BusinessDay 26 Aug 2020

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news you can trust I ** wednesDAY 26 AUGUST 2020 I vol. 19, no 636

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Here’s what Nigeria must do in five months to fuel economic rebound

igeria’s deepest economic contraction in 10 years in the second quarter (Q2) of 2020 means Africa’s largest economy will need to embrace rapid reforms if it is to rebound from the slump by early next year.

Exacerbated by the recent economic lockdown to contain the spread of the novel coronavirus, the second-quarter contraction of -6.1 percent is the deepest Nigeria has witnessed since 2004, as the economy was faced with the double challenge of lower oil prices and Covid-19 pandemic.

The National Bureau of Statistics’ (NBS) gross domestic product (GDP) numbers for Q2 2020 did not come as a surprise to many analysts given the outbreak of the Covid-19 pandemic, which worsened the country’s

fgn bonds

Treasury bills

60m NGUS jul 30 2025 576.68

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Import waivers boost modular refineries, but troubled ports may hinder investments ISAAC ANYAOGU

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our modular refineries are set to come on stream before the end of this year with over 25,000 barrels per day (bpd) refining capacity spurred

by Federal Government’s duty waivers to operators, but the troubled Apapa ports threaten these plans.

Investigation shows that the benefits of a duty waiver are Continues on page 31

Inside

CITN, in PH, strategises on P. 2 post-COVID tax environment

L-R: Philip Shaibu, Edo State deputy governor/running mate; Edun Akenzua, Enogie of Obazuwa, and Godwin Obaseki, Edo State governor/candidate of the PDP, during the governor’s courtesy visit to the traditional ruler.

PEF makes over N66bn yearly as administrative charges from sale of petroleum products P. 4

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Retail industry woes deepen as consumer firms continue to struggle BALA AUGIE

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igeria’s retail and consumer goods ma nu fa c tu rers were already struggling with weak consumer spending before government measures to control coronavirus pandemic closed down swaths of the economy.

During the lockdown, buying and selling activities were disrupted along the value chain as factories worked below capacity, while some stores or outlets shuttered.

There were bottlenecks to buying activities as port restrictions imposed by the government to contain the spread of the virus hindered operators in the industry from taking their goods out of the country and earning dollar revenue; also imported products could not find their way to their destinations.

The border closure and cessation of activities at the nation’s airports exacerbated the already anaemic situation of companies that are already walking on rotten ice.

To validate the misery is the recent data released by the National Bureau of Statistics (NBS) that showed the trade industry contracted by at least 16.59 percent as at the second quarter of the 2020.

The decline in the retail industry is reflective of disruptions to supply chains, weak consumer demand brought about by elevated inflationary pressures and liquidity challenges in the FX market, according to Gbolahan Ologunro, equity research analyst at CSL Stockbrokers Limited.

Analysts are of the view that rising cost of living, spiralling utility bills, and high unemployment rate mean consumer companies will continue to see sales and margin fall, and that it could get worse due to disruption to the buying side of the market brought on by Covid-19 headwinds.

The jobless rate rose to 27.1 percent in Q2, 2020, that compares with 23.10 percent in the third quarter of 2018, which was the last period the NBS released labour-force data.

Inflation rate jumped to 12.85 percent as of July, the highest in 27 months, thanks to border closure and farmers/herders’ disputes.

Analysis of the half-year financial statement of the largest consumer goods firms showed they saw a 1.28 percent reduction in cumulative sales to N717.19 billion from N726.50 billion.

Similarly, combined net

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Nestlé S.A pays N748m for additional 636,384 units of Nestlé Nigeria Iheanyi Nwachukwu

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estlé S. A., the parent company of Nestlé Nigeria plc, has increased its equity stake in the company with the purchase of additional 636,384 units. Nestlé Nigeria is one of Nigeria’s largest food and beverage companies. The share dealing by the company’s insider done on the Nigerian Bourse on August 20 was at N1,174.67 per share, cumulatively valued at N747.54 million.

