Abule-Ado incident, one can imagine that what is waiting to happen in Apapa would not be a child’s play.

It is only in Nigeria that one sees tank farms sitting in the middle of the city. It is not

like that in other developed countries of the world,” said Haastrup, who doubles as the executive vice chairman of ENL Consortium, a terminal operator in Apapa Port.

Stating that Apapa and Tin-Can Island are the gateway to the nation’s economy where trillions of government revenue generated,

she said that Nigerian economy depends largely on the seaports with a large chunk of import and export volumes being handled daily through both ports.

“The problem with Nigeria is that we wait till things get too late before we start to run around. If Nigeria does not do the right thing now to

COVID-19: Business activities at Shanghai port back to normal after crisis AMAKA ANAGOR-EWUZIE with agency report

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argo throughput at Shanghai’s Yangshan Deepwater Port, China’s single largest container processing port is nearing pre-COVID-19 levels as business activities returns to the port.

Yangshan Port said that in the last week, it cleared 52,000 twenty-foot equivalent Units (TEUs) of containers a day on average, nearly 95 percent of levels in pre-COVID-19 days.

According to report, on 4 March 2020, 19 ships run by mainline operators berthed at its premises for loading and unloading. “The vessels included six ultra-large container ships that can carry at least 18,000TEUs each. The ships will then sail on to Europe, North America and the Mediter-

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drivers to ferry containers to and from the ports, exacerbating the supply chain bottleneck.

Shanghai is the world’s busiest container port and Yangshan contributes 40 percent to its throughput.

Caused by a novel coronavirus, surfaced in Wuhan, China, in December 2019, but has since spread around the world, resulting in nearly 100,000 infections and more than 3,000 deaths.

Shanghai port, like many Chinese ports, are minimising the risks of infections by reducing faceto-face meetings and physical contact, with operations carried out remotely where possible.

Meanwhile, the impact of the Covid-19 virus on the supply is waning fast according to Sea-Intelligence’s latest Spotlight newsletter, with the race now on to meet the ex-

urgently be corrected by the Federal Government,” she stated.

She pointed out the need to correct the situation by facilitating the distribution of petroleum products through pipelines, and not using trucks. “Also, once government can get the refineries working, there will no longer be need for tank farms in Apapa, which attract these trucks.”

Meanwhile, she also pleaded with the new DG of NIMASA to help the port community by speaking with Mr. President on the need to change the situation in Apapa by relocating the tank farms.

Haastrup, who noted that training of dockworkers, which is the role of NIMASA has been left for too long, pleaded with the new DG of NIMASA to in addition to ensuring security within Apapa area, pay attention to training dockworkers.

PEBEC: NSC wins World Bank Ease of Doing Business ranking award

…Lines race to reposition empties in China ranean.”

Yangshan Port estimates that in the past week, there were at least 22 daily arrivals and departures of ships on long-haul routes, an increase of 36.5 percent two weeks before.

Furthermore, there were around 32 daily arrivals and departures of feeder vessels, up 20 percent from what it was two weeks earlier. The feeder vessels transport containers between Yangshan and ports along Yangtze River.

Chinese ports have begun clearing of their cargo backlog on their docks as workers resume work, after the prolonged Lunar New Year holidays that were implemented in a bid to curb the COVID-19 outbreak.

Although the holidays have ended, businesses remain cautious and have asked employees to resume work in batches. This also caused a shortage of truck

change the situation, it may get out of hand,” she warned.

She cited example of an explosion that happened in London in 2005 (a major fire at an oil storage facility at the Hertfordshire Oil Storage Terminal), which started in a tank farm, adding that tank farms supposed to be located far away from the city because it could blow up human lives, bridges and other properties.

Recall that the STOAN chairman had in several forums stated that the large number of tank farms located within Apapa has also compounded the chaotic gridlock in the port city, even as more licenses were being issued to new tank farm owners. “ The reason for the gridlock was that there is proliferation of petroleum tankers due to the preponderance of fuel tank farms and petroleum depots in the Apapa community. This is an anomaly, which should

pected increase in demand from China.

The incidence of new blank sailings is falling and the backhaul freight rates are beginning to increase as shipping lines prefer to reposition empties rather than concern themselves about the comparatively limited backhaul cargo.

“The bulk of the blank sailings were announced d ur ing w e eks 7 an d 8.

Weeks 9 and 10 have seen a clear tapering off in terms of new blank sailings, and the level of new announcements of blank sailings is back to the normal level.

This means that carriers are seeing demand ramping up back to normal levels over the next few weeks as well,” said the Spotlight report.

The race is on, according to Sea-Intelligence to reposition empty containers to take advantage of the expected increase in Chinese exports.

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n recognition of the efforts put into driving reform in the nation’s port environment through the Presidential Enabling Environment Council (PEBEC), the Nigerian Shippers’ Council (NSC) has won the World Bank 2019 Doing Business Ranking Award.

The award was in recognition of its contributions to the implementation of Trading across Border Indicator of the World Bank Doing Business, which saw Nigeria move up 15 places on the World Bank Doing Business Ranking 2020.

Adaora Nwonu, NSC’s reform champion at PEBEC, also received a special recognition award as the reform champion of the Council on the World Bank 2020 Doing Business Index.

The Annual PEBEC Award which took place at the State House in Abuja was hosted by the (PEBEC) under the chairmanship of the Vice President Yemi Osinbajo.

Osinbajo reiterated the @Businessdayng

critical role enabling business environment plays in a nation’s effort to grow in a sustainable manner and ensure the prosperity of its people.

While commending the awardees, he urged them to keep up the good work by going the extra mile in supporting the actualisation of the Federal Government’s reforms towards ensuring a business environment that is conducive.

Jumoke Odumole, special adviser to the President on Ease of Doing Business/ PEBEC secretary, acknowledged the support of Ministries, Department and Agencies as well as private sector institutions towards the improvement recorded by Nigeria on the World Bank Doing Business Ranking and Being named among the top 10 most improved economies for the second time.

She noted that there was still more work to be done to attain the target of being among the first 70 on the World Bank’s index by 2023.

Wednesday 25 March 2020

BUSINESS DAY

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Hapag Lloyd Liner makes first call at Ports & Cargo Terminal amaka Anagor-Ewuzie

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or ts & Carg o Handling Services Limited (PCHSL), the concessionaire in charge of Terminal C of the Tin-Can Island Port has added a new client to its list following the maiden call at its terminal by Hapag Lloyd AG Limited, German shipping firm.

Hapag Lloyd, the world’s fifth largest container carrier in terms of capacity, recently made its maiden call at the terminal with one of its largest vessel, Navious Azure, a container ship built in 2007 with gross tonnage of 39,906 tons and length

overall of 260.5 meters.

While welcoming the vessel’s crew, John Jenkins, managing director, Ports & Cargo Handling Services Limited, described the development as a testimony of the terminal’s readiness to provide cutting-edge port terminal services to more clients.

“We are excited to have this ship berth at our terminal today. We are delighted that Hapag Lloyd, which is one the world’s largest ocean shipping fleet owners, prefers our terminal for their operations, and going forward, the shipping line will call frequently at this terminal,” he said.

According to him, the

new business relationship with Hapag Lloyd is one of the several partnerships

PCHSL has been working on in the past few months.

“This new wave of pa-

tronage is as a result of the massive investment we have made both in mod-

L-R: Magret Orakwusi, chairman, Shipowners Forum; Bashir Jamoh, director general, Nigerian Maritime Administration and Safety Agency (NIMASA); Vicky Hasstrup, chairman, Seaport Terminal Operators Association of Nigeria (STOAN), and Mary Hamman, immediate past president, Women’s International Shipping & Trading Association (WISTA) at an industry stakeholders reception held in honour of Jamoh in Lagos recently.

ern equipment, quality personnel and improved processes over the years.

All these have translated in better service delivery, which is what an average client wants,” he added.

In his response, John Trafiero, captain of the s h i p, w h o w a s ov e rwhelmed by the hospitality and excellent service provided by the company, expressed joy at berthing at one of Africa’s prime ports.

“We have received a resounding welcome here today and it would stick in our memories wherever we sail to. Though, we are sailing back very soon, my crew and I cannot wait to be back here again,” he said.

Local Content: MG Vowgas, an indigenous firm builds specialise air boat amaka Anagor-Ewuzie

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G Vo w g a s Limited, an indigenous firm, has continued to receive accolades for clinching an award at the just concluded Nigeria International Petroleum Summit (NIPS).

The firm won the award in the ‘Local Content Company of the Year’ category for building a specialised air boat that has the capability to move on land and on water. The boat, which is called ballistic boat, has

features that can be fitted with arms and ammunition that can fire in any military operation on land or sea.

Godwin Izomor, group managing director of MG Vowgas Limited, who disclosed this to newsmen in Port Harcourt recently, said the firm has what it takes to deliver on its mandate, particularly in the production of specialised equipment for the military.

He expressed delight over the confidence the military repose in his firm just as he called for encouragement and support, to enable Nigeria to save the

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foreign exchange lost in procuring equipment from foreign countries.

Izomor said Nigerian personnel in the company are already understudying some of the expatriates in order to position to effectively take over their roles and responsibilities in the firm.

He further disclosed that the firm is working closely with the Defence Research and Development Bureau (DRDB) of the Ministry of Defence to build ballistic missiles, submarines, satellite rockets and other specialised equipment for

the military.

According to him, Gen. Abayomi Gabriel Olonisakin, chief of Defence Staff has visited the facility and was impressed by what he met on ground. “Remember, this is a wholly indigenous firm and in line with the provisions of the Local Content Act, we source most of our materials locally.”

To address the challenge of over dependence on foreign countries, he stated that his firm has entered into partnership with several manufacturers to develop human capacity in most of its areas of operations.

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“We are doing all these to show our people that we do not need to go overseas to procure this equipment. We have the capacity to build them here locally. That is why we are calling on everyone to come on board so that we can take our country to the desired height in every sphere of human endeavours, particularly in the oil, gas and maritime industries,” he added.

Lawrence Nwachukwu, an industry player, said indigenous companies like MG Vowgas Limited should be encouraged by the government to enable them

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position to provide employment for Nigerians.

According to him, creating employment would help to address the issue of insecurity in the country because someone who is gainfully employed would not be able to participate in insurgency, banditry, terrorism or any other form of criminal activities ravaging the country.

He further stated that government needs to build indigenous capacity in all sectors of the economy especially in the oil and gas industry, as well as maritime sector.

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Wednesday 25 March 2020

BUSINESS DAY

BANKING CBN, banking industry in collaboration to contain impact of Covid-19 …Lenders prohibit customers entrance into banking hall Stories by HOPE MOSES-ASHIKE

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ver the weekend, the Central Bank of Nigeria (CBN) in a meeting with the Bankers’ Committee, comprising mainly of chief executives of banks, dealt with the impact of Covid-19 on the banking system in particular and the economy in general.

The committee discussed the significant health and economic crisis caused by the novel coronavirus, which has resulted in escalating worldwide infections, deaths, disruptions in global supply chains, travel restrictions and turmoil in the international financial markets.

The committee agreed that profit will not be the primary motive at this time; rather, preserving confidence, financial stability and support for the economy will be the overriding objective.

Godwin Emefiele, governor of the CBN, who presided over the meeting, said engagements would be held with correspondent banks, trade creditors, trading partners regarding existing Letter

Godwin Emefiele, CBN governor

of Credit (LC) and trade commitments. The industry is committed to resolving these commitments in a comprehensive and orderly way.

At the extra ordinary bankers committee meeting Emefiele said the exchange rate of N380 per dollar at the Investors and Exporters (I&E)

forex window was not devaluation but an adjustment.

“CBN has a responsibility to see to adjustment in currency. What you have seen is an adjustment in currency.

We have also been accused that we have a hand. We don’t have a hand,” Emefiele said.

The CBN on Saturday de-

Sterling Bank partners HEI for medical intervention trust fund

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terling Bank Plc is collaborating with Health Emergency Initiative (HEI) to establish a medical intervention trust fund.

The partnership is a sustainable one that is meant to alter the health and emergency system in Nigeria.

Obinna Ukachukwu, division head, health and education sectors, Sterling Bank said the partnership is designed to provide emergency medical assistance to accident and emergency patients in public health institutions and provide training to address the public apathy in pre-hospital emergency care, stimulate public interest and close the skill gap.

“We will be assisting destitute patients in public hospitals for treatment not exceeding N20,000.00,” he said at the official launch of the trust fund in Lagos.

Ukachukwu said the bank believes in very responsible business practices or responsible method or growing its and that is why it focuses on the hearth sector.

So there is real emphasis on health, education, re-

newable energy, and huge emphasis on transport and agriculture, he said.

“This partnership is a direct focus on health and transport.

We are looking at how we can work with HEI to improve emergency response in Nigeria”.

Speaking further he said, “We partner to train people on how to handle emergency response. We also train road traffic operators, like Lagos State Traffic Management (LASTMA), Police and different people on how to handle this”.

Pascal Achunine, executive director, HEI, said the collaboration with Sterling Bank is a hand shake between the social and the private sec-

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tor as most times the private sector does not trust the social sector because of lack of transparency on how funds are administered.

“So Sterling Bank carried out due diligence on HEI and considered that what we have been doing has brought succour to over 103 accident victims, who have been assisted with over 80 percent survival rate,” Achunine said.

He said HEI has also assisted 400 primary healthcare cases, ranging from malaria, to diarrhoea, pneumonia and sepsis, adding that among beneficiaries, 60 percent is children. “So we have been doing more on infant and maternal cases”.

Achunine explained that the collaboration aimed at working together to build a structure and set up a medical intervention trust fund that would flourish, as well as make corporate organisations, individuals commit resources to that so that at any time when an emergency happens, or when cases that require less than N20,000 happen, there will be sufficient fund to attend to such.

valued the Naira as official exchange rate is now at N360 per dollar. The official rate which stood at N307 per dollar as at Friday is now pegged at N360 according to data from the CBN website.

Akintunde Olusegun, financial market analyst at Polaris Bank Limited said the devaluation was long expected even though the CBN has always maintained it will not. The impact of corona virus pandemic coupled with the oil price war that ensued between Saudi Arabia and Russia more than halved oil prices, putting pressure on the already stressed foreign reserve and casting doubt on the apex body resolve to continue the defence of the Naira.

It will have a negative downside impact on headline inflation as a result of its expected impact on the price of imported goods and raw materials (cost push inflation).

Nigeria is still more of imported goods consuming nation than producer. The impact will be directly felt by Nigerians paying children school fees of students abroad as well as all outbound vacation and medical tourism.

However, the moving of

the official rate to N360/$ will cushion the effect of drop in revenue on state governments in Naira terms as the new conversion rate will be in favour of Federation Accounts Allocation Committee (FAAC) allocation, he said.

“I expect more combined policies from both fiscal and monetary authorities around import substitution and backward integration.

Urgent structural reforms are needed at this time to support local production and consumption and to attract the much needed Foreign Direct Investments (FDIs)”.

The devaluation is not all negative, he said, adding that exporters will benefit in terms of conversion of their dollar earnings to Naira and the affordability of exports product to international buyers as a result weak Naira will bring more patronage.

Nigerian banks on Monday restricted access into banking hall by customers for fear of contact with coronavirus, which is rapidly spreading across the globe.

These banks are located at Ikeja and Ojueledge areas of Lagos State and they include First Bank of Nigeria, FCMB,

GTBank, Fidelity Bank, Access Bank, Ecobank, and Zenith Bank among others.

Investigation shows that customers queued in large numbers outside the bank as they were being directed to go to the Automated Teller Machines (ATMs) for withdrawals.

“We have been here since morning, before they opened the bank. Our attempt to get inside the banking hall was denied by the security men; instead we were directed to the ATM stand,” one of the customers at Zenith Bank at Mushin, Lagos said.

Access Bank in a note to customers said, “We have put in place a robust business continuity management programme that will ensure minimal business disruption and mitigate any potential negative impact. We are preparing alternate locations for key functions to ensure continuity should there be any disruptions in our primary locations.

We are working hard to scale our IT systems to support the expected increase in mobility that would be required to operate efficiently and respond to our customer needs during this period”.

Keystone Bank, LCCI enhance business consultancy for MSMEs

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eystone Bank Limited, a technology and service driven bank, has said it is partnering with the Lagos Chamber of Commerce and Industry (LCCI) to provide business consultancy services for micro, small and medium scale enterprises (MSMEs) in Lagos State in a bid to help small businesses grow.

Speaking at the launch of the inaugural edition of LCCI’s annual SME Support Centre in Lagos recently, Helen Nwelle, group head, MSME and value chain management of Keystone Bank, commended LCCI on the introduction of the programme while also assur-

ing the Chamber of the bank’s steady support.

She noted that, “Keystone Bank is an SME-centric bank focused on delivering tailored MSME value offerings and that has continually spurred our involvement in programmes like these.

“SMEs are the bedrock of our economy and the LCCI SME Support Centre will provide a platform where SMEs can meet seasoned consultants who will offer advisory services in areas of book keeping, capacity building, branding and digital marketing, to enable them to remain competitive in the current business climate.”

Citing SMEDAN’s latest report, Nwelle said, “Ninety nine percent of SMEs are in the micro sector, which means a lot of them are unstructured, making it difficult for them to access finance from banks and other funders. Therefore, this initiative will help empower SMEs with the needed skills for book keeping and cash flow analysis to aid finance readiness.”