Apart from Nestlé S.A, Switzerland, with 524,559,457 ordinary shares (representing 66.18%) and Stanbic IBTC Nominees Limited with 7.22 percent, no other shareholder held 5 percent or more of the paid-up capital of the company as at June 30, 2020.

NestléS.A.isaSwissmultinationalfoodanddrinkprocessing conglomerateheadquarteredin Vevey, Vaud, Switzerland. It is the largest food company in the world, measured by revenues and other metrics.

Nestlé has been in operations in Nigeria since 1961 in the Food and Beverage segment. The company produces and markets global brands like Maggi seasoning cube, Milo and Nestle Pure Life Water.

Nestlé Nigeria recently released its half year (H1) results, reporting a flat topline performance. H1’20 revenue came flat at N141 billion,

same compared with the preceding H1’19 period.

While food revenue continued to underperform this year (-2.5% year-on-year (y/y) to N86bn in H1’20), the revenue growth in beverages (+2.5% y/y to N55bn) acted as a buffer, likely boosted by Ramadan demand in second-quarter (Q2).

Amid pandemic-induced inflationary pressures, Nestlé Nigeria gross profit moderated 7.9 percent in H1’20 to N60.8 billion, while after tax profit for the period printed lower at N21.8 billion from H1’19 high of N26.2 billion.

United Capital Research analysts who adjusted some of their expectation for the rest of the year in line with the new realities in the macroeconomic environment had on August 4 asked investors to “buy” Nestlé Nigeria plc shares at their review target price (TP) of N1,343.2.

“Adjusting our model estimates with the new assumptions, we review our year-end target price to N1,343.2/share.

The stock currently trades at a market price of N1,175/share, a 14.3 percent discount to our year-end Target Price. We maintain our BUY rating on the Ticker,” the analysts had said. The stockclosedtradingweekended Friday, August 21 at N1,175.

Meanwhile, Vetiva Research analysts had asked investors to “sell” Nestlé Nigeria, saying their target price for the stock was N1,078.08. www.businessday.ng

L-R: Lamido Yuguda, director-general, Securities and Exchange Commission (SEC); Frank Aul, head of finance and accounts, and Yewande Sadiku, executive secretary, Nigerian Investment Promotion Commission, during a Senate public hearing interactive session on the 2021-2023 medium term expenditure frame work and fiscal strategy paper at the National Assembly, Abuja. NAN

9m contributors await transfer window as PenCom puts Covid-19 behind Modestus Anaesoronye

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ver nine million contributors already registered with the different Pension Fund Administrators (PFAs) are set to port to their choice PFA when transfer window opens by the end of this year.

The scheme, which ought to have started since first quarter of 2020 according to the regulator’s timetable, could not make headway as a result of coronavirus (COVID-19) pandemic and lockdown of interstate travels.

But hope is coming on the heels of a new announcement by the National Pension Com-

mission (PenCom) that it is ready to commence capacity building for stakeholders since lockdown of interstate travel andCovid-19havebeenrelaxed.

Therearecurrently9,039,748 registeredcontributorsandtotal pension asset under management valued at N11.085 trillion as of June 30, 2020.

Section 13 of the Pension Reform Act, 2014, allows contributors to move their Retirement Savings Account (RSA) through a transfer window from one Pension Fund Administrator (PFA) to another, provided that it is not more than once in a year.

It is expected this will affect negatively some PFAs whose services in terms of returns on investment as well as custom-

ers relations have not been excellent, and therefore working in favour of those who have done better.

PenCom in a statement released last week said it had been working assiduously to actualise the provisions of Section 13 of the Pension Reform Act, 2014, stating that preparatory to the opening of the Transfer Window, the Commission developed and deployed the Enhanced Contributor Registration System (ECRS) in September 2019.