According to a statement from the LCCI, the programme has the objective of introducing business consultancy services to MSMEs as part of an effort to boost businesses of entrepreneurs in Lagos State and by extension, the rest of Nigeria.

GTBank expands access to health insurance for low-income earners

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uaranty Trust Bank Plc has the launch Beta Health, a lowcost health financing product that offers instant access to health insurance for every Nigerian. The first of its kind in Nigeria, Beta Health provides coverage for basic and essential health services such as; general consultations, treatment for malaria, Ante Natal care, amongst others, for a subscription of N500 a month.

As at 2018, more than

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90 percent of the Nigerian population are not enrolled in any health insurance scheme, according to the country’s Ministry of Health. This is because health insurance is either too expensive or not very accessible to most people across the country. Beta Health is a response to this pressing national need and the latest offering in the long line of GTBank’s innovative products and services aimed at adding value to @Businessdayng

people’s everyday lives.

People who subscribed to Beta Health can walk into over 1,000 hospitals nationwide and get attended to for select medical cases, at no out-ofpocket cost. There are, on average, at least 5 healthcare centres in every local government area under the Beta Health coverage, and the plan also allows for subscription on behalf of a third-party; such as relatives, domestic staff, contract workers and employees of small businesses.

Wednesday 25 March 2020

BUSINESS DAY

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@Businessdayng

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Wednesday 25 March 2020

BUSINESS DAY

tax issues Nigeria’s border closure – Impact on Nigerian economy and recently signed African Continental Free Trade Agreement (AfCFTA) Nwakaego Ogueri-Onyeukwu, Michelle Okwusogu and Loretta Eze

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Introduction he AfCFTA framework is scheduled to take effect from July 2020. However, given the recent Nigeria land border closure with neighboring countries, it appears that the country may be unprepared to implement the AfCFTA commitments when these take effect.

Subsequent to Nigeria signing the AfCFTA, the federal government announced the closure of its land borders with Benin, Niger and Cameroon to prevent the movement of all goods, thereby effectively banning all imports and exports.

The government has justified the decision as a tactic to curb smuggling of goods such as rice, tomatoes and poultry in order to protect domestic farmers and increase agricultural production within Nigeria; stop illegal exports of cheaper, subsidised petroleum products from Nigeria to neighbouring countries; and ensure compliance with existing rules of origin within the Economic Community of West African States (ECOWAS).

This article seeks to address the impact of Nigeria’s border closure on the economy vis-a-vis the recently signed AfCFTA. The AfCFTA agreement The high and prevalent trade barriers within the African Continent constitute the major roadblock to trade on the African continent. Tariff and Non-tariff barriers represent a critical obstacle to the action of buying and selling, capital investment and the free movement of people amongst African countries. These trade barriers can be classified into taxes on imports, infrastructure gaps, significant trade-related transaction costs, technical barriers, import quota and non-tariff trade measures.

To curb these barriers, African regional leaders agreed to establish an Africa-wide mechanism for reporting, monitoring and eliminating tariff and non-tariff barriers. As such, the Assembly of Heads of State and Government of the African Union, at the 18th Ordinary Session held in Addis Ababa, Ethiopia in January 2012, defined the decision to harmonize trade amongst African countries by means of the AfCFTA. This requires African countries to look inward and make it easier to trade with one another by removing barriers to increased trade on the continent, such as high import and export tariffs.

The pact aims to boost intra-African trade by making Africa a single market of 1.2 billion people and a cumulative GDP of $2.5 trillion, across all 55 member states of the African Union. The UN Economic Commission for Africa (UNECA) estimates that the implementation of the agreement could increase intra-African trade by 52% by 2022 (compared with trade levels in 2010) and double the share of intra-African trade (currently around 13% of Africa’s exports) by the

start of the next decade. Direct access to a larger market will, on one hand, significantly improve commerce and industrialization across the continent and eliminate unemployment, on the other.

Despite having a deadline of 2017, the AfCFTA was not established until 21 March 2018 when the Kigali declaration was signed in Kigali, Rwanda, by 44 Heads of State . Subsequent to the signing, the operational phase of the AfCFTA was launched in Niamey, Niger on 7 July 2019 at the African Union’s Extraordinary Summit, with a transition period up to 1 July 2020, when trading is expected to commence under the deal.

Potential Benefits & Relevant Implications for Nigeria The main objective of the AfCFTA is to create a single continental market for goods and services , with free movement of business, persons and investments while also enhancing the competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources. The agreement will also assist to expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation across Regional Economic Communities (RECs) and across Africa .

According to a research paper published by the United Nations Conference on Trade and Development (UNCTAD) in February 2018, the AfCFTA offers many opportunities for sustainable development and economic growth in African economies. Nigeria, being Africa’s biggest economy and a regional leader, has a lot to gain from the recently signed AfCFTA including; • Benefits from lower import prices – With the commitment to remove tariffs on 90% of goods produced within the continent, Nigeria, alongside other countries, will enjoy cheaper access to goods and services from member states.

• Increased output and higher value-added jobs – The agreement will not only increase trade and investment amongst member states but will also facilitate Nigeria’s entry into the formal economy/local market of member states thereby increasing Nigeria’s access to a wider African Market. The unique continental marwww.businessday.ng

ket access would result in increased productivity and output and contribute to boosting Nigeria’s manufacturing sector and exports. The expected influx of business people, trade and investment will subsequently result in increased GDP and employment opportunities.

• Increased Innovation – This encompasses technological and industrial innovation, specialization etc. After trade liberalization, countries may specialize in the production of goods in which they have a comparative advantage vis-a-vis their trade partners. Specialization often raises output as the process allows for better and more efficient use of productive resources in economies.

• Addressing physical infrastructure gap – The AfCFTA encourages trade and capital investments in member nations. Increased public and private investments should consequently address majority of the infrastructural gaps in Nigeria such as investments in transport infrastructure.

Although the AfCFTA will give countries access to more markets in the global economy thus promoting economic integration, there are consequences that may arise from the agreement. These include : • Loss in trade tariff revenue – Although the Free Trade Agreement could increase cheaper access to goods and services which would result in economic gains for purchasing countries by removing tariffs on goods produced, selling countries would suffer significant tariff revenue losses. For the public sector, lower tariff revenues are the most pronounced concern in many developing countries like Nigeria as income/revenue earned from the custom duties, tariffs and taxes levied on imported goods will be reduced or lost. The possibility of experiencing significant tariff revenue losses during the transition remains a challenge for successful completion of the AfCFTA as these revenues are an important source of income for some governments.

• Stronger competition from foreign companies thus displacing local SMEs – Many SMEs fear that increased regional integration would lead to unfair competition for jobs and the goods produced locally in Nigeria. Trade liberalization also al-

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lows firms to access a large continental market and gain from economies of scale. In the long run, increased competitive pressures may improve firm efficiency but may also expose smaller firms to stiffer competition.

• Adverse impact on the agricultural sector – Given the expected growth in the agricultural sector and its contribution to the Nigerian economy and Africa at large, the objectives of the AfCFTA may bring about possible adverse impact on economic growth. For instance, an importation of cocoa into Nigeria from Cameroun may significantly affect the production and ability to sell cocoa by local farmers and vice-versa.

• Crucial adjustment costs – For African countries to enjoy benefits from the regional integration, they may have to reallocate resources within and between sectors. For example, potentially falling tariff revenues may cause challenges for governments. While some sectors shrink, workers may face temporary unemployment and domestic firms may suffer additional costs of upgrading labor skills or training for new skills in a bid to compete with international firms and as a result of the influx of business people, trade and investment. In addition, the implementation costs of trade reforms as a result of the liberalization may contribute to significant costs of adjustment.

Indeed, liberalization of trade in goods and services may entail adjustment costs for the African Union member States but these costs are typically outweighed by significantly higher long-term gains. However, despite the many benefits this agreement will render, not all the countries are expected to benefit equally from the free trade agreement as some countries will lose, others will gain.

While expected average GDP growth is around 1%, some countries are expected to grow over 3%, while some others are expected to contract.

Therefore, African governments must commit to keep working so that the gains from the AfCFTA are distributed as fairly as possible, making sure no one is left behind.

Nigeria’s Border Closure and its implication on Africa’s economic integration Nigeria’s border closure, which took effect in October 2019, was ex@Businessdayng

pected to be beneficial to Nigerian farmers/agriculturalists. Though the border closure was expected to end on January 31 2020, it is still in force as of the time of this writing and the negative consequences are beginning to outweigh the positive consequences envisioned when the closure began.

Traders were refused entry of goods, even those for which they had already paid customs duties; Consumers face inflated prices of food products—with some products being doubled in price and Exporters are unable to carry out business transactions with neighboring countries.

There are major concerns about the sustainability of this action and whether domestic food production can meet domestic demand. While the border closure may favour Nigerian farmers, in the long run consumers will have access to limited variety of products and will be exposed to high prices, case in point, rice. In 2017 alone, the demand for rice in Nigeria reached 6.7million tons. This was almost double the 3.7million tons produced domestically. Since the border closure in October 2019, the price of a 50-kilogram bag of rice has increased from 9,000 naira ($24) to about 22,000 naira ($61) .

In addition, and pursuant to Agenda 2063, the AfCFTA aspires to “create a continental market with the free movement of business persons, capital, goods and services”; however, the closure of the Nigerian border is inconsistent with the provisions of the AfCFTA to which it committed only a few months ago. These actions of the Nigerian government also raise important concerns about the prospects of regional integration – with Nigeria as a party to the agreement.

Being the most populous nation on the continent, Nigeria’s action to restrict trade flows so shortly after signing the AfCFTA is a major setback. It indicates the unpreparedness of African governments to display stronger leadership and the unreadiness for the free trade transition process.

The real issues however are not with the AfCFTA treaty itself but lie potentially in its implementation.

For example, the border closure demonstrates that there may be a gap in the implementation of the AfCFTA that must be fixed before the commencement date of July 2020, to enable cordial free trade on the continent. The Nigeria border closure must be resolved as soon as possible as it is disruptive and may create fear of resistance to trade deals amongst other African Countries which may hinder the AfCFTA negotiations and its implementation in these countries. The border closure may further serve to reduce other countries’ commitments to economic integration in Africa.

Nwakaego Ogueri-Onyeukwu is Manager, KPMG Advisory Services; Michelle Okwusogu, Senior, KPMG Advisory Services, while Loretta Eze is an Experienced Analyst at KPMG Advisory Services

Wednesday 25 March 2020

BUSINESS DAY

31

FINANCIAL INCLUSION

& INNOVATION

Why banks may record higher e-payment revenue amid boost in online orders Stories by Endurance Okafor

W

hile a lot of industries have been disrupted globally by the coronavirus outbreak, the e-commerce market is among the few that is likely to be favored by the pandemic.

Nigeria’s financial institutions are expected to leverage the likely surge in online shopping amid virus outbreak to post higher epayment revenue.

“With the COVID-19 epidemic posing significant concerns and a possible lockdown on activities, online shopping becomes an increasingly attractive option for consumers. Ultimately this leads to increased E-Payments revenue for the banks,”Ayorinde Akinloye, a research analyst at CSL stockbrokers said.

Among the electronic channels mostly patronised by Nigerians, Mobile payment and PoS recorded some of the highest revenue reported by Nigerian financial institutions in 2019.

According to the data by the Central Bank, the volume of transaction that was done through mobile payment was valued at N5.08 trillion while PoS posted N3.2 trillion in the same year.

A recent report by Quantum Metric, a SaaS platform provider shows the number of online shoppers increased

8.8 percent since the outbreak of coronavirus and led to a 52 percent surge in online sales as against the value reported a year ago.

The firm analyzed 5.5 billion anonymous and aggregated online and mobile visits to retailer websites from Jan 1 to Feb 29.

Ayo Ibaru, COO /Director - real estate advisory, Northcourt is optimistic that Nigeria’s e-commerce industry will benefit from the virus outbreak.

“E-commerce is expected to grow due to the virus outbreak,” Ibaru said adding that the growth of the e-commerce industry in

Africa’s largest economy will also lead to an increase in the demand for last-mile warehousing.

According to consulting and research firm Technomic, 52 percent of consumers globally are avoiding crowds and 32 percent are leaving their house less often because of coronavirus.

Like other countries around the world, Nigeria is gradually observing a partial lockdown with many of its citizens undergoing selfimposed quarantine.

With 36 confirmed cases and one death on Monday, the Federal Ministry of Health and the Nigeria

Tech-startup Youverify raises $1.5m seed round to automate KYC process

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ouverify, Nigerian Know-Your-Customer (KYC) startup has raised a $1.5 million seed funding round to help improve its technology and accelerate business development in Nigeria and abroad, as announced by the company.

Youverify aims to help financial services companies and mobile operators automate the verification processes of different types of data treated separately today, such as identity, academic background, home address, credit history and facial recognition.

According to the Lagosbased start-up, it has performed more than 300,000 custo m e r re g i st rat i o n s

and verifications since it launched in 2018 and is now planning on growth both in Nigeria and across Africa after raising the $1.5 million seed funding round.

“This constitutes a unique opportunity for us to take further our ambition to simplify and secure our client’s internal processes, whether in the recruitment of staff, or customer onboarding. Our ambition is to be the leading African player in verifying people and companies’ identities by making data protection and security the core of our proposal,” Olugbenga Agboola co-founder and chief executive officer (CEO) of Youverify said.

The round was led by Or-

ange Digital Ventures Africa (ODV), which counts Youverify as the fifth company to join its portfolio, and also includes Loftyinc Afropreneurs Fund, an early-stage investment fund.

“Matters of security and access to financial or telecommunications services should never be at odds with each other. Telecom operators like Orange are at the forefront of these transformational challenges.

We are proud to support Youverify, which intends to resolve this triple objective of fostering financial inclusion, strengthening security and preserving user rights over their data,” Grégoire de Padirac, investment manager at ODV said.

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Centre for Disease Control (NCDC) have recommended that maintaining social distancing, high hygiene culture through regular washing of hands with soaps and sanitizers and self-isolation as some of the safest measures of preventing the spread of the virus.

As part of measures to curb the spread of Coronavirus, Lagos State government declared two weeks break for civil servants in the state. The executive governor of the state, Babajide Sanwoolu announced this on Sunday.

“I hereby direct that all public officers in the entire unified public service from

grade level 1 to 12, which constitutes about 70% of our entire workforce should stay at home from Monday, March 23, 2020, for fourteen days at the first instance,” he said.

The Federal Government also imposed a travel ban on 13 high-risk coronavirus infested countries, the House of Representatives mandated it to ban open worship and other public gatherings until further notice.

Churches and mosques have been advised to lockdown as schools are shut in Lagos and the nine states in the Northwest.

The National Universities Commission (NUC) on Friday ordered the closure of all universities in Nigeria to prevent further spread of coronavirus.

“As part of the measures to contain and prevent the spread of the covid-19 throughout the country, approval has been granted for the closure of all schools,” NUC’s deputy executive secretary Suleiman-Ramon Yusuf said in a circular.

Financial analysts are therefore optimistic that the above measures to contain the spread of the virus will boost demand for online shopping and, thus increase the use of electronic payment.

Meanwhile, before the virus outbreak, Nigeria’s e-commerce industry was described as one on a growth trajectory as McKinsey pro-

jected the size of the market to reach $75billion by 2025, N58 billion higher than the current estimate of over $17billion.

The expansion of the industry is buoyed by the country’s young population coupled with the mobile phone penetration estimated at 89 percent by Global System for Mobile Communications (GSMA).

According to the 2019 data by GSMA, 50 percent of the total 89 percent of mobile phone users in Nigeria have access to the internet.

With broadband of 40 percent Nigeria has about 184.4 million mobile phone subscribers as of December 2019, as compiled from data

by Nigerian Communications Commission (NCC).

Nigeria’s growing cashless economy which began in Lagos in 2012 has since improved with digital payment and electronic banking implemented in phases across 27 states of the federation. This is another catalyst responsible for the growth reported by the country’s ecommerce industry, as compiled from industry sources.

Nigeria’s e-commerce industry which has some popular online stores like Jumia, Nigeria’s version of amazon. com, PayPorte, Deal Dey, Gloo.ng have also leveraged social media to onboard informal online owners who use Instagram, Facebook and Twitter their means of selling their products.

GTB launches health insurance product at N500 per month

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uaranty Tr ust Bank Plc (GTB) has announced the launch of Beta Health, a low-cost health insurance product that offers instant access to health care services.

“We have come up with a simple solution that we believe would make a big difference in improving access to quality, basic healthcare for every Nigerian. We call it Beta Health,” the tier-one bank said in a mail seen by BusinessDay on Thursday.

Describing Beta Health the lender said at a cost of just N500 a month all subscribers can access health care services.

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“Designed in partnership with leading insurance providers, it allows you walk into over 1,000 hospitals nationwide and get attended to for basic and

@Businessdayng

essential health services such as general consultations, treatment for malaria, Ante-natal care, etc., at no out-of-pocket cost,” the commercial bank said.

Explaining how interested persons can sign up for Beta Health, GTB said it takes less than a minute and no paperwork is required to sign up.

“All you have to do” is dial the bank’s UUSD code “from your mobile phone to sign up. Beta Health also allows you to subscribe on behalf of a third-party; such as relatives, domestic staff, contract workers and employees of small businesses,” it said

32

Wednesday 25 March 2020

BUSINESS DAY

Harvard Business Review

ManagementDigest

15 questions about remote work, Answered ity going down. There’s robust evidence showing that it shouldn’t change.

Tsedal Neeley The coronavirus pandemic is expected to fundamentally change the way many organizations operate for the foreseeable future.

As governments and businesses around the world tell those with symptoms to self-quarantine and everyone else to practice social distancing, remote work is our new reality. How do corporate leaders, managers and individual workers make this sudden shift?

Tsedal Neeley, a professor at Harvard Business School, has spent two decades helping companies learn how to manage dispersed teams. In this edited Q&A, drawn from a recent HBR subscriber video call in which listeners were able to ask questions, she offers guidance on how to work productively at home, manage virtual meetings and lead teams through this time of crisis.

Are organizations prepared for this sudden transition? he scale and scope of what we’re seeing, with organizations of 5,000 or 10,000 employees, asking people to work from home very quickly, is unprecedented. So, no, organizations are not set up for this.

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What’s the first thing that leaders and individual managers can do to help their employees get ready?

Get the infrastructure right. Do people have the requisite technology or access to it? Who has a laptop? Will those who do [have laptops] be able to dial into their organizations easily? Will they have the software they need to be able to do work, have conference calls, et cetera? What about the employees who don’t have laptops or mobile devices? How do you make sure that they have access to the resources they need to do work? Direct managers have to very quickly ensure that every employee has full access, so no one feels left behind.

What should people who aren’t accustomed to remote work do to get psychologically ready for it?

Develop rituals and have a disciplined way of managing the day.

Schedule a start and an end time.

Have a rhythm. Take a shower, get dressed, even if it’s not what you’d usually wear to work, then get started on the day’s activities. If you’re used to moving physically, make sure you build that into your day. If you’re an extrovert and accustomed to a lot of contact and collaboration with others, make sure that still happens. Ask yourself: How will I protect myself from feeling lonely or isolated and stay healthy, productive and vibrant? Create that for yourself.

Remember that you might actually enjoy working from home. You can play the music you like. You can think flexibly about your time.

It can be fun. As for managers, they need to check in on people. Make sure not only that they’re set up but also that they have a rhythm to their day and contact with others.

Ask: “What can I do to make sure that this sudden and quick transition is working for you?”

How should those check-ins happen? As a group? In oneon-ones? Via phone calls?

Or video chats?

First, you should have a group conversation about the new state of affairs. Say, “Hey, folks, it’s a different world. We don’t know how long this is going to last. But I want to make sure you all feel that you have what you need.”

This should be followed by a team launch to jump-start this new way of working. Figure out: How often should we communicate? Should it be video, phone, or Slack/Jive/ Yammer? If you’re not using one of those social media systems, should you? What’s the best way for us to work together? You’ve got to help people understand how to do remote work and give them confidence that it will work.

Once those things are sorted out, meet with your group at least once a week. In a remote environment, frequency of contact cannot go down. If you’re used to having meetings, continue to do so. In fact, contact should probably go up for the whole team and its members. Newer employees, those working on critical projects, and people who need more contact will require extra one-onones. Remember, too, that you can do fun things virtually: happy hour, coffee breaks, lunch together. All these things can help maintain the connections you had at the office. There’s ample research showing that virtual teams can be completely equal to co-located ones in terms of trust and collaboration. It just requires discipline.

How does working from home affect psychological health? What can employers do to make sure that people are staying focused, committed and happy?

People lose the unplanned watercooler or cappuccino conversations with colleagues in remote work. These are actually big and important parts of the workday that have a direct impact on performance. How do we create those virtually? For some groups and individuals, it will be constant www.businessday.ng

instant messaging. For others, it will be live phone conversations or video conferences. Some people might want to use WhatsApp, WeChat or Viber. A manager can encourage those types of contact points for psychological health.

People are not going to be able to figure these things out organically.

You’ve got to coach them. One more piece of advice: Exercise. It’s critical for mental well-being.

What are the top three things that leaders can do to create a good remote culture?

There are more than 10,000 books in the English language on Amazon on virtuality and how to lead remotely or at a distance. Why is that? Because this is very difficult to do, and managers have to actively work on it. Number one, make sure that team members constantly feel like they know what’s going on. You need to communicate what’s happening at the organizational level because when they’re at home, they feel like they’ve been extracted away from the mother ship. They wonder what’s happening at the company, with clients and with common objectives. The communication around those are extremely important. So you’re emailing more, sharing more.

During this period, people will also start to get nervous about revenue goals and other deliverables.

You’ll have to make sure they feel like they’re going to be OK. Another thing is to ensure that no members feel like they have less access to you than others. At home, people’s imaginations begin to go wild. So you have to be accessible and available to everyone equally.

Finally, when you run your group meetings, aim for inclusion and balance the airtime so everyone feels seen and heard.

How will these changes affect productivity?

Productivity does not have to go down at all. It can be maintained, even enhanced, because commutes and office distractions are gone. Of course, you might be at home with your partner or kids and those issues will need to be worked out. Another problem might be your ability to resolve problems quickly when you can’t meet in person, in real time. That might create delays. But other than that, I don’t see productiv-

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If the social distancing policies go on for a while, how do you measure your employees’ productivity and eventually review them on that work?

I’ll say this to every manager out there: You have to trust your employees. This is an era and a time in which we have to heed Ernest Hemingway’s advice: “The best way to find out if you can trust somebody is to trust them.” You can’t see what people are doing.

But equip them in the right ways, give them the tasks, check on them like you’ve always done, and hope they produce in the ways you want them to. You can’t monitor the process, so your review will have to be outcome-based. But there’s no reason to believe that, in this new environment, people won’t do the work that they’ve been assigned. Remote work has been around for a very long time. And today we have all of the technologies we need to not only do work but also collaborate. We have enterprisewide social media tools that allow us to store and capture data, to have one-to-many conversations, to share best practices and to learn.

Let’s talk about virtual meetings. What are some best practices, beyond the general advice to clarify your purpose, circulate an agenda, prepare people to be called on and so forth?

First, you have to have some explicit ground rules. Say, “Folks, when we have these meetings, we do it in a nice way, we turn off of phones, we don’t check emails or multitask.” I highly recommend video conferencing if you have the ability to do that. When people are able to see one another, it really makes a difference. And then you trust people to follow the ground rules.

Number two, because you no longer have water-cooler conversations, and people might be just learning how to work from home, spend the first six to seven minutes of a meeting checking in.

Don’t go straight to your agenda items. Instead, go around and ask everyone, “How are you guys doing?” Start with whomever is the newest or lowest status person or the one who usually speaks the least. You should share as well, so that you’re modeling the behavior.

After that, you introduce the key things you want to talk about and again model what you want to see, whether it’s connecting, asking questions or even just using your preferred technology, like Zoom or Skype for Business.

The last thing is you have to follow up these virtual meetings with redundant communication to ensure that people have heard you and that they’re OK with the outcome. Say you have a video conference about a topic. You follow it up with an email or a Slack @Businessdayng

message. You should have multiple touchpoints through various media to continue the trail of conversation.

And how do you facilitate highly complex or emotionally charged conversations when people aren’t face to face?

You can only raise one or two of these topics because you don’t have the time or opportunity to work things through after the meeting. You can’t just walk to people’s offices to follow up. So, be very thoughtful about what you bring up and when and how you do it. But you can still have these conversations. Allowing people to disagree in order to sharpen the team’s thinking is a very positive thing. Sometimes, in virtual environments, people don’t feel psychologically safe, so they might not speak up when they should.

And so you might even want to generate or model a little of disagreement — always over work, tasks or processes, of course, never anything personal.

In light of various day care and school closings, how do you discuss children and child care?

Leaders should be prepared for that conversation and to help people think those issues through.

The blurring of boundaries between work and home has suddenly come upon us, so managers have got to develop the skills and policies to support their teams.

This might involve being more flexible about the hours in which employees work. You don’t have to eat lunch at 12 p.m. You might walk your dog at 2 p.m. Things are much more fluid, and managers just have to trust that employees will do their best to get their work done.

We’ve talked about internal communication, but what advice do you have for people in client-facing functions?

We’ve been seeing virtual sales calls and client engagements. You do the exact same things. Here, it’s even more important to use visual media. Take whatever you would be doing face-to-face and keep doing it. Maybe you can’t wine and dine.

But you can do a lot. Be creative.

What do you do in an organization where you have a mix of both blue- and whitecollar workers? Or for those colleagues who aren’t properly equipped?

The organizations have to figure out a way to support those workers: some kind of collective action to help them because otherwise you’re completely isolating people who are critically important to your operation. I would put together a task force, and I would find solutions to keep them connected and ensure that they still feel valued. And include them in the planning.

Wednesday 25 March 2020

BUSINESS DAY

33

news

Customs ready to implement directive on total border closure - spokesman AMAKA ANAGOR-EWUZIE

A

s part of effort to contain the spread of the deadly coronavirus, Nigeria Customs Service (NCS) on Tuesday said its officers were ready to implement the new Executive Order on total closure of all the nation’s land borders.

Joseph Attah, national public relations officer of Customs, said this on TVC programme, “Your View,” on Tuesday morning.

According to Attah, Customs operatives are alert on their duty posts at land borders, seaports and airports to enforce government directives accordingly.

Attah, who stated that the above mentioned areas were well manned by Customs officers, said the new order would ensure there

was no movement of people in and out of the country through the land borders.

“This is total lockdown and we must ensure that things that can endanger our lives and security are not allowed into the country,” he said, who doubles as the border drills’ spokesman.

He further said the service had put down measures to protect officers on duty, by ensuring that they wear hand gloves, use sanitizers and other necessary items needed to ensure safety.

Recall that Nigerian land borders have been partially closed to all forms of international trade for the past seven months in line with the Federal Government’s drive to end smuggling of contraband commodities and to improve local production.

Obaseki advocates sustainable funding of research to combat infectious diseases

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do State governor, Godwin Obaseki, has called for adequate and sustainable funding of research and development (R&D) by governments and high-networth individuals to combat the spread of infectious diseases.

The governor said this in commemoration of World Tuberculosis Day, marked every March 24, by the World Health Organisation (WHO) and other organs of the United Nations to raise awareness of the disease.

He said, “As we mark the World Tuberculosis Day, it is important for governments and high-net-worth individuals to provide funding for research that will lead to workable solutions on prevention and cure to infectious diseases. The need to support adequate and sustainable research is more important as the world battles to halt the spread of the novel Coronavirus (COVID-19) disease.”

Obaseki said the Edo Health Improvement Programme (Edo-HIP) is designed with wellequipped primary healthcare system to help in the fight against infectious diseases, especially with the intensification of immunisation efforts in the state.

The governor said the state’s investment in human capital cuts across education and health infrastructure, noting that refurbishing of 30 primary healthcare centres through the Edo-HIP initiative across the state has improved access to healthcare

services.

On the theme for this year’s celebration, ‘It’s time’ the governor said it is imperative for all leaders to support genuine effort by researchers and other stakeholders to provide innovative solutions for tuberculosis, as part of measures to improve access to prevention and treatment of the disease.

He noted, “It is important to acknowledge the role of leaders in ensuring their people have access to quality medical care on prevention and treatment of tuberculosis at the centres closest to them.

“People should be encouraged to visit hospitals to access quality and affordable healthcare on prevention and treatment of infectious disease like tuberculosis. In Edo State, the compulsory Health Insurance Scheme for every resident is designed to assist them get basic medical care rather than resort to self-help.”

Obaseki added that the state government will continue to intensify campaign on immunisation in the state which is anchored on the need for children to lead lives that are not shortened by vaccine-preventable diseases.

He said his administration will continue to support the Irrua Specialist Teaching Hospital (ISTH), to stem the spread of infectious disease like the novel COVID-19, as part of government’s resolve to tackle health issues.

Feminik Logistics joins others to fight spread of coronavirus Daniel Obi

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igerian firms have suddenly woken up to join in the fight against the spread of coronavirus pandemic, which if unchecked would have severe consequences on commerce.

Already, some markets are businesses have shut down while others have asked their employees to work remotely in compliance to social distancing.

To assist in checkmating the ferocious disease in Nigeria, a country with about 32 cases with one death, Feminik Logistics, one of Nigeria’s

foremost logistics companies and a member of World Cargo Alliance (WCA) and Global Affinity Alliance (GAA) network, visited different spots within Lagos recently to distribute free hygienic tools including hand sanitizers, face masks and soaps to stop the spread of coronavirus in Lagos.

This outreach is in line with Feminik Logistics’ extensive CSR initiatives and a way to engage with the public on the need to take preventive measures in order to stop the spread of the virus by observing personal hygiene such as frequent washing of the hands for the safety of everyone.

Covid-19: How Nigerian government can avert mass layoffs by OPS - NECA Joshua Bassey

…after Atiku’s son tested positive

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tion to provide palliatives and stimulus to businesses, “we make bold to say that much more could be done to keep businesses afloat and reduce the risk of massive job losses.”

Olawale notes that governments in other climes have taken specific measures to protect local industries and guarantee job security for their citizens.

“In Australia, government provided tax-free cashflow for employers. Up to $25,000 is available to help pay wages or for investment to protect against downturn in activity.

“This is excluding wage subsidy and instant asset writeoff for businesses with turnover of less than $500 million. In China, SMEs were exempted from payment of pension contributions, unemployment and work injury insurances, while same had been halved for large companies from February to April 2020, and also extension on the tax reporting period; import goods and materials were exempted from import tax, among other palliatives.”

he Nigerian government must urgently initiate specific and direct business sustainability schemes to save organised businesses from the debilitating effect of the Covid-19 pandemic to avert looming mass layoffs of workers.

This is the position of Nigeria Employers’ Consultative Association (NECA), which says such measures are already being taken in other countries to sustain jobs.

The International Labour Organisation (ILO) has projected that over 22.7 million jobs could be lost globally as a result of the Covid-19 pandemic.

In Nigeria, however, even before the outbreak of Covid-19, the unemployment situation had been worrisome, and NECA believes it does not have to get worse.

Timothy Olawale, directorgeneral of NECA, speaking in Lagos, says while the body commend the efforts of the Central Bank of Nigeria (CBN) for inten-

…Aisha Buhari calls for total shutdown

Speaking further, the NECA director-general states that Cook Island provided an economic stabilisation fund consisting NZ56 million to support business continuity.Itincludedprovisionofwage subsidyattheminimumrateforup tothreemonthswhileinDenmark, the government is providing Pay Compensation Scheme to companies with the risk of laying off in order to retain jobs.

He notes that under the scheme, which will last for three months, the state will cover 75% of the salaries of employees paid on a monthly basis who would otherwise have been fired, with companies paying the remaining amount.

He further notes that for hourly workers covered by the agreement, the government will cover 90% of their wages, up to 26,000 Danish kroner (£3,162) per month.

He also points to France, where the government proposed that water, gas and electricity bills as well as rents will be suspended for companies in difficult situation.

Similarly, fixed costs will also be reduced by the saving of rents, especially for businesses that have to closed, in France, while in the Ireland government instituted a payment of €305 per week for two weeks for those self-isolating and for those diagnosed with the virus, the payment will be made for the duration of illness.

“This is separate from the payment of €203 per week for six weeks (Covid-19 pandemic unemployment payment) available for affected workers (including self-employed) who have been impacted but not ill or self-isolating,” the director-general says.

He also makes reference to Italy, where the government, among others, initiated the suspension of payments of taxes and social security contributions, while the Japanese government pays 8,330 yen per day for each worker who misses work, while selfemployed people, as well as freelance workers who meet certain conditions, will receive a uniform 4,100 yen per day.

Yakubu Dati (r), Plateau State commissioner for land, survey and town planning, being offered sanitizer by Attia Nasreddin, chairman/chief executive officer, NASCO Group of Companies, during the visit of the commissioner to the NASCO

Air Peace denies carrying COVID-19 suspect on-board flight IFEOMA OKEKE

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igeria’s major carrier, Air Peace, has denied airlifting a passenger suspected of being infected with coronavirus on its Lagos-Kano flight on Tuesday.

The airline explained that a 13-year-old boy who was accompanied by his parents but flying for the first time suffered from flight phobia and vomited in the aircraft while the aircraft was airborne.

Air Peace also explained that when the incident happened the Captain in Command of the flight informed air traffic control and Port Health about the development before the flight landed at the Mallam Aminu Kano International Airport, Kano.

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Unfortunately, some officials at the airport made a video of the aircraft when it arrived and shared it on the social media and misinformed the public that the aircraft had a COVID-19 suspect.

Air Peace disclosed that the flight waited for about 50 minutes so that officials from Port Health Authority would attend to the boy.

Port Health has also confirmed that the boy suffered from flight phobia and disclosed that after interviewing the parents they disclosed that the boy vomits even when he travels by road to school, adding that when he was tested the test showed negative.

Toyin Olajide, chief operating officer of Air Peace, who made this known, said as it had become a tradition, the airline’s

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COVID-19 team sanitises and checks the temperature of every passenger and gives approval before he was allowed to board the airline’s flight.