It noted that the Commission had developed the RSA Transfer System (RTS), a robust electronic platform that would enable seamless RSA transfers.

“PFAs would be able to

utilise the RTS platform for the submission of RSA transfer requests. The full deployment of the platform would however entail extensive training of the PFA’s relevant personnel and simulation of the processes, industry-wide.”

According to the Commission, PenCom was unable to carry out these activities as planned due to the nationwide lockdown because of the Covid-19 pandemic.

“Subsequent to the easing of the lockdown by the Federal Government and the lifting of the ban on interstate travels between the end of June and July, 2020, the preparations for a comprehensive training plan were concluded,” it noted.

CITN, in PH, strategises on post-COVID tax environment … wants government to give tax holiday as palliative Ignatius Chukwu

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he national council of the Chartered Institute of Taxation of Nigeria (CITN) has risen from its national council meeting and retreat in Port Harcourt, Rivers State, with new strategies on how to cope with post-Covid-19 tax situation in Nigeria.

This is as the president, Gladys Olajumoke Simplice, calls on the Federal Government to declare a tax holiday as form of palliative to the Nigerian tax community.

At the four-day event held at Faarah Coffee Lounge in Port Harcourt, the council adopted the training theme - ‘CITN and the March Towards Strategic Redirection as a Recipe for Global Leadership in Professional Practice,’ handled by Michael Stevens Consulting.

The council members told newsmen that the dynamic and changing nature of the tax en-

Gladys Olajumoke Simplice, CITN president

vironment makes it necessary for members to re-strategise and also retrain the members to cope with the changes, especially in the task of training and certifying new members.

The president further told newsmen that taxpayers had been hard hit and must be rescued by the Federal Government to survive, bounce back, and continue to pay taxes. The government had earlier turned down calls for tax waivers in the Covid-19 pandemic era but said it could only consider

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extension of deadlines.

The Rivers State government led by Governor Nyesom Wike however announced far-reaching palliatives early in August 2020, including suspension of informal sector tax drive, extension of tax filing to December 2020, and 50 percent reduction in some others including capital gains. The business community hailed the declarations.

The CITN president, who joined in commending Governor Wike, told newsmen that Rivers State had held out hope and encouragement to taxpayers who she said clearly see their taxes in action. The state has awardedcontractsforfiveflyovers and other link roads worth N54 billion in the state capital so far.

Simplice said giving palliatives and showing clear evidence of tax at work as Rivers did would spur the citizens and taxpayers into adopting voluntary tax compliance and make @Businessdayng

taxpaying a happy experience.

“Each state is allowed to give palliatives to its tax paying community. So, you look at your local tax climate and decide what to give the taxpayers at this time. You need to assess the low income group and know what to do for them,” she stated.

As professionals who look at books of companies, the institute says most Nigerian companies cannot afford even to pay for tax advice, she said many countries were so far giving different palliatives, adding that the taxpayer needed to survive and resume paying taxes.

The CITN has looked at suggestions to table before the Federal Government after the Port Harcourt meeting, she said, saying the areas have already been pencilled down for discussion.

Simplice, who is also the president of the West African Union of Tax Institute, said the

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PEF makes over N66bn yearly as administrative charges from sale of petroleum products ISAAC ANYAOGU

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hile motorists groan under the weight of ever rising petrol price, the Petroleum Equalisation Fund, a parastatal, under the Ministry of Petroleum Resources, established to administer the so-called uniform prices of petroleum products throughout the country carts away the princely sum of N50billion yearly from the sale of refined petroleum products according to BusinessDay investigation.

The finding has sparked outrage among Nigerians in an era of rising inflation which means less disposable income for the people and questions are now being asked as to why Nigerians should be paying subsidy for an agency of government that should long have been scrapped.

Even in South African

where the government has achieved a uniform pricing formula for petrol, there is no government age Under the current system where the NNPC is almost importing all the country’s refining product needs, PEF’s cost is built into the pricing template captured under distribution margins.