She also disclosed that the aircraft was again disinfected by Port Health Authorities at the Kano airport before passengers were checked in to Abuja.

“We did not carry any passenger that has COVID-19. What happened was that a 13 year-old boy was travelling by air for the first time. He was with his parents. While airborne, he started vomiting. The pilot promptly called Port Health, even when it was obvious that he was suffering from flight phobia.

“The Captain also informed the Control Tower about the incident but when the aircraft @Businessdayng

some people made a video of the aircraft and started circulating false information about what really happened.

“When the aircraft landed it was delayed for 50 minutes so that Port Health officials would come and examine the boy.

They checked his temperature and certified him okay. They also disinfected the aircraft and we boarded passengers to Abuja.

“We have been protecting out passengers and crew from Coronavirus. We are the first airline to adopt the screening of passengers for COVID-19 before boarding them and we have our COVID-19 team, which must certify every passenger before he is allowed to board. It is regrettable that some people chose to misinform the public about what happened,” Olajide said.

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COVID-19: Ogun confirms fresh case of 62-year patient, tracks 32 contacts RAZAQ AYINLA, Abeokuta, & KELECHI EWUZIE, Lagos

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gun State government has confirmed fresh case of a 62-year-old man, a UK returnee who was tested positive for coronavirus in Sagamu area of the state.

BusinessDay reports that the UK returnee whose name is withheld, arrived Nigeria last week Tuesday, March 17, was tested positive to the disease, having engaged in self-isolation before being tested positive.

Speaking in Abeokuta while briefing some journalists, Tomi Coker, Commissioner for Health, said the UK returnee “has been very responsible by isolating himself since he arrived Nigeria,” adding that a total number of 32 contacts had been identified and tracked for COVID-19 in the state.

Coker said 32 contacts who included 28 healthcare givers and four members of of COVID-19 patient’s family whom the UK returnee presented himself with history of dry cough before he was tested positive to the virus, had also been identified and under close medical observation and security supervision.

He said, “Today, we have a newly confirmed case of COVID-19 in Ogun State. Our priority at the moment is to provide

care for the gentleman. He’s been transferred to our Isolation Centre which is located at Olabisi Onabanjo University Teaching Hospital (OOUTH), Sagamu.”

However, determined to compensate primary and secondary school pupils for the time lost due to the restriction placed on schools across the state to prevent the spread of Coronavirus, the Ogun State Ministry of Education has commenced the transmission of digital classes.

The digital classes tagged “Ogun DigiClass will be commenced Tuesday, March 24, 2020, and will be aired on the Ogun State Television, OGTV. Dapo Abiodun, Ogun State governor disclosed this on his twitter handle @dabiodunMFR saying the initiative will be facilitated by the State Ministry of Education, Science and Technology and will be handled by experienced educators on core topics.

Abiodun says the morning session will be aired between 9 am - 11 am, while the afternoon session will be aired between 1 pm-2pm.

According to him, “The interactive class, which will allow for questions from viewing pupils and students, can be watched online by those who do not have access to the televised sessions via http://ogundigiclass.ng Abiodun urged Parents and guardians to allow and enable

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their children and wards to benefit from this initiative.

Meanwhile the Lagos State Commissioner for education, Folashade Adefisayo the Lagos State government as part of measures to sustain continuous learning for students has planned some Radio and Television Programmes to support senior secondary school 3 students preparing for their West African Senior School Certificate Examination (WASSCE).

Adefisayo noted that some of the teachers will be assigned to teach and review with the students on 8 core subjects with emphasis on relevant topics. The subjects are; English Language, Mathematics, Biology, Chemistry, Physics, Literature-In-English, Financial Accounting and Economics. These intense sessions of teaching and exchange of knowledge by the teachers will be recorded, aired on several media stations and streamed online through various social media platforms.

Adefisayo expressed that this programme which is to review what the students have been taught before the break will run from Monday through Thursdays while a phone-in session with the Honourable Commissioner and other teachers will be aired on Friday to create an avenue for the students to ask questions on areas in which they are having challenges.

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Wednesday 25 March 2020

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COVID-19 to increase unemployment rate … 24.7m job loss projected by ILO Gbemi Faminu

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esides hitting the economy hard, the coronavirus (COVID-19), still spreading like wildfire, is also going to deal the labour force a huge blow as the International Labour Organisation (ILO) projects that the virus could claim up to 24.7 million jobs, forcing a rise in unemployment scale.

According to the ILO, “The world of work is being profoundly affected by the global virus pandemic. In addition to the threat to public health, the economic and social disruption threatens the long-term livelihoods and wellbeing of millions.”

Based on different scenarios for the impact of COVID-19 on global GDP growth, the ILO estimates indicate a rise in global unemployment of between 5.3 million (low scenario) and 24.7 million (high scenario) from a base level of 188 million in 2019,” according to a report.

This is fuelled majorly by the screeching halt global economies are experiencing, which has called for the need to restrict movement and reduce interactions to the most minimal level. Consequentially, the fall in employment rate will increase unemployment and underemployment.

The report also states that the decline in economic activity will increase working poverty projected to lie between 8.8 and 35 million additional people.

Similarly, the International Air Transport Association (IATA) has disclosed that Nigeria’s aviation industry will lose $434 million in revenue as well as over 22 thousand jobs, and over 2 million passengers as a result of the coronavirus.

The disease, which broke out in China, has affected over 40 countries leading to more than 12 thousand deaths. In addition, the impact of the virus has grown beyond a health calamity into a global economic and social mishap limiting growth and development.

“This is no longer only a global health crisis, it is also a major labour market and economic crisis that is having a huge impact on people,” said ILO director-general, Guy Ryder.

Analysts believe that due to the screeching halt in economic activities as well as possible low demand, companies revenue will be affected, which will lead to downsizing.

Akinloye Ayorinde, analyst at CSL Stockbrokers Limited, said the coronavirus, which has caused a slowdown in economic activities, would grow the unemployment rate as many companies would engage in layoffs.

Samsung records major milestone, acquires approval to operate private jetty in Lagos Shipyard ISAAC ANYAOGU

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amsung Heavy Industries Nigeria (SHIN) says it has recorded another major milestone in its operations after obtaining approval to expand its fabrication and integration yard services following a new lease from the Nigerian Port Authority (NPA).

SHIN notes in a release that it had received an approval from NPA backed by Presidential Committee for their licence application to operate a private jetty for their fabrication and integration yard in Tarkwa Bay, Lagos.

According to the statement, the new direct lease agreement opens up opportunities for more international projects, partnerships and an expanded service offering for the worldclass facilities with over 500

million length of robust quay wall, where Samsung made an investment of over $300 million.

The new licence provides SHIN with a strong foundation to continue its leading fabrication and integration activities for West Africa’s oil and gas industries, as well as maritime related activities. The SHIN fabrication and integration yard is now able to deliver marine services, ship maintenance, repair and manufacturing to the regional maritime industry.

It is gathered that the flexibility of its facilities allows it to accept all kinds of seagoing vessels and conduct a wide range of operations.

The SHI-MCI yard, which is one of the most advanced ISO 29001 and ISO 9001 certified yard in West Africa, is a fully secure facility that is strategically located to allow optimum

proximity to the main shipping channel. Due to this, it will also save customers costs due to its excellent accessibility.

The 502-metre-long quay wall alongside the 121,000 square metre yard can accommodate ships with up to 13metre draft and boasts the largest capacity travelling tower crane in West Africa with a lifting capacity of 70 tons It also has a load-bearing capacity of 25 metric tons per square metre on average and vessel mooring bitt capacity of 100 tons (in total there are 72 bitts); while the quayside height from the chart datum is 2.6 metres.

The statement adds that the certainty of a direct lease, followed by the private jetty license will enable SHIN develop full multi-purpose terminal operations and expand its operations to include one-stop

logistic services to customers.

The new agreement permits any national vessels to berth directly alongside the 502 metres wharf and discharge their cargo in various types and sizes.

Jejin Jeon, managing director of SHIN, says the yard will also handle the transportation of container cargo, vessel maintenance, supply of utilities, storage space and will facilitate crew changes.

“I am pleased that the Federal Government of Nigeria, acted by NPA has entrusted us with a direct land lease for our existing fabrication and integration yard, and approved our license application to operate our facilities as a private jetty.

This gives more certainty to foreign investors to continue investing in Nigeria and will attract significantly new international projects for the benefit of all stakeholders.

Stakeholders caution government on fixation on debts as COVID-19 alters budget KELECHI EWUZIE

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he Federal, State and L ocal governments have been urged to be proactive in spending to avert the looming danger associated with increasing debt, seeing that coronavirus pandemic has affected oil price that in turn alters the 2020 national budget implementation.

This obser vation was made at the 2020 roundtable discussion titled: The Art of National Budgeting and Nigeria’s Debt Profile: Sectoral and Demographic Implications organised by the Covenant University’s Centre for Economic Policy and Development Research (CEPDeR).

Ben Akabueze, directorgeneral, Budget Office of the Federation, who was the keynote speaker, said the Budgeting in Nigeria had been focused on allocation rather than revenue (fund availability) due to the oil wealth effect, adding that this discourse was very timely considering the current effects of COVID-19 and dwindling oil prices.

Akabueze, who was represented by Olumide Ayodele, technical adviser to the director-general, Budget Office of the Federation, said Nigeria’s analysts need to focus on Sub-National budgets in order to engender the required development needed at the grassroots.

The ke ynote speaker pointed out that the main challenge to the Federal Government budget financing was the poor revenue perfor-

mance that could be attributed to several factors.

Talking about revenue, he noted that the COVID-19 pandemic would have an impact on VAT, domestic income, foreign trade, oil prices and spikes in risk aversion in the global financial market.

Discussing the budget’s impact on Small and Medium-scale Enterprises, Oluwasegun Osidipe, director, Economics and Statistics, Manufacturers Association of Nigeria (MAN), said it was the expectation of manufacturers that a critical portion of the budget would be allocated to developing strategic infrastructure, saying, “The major challenge is not the availability of incentive is not the availability of necessary policies, the major challenge is SMES getting the right information to even know what is available for them”.

It is the stringent regulatory environment by government account for why a lot of SMEs play in the informal sector, Osidipe said, adding that unless government changes its strategy, it will continue to lose the huge money exchanging hands in the informal sector.

Temitope Jebutu, general manager, AACE Food Processing & Distribution Limited, while discussing the budget as it affect agriculture sector, observed that the 2020 budget was already starting on the wrong foot, noting that a budget that was done on a $57 per barrel oil benchmark was already faulty in implementation going by the global crisis of Covid-19. www.businessday.ng

L-R: Green Kinikanwo, board chairman, Rivers State Primary Health Care Management Board (RSPHCHB); Kaniye Ebeku, commissioner for education, Rivers State; Solomon Eke, executive chairman, Obio/Akpor Local Government Area; Michael Daramola, legal and corporate affairs director, International Breweries plc, and Eze Amb G B Odum, paramount ruler/Nyenwe Eli, Oginigba Kingdom in Rivers State, during the inauguration of the N44m Oginigba Health Centre built and equipped by International Breweries in Rivers State.

Huawei awarded leadership telecoms firm of the year 2019 SEGUN ADAMS

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uawei Technologies Company Nigeria Limited has been awarded the Leadership Telecoms Company of the Year 2019. Huawei began operations in Nigeria in 1999, over two decades ago.

Through these years, the company has proven to be a trustworthy ICT partner for Nigeria, maintaining its focus on connecting the unconnected by providing technology for all.

The annual Leadership Award, organised by Leadership Group Limited, is recognised as a highly coveted prestigious award that focuses on celebrating organisations and individuals in the public and private sector who have made a distinguishing difference in a calendar year. The 2019 Leadership award ceremony was well attended by a past vice president of Nigeria, state governors, CEOs, royal leaders, entertainment stars and prominent entrepreneurs.

Commenting on the award,

Kelvin Yangyang, the deputy managing director and head of public relations, Huawei Technologies Company Nigeria, in an interview, stated, “Huawei is happy to be recognised for its contributions to the growth of the Nigerian ICT industry. In over two decades ago since Huawei began business operations in Nigeria, we have collaborated with the government, operators and other partners to ensure every Nigerian enjoys quality access to telephony and internet coverage across the nation – in rural and urban areas. Huawei is committed to do more. We will continuously support and contribute to digital inclusion in Nigeria by making technology accessible for all”.

Since Huawei’s entrance into Nigeria, the company has developed ICT infrastructure that enables digital transformation by building secure networks, which presently connects more than half of the country, in rural and urban areas.

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Lagos tests 25 people per day on coronavirus ... monitors 5000 ANTHONIA OBOKOH

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s Lagos State has confirmed 28 cases of coronavirus, Japheth Olugbogi, chairman, Committee on Covid 19, Nigeria Medical Association (NMA) Lagos State branch, says over 25 people are tested per day in the state.

According to Olugbogi on a national television, as cases are coming in the government keeps rolling out results to the populace, noting that the government is not hoarding the numbers.

“We are also monitoring and testing people in contact tracing. We don’t have enough test kits just like every other nation dealing with this issue, but we are monitoring more than 5,000 people and we test immediately if any of those people begin to show symptoms,” @Businessdayng

he said.

Olugbogi said we had rolled out a lot of messages and were still doing a lot, saying, “We want to partner with the media to disseminate accurate information.”

He therefore advised that people should not wear a pair of hand gloves throughout the day, noting that it could spread a lot of germs everywhere.

All schools in Lagos have now closed, as the Lagos State government has also asked all public officers from level 1 to 12 to stay at home for the next two weeks as a precaution against the spread of coronavirus.

The state governor, Babajide Sanwo-Olu, in a briefing recently, advised that those returning from foreign trips were also expected to self-isolate.

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Bauchi governor tests positive to coronavirus …as three Abba Kyari’s staff test positive Godsgift Onyedinefu & Tony Ailemen, Abuja

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auchi State governor, Bala Mohammed, has tested positive to coronavirus, according to information emanating from his aide. Mukhtar Gidado, senior special assistant to the governor on media, disclosed this in a press statement on Tuesday.

The governor had earlier admitted he met and shook hands with Mohammed, son of former Vice President of Nigeria, Atiku Abubakar, who tested positive to the virus on Sunday.

Meanwhile, three staff of the Chief of Staff to the President, Abba Kyari, are said to have tested positive to the virus.

Although it has not be confirmed, the Presidential Villa has scaled down the number of reporters to cover activities of the President during the period of the current restrictions announced by the Federal Government.

A circular titled “COVID-19: Downward Review of Correspondents’ Presence in the Presidential Villa”, signed by the deputy director of information at the State House, Attah Esa, Presidency selected eight reporters and five cameramen to report events, until further notice.

The decision, according to Esa, follows the “current restriction in the Fed-

CONFIRMATION OF NAME Same person bears Ganiyu Quadri and Ganiyu Quadri Adebayo. Henceforth, I want to be known as Ganiyu Quadri Adebayo. All former documents remain valid. Polaris Bank, general public should take note.

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eral Capital Territory (FCT) against gathering of not more than 50 persons at the same time at any venue, as well as to be able to maintain social distancing following the spread of Covid-19 pandemic.

“It has become imperative to drastically review down the presence of the over 100 State House Correspondents who usually rendezvous in the Press Briefing Room in the Presidential Villa during this period since all other departments have scaled down the presence of their staff.

“Accordingly, only the under listed correspondents are to enter the Villa for media coverage of any event beginning from Wednesday, March 25, 2020 until further notice as the Covid-19 incidence will dictate.”

Presidency said the team, made up of the chairman, SH Press Corps, NTA crew, Channels TV crew, TVC crew, FRCN reporter, VON reporter, NAN reporter, the Sun Reporter, will be coordinated by the chairman.

The photographers include those of ThisDay, Leadership photographer, Daily Trust photographer, Guardian photographer and Vanguard photographer.

“During this interim arrangement, we advise those who are not represented in the above list to liaise with those listed for necessary information/news as well as the Information Officers in the President’s Media Office.

“We plead for your understanding and cooperation as the Security Department enforces the restriction measure during this trying period.

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Lagos orders closure of non-food markets, stores from Thursday ...as 1,800 suspected cases under watch Joshua Bassey & Anthonia Obokoh

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he Lagos State government has ordered the closure of all markets from Thursday, March 26, as a further step to contain the spread of the coronavirus pandemic.

The order came as the number of suspected cases under watch in the state has risen to 1,800. Actual confirmed cases of the coronavirus in the state as at Tuesday, March 24, stood at 28, with the possibility it might climb higher.

The state governor, Babajide Sanwo-Olu, who addressed journalists at the Government House, Marina, said the decision to close the markets was to halt person-toperson spread of the virus.

According to Sanwo-Olu, only markets and stores that sell food items, drugs, water, among other human essentials, would be al-

lowed to operate.

“Fellow Lagosians, today I have some further new directives and guidelines to share with you, as follows: “The organised private sector is hereby encouraged to follow the steps of the public sector and allow as many workers as possible to work from home.

“Banks and other financial institutions are encouraged to prioritise online channels for their services to the public; with only essential and key senior staff being in the office during these times.

“The chief judge of Lagos State has been directed to ensure that all magistrate and high courts in Lagos State close immediately to the public and suspend all court sittings; and much as is possible, essential services should be transacted electronically,” he said.

Sanwo-Ou added that all public parks, including those in private and residential estates, swimming

pools, gyms, beauty salons, and all such public places are expected to shut down at this time, until further notice.

“All open markets and stores are directed to close, except for sellers of food and medicines, medical equipment and other essential life-saving products.

For those that fall into the aforementioned categories, it is imperative that they observe necessary precautionary measures of social distancing,” he added.

The governor also urged all travel to and from Lagos, whether by air or by road, be avoided at this time, in line with earlier directive by the Federal Government to the residents of Lagos and Abuja to stay home.

He said, “I would like to reiterate this in the strongest terms possible. As much as possible let us all refrain from inter-state traveling of any kind, until the worst of the crisis is behind us.”

He warned that anyone caught flouting any of the above directives as well as the previously issued directives would be dealt with to the fullest extent of the law.

“As I mentioned, law enforcement agencies and other relevant Lagos State protection agencies have been imbued with the power to deal with recalcitrant offenders.

We will not relent in ensuring strict compliance with our directives.

He, however, said that all confirmed cases and the ones that have since been discharged, were doing well and in stable condition.

He also assured that the state government was identifying other isolation centers across the five divisional zones of Ikeja; Badagry; Ikorodu; Lagos Island and Epe to ensure seamless and coordinated approach towards the quick identification and isolation of suspected cases without overwhelming the mainland infectious diseases hospital in Yaba.

L-R: Issa Aremu, general gecretary, NUTGTWN; Kole Shittima, chairperson, planning committee; Owei Lakemfa, former national secretary, NLC; Bayo Olukoshi, lead speaker, and Kabiru Yusuf, chairman, Media Trust Limited, during a memorial colloquium, theme “The Future of Democracy in Nigeria” for Bjorn Beckman, comrade scholar internationalist and friend of Nigeria, in Abuja.

Pic by Tunde Adeniyi

National Assembly adjourns for two weeks as coronavirus fear heightens across Nigeria … no senator has tested positive … mourns late senator Oko Onyinye Nwachukwu, Solomon Ayado & James Kwen, Abuja

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igeria’s National Assembly on Tuesday adjourned plenary for two weeks as fear of the coronavirus pandemic heightens across Nigeria and after some lawmakers who recently returned to the country refused to self-isolate.

The lawmakers will resume April 7, 2020.

The resolution for a recess was reached during a closed session by the Senate, and announced by the president of the Senate, Ahmad Lawan, after a closed meeting with senators, which lasted about 40 minutes.

Lawan, while giving details into what transpired during the

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closed-door session, said lawmakers unanimously agreed that the National Assembly adjourn plenary for a period of two weeks due to the virus, which has led to most countries shutting down activities so as to curtail the spread of the disease.

He, however, emphasised that the Senate would reconvene to attend to matters of national importance that require urgent legislative intervention within the period the National Assembly would be on recess.

“The Senate in particular, and the National Assembly in general, further resolved to adjourn sitting for two weeks from today, due to the pandemic of coronavirus ravaging the entire world and the entire world, and therefore, the Senate resumes on the 7th of April.

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“However, the Senate will be on hand in case of emergency in any national issue that requires its attention,” Lawan said.

He further advised Nigerians to observe all preventive measures recommended by the National Centre for Disease Control (NCDC).

While calling on the Federal Government to immediately set aside a Special Intervention Fund to curtail the spread of COVID-19 in Nigeria, Lawan advocated for the release of financial assistance to states for the same purpose.

“As at now the only way out of the pandemic is for the population to observe recommended measures/advices by the NCDC. The Federal Government should devote special funds to fight the COVID-19 virus threatening Ni@Businessdayng

geria.

“Also, the Federal Government should give financial and other resource assistance to the states in the fight against the virus,” he said.

He added, “The Senate Committee on Health and Private Healthcare and Communicable diseases will continue to engage the Federal Ministry of Health and Presidential Task Force on COVID-19.

Also, the House of Representatives is to totally shut down legislative activities indefinitely as a preventive measure against the dreaded coronavirus pandemic.

However, the Senate denied that 10 senators who returned from abroad had refused to get tested of COVID19, insisting that “no Senator has tested positive of coronavirus.”

Wednesday 25 March 2020

BUSINESS DAY

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@Businessdayng

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Wednesday 25 March 2020

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news CBN in watch-and-see mode, holds...

Continued from page 1

Babajide Sanwo-Olu (m), Lagos State Governor, briefing Government House correspondents after the State Security Council meeting at Lagos House, Marina, on yesterday. With him (L-R): Abdulfatai Sanusi, director, Department of Security Service (DSS); Etsu Ndagi, brigade commander, 9 Brigade, Ikeja Army Cantonment; Gbenga Omotoso, commissioner for information and strategy; Hakeem Odumosu, commissioner of police, Lagos Command; Akin Abayomi, commissioner for health, and Ibrahim Aliyu, commander, Nigeria Navy Ship (NNS) Beecroft, Apapa.

Coronavirus hits Nigeria’s seat of power...

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ported cases in the country

officially stood at 42 as at press time.

At least three persons working in the office of Kyari have also been reported to have tested positive to COVID-19, although the Nigeria Centre for Disease Control (NCDC) was yet to officially tally that number as at 7:30pm yesterday.

Senior government officials will be among the list of those the NCDC will be contact-tracing. These elites, used to travelling abroad for medical care, are stuck in Nigeria.

“Will the countries they have invested hugely in be willing to accommodate them on health emergency basis?

No,” said Olohunlana Aminat Olanyinka, an economist and policy analyst at the University of Lagos. “It is indeed time for our leaders to have a rethink and understand there is no place like home.”

Olanyinka pointed to the low recovery rate noted in the country, attributing it to poor healthcare facilities in the country.

So far, of the 42 cases reported, only two patients have recovered, although there has been just one death.

A son of former Vice-President Atiku Abubakar has been infected and Buhari’s daughter is in self-isolation after returning from the UK. Kyari was confirmed as a carrier of the virus by the NCDC after returning on March 14 from Germany, where he went for a meeting to discuss a power deal with Siemens.

But as opposed to the proper tradition of self-quarantining for at least 14 days after returning from a trip to a coronavirus-burdened country like Germany, where over 31,ooo of its populace have been infected, Kyari was at Aso Rock last Sunday for a meeting that had in atten-

dance top political leaders, including President Buhari and Vice President Yemi Osinbajo.

This has sparked serious outrage and fear, with health experts saying the virus may have been transmitted to others present at the meeting, which might escalate the country’s affected numbers.

The growing list of the elite class would add to the increasing number of Nigerians jostling for the country’s limited health-care facilities which are already insufficient to contain the spread.

There are few COVID-19 testing centres in the country while isolation facilities, like in Enugu, are sub-standard, prompting lawmakers to decry the situation recently.

Africa’s largest economy is banking on its failing health sector, which has suffered low budgetary allocation and years of neglect from the government, for rescue to contain the coronavirus pandemic, at a time when advanced countries have shut their borders in order to keep the virus at bay.

Olanyinka of the University of Lagos said the situation in Nigeria could have been different if the government had paid attention to the healthcare system.

Taking a cue from some of the worst-hit countries, South Africa’s President Cyril Ramaphosa on Tuesday announced that sub-Saharan Africa’s worst affected country would be on lockdown by midnight on Thursday.

The aim is to reduce stress on the country’s healthcare system and flatten the curve.

South Africa and other countries that are badly hit can boast of better healthcare systems, indicating Nigeria could have it much worse if preventive measures do not go according to plans.

Nigeria has 0.5 hospital beds per 1,000 patients compared to 2.9 in the United States, 3.4 in Italy, 4.2 in China, 2.8 in the United Kingdom

and 2.8 in South Africa, according to latest data from World Bank.

There is 0.4 doctor per 1,ooo Nigerians compared to 1.8 in China, 2.8 in the United Kingdom, 4.1 in Italy and 0.9 in South Africa.

According to the World Health Organisation (WHO), Nigeria has one of the lowest doctor/population ratio in Africa. A poll citing the Medical and Dental Council of Nigeria (MDCN) reported that there are about 72,000 nationallyregistered Nigerian doctors, with only 35,000 practising in-country.

Factoring this figure with national population estimates, there is a deficit of over 260,000 doctors in Nigeria and a minimum of 10,605 new doctors need to be recruited annually to meet global targets.

An earlier BusinessDay investigation showed that the country’s emergency system is morbid, with facilities in the Lagos State University Teaching Hospital unable to accommodate emergency cases.

The problem can be directly linked to underfunding of the healthcare system and has seen many medicine graduates leave the country for better climes, a medical doctor at a private hospital told BusinessDay on anonymity basis due to his company policies.

No less than 5,405 Nigerian doctors are practising in the UK alone, according to Nigerian Medical Association (NMA) data.

The indirect cost of illness in Nigeria has been estimated at $879 billion, more than double the country’s GDP, and accounting for about 36 percent (more than one third) of the $2.42 trillion total productivity loss across the WHO African region.

This was contained in an exhaustive report on ‘The indirect cost of illness in Africa’, produced by the World Health Organisation.

The report also noted approximately 50.9 percent of loss in Lower-middle-income

Countries (LMIC) was borne

by Nigeria, which in 2018 had a paltry health budget of N340 billion ($946 million), equivalent to $5 per person when divided by the country’s 193 million population.

Nigeria’s health expenditure as a percentage of the Gross Domestic Product (GDP) averaged 3.4 percent between 2007 and 2016, compared with South Africa (6.5 percent) and Kenya (4.5 percent), according to data sourced from the World Bank.

In the pharmaceutical aspect of healthcare, the cost of drugs also makes it difficult for many people to get treatment.

70 percent of drugs used in Nigeria are imported, implying the already financially challenged Nigerians have to a pay premium for most medicines.

“In Nigeria we import most of our raw materials, it is only water that we do not import,” said Moji Adeyeye, director general, National Agency for Food and Drug Administration and Control (NAFDAC. The almost non-existent and equally weak health insurance in Nigeria has seen out-of-pocket payments for healthcare become the norm, driving many people into poverty. Fifteen years after the inception of the National Health Insurance Scheme (NHIS), it has only managed to enrol about 4 percent of Nigerians, roughly 7.7 million of the 193 million population.

In the face of the critical health crisis and its consequent effect on the economy, the Central Bank of Nigeria announced a N1.1trn credit support for the manufacturing and healthcare industry, especially, while it released foreign exchange to 10 pharmaceuticals to boost medical supplies in the country.

“The problem is when or if the number of infection starts hitting hundreds. For now we can cope,” a medical doctor told BusinessDay. “We cannot build a hospital in 10 days like China but can fall back to makeshifts.”

tervention facilities.

After the two-day Monetary Policy Committee (MPC) meeting, all the members unanimously voted to keep other parameters unchanged. Consequently, Cash Reserve Ratio (CRR) was retained at 27.5 percent, the liquidity ratio at 30 percent as well as the asymmetric corridor around the MPR at +200 and -500 basis points.

“The choice to hold considered the loan to deposit ratio and the CRR policy which sterilise excess liquidity in the banking system, hence an increase in the MPR would have been counterproductive,” said Godwin Emefiele, governor of the CBN. The committee felt that tightening would result in unreining input in the rising trend in inflation and that it would support reserves creation. Nigeria’s inflation rate rose to 12.20 percent in February 2020 from 12.13 percent recorded in January.

However, Emefiele said tightening would reduce money supply and limit the capacity of deposit money banks to create credit, thus resulting in increasing the cost of credit with adverse impact on output growth.

Tightening will also reduce aggregate demand as a fall in aggregate consumption will result in output compression, whereas at this time policy emphasis should be on stimulating aggregate supply and demand both of which have already been weakened by COVID-19.

“No surprises from the CBN’s Monetary Policy Committee, with the CBN holding all parameters unchanged, largely as expected,” Razia Khan, managing director, chief economist, Africa and Middle East Global Research, Standard Chartered Bank, said.

With respect to loosening, the committee felt it would stimulate the economy in the short term and boost aggregate supply and demand. Nevertheless, the committee was of the view that there was a need to be cautious in loosening given the fact that it would exacerbate an already worsening inflationary condition resulting in massive pressure on reserves and exchange rate.

Bismarck Rewane, CEO, Financial Derivatives Company, said the MPC rate is an anchor rate which anchors all other rates.

“Even if we increase it or reduce it the banks will not reduce lending rates, so what is the use of the MPR? The whole point of the MPC meetings is to influence be-

haviours, or make investors react in a certain way at the end of the day. The discussion is about what they can do with their policies right now given the coronavirus,” Rewane said.

Based on the current downturn in oil prices, Emefiele said staff projections indicate that output in 2020 would be less than earlier envisaged. The major downside risks to the outlook include the continued spread of COVID-19; further decline in crude oil prices and the reduction in accretion to external reserves; reduced government revenue leading to weak aggregate demand; declining non-oil receipts; as well as infrastructural and security challenges.

He said these headwinds would be partly mitigated by the timely and effective response of the monetary and fiscal authorities in containing the spread of the COVID-19 viral infection, the recalibration and adjustment of the 2020 federal budget to the revised thresholds while pegging expenditure to critical sectors of the economy, adoption of a new fiscal regime to encourage the build-up of fiscal buffers; sustained CBN interventions in selected sectors; enhanced flow of credit to the real sector and deliberate policies to diversify the Nigerian economy.

The MPC members urged the NASS to avoid the tendency to increasing the benchmark price of oil in the federal budget as this usually results in the adoption of unrealistic budget re-estimate.

The committee cited the potentials for foreign direct investment flows to the Nigerian auto, manufacturing, aviation and rail industries which the country can take advantage of.

However, Lanre Buluro, director and head of sales, Chapel Hill Denham, said the decision to hold the MPR was very surprising.

“What’s the value of the MPR? Is it the best bank rate for lending? It is quite relevant in the grand scheme of things, although banks might not necessarily follow but usually there is this moral suasion about numbers and how some people behave in some kind of way around that number,” Buluro said.

Abdulrahman Yunusa, member, governing council, CIBN, said, “As a banker, I will say that is quite disappointing. The job of the MPC is to clarify whatever they are trying to signal and also trust that as rational economic base people are going to take a cue from that.”

Wednesday 25 March 2020

BUSINESS DAY

39

FEATURE

Ensuring that hunger does not kill more people than COVID-19 in Africa NDIDI NWUNELI

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ith the global spread of the COVID-19, and gradual lock downs in cities and countries across Africa, I have new fears - that starvation and hunger may kill more people than the virus. These fears are hinged on the realization that it is planting season in most parts of the Continent, and yet farmers are being asked to sit at home, the movement of seasonal workers is restricted, research institutes that provide seeds, fertilizer blending companies and agrodealers, processors and markets are all being shut down. Our regional and national borders are closed, and trading is being restricted. These realities, if pro-longed and not urgently addressed, will lead to short term consequences of food shortages, price hikes, and medium to long term consequences of under-nutrition, mass starvation and eventually death, especially among our most vulnerable populations.

While I understand the urgent need to stem the virus through social distancing and lock downs, we have failed to recognize that workers in the food industry, just like our health care workers, are essential to the fight against the pandemic and desperately need to be protected and supported. Indeed, without nutritious food, the sick cannot recover, and the healthy will eventually become unwell.

My fears are shared by a few stakeholders in Europe and North America. The EU Farmer’s organization - COPA-COGECA earlier this week actively advocated for support to ensure minimal disruptions to the food supply chain, worker protection and contingency plans. The United Kingdom and the United States have already outlined comprehensive plans to provide intervention grants, loans, and tax holidays, for stake-

holders in the food industry, including restaurant owners and retailers affected by the economic fallout of the pandemic. In Mexico, farmers who continue to plough their fields are being celebrated as heroes.

Sadly, unlike our counterparts in Europe and North America, there has been no coordinated action from industry groups, the private sector, civil society, or the public sector to raise awareness about the looming food crises on the African Continent, linked to COVID-19.

Thankfully, it is not too late to act!

We must take decisive and proactive steps to ensure that our people have access to affordable nutritious food in both our urban and rural communities. This will require that: • Our governments at the federal, state, and local levels recognize key stakeholders in the food and agricultural landscape as essential workers

“

Sadly, unlike our counterparts in Europe and North America, there has been no coordinated action from industry groups, the private sector, civil society, or the public sector to raise awareness about the looming food crises on the African Continent, linked to COVID-19

www.businessday.ng

and provide them with the protection and support that they need to continue to work, following prestipulated safety and health protocols. We must keep food markets and factories open, with clear guidelines around limiting crowds, and widely publicized schedules for who can enter during what periods of time. We can also learn from China’s example over the last few months, where government officials, especially the Ministry of Agriculture and Rural Affairs (MARA) and Ministry of Human Resources and Social Security and National Health Commission repeatedly issued comprehensive notes to farmers on the control and prevention of the virus in rural areas, as well recommendations and protocols for preparing for their planting season and sustaining the livestock and poultry sectors.

Beyond guidance and protocols, our governments must urgently partner with the financial services sector to develop comprehensive loan packages for farmers, and entrepreneurs who are committed to working during the crises and can demonstrate their capacity to fill critical gaps in the food ecosystem.