In the distribution margins for July the total amount for PEF to be used to pay transporters is N11.55 made up of: Bridging N7.5, National Transportation an Average 3.89 and Marine Transportation Average N0.15. Out of this, PEF management administration cost amounts to N2.50.

The volumes reported daily for products are 56m for petrol, 14m for diesel and 3m for kerosine daily. At N2.50 levy per litre, PEF makes on average N51billion on petrol, N12.7billion on diesel and and N2.7billion on kero-

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sene every year though it bears no cost and assumes no risk in importing refined products into the country.

In effect, the PEF keeps about N66.4billion every year as administrative charges to ensure a uniform pricing for petroleum products across Nigeria.

This is similar to what obtains with the Petroleum Products Pricing Regulator Authority (PPPRA) who are earning over N30billion yearly as administrative charges regulating petrol prices.

These Two Federal government agencies make over N90bn yearly as administration charges for the sale of petroleum products even though they are not importing or selling petrol.

This pattern of charges places a burden on consumers who have to cover the cost and allows corruption to fester in the marketing of Nigeria’s pe-

troleum products especially petrol.

Analysts say this is not what obtains in other climes. In South Africa for example, marketers achieve price uniformity without a government agency enforcing it because there is a clear standard to determine prices ( indexes to previous month crude prices) allowing for transparency in the process.

Yet, the presence of the agency that enforce uniform pricing has not even led to uniform pricing across the country.

For instance, while the official pump price of petrol was N143 per litre in July, data from the National Bureau of Statistics (NBS) show that the country was unable to keep to uniform price as petrol was sold in Adamawa State for N145.00, Abia State for N144.93 and Enugu State for N144.80.

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The development defeats the reasons for setting up PEF as NBS further disclosed that the products sold lower in states like Gombe for N142.57; Ogun for N140.30; and Gombe for N142.57.

“PEF’s price-setting is not compatible with a liberalised downstream petroleum sector,” according to an oil marketer.

According to him, “allowing a government body administer equalisation fund will create a rent-seeking opportunity for a gatekeeper which can easily lead to fraud.”

Former President, Nigerian Association for Energy Economists (NAEE), Wunmi Iledare, said the country could not pretend to deregulate and set the price at the same time, nor keep an equalisation agency.

“This is what we refer to as transfer payment syndrome. The way out is complex but doable,” Il-

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edare said.

Luqman Agboola, head of energy and Infrastructure at Sofidam Capital said: “With prices now fully deregulated, PEF has been overtaken by the recent development, although it might require appropriate legislation to scrap the agency,” The bridging cost was introduced as a temporary measure when Turnaround Maintenance (TAM) of the nation’s refineries was to be conducted.

However, the scheme remained for decades as the state of the refineries has worsened.

The PEF management says it achieves its objective by reimbursing a marketer’s transportation differentials for petroleum products movement from depots to their sales outlets (filling station), in order to ensure that products are sold at uniform pump price throughout the country.

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The National Water Resources Bill 2020: Obnoxious and against national unity!

Franklin Ngwu

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s leaders of the National Assembly, it is important that the Senate President Ahmad Lawan and Speaker of the House of Representatives Femi Gbajabiamila appreciate and understand that their actions and inactions can result in crises of unimaginable consequences. Being in the same party with the President should not mean an abdication of their vital responsibilities to Nigerians, old and young, born and unborn. Rather than leading a National Assembly for Nigerians, they seem to be leading one that can be best described as a rubber-stamp of the Executive.

With almost all requests and bills from the President accepted and pushed through, what then is the role of the National Assembly under Lawan and Gbajabiamila? Will it not be better to scrap the National Assembly and save the billions allocated to them, a friend queried! To discountenance this growing perception of leading a docile 9th National Assembly, it might be important for Nigerians to know the bills and requests from the President that have been rejected by the National Assembly.