These interventions must actively engage women, who play a critical role in the sector. In addition, our governments must assess the national strategic and emergency grain reserves to gauge what is available and how to effectively manage and deploy these reserves in a transparent and accountable manner to minimize price hikes and widespread shortages.

•Our industry associations, fast moving consumer goods companies, international trading companies, aggregators, wholesalers, and retailers must work together seamlessly to ensure the efficient and effective provision of affordable food to the masses of people. Leveraging technology, raw material suppliers and processors can actively partner with logistics providers and retailers to

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ensure that food is moved to where it is needed most, and no community is left behind.

This is not a period for hoarding and price gouging, with a focus on profits and growth at all costs. Companies must rise to the higher ideal of shared corporate values, where they put the needs of their customers and the African people ahead of their own requirements for profits and shareholder value. To ensure that this occurs, consumer protection and anti-competition agencies must closely monitor the activities of the largest actors in the food industry to ensure a level playing field.

In addition, the private sector can facilitate the introduction of drones, sensors and other precision agriculture and innovative technology solutions, which will allow for active monitoring of commercial farm activity from a distance. Companies such as Atlas AI have demonstrated the power of technology to manage farms and assess impact, without direct human contact.

Our nonprofit organizations and media organizations must provide thought-leadership, monitoring and guidance to the entire ecosystem.

Organizations such as GAIN are already providing critical guidance during this period.

•Finally, average citizens must invest in their own backyard and community gardens, while ensuring social distancing, manage their food budgets judiciously and share with their neighbors. We must rebuild trust in our communities by caring for the most vulnerable at this exceedingly challenging time in our history as humanity!

As an eternal optimist, I am hopeful that as a people we will survive the COVID-19 pandemic, emerging with some critical lessons and a more resilient, united, and efficient food ecosystem. Now is the time for governments, stakeholders in the food ecosystem and citizens to act! Every minute counts! @Businessdayng

NDIDI OKONKWO NWUNELI is the managing partner of Sahel Consulting Agriculture & Nutrition and the Co-Founder of AACE Foods.

She is a 2018 Aspen New Voices Fellow and is currently writing a book titled “African Entrepreneurs Nourishing the World,” as a research fellow at the MR-CBG at the Harvard Kennedy School. www.sahelconsult.com

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BUSINESS DAY

FT

FINANCIAL TIMES

World Business Newspaper

Facebook eyes multibillion-dollar stake in Reliance Jio Deal seeking to expand social media giant’s presence in India stalled by coronavirus travel ban Anjli Raval, Tim Bradshaw and Benjamin Parkin

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acebook is seeking to buy a multibilliondollar stake in Reliance Jio, whose cutprice mobile internet service has attracted 370m Indians in just three years, according to two people with knowledge of the discussions.

Facebook was close to signing a preliminary deal for a 10 per cent share in the heavily indebted Jio, one person close to the negotiations said, although the timetable of a deal has been affected by the global lockdowns caused by the coronavirus outbreak.

If it proceeds, the deal would give Facebook a key foothold in the Indian market, where its WhatsApp chat service has 400m users and is about to launch a payments service.

Since launching Jio in 2016, Mukesh Ambani’s Reliance has emerged as the only Indian company capable of competing with US tech groups in the fast-growing Indian market, expanding from mobile telecoms into everything from home broadband to ecommerce.

Analysts at Bernstein valued Jio at more than $60bn.

Google had also been engaged in separate talks with

Since launching Jio in 2016, Reliance has emerged as the only homegrown company capable of matching US tech giants in the Indian market © Bloomberg

Reliance Jio, one of the people briefed on the discussions said.

The talks come after Microsoft last year announced plans to partner with Jio to offer cloud computing to businesses.

India has emerged as a vital market for Facebook and its WhatsApp messaging platform. The number of internet users in India is expected to rise to about 850m in 2022, according to consultancy PwC, up from 450m in 2017. Facebook overall is now estimated to have more users in India

than any other single country.

Meanwhile, the country overtook the US last year to become the world’s secondlargest smartphone market after China by unit shipments, according to Counterpoint Research, making it a high priority for Silicon Valley companies as well as their rivals in China.

However, the Indian market has become increasingly difficult for Silicon Valley companies to access, as the government has added restrictions to

overseas businesses operating there, including with its proposed Personal Data Protection Bill.

A deal with Facebook was due to be announced later this month, coinciding with the end of the Indian financial year.

Reliance’s debt burden has swelled as it has expanded Jio, and the deal would form part of its plans to cut net debt to zero by March 2021. The company has also built the largest retail player in India as it

makes an aggressive move into consumer-facing businesses.

In an attempt to reduce its debt pile, Reliance has sought to sell off stakes, including 20 per cent of its refining unit to Saudi Aramco, and a $3.3bn investment by Brookfield in its tower business.

Facebook has collaborated with Reliance Jio in the past, including on a digital literacy initiative last year. But the social network ran into trouble in India four years ago when the country’s telecoms regulator blocked its “Free Basics” app, which was an effort to provide free access to popular internet services including Wikipedia and weather forecasts as well as its own social networking apps.

Critics at the time accused Facebook and its Internet.org connectivity initiative of “digital colonialism”.

Reliance announced last year that it would separate Jio out into a new company and attract new investors ahead of an eventual listing. Mr Ambani, India’s richest man, said at the time that the company had “received strong interest from potential strategic partners”.

Reliance and Google did not immediately respond to a request for comment. Facebook declined to comment.

US stocks sharply higher as Congress closes in on stimulus

Investors return to risk assets following Fed intervention and political progress Hudson Lockett, Leo Lewis Adam Samso, Philip Georgiadis, and Richard Henderson

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lobal stock markets rallied sharply on Tuesday, buoyed by this week’s effor ts by the U S Federal Reserve to support the economy and as Congress closed in on an agreement for a fiscal stimulus to alleviate the effects of the coronavirus.

The US S&P 500 was up almost 8 per cent per cent at lunchtime in New York and European bourses jumped, with the continent’s Stoxx 600 index up 7 per cent. London’s FTSE

100 rose 7 per cent, while Frankfurt’s Dax advanced 9 per cent.

The rally in Europe followed significant rises in Asia as investors digested the Fed’s pledge to buy an unlimited amount of bonds, which appeared to have relieved some of the strains in important fixed income markets.

Kit Juckes, strategist at Société Générale, said the improvement in mood followed “Herculean efforts by central banks and governments”.

“Overall, the response is broader, and bigger than during 2008/2009 financial crisis. But this is more global, and more serious. If you take a step back and look at what the Fed has www.businessday.ng

done . . . it’s incredible,” he said.

In the US, a $2tn stimulus package was under discussion on Capitol Hill, with some negotiators predicting a deal by the end of the day. Democrats have insisted on stringent limits on how big businesses use coronavirus rescue funds.

The dollar, which has surged amid the crisis, weakened to provide some respite for vulnerable currencies including the British pound, which rose more than 2 per cent to $1.18.

The 10-year US Treasury yield gained 0.10 percentage points to just over 0.87 per cent.

The price of Brent crude, the international oil marker, rose 2 per cent to $27.50 a barrel.

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The economic picture remains bleak across the world.

Surveys showed on Tuesday that business activity in Europe crumbled this month, providing some of the first glimpses into the extent of the damage to the region’s economy caused by the pandemic.

Analysts said the real situation was likely even worse, as more restrictive measures banning social contact came into force in most countries after the surveys were taken.

Credit Suisse said on Tuesday that it expected the S&P 500 to rise by 20 per cent from current levels by the end of the year, but its chief US equity strategist Jonathan Golub warned there @Businessdayng

will be further pressure on stocks in the coming weeks as poor economic data tests investor confidence further.

“For the US economy to be able to come out of the current crisis and the ongoing recession relatively unscathed, more radical policy interventions will be needed in the next few weeks,” said Anna Stupnytska, global head of macro and investment strategy at Fidelity International.

“It’s still anyone’s guess how deep this actually is,” said Bert Colijn, a senior economist at ING. “Perhaps most relevant is how much unemployment and bankruptcies can be avoided to determine the possible steepness of a recovery.”

Wednesday 25 March 2020

BUSINESS DAY

44

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Glitchy coronavirus markets cause quant funds to misfire Renaissance, Two Sigma and DE Shaw suffer unusual setbacks Robin Wigglesworth and Ortenca Aliaj

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ome of the bestk n ow n c o mpu te rpowered hedge funds have struggled to adjust to the chaotic markets rocked by the coronavirus, with Renaissance Technologies, Two Sigma and DE Shaw seeing some of their biggest funds hurt this month.

So-called quantitative funds rely on high-powered computers, vast data sets and algorithms to systematically exploit patterns in securities prices. Their success has spawned a multitude of copycats and led many traditional investment groups to try to emulate their techniques. DE Shaw, Two Sigma, and Renaissance — considered the gold standard of quant funds — now manage close to $200bn combined.

But the ferocity of the recent market turmoil has inflicted some painful losses, forcing many quants to ratchet back their positions. One big investor in hedge funds described the numbers from his quant portfolio as a “disaster”, while some say the setbacks resemble a “quant quake” — a reference to a brief but traumatic period for the industry in August 2007.

Credit Suisse estimates that quant funds as a whole have nearly halved the size of their positions since the beginning of the month, and that the average quant fund has lost 14 per cent this year. “This rapid unwind is indicative of the magnitude of the broader shift

in attitude towards the economic fallout from Covid-19,” the bank’s hedge fund desk said in a note to clients on Sunday.

“There are weeks when risk becomes difficult to manage,” said Mark Connors, global head of risk advisory on Credit Suisse’s prime services desk. “Most funds have had a tough period with both longs and shorts in this environment.”

Renaissance, one of the industry’s most fabled names, has seen losses deepen lately. Its flagship Renaissance Institutional Equities fund, which tends to have mostly long positions, has dropped 18 per cent in March, increasing its year-to-date fall to 24 per cent, according to people briefed on the numbers. Renaissance’s

Institutional Diversified Global Equity fund is down 15.8 per cent for the year, as of Friday.

The Long Island-based group, founded by the mathematician and former codebreaker Jim Simons, has during the past two decades notched up an enviable record of performance. Its flagship Medallion fund was so successful it kicked out external investors in 2005, and has since restricted itself to managing the money of Renaissance’s own executives. Mr Simons last year said that Medallion had delivered an annual average return of about 40 per cent since 1988, net of fees.

Two Sigma has also found the environment unusually tricky. Its

flagship Spectrum fund is down close to 2 per cent for the year, according to a source familiar with the results. But its “global macro” Compass fund has fared worse and is down 13 per cent as of Friday, while its Absolute Return fund has lost 3 per cent.

Two Sigma was founded in 2001 by computer scientist David Siegel and mathematician John Overdeck, who met while working together at DE Shaw (where they overlapped with Amazon founder Jeff Bezos). Although a younger company than Renaissance and DE Shaw, Two Sigma has grown rapidly over the past decade and is widely considered to be at the cutting edge of the systematic investment industry.

Meanwhile, DE Shaw’s main fund Composite — which has suffered just one down year during the past two decades — lost 2.6 per cent in the month to last Friday, tipping it into negative territory for the year.

The New York group’s global macro fund Oculus has dipped 0.8 per cent this month, but remains an outlier in the hedge fund world with a 2.5 per cent gain so far in 2020. But the early-year resilience of DE Shaw’s pricey “statistical arbitrage” hedge fund Valence faded during last week’s extreme volatility. It has now fallen more than 9 per cent for the month and is down 4.6 per cent for the year.

The fact that even Valence has been hit highlights how markets have become increasingly treacherous. Valence charges a 3.5 per cent fee for assets it manages and takes 35 per cent of the profits it generates, nearly treble the industry average.

Statistical arbitrage — systematically exploiting small but reliable relationships in markets — was DE Shaw’s first strategy when it was started by computer scientist David Shaw in 1988. The company ranks as the fifth-highest returning hedge fund of all time, according to an annual ranking by LCH Investments.

The trio’s performance may still be broadly better than the quant industry average, yet is a reversal in fortune from previous bouts of volatility that the group has largely managed to navigate. For example, the flagship investment vehicles of Renaissance, Two Sigma and DE Shaw all notched up big gains in 2018 despite choppy conditions that year.

Oil industry faces biggest crisis in 100 years Producers are facing up to the crash in oil demand as coronavirus forces economies into hibernation David Sheppard

I

t is no exaggeration to say the oil industry faces its gravest crisis of the past 100 years.

As western economies go into hibernation, hoping to snuff out the first wave of coronavirus through lockdowns and isolation, the industry is facing up to the fact that fuel demand is going to fall faster than ever before.

Already prices have roughly halved since the start of this month as airlines have been grounded and millions of commuters eschew the car for a short walk to a laptop on their kitchen table.

For an industry long aware that a 1-2 per cent swing in the balance of supply and demand can be the difference between prices soaring or collapsing, the extent of the fall in consumption is hard to process.

As Europe and North America hunker down, the latest estimates suggest 10 to 25 per cent of global consumption could vanish in the coming few months. In normal times the world consumes some 100m barrels a day.

Such is the scale of the demand collapse that it risks overshadowing the price war between Saudi Arabia and Russia, who are flooding the market with unnecessary barrels after falling out over how to respond to the crisis. But there is little doubt their actions have exacerbated the crash and lengthened the timeline of recovery.

The result is likely to be storage tanks being filled to the brim within months. Even supertankers at sea, called into action as emergency storage vessels, could be maxed out by the end of summer.

Respite will come only once the most expensive oil production starts to shut down, or the weakest producers go bust.

But oilfields cannot be turned off and on like the flick of a light switch. The cost and the risk of shutting down active production is more likely to lead to a war of attrition.

Crude dipped below $25 a barrel last week, its lowest level since 2003, before regaining some ground to trade around $28 on Tuesday. Analysts are starting to www.businessday.ng

predict the price could fall to the teens or even into single digits.

Large-scale lay-offs, already shooting higher in leisure industries, will not be far behind for the energy sector, with scattered reports of contractors already being let go.

The crash has come at the worst time possible for an industry that was already out of favour with investors, who fear that oil demand will peak in the next decade or so and worry about environmental impacts.

The few hardy investors who stuck with the energy majors have been burnt once again. BP’s share price is down more than 50 per cent this year to a level last seen in 1995, sinking below even the depths of the Macondo disaster when the company’s very survival was in doubt.

ExxonMobil, once the world’s biggest publicly listed company, has lost 70 per cent of its market value over the past six years.

If the short-term outlook for the industry is, frankly, a hellscape, the long-term outlook is arguably not that much better. The pandemic

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could leave a mark on already stuttering oil demand growth. International travel will take time to recover. Companies and employees who adapt successfully to working from home are likely to make it a bigger part of their future, keeping more cars off the road.

That leaves the industry with little to pitch beyond medium-term hopes that the sheer size of the price crash will ultimately starve competitors of so much investment that production falls short and prices rise.

But a recovery bookended by disaster, from the latest crash to peak demand, is unlikely to be considered particularly compelling.

Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed.

Find the latest here.

In that context BP’s decision to stick with its commitment to accelerate into the energy transition makes perfect sense, despite naysayers arguing the price crash would weaken the company’s @Businessdayng

resolve. To attract new investors it is no longer enough to defend the dividend. The industry needs a new narrative.

National oil companies, too, are left surveying the ashes.

Saudi Arabia has pretty much torched its own carefully cultivated image as a reliable steward of the oil market. Even if the kingdom emerges victorious from the price war with a bigger share of a soonto-be-shrinking market, political allies will see confirmation that warm words about stability mean little under the leadership of Crown Prince Mohammed bin Salman.

For some the oil industry might seem a deserving victim. Its arrogance over climate change — only partially reversed in recent years — has cost it many sympathisers. But you do not have to think charitably towards the sector to realise there is a tragedy in waiting.

Opec’s weakest members, such as Iraq and Nigeria, haunted by the oil curse that has sown corruption and inefficiency throughout their economies, face a huge cash crunch.

Wednesday 25 March 2020

BUSINESS DAY

FT

45

ANALYSIS

From cover-up to global donor: China’s soft power play

With its economy showing signs of life, Beijing aims to restore a reputation damaged by coronavirus James Kynge and Hudson Lockett

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ust one month ago, China appeared to be reeling under the impact of the coronavirus epidemic. Its economy was in freefall and the death of a whistleblower doctor from Wuhan had unleashed an online revolt against the country’s communist authorities.

Just how quickly the situation has changed was demonstrated last week by Aleksandar Vucic.

With the virus now classified as a pandemic and its epicentre having shifted from Asia to Europe, the Serbian president issued a public appeal that has become a much-needed propaganda boost for Beijing.

Citing the “centennial and strong-as-steel friendship” between Serbia and China, he called on his “brother and friend” Xi Jinping, his Chinese counterpart, to assist in battling the disease.

“I am asking that you send us anything you can,” Mr Vucic was quoted as saying. “We need everything, from masks, gloves to ventilators, literally everything, and most of all we need your knowledge and people who would be willing to come here and help.”

It was just what China had been looking for — an opportunity to start reframing its role from that of the country that accelerated the virus’s spread through cover-ups, to that of the magnanimous global power offering leadership at a time of panic and peril in much of the rest of the world.

“China is trying to turn its health crisis into a geopolitical opportunity,” says Yu Jie, senior research fellow on China at Chatham House, a UK think-tank. “It is launching a soft power campaign aimed at filling the vac-

uum left by the United States.”