One of such bills that should be roundly rejected is the current National Water Bill 2020 which the House of Representatives on Thursday July 23rd, 2020 shockingly referred to the “Committee of the Whole” for third reading and final passage. In-

terestingly this is the same bill that was rejected by the 8th National Assembly under the leadership of Yakubu Dogara and Bukola Saraki!

Expectedly finding solace and accomplices in Gbajabiamila and Lawan, the contentious water bill was most surprisingly represented to the 9th Assembly. What is even more shocking is the way Gbajabiamila allowed the bill to go through. Whereas he clearly recalled that it was the same divisive and retrogressive bill that was presented and rejected during the 8th National Assembly, he for reasons best known to him or possibly hypnotised allowed the bill easy passage. Utilising Order 12, Rule 16 of the Standing Orders of the House of Representatives, 9th edition but in breach of the House rules and provisions of the 1999 constitution, the bill was brazenly reintroduced and referred to the “Committee of the Whole” for third reading and final passage on July 23rd 2020 just before the House adjourned for a two-month break.

But what is the “National Water Resources Bill 2020? It is a bill that seeks to place all water resources and the banks of water sources including surface and underground sources under the control of the Federal Government and its agencies that will be established under the act. Maintaining that “All surface water and ground water wherever it occurs is a common resource”, the suspicion of the bill is clearly stated in Section 13 which states as follows- “in implementing the principles under subsection (2) of this section, the institutions established under this Act shall promote integrated water resources management and the coordinated management of land and water resources, surface water and ground water resources, river basins and adjacent marine and coastal environment and upstream and downstream interests’’

‘

How can the federal government be thinking of controlling all the water resources in the country when the much in her control have caused more of a crisis and underdevelopment than sustainable development.

This seems to be an advanced RUGA Bill where the Federal Government can now decide who will fetch water in a village stream

Reading through the bill, one is left not only shocked but pushed to agree to the perception that some people are really working against Nigeria or pushing Nigeria into an irreversible crisis.

Moreover, coming at a time when the Nation is intensely polarised along religious and ethnic lines caused mainly by the actions and inactions of the Federal Government, the insensitivity of the Government and leaders to our peculiarities and expectations is sad. While it is glaringly clear that the Federal Government is exponentially failing in her efforts to dominate and micro manage Nigeria through the 68 items in the exclusive legislative list, one wonders why the same weak government is frantically working hard to grab more powers through bills such as this irritating water bill.

Where does one begin! While the support for devolution of powers or restructuring of Nigeria is on the increase across all the geo-political zones of the country, the Federal Government is working hard to concentrate more powers at the centre. Are our leaders really from Nigeria and what is their agenda, another friend queried? How can the federal government be thinking of controlling all the water resources in the country when the much in her control has caused more of a crisis and underdevelopment than sustainable development. This seems to be an advanced RUGA Bill where the Federal Government can now decide who will fetch water in a village stream! Rather than focus on how to embed competition for development through the transfer of some items from the exclusive legislative list to the concurrent and residual lists, the APC led Federal Government prefers to further entrench competition for power through retrogressive and anti-development bills such as the current water bill.

In examining the water bill and others such as the CAMA 2020 act particularly section on the powers of the government to remove the trustees of a non-governmental organisation such as a church, it is important to remind the Federal Government that the essence of government is to advance the wishes and aspirations of majority of Nigerians.

It is difficult to understand why the Federal government believes that a farmer in Oron in Akwa Ibom or Akoko in Ondo State should get permission from a Minister or agency of the government in Abuja before he or she can make use of a stream in his village. As the passage of the bill will mean the total abdication of rights and privileges of Nigerians to use their ancestral resources, all efforts must be made to reject the bill.

This will require the concerted efforts of all well-meaning Nigerians to voice their opposition and rejection of the bill. Three groups that their contribution will be most needed are the media, traditional rulers and religious leaders.