The aim of its new propaganda push, analysts say, is mostly to repair the serious damage that the pandemic — which originated in China — has done to its reputation at home and abroad.

China is intent on showing itself as a responsible power, just as it did in the aftermath of the 2008 financial crisis when Beijing’s economic stimulus helped lift global demand.

But this time, it is also displaying a much harder edge.

Whereas in 2008 Beijing coordinated its efforts with those of the US, China is now mixing its humanitarian donations to hard-hit countries with stinging tirades against the US. The impression given is that of a rising superpower trying to show the incumbent which is the more important nation.

While US president Donald Trump lashes out over the “Chinese virus” as he fights criticism and a market meltdown at home, China has launched a hightempo programme of pandemic diplomacy, winning headlines around the world for the good deeds it is doing in Europe, Africa and elsewhere.

Beijing has much ground to make up. Many people around the world blame China for multiple mis-steps that helped make the coronavirus such a potent threat. But with its economy starting to bounce back after a disastrous three months and its financial markets becoming a refuge for skittish global capital, there is a chance that Beijing may end up enhancing its international standing — something that would have seemed unthinkable a month ago.

China’s play rests upon its claim to have all but halted the virus’s spread domestically.

In spite of scepticism over the accuracy of official statistics, the number of people newlyinfected with coronavirus each day has fallen to double digits www.businessday.ng

recently. In countries such as Italy, Spain, Iran and Germany, the new case count is running at well over 1,000 a day.

China’s surge 20,000 Testing kits, along with 100,000 masks and 1,000 protective suits, pledged by Jack Ma’s foundation to each African country 8% Oxford Economics’ prediction of growth in Chinese second-quarter GDP from the previous three-month period $324bn Foreign ownership of sovereign renminbi bonds, boosted by a surge in demand in March, according to Bond Connect The impression that China is turning a corner is reinforced by economic data. A China Economic Activity Index compiled by the Financial Times to track the country’s progress in getting back to work shows a steady uptick in areas such as real estate sold, power plant coal consumption and traffic congestion. However, cinema admissions, a proxy for consumer demand, remains very weak.

If China can avoid a second wave of outbreaks, it will probably become the first large country to recover from the pandemic. Most economists are now forecasting an unprecedented contraction in gross domestic product during the first quarter of the year, followed by a sharp snapback in the second quarter.

For instance, Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong, expects a bounce of 8 per cent for the second quarter from the previous three-month period.

If such growth materialises, then China could stand as a rare example of growth in a world racked by economic crisis, boosting both its soft power appeal and giving it room to intervene on behalf of countries that are stricken and request as-

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sistance, such as Serbia.

“With China’s domestic demand-driven economy set to rebound and mainland investors avoiding the panic that has smacked western markets, its economy could put a floor under global growth and offer a safe haven to investors,” says Andy Rothman, an investment strategist at Matthews Asia, an investment fund.

The potential for such “safe haven” status does not seem far fetched. Offshore investors poured Rmb90bn ($13bn) into China’s government bond and policy bank securities market in the year to the end of February, according to figures from the company that operates Hong Kong’s bond trading scheme with the mainland — and inflows have accelerated further in March, traders said. This brought total foreign ownership of sovereign renminbi bonds to a record Rmb2.27tn.

“Global investors are not going to stop piling in,” says Hayden Briscoe, Asia-Pacific head of fixed income at UBS Asset Management. “They need a safe market that’s actually offering them a nominal yield.”

Opinion differs on whether Beijing, confronted with a sharp contraction in growth in the first quarter, will unleash a stimulus package like the one that dragged the global economy back to growth in the aftermath of the 2008 financial crisis. Some analysts think China’s high debt levels preclude such an option but others, such as Mr Rothman, regard such a package as a distinct possibility.

“I have no doubt that if the domestic economy fails to show clear signs of reawakening in April, the government will step in with some of the bazooka-like measures deployed during the [financial crisis],” he says. “Interest rates in China are relatively high, so there is room to cut [and] there is room to . . . ramp @Businessdayng

up infrastructure construction.”

With its economy recovering, Beijing is at liberty to hand out assistance to affected countries — not forgetting to play their gratitude back to home audiences. In the case of Serbia, for example, some 300m Chinese have watched a video in which Mr Vucic says that without “our Chinese brothers”, Serbia would be incapable of defending itself against the virus, Chinese officials said.

Serbia has been far from the only recipient of Chinese goodwill. In a phone conversation last week, Mr Xi told Pedro Sánchez, the Spanish prime minister, that China will do its best to provide support. He added that “sunshine comes after a storm”, suggesting that the two countries should step up co-operation after the outbreak is over.

Italy, which has suffered more than 6,000 deaths — a higher toll than China — appealed to its EU neighbours this month to send face masks for medical workers.

But it was China that stepped up first. It dispatched masks, ventilators and 300 intensive care doctors to support overwhelmed hospitals in the country.

Luigi Di Maio, Italy’s foreign minister, said last week: “We will remember those who were close to us in this difficult period.”

Watching the Chinese example, Russia has also followed suit, announcing on Sunday that it was sending planeloads of medics and hospital supplies to Italy.

China has made similar overtures — supplying medical equipment, advice and in some cases staff — to several other countries in Europe, Africa and the Middle East. Xinhua, the official Chinese news agency, reported that each of 54 African nations will receive 20,000 testing kits, 100,000 masks and 1,000 Continues on page 46

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Wednesday 25 March 2020

BUSINESS DAY

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NATIONAL NEWS

Gilead criticised over ‘orphan status’ for potential virus treatment Activists slam US drugmaker for seeking exclusivity ‘despite calls for solidarity’ to tackle pandemic Donato Paolo Mancini

G

ilead Sciences has come under fire for securing a de facto monopoly in the US for an experimental drug seen as a potential coronavirus treatment, with activists accusing the US drugmaker of “morbid calculus” and “the most blatant abuse of the orphan drug act”.

Under the act, a pharmaceutical company can obtain “orphan status” for a drug, giving it exclusivity on sales and the right to set prices for seven years, along with significant tax incentives and other benefits. It is granted by the Food and Drug Administration for a drug to treat diseases that affect less than 200,000 patients in the US. “At the time of the request for orphan drug designation, only a small number of Americans were affected by Covid-19,” Gilead said in statement on Monday, adding that it had been “making significant at-risk investments to develop and manufacture” the drug, called remdesivir, as the pandemic spreads.

But health activists on Tuesday hit out at the orphan status. Thiru Balasubramaniam, the Geneva representative of Knowledge Ecology International, an intellectual property advocacy group, said seeking the designation was the result of “morbid calculus” from Gilead.

“Despite calls for solidarity in the wake of the Covid-19 pandemic, Gilead Sciences has exhibited a

Medical staff at a roadside coronavirus testing station in San Francisco. At present, there is no approved treatment or vaccine for the disease © Getty

ruthless penchant for insatiable greed that would rival a medieval Raubritter,” he said.

Ellen ’t Hoen, director at nongovernmental organisation Medicines Law & Policy, said: “This is the most blatant abuse of the orphan drug act I have ever seen. It provides further evidence of the urgent need for an overhaul of the current pharmaceutical incentive system.”

She said it would grant Gilead a “very strong monopoly” for the treatment, adding: “You cannot compulsory license an orphan drug

exclusivity. That should not stop the government from taking measures now.”

Zain Rizvi, a researcher in medicines access at advocacy group Public Citizen, said: “It is absolutely ridiculous, and shows the lengths pharmaceutical companies are willing to go to cash in from a crisis.”

Globally, the virus has affected at least 334,000 and killed more than 14,000, according to the World Health Organization. There are at least 31,000 confirmed cases in the US. There are no approved

treatments for the disease, and drugmakers around the world are working to devise treatments and vaccines.

Remdesivir was originally developed to treat Ebola and has shown effectiveness against other coronaviruses in animal studies and is now being tested on patients in clinical trials. Gilead had been providing emergency access to remdesivir via health agencies for some patients on compassionate grounds, but hours before the orphan drug designation was announced, it

said it would stop doing so due to “overwhelming demand”.

Gilead’s application for orphan status contrasts with the approach of some other major drugmakers.

On Monday, the Financial Times reported that AbbVie would be dropping its patent protection on Kaletra, another potential coronavirus treatment candidate.

Observers suggested AbbVie may have been motivated by anticipated demand surges should the treatment prove effective, or because higher-income countries would likely follow in the steps of Israel by issuing compulsory licences for the drug to treat coronavirus.

It is not the first time that Gilead has drawn criticism over patents for drugs treating diseases that are a matter of public health priority.

It is embroiled in a legal dispute with the US federal government over its HIV treatment Truvada relating to alleged infringements that the lawsuit claims have helped Gilead reap billions of dollars from taxpayer-funded research.

In a statement provided upon request, Gilead said it was acutely aware of the need surrounding the pandemic, and was working to “responsibly provide emergency access to remdesivir while these studies are ongoing”.

“If remdesivir is proven to be safe and effective to treat Covid-19, we are committed to making remdesivir both accessible and affordable to governments and patients around the world,” a spokeswoman said.

From cover-up to global donor: China’s soft power play Continued from page 45 protective suits for medical use from the Jack Ma Foundation, a charitable organisation led by China’s wealthiest individual and former Alibaba chief.

Mr Xi lost no time in linking such efforts last week to the Belt and Road Initiative, his signature policy to win influence around the world by building infrastructure. He was quoted as telling Giuseppe Conte, Italy’s prime minister, by phone that Beijing was willing to contribute to a “health silk road” — a clear reference to the fact that Italy is the only country in the G7 to have signed up to the BRI. “China is trying to capitalise now in terms of soft power,” says Joshua Kurlantzick, senior fellow at the Council on Foreign Relations, a US think-tank.

As it portrays itself as a saviour, China is also emphasising a telling difference between this and previous global crises: Beijing is going it alone, with no hint of US co-operation.

Even as recently as 2014, when the Ebola virus ravaged west Africa, killing at least 10,000 people, the US and China co-

operated closely. Chinese and Americans worked side by side in laboratories in Sierra Leone and at an airport offloading emergency supplies, according to a Carter Center report.

Beijing and Washington also joined relief efforts in the aftermath of the 2004 south-east Asian tsunami. Following the 2008 financial crisis, both countries agreed on its causes and took concerted measures to boost global demand. It was China’s $586bn stimulus programme in 2009 that helped lead the world out of the downturn.

But after years of trade disputes, this time things are very different, says Ryan Hass, a former senior White House and state department official who is now at the Brookings Institution think-tank.

“The spread of the coronavirus has held a mirror up to the bilateral relationship and the image that has emerged is ugly,” says Mr Hass. “Now, leaders in both countries are consumed by arguments over where the virus emerged and who is to blame for its spread, rather than on what must be done, collectively, to stop it.”

The clearest example of what www.businessday.ng

Mr Hass calls a “downward spiral” in US-China relations has come in a bitter argument over what to call the coronavirus pandemic. Mr Trump has repeatedly called it the “Chinese virus”, eliciting a “strong condemnation” from Beijing’s foreign ministry.

But Mr Trump has not been unprovoked. Zhao Lijian, a Chinese foreign ministry spokesperson, has pushed theories — without providing supporting evidence — that the virus may have been hatched by the US military. This claim has been repeated by China’s official media and by Chinese ambassadors around the world, although Cui Tiankai, China’s ambassador to the US, appeared to distance himself from the claim this week.

Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed.

Find the latest here.

Not content with starting a war of words with the US president, China’s state media has also claimed that its authoritarian governance system is better suited to cope with a viral outbreak than democratic sys-

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tems, even though this ignores the performance of Taiwan and South Korea, which arrested the virus’ spread far more effectively than China.

Such moves, say analysts, are undermining the soft power projection that Beijing is aiming for.

“China will struggle to persuade the world that it is a benign major power coming to the aid of those in need when it simultaneously is pushing out fringe conspiracy theories,” says Mr Hass. “It would be much wiser of Beijing to let its aid to others speak for itself, but it is unclear whether it has the discipline to do so at the moment.”

Minxin Pei, a professor at Claremont McKenna College in Los Angeles, says China’s recent actions, including the expulsion of US journalists this month, made potential co-operation with the US to combat the virus more difficult.

“Instead of touting the superiority of its one-party regime, China will do well to be a generous global leader that shares its medical resources and supplies with other countries, especially developing countries in desperate need of help,” he says. @Businessdayng

And whatever kudos China wins from its humanitarian gestures will be set against its early mis-steps and cover-up.

“Its progress was achieved at horrendous cost. Since arguably China could have prevented the outbreak in the first place if it had a more transparent system and greater press freedom, Beijing could try to cite its success as proof of the capabilities of its political system, but not many people outside China would buy it,” he adds.

It is clear that the pandemic is compounding deep fractures in a US-China relationship that has sunk to its lowest ebb since the 1989 massacre of pro-democracy demonstrators around Tiananmen Square in Beijing.

Bill Bishop, a Washingtonbased China expert and author of the newsletter Sinocism, says the relationship is approaching a “precipice”.

Mr Bishop says a toxic mix of economic downturns in the US and China, nationalistic citizens and political leaders trying to deflect blame on to an external rival has the potential to deepen the crisis. He wrote last week: “The carnage from the coronavirus has barely begun in the US.”

Wednesday 25 March 2020

BUSINESS DAY

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Wednesday 25 March 2020

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Live @ The Exchanges Market Statistics as at Tuesday 24 March 2020

Top Gainers/Losers as at Tuesday 24 March 2020 LOSERS

GAINERS Company

Opening

Closing

Change

N23.85

N26.1

2.25

N21

N21.5

0.5

ZENITHBANK

N10.7

N10.95

0.25

CUSTODIAN

N5.65

N5.9

0.25

CADBURY

N5.4

N5.6

0.2

STANBIC CAP

ACCESS

Company

ASI (Points)

Opening

Closing

Change

N14.6

N13.15

-1.45

NASCON

N9.4

N8.5

-0.9

UBN

N6.5

N6

-0.5

VOLUME (Numbers)

N5.65

N5.15

-0.5

VALUE (N billion)

N4.45

N4.05

-0.4

MARKET CAP (N Trn)

CONOIL

ETI

DEALS (Numbers)

21,741.16 4,561.00 330,101,923.00 3.568 11.329

Global market indicators FTSE 100 Index 5,318.79GBP +324.90+6.51%

Nikkei 225 18,092.35JPY +1,204.57+7.13%

SPX:IND S&P 500 Index 2,412.43USD +175.03+7.82%

Deutsche Boerse AG German Stock Index DAX 9,542.61EUR +801.46+9.17%

Generic 1st ‘DM’ Future 20,096.00USD +1,599.00+8.64%

Shanghai Stock Exchange Composite Index 2,722.44CNY +62.27+2.34%

Nigeria stocks close in green despite ravaging Coronavirus Pandemic ...bargain hunters in action Stories by Iheanyi Nwachukwu

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igeria’s stock market closed in the green zone on Tuesday March 24 as investors in their remote trading saw opportunities in low priced value stocks, chief among them is that of Stanbic IBTC Holdings (+9.43percent).

Bargain hunters still see opportunities in low priced but value stocks amid growing concern about the economy.

Though the record increase of the NSE ASI by 0.19percent helped reduce the year’s negative return to -19percent, the stock market still remains in the bearish

L-R: Ifeanyi Obialor. head Anti-Corruption Unit, Independent Corrupt Practices and other Related offences commission; Isyaku Tilde, acting, executive commissioner operations, Securities and Exchange Commission and Mary Uduk, acting director general SEC during the Inauguration Ceremony of AntiCorruption, Transparency Unit and Monitoring Unit of SEC in Abuja.

region. Many stocks currently trade at their 52-week low.

At the close of remote trading on the Nigerian Bourse, the value of listed stocks increased to N11.329trillion while the NSE ASI closed higher at 21,741.16points. In 4,561 deals investors exchanged 330,101,923 units valued at N3.568billion.

Market watchers observed the ASI was lifted by gains in the Oil & Gas sector (+0.25percent) and Industrial goods sector (+0.02percent) as well as some Tier 1 banks.

This month alone, the Nigerian stock market has decreased by 17.07percent as investors continue to weigh the risks of holding naira assets as declining oil price and confirmed cases of Coronavirus Pandemic rises in the

country.

“With no significant improvement in some fundamental indicators (such as Crude Oil prices and the spread of the Covid-19) that can uplift investors’ confidence, we anticipate a continued pressured market though the possibility of bargain hunting still exist due to recent declines”, according to Lagos based research analysts at Vetiva.

Meanwhile, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) after its meeting on March 23 and 24, 2020 resolved to; retain the MPR at 13.50 percent; retain the CRR at 27.5 percent; retain the Liquidity Ratio at 30 percent; and the Asymmetric window at +200 basis point and -500 basis points, around the MPR.

SO&U Group temporarily suspends physical businesss operations

Coronavirus: SEC Nigeria issues advisory

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s the incidences of COVID-19 increase, o n e o f Nig e r i a’s leading Integrated Marketing Communications Groups, SO&U has announced safety measures to protect its staff, clients and community.

The company has announced the temporary suspension of operations at its Opebi and Ikeja GRA locations thus mandating its employees to activate a remote operation and service mode till further notice.

According to the Company’s Group Managing Director, Mr. Udeme Ufot, “ It is our collective responsibility to help stop the spread of COVID-19 and in line with this, the SO&U Group is encouraging its employees, clients and the general public to take precautions necessary to safeguard their health and that of others. As a business,

community and team, we hold firmly to faith and trust that united we will fight and beat the COVID-19 scourge.

One of such measures we have immediately embraced is the global call for “Social Distancing” amongst other advisory measures by both the local and International Health Organizations even in our business operations” “Following recent development in the spread of the dreaded virus, we have been constrained to activate our scenario 2 crisis response option to the health crisis, which is voluntary shutdown of our offices, and remote operations from home by all our staff except those who must absolutely be in the office.

On Monday, 23rd March, we tested our business continuity systems and are confident of our capability www.businessday.ng

to service our clients’ needs remotely from outside our offices without disruption.” “ We s h a l l p e r s e v e r e through this challenge and believe that together we shall emerge from it with a deeper sense of purpose” he added.

The firm seeks the understanding and cooperation of all clients and other stakeholders to ensure the success of the remote work mode even as the management team reaffirms their commitment to delivering top notch creative and communications services.

SO&U Group is one of Nigeria’s leading integrated marketing communications group comprising of SO&U Advertising, Maximedia Global, Soulcomms, Lucid AudioVisual, Vyrus Digital and Iris Exposures.

...introduces electronic filing, processing of all applications, returns he Securities and Exchange Commission (SEC), in furtherance of its role as the apex regulator of the Nigerian capital market has issued an advisory that would mitigate the impact of Coronavirus (COVID-19) on capital market operations.

In a circular to capital market stakeholders on COVID-19, the SEC released a number of market-focused adjustments to be adopted in the interim in response to the effects of COVID-19 which includes filing and processing of applications electronically, extension of deadline on 2019 annual reports and first quarter (Q1) 2020 reports, postponement of the Q1 Capital Market Committee meeting earlier scheduled for April 23, 2020.

The Commission stated that applications shall be filed

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electronically while pending applications and requests by CMOs for update of information would be processed via registration@sec.gov.ng.

However, fresh applications for registration of Capital Market Operators are suspended until further notice.

Also, returns shall be filed electronically while the Commission has approved a 60day extension, in the first instance for public companies and capital market operators to file their 2019 annual reports and Q1 2020 reports.

By the advisory, public companies are to take appropriate precautionary measures as recommended by the Federal and State Governments as well as the Nigerian Centre for Disease Control (NCDC) to ensure the safety of shareholders and participants at Annual General Meetings/ Extra-Ordinary General Meet@Businessdayng

ings and other meetings which may be held during the prevalence of the pandemic.

“The first Capital Market Committee Meeting for the year scheduled to hold on April 23, 2020, and all other meetings have been postponed indefinitely. All complaints and enquiries should be made to the Commission at sec@sec.gov.ng, 09-4621100 and 09-4621168 or at our various social media accounts “It is important to note that the foregoing guidelines are not exhaustive, but rather represent an outline of immediate actions the Commission considers necessary to sustain the actualization of its regulatory mandate and maintain the integrity of the Nigerian capital market during this challenging period. Accordingly, the Commission will continue to issue updates to market stakeholders as appropriate.

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Wednesday 25 March 2020

BUSINESS DAY

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Wednesday 25 March 2020

BUSINESS DAY

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Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 24 March 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 199,053.26 5.60 3.70 286 36,034,795 UNITED BANK FOR AFRICA PLC 150,477.45 4.40 -2.22 371 18,812,063 ZENITH BANK PLC 343,791.61 10.95 2.34 877 77,914,364 1,534 132,761,222 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 139,991.64 3.90 1.30 282 24,710,589 282 24,710,589 1,816 157,471,811 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,096,514.84 103.00 - 101 759,240 101 759,240 101 759,240 BUILDING MATERIALS DANGOTE CEMENT PLC 2,210,153.81 129.70 - 172 1,679,252 LAFARGE AFRICA PLC. 146,580.94 9.10 - 62 538,846 234 2,218,098 234 2,218,098 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 320,408.06 544.50 - 5 75 5 75 5 75 2,156 160,449,224 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 8,538.46 3.20 - 3 9,178 3 9,178 3 9,178 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 3 9,178 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 52,512.75 55.05 - 13 139,770 OKOMU OIL PALM PLC. PRESCO PLC 36,450.00 36.45 - 1 50 14 139,820 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,740.00 0.58 - 1 8,000 1 8,000 15 147,820 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 1 1,662 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 24,795.27 0.61 8.93 73 8,543,895 U A C N PLC. 20,457.21 7.10 - 38 831,047 112 9,376,604 112 9,376,604 BUILDING CONSTRUCTION ARBICO PLC. 423.23 2.85 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 31,284.00 23.70 - 55 627,493 ROADS NIG PLC. 165.00 6.60 - 0 0 55 627,493 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,390.52 0.92 - 14 119,601 14 119,601 69 747,094 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 5,558.94 0.71 - 3 5,088 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 8 4,140 INTERNATIONAL BREWERIES PLC. 134,310.34 5.00 - 22 122,476 NIGERIAN BREW. PLC. 215,916.36 27.00 - 60 157,075 93 288,779 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 108,000.00 9.00 - 42 254,130 FLOUR MILLS NIG. PLC. 85,287.90 20.80 - 30 238,708 HONEYWELL FLOUR MILL PLC 6,582.06 0.83 - 7 68,092 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 22,520.23 8.50 -9.57 48 5,742,824 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 127 6,303,754 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 9,672.74 5.15 -8.85 73 1,298,645 NESTLE NIGERIA PLC. 673,757.81 850.00 - 154 632,645 227 1,931,290 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,316.09 4.25 - 7 93,041 7 93,041 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,080.43 4.05 - 16 67,978 UNILEVER NIGERIA PLC. 60,322.56 10.50 - 32 73,947 48 141,925 502 8,758,789 BANKING ECOBANK TRANSNATIONAL INCORPORATED 74,315.68 4.05 -8.99 53 606,556 FIDELITY BANK PLC 48,967.41 1.69 -2.87 163 16,356,697 GUARANTY TRUST BANK PLC. 497,386.93 16.90 0.90 624 78,899,230 JAIZ BANK PLC 14,437.48 0.49 8.89 9 627,277 STERLING BANK PLC. 28,790.42 1.00 -1.00 73 9,716,490 UNION BANK NIG.PLC. 174,724.52 6.00 -7.69 32 454,566 UNITY BANK PLC 4,909.52 0.42 - 9 301,732 18,515.74 0.48 6.67 25 767,667 WEMA BANK PLC. 988 107,730,215 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 5,000 AIICO INSURANCE PLC. 8,044.45 0.71 - 14 298,471 AXAMANSARD INSURANCE PLC 18,375.00 1.75 - 4 12,800 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CORNERSTONE INSURANCE PLC 8,543.11 0.58 - 4 84,036 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,537.92 0.21 4.76 11 2,176,146 LAW UNION AND ROCK INS. PLC. 3,952.62 0.92 - 2 12,470 LINKAGE ASSURANCE PLC 3,280.00 0.41 -4.65 7 2,287,826 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 2 16,470 NEM INSURANCE PLC 8,448.80 1.60 - 19 529,600 NIGER INSURANCE PLC 1,547.90 0.20 - 3 55,926 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 2 14,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 2 68,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 20,000 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 5,278.17 0.22 4.76 23 2,272,241 95 7,852,986 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,629.63 1.15 9.52 19 1,096,850 19 1,096,850

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,671.82 1.36 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,700.00 3.85 - 22 95,844 CUSTODIAN INVESTMENT PLC 34,703.00 5.90 4.42 10 116,301 DEAP CAPITAL MANAGEMENT & TRUST PLC 495.00 0.33 - 0 0 FCMB GROUP PLC. 30,892.23 1.56 0.65 68 13,825,458 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 1 9,058 274,179.65 26.10 9.43 24 419,491 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,000.00 2.00 -7.83 99 6,623,666 224 21,089,818 1,326 137,769,869 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 - 0 0 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 4,798.63 2.30 4.07 7 694,396 GLAXO SMITHKLINE CONSUMER NIG. PLC. 4,604.12 3.85 2.67 38 1,838,516 3,364.21 1.95 - 39 949,353 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 835.63 0.44 - 1 5 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 85 3,482,270 85 3,482,270 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 2 40,000 2 40,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,000.21 0.34 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 0 0 287.07 0.58 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 986.17 0.21 5.00 4 1,460,990 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 4 1,460,990 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 5 309 5 309 11 1,501,299 BUILDING MATERIALS BERGER PAINTS PLC 1,767.92 6.10 - 10 26,473 BUA CEMENT PLC 1,195,411.70 35.30 - 4 25,760 15,050.00 21.50 2.38 17 305,843 CAP PLC MEYER PLC. 244.37 0.46 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 31 358,076 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,113.59 1.20 - 10 258,949 CUTIX PLC. 10 258,949 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 41 617,025 CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 10 54,840 10 54,840 INTEGRATED OIL AND GAS SERVICES OANDO PLC 26,727.54 2.15 6.97 52 979,666 52 979,666 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 52,827.21 146.50 - 28 60,808 ARDOVA PLC 17,974.24 13.80 - 11 18,697 CONOIL PLC 9,125.47 13.15 -9.93 26 319,821 ETERNA PLC. 3,116.91 2.39 - 13 32,734 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 3 2,597 TOTAL NIGERIA PLC. 36,328.84 107.00 - 12 51,214 93 485,871 155 1,520,377 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,779.06 3.00 - 27 4,139,633 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 1 13,000 28 4,152,633 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 20,000 1 20,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 1 2,326 IKEJA HOTEL PLC 2,058.01 0.99 - 1 100 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 2 2,426 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 3 21,333 3 21,333 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 0 0 LEARN AFRICA PLC 771.45 1.00 - 4 19,449 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 427.10 0.99 - 1 4,000 5 23,449 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 580.20 0.35 6.06 5 164,900 5 164,900 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 1 907

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BUSINESS DAY Wednesday 25 March 2020 www.businessday.ng

Nigeria yet to wake up to a rapidly changing world STEPHEN ONYEKWELU

N

igeria is facing low oil prices and the novel coronavirus pandemic, two disablers of economic growth but with fewer arrows in its quiver than it had in 2008, during the global economic recession.

In the week ending March 7, OPEC+ a three-year old alliance between the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members including Russia to keep crude oil volumes down and shore up prices broke down. Prices crashed to lows seen during the 1991 Gulf War. The coronavirus pandemic has compounded the impact of crashing oil prices by taking a severe hit on demand for crude oil. China accounts for over 80 percent of global oil demand but the contagion has shut down factories in the world’s second largest economy and prevented movement of people, depressing oil demand.

With the virus spreading across the world and countries such as Italy, Spain, Senegal, India and South Africa among others going on total lockdown, oil demand will further decrease.

The US Federal Reserve (the Fed) and its global counterparts moved aggressively with sweeping emergency rate cuts and offers of cheap dollars to help combat the coronavirus pandemic that has jolted markets and paralysed large parts of the world economy.

The coordinated response from the Fed to the European Central Bank (ECB) and the Bank of Japan (BOJ) came amid a meltdown in financial markets as investor anxiety deepened over the difficulty of tackling a pathogen that has left thousands dead and shuttered many countries from global trade.

But Nigeria seems unprepared to deal with crashing oil prices and the coronavirus pandemic.

Saudi Arabia may survive an oil price war and low prices for a longer time than Nigeria because of its large foreign reserves of $502 billion. Russia says it has the firepower to survive the price war, referring to its $570 billion foreign reserve and its $150 billion national wealth fund.

Nigeria lacks such luxuries.

Africa’s biggest oil producer has squandered its oil wealth, estimated at $300 billion since the 1970s. Nigeria survived the 2008 global recession thanks to sufficient buffers in the form of external reserves worth $62 billion and excess crude savings of $20 billion.

“For Nigeria, pressure on the currency amid slower dollar inflow would be on the front burner as the ability of the Central Bank of Nigeria to support the

President Buhari

naira with its dwindling foreign exchange reserve comes into question,” one economist who did not want to be quoted said.

In 2008, Nigeria owed $3.7 billion in external debt and inflation rate was 11.58 percent.

The exchange rate was N117 per dollar. External debt has surged 627 percent to $26.9 billion as of September 2019, according to data by the Debt Management Office (DMO). External reserves have nearly halved to $36 billion and excess crude savings are 90 percent depleted to below $2 billion (including the funds under management by the Nigeria Sovereign Investment Authority).

Inflation rate is also higher today at 12.13 percent while the exchange rate has weakened to N360 at the central bank’s official window and N380 at the Investors and Exporters window.

Before these crashes in oil price some three weeks ago, there have been several warnings about the perilous future of oil and the potential catastrophic consequences for oil-dependent countries such as Nigeria.

At best of times, oil is problem-

atic for most oil-dependent countries as they are at the mercy of oil market vagaries and buffeted by oil price and oil revenue volatilities, Olu Fasan, a BusinessDay columnist, and a visiting fellow at The London School of Economics said.

No country is more at risk than Nigeria, a country where oil accounts for 96 per cent of exports and over 75 per cent of government revenues; a country that has absolutely no resilience to oil price shocks.

Unlike the 2016 lows, which were largely driven by oversupply, the current oil price crash is a demand-led crisis. The global economy is facing the possibility of a recession, as the coronavirus continues to spread. The airline industry could lose more than $100 billion. The rough patch ahead is unprecedented, it could be worse than 2008 and 2016.

“The buffers we have today are nowhere near 2008 which means we are more vulnerable to an economic meltdown that could be worse than 2016’s recession,” said Bismarck Rewane, a leading Nigerian economist and CEO of consulting firm, Financial Deriv-

‘‘

Africa’s biggest oil producer has squandered its oil wealth, estimated at $300 billion since the 1970s. Nigeria survived the 2008 global recession thanks to sufficient buffers in the form of external reserves worth $62 billion and excess crude savings of $20 billion

atives Ltd in an earlier interview with BusinessDay. In 1991, Saudi Arabia cut production to stem the effect of the Gulf War – its alliance with Russia 25 years later shows it’s impossible for it to do so alone today.

In 2008, when the global economy slid into a recession, after effects of subprime loans on financial markets, Nigeria was ring-fenced by a cash pile of dollars in its foreign reserves; in 2020 the reverse is the case.

Nigeria’s dependence on oil at a time when forward looking countries are investing heavily in green energy to tackle climate change is self-defeating. And as alternatives, such as electric cars, become readily available and cheaper, oil will become unattractive.

The coronavirus has also taken a toll on oil demand. Oil is acutely susceptible to demand shocks, and this will increasingly happen as population growth slows in the West and as demand shifts in favour of more environmentally friendly energy.

Nigeria has dithered on diversifying its economy it has depended on oil, ignoring billions of standard cubic meters of gas in its reserves as the world goes electric, discards combustion engine.

France, Spain, Greece, Mexico have said they will remove diesel cars and vans by 2025. Norway will phase out conventional cars by 2025, followed by France and the United Kingdom in 2040 and 2050, respectively.

Yet Nigeria dithers, seemingly quarantined from a rapidly changing, increasingly connected world. A hyper connected superhighway on which the pandemic has rode across to every continent in the world.

Take for instance, the Daxing International Airport in Beijing,

China, which was launched last year. With the opening of the airport, Beijing has joined a group of cities, including New York and London, that have two-long haul international airports.

In the first half of 2009, China exported $521 billion worth of clothes, toys, electronics, grains and other commodities to the rest of the world. This shows how much global trade has made China a powerhouse and the world’s factory of sorts.

Though what China produced in 2009 represented a 22 percent decrease from the first half of 2008, it compares favourably to other major exporters; German exports fell by 34 percent over the same period, Japanese exports were down by 37 percent and US exports dropped by 24 percent, according to Global Trade Information Services.

China’s exports have already contracted sharply in the first two months of 2020, as the fast outbreak caused massive disruptions to business operations, global supply chains and economic activity.

The gloomy trade report is likely to reinforce fears that China’s economic growth halved in the first quarter to the weakest since 1990 as the pandemic and strict government containment measures crippled factory production and led to a sharp slump in demand.

Factory activity contracted at the fastest pace ever in February, even worse than during the global financial crisis of 2008, an official manufacturing gauge showed with a sharp slump in new orders.

Realising how connected the world has become since it recorded its first case of coronavirus on February 28, Nigeria has joined other African countries to place travel bans on all countries with more than 1,000 recorded cases.

The ban has been extended.

Nigeria has restricted entry into the country for travellers the US and UK. Others include China, Italy, Iran, South Korea, Spain, Japan, France, Germany, the United States, Norway, UK, Netherlands and Switzerland, the country’s National Centre for Disease Control said on its Twitter account. Some say these measures could have come a lot earlier.

Nigeria is more connected to the world than it was in 2008 – 62.99 million of its citizens could connect to the world through mobile phones in 2008. Today, the country has 169.2 million Nigerians mobile subscribers, representing an 83 percent penetration of the total population of over 200 million people.

The International Monetary Fund has warned that oil-exporting countries must be ready for a post-oil future sooner rather than later. Sadly, Nigeria is doing little to prepare for that future.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.