With a combined effort, the citizens will be properly sensitized to demand from their representatives at the National Assembly to either reject the bill or be recalled. The PMB government should be reminded that Nigeria is immensely blessed with abundant human and natural resources that requires only foresightedness and inclusive leadership to achieve double digit sustainable growth and development rather than the present approach of undue control, divisiveness, exclusion, tension and domination which will do no one or group any good!

Dr. Ngwu, is an Economist/Associate Professor of Strategy, Risk Management & Corporate Governance, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@ lbs.edu.ng

Solving disunity and underdevelopment in Nigeria

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ased on the political antecedents and experiences of most countries on the African continent, the heterogeneity of a country is a fillip and force for its political combustion and conflagration. Since the dawn of post-colonialism in Africa, some African countries, which are multi-ethnic in nature and composition, have been battling the vexed and divisive problem of ethnicity. Ethnic rivalry has become a feature common to most African countries.

Consequently, some African countries had disintegrated. Somaliland emerged from Somali while Eritrea pulled out of Ethiopia. Sudan split, giving birth to South Sudan. Sadly, the newly independent State of South Sudan has had intermittent political turmoil, which is traceable to the problem of inter – tribal battle for political supremacy. Now, the Luo and Kikuyu peoples of Kenya are always fighting over political power at the centre. And the people of Southern Cameroun have not stopped agitating for statehood.

Back home in Nigeria, the remote cause of the Nigeria – Biafra civil war, which raged between 1967 and 1970, was ethnic animosity, which reigned in the country, then. That gratuitous civil war caused the loss of millions of human lives and the ruination of our country’s economy and infrastructures. Till now, we are still rallying from the disastrous effects of that internecine civil war.

But have we forged unity and national cohesion from the crucible of that war?

The answer to the question is no. Nigeria is still a disunited country, which is sundered apart by the divisive factors of religious differences/conflicts and ethnic rivalry. Nigeria, which has more than 250 ethnic groups, is an amalgam of ethnic and sub-ethnic groups, which are highly incompatible. It is a blend of diverse ethnic nationalities,

which are antagonistic of one another. That is why disunity with its concomitant effects of underdevelopment has been our lot for a long time.

Nigeria has always convulsed along ethnic and religious lines, with the north being the hotbed of religious crisis. In the first decade of this century, a Thisday newspaper reporter made a prognosis of what Prophet Mohammed would do were he alive, and were he to witness the world beauty contest slated to take place in Abuja. Her newspaper article caused quite a stir in Nigeria, driving the conservative northern Muslims to start rioting, and destroying properties. Consequently, Nigeria lost the chance to host that edition of the world beauty pageant.

Again, the Maitatsine religious uprising in the 1980s in the north caused the destruction of life and property. Now, the Boko Haram insurgents are waging a religious war to enthrone Islamic theocracy in the north. During the periodic national elections, the jostling for political offices by politicians will heat up the polity and cause the monster of bitter ethnic rivalry to rear up its ugly head.

However, Nigeria embraced and adopted federalism as a panacea to the centrifugal forces of ethnic rivalry and nationalism and the issue of religious conflicts. More so, our adoption of the federalist structure ought to have afforded the component units in our country the opportunity to develop at their own pace. But sadly, Nigeria is not practising true federalism. Our federalism is a grotesque caricature of what federalism ought to be.

Here, in Nigeria, a federal state, the centre is always dishing out financial handouts to most state governments, whose finances are always in the red. What obtains now in our benighted country is a departure of what happened in the first

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republic when we had regions, and practised true federalism. Then, the regions achieved economic prosperity and financial buoyancy by their practice of agriculture. It’s regrettable that regionalism died with the collapse of the first republic.

The component units that make up Nigeria will achieve rapid development if we are to practise true federalism. The states and local governments ought to be independent and seek alternative ways to generate revenue rather than depending solely on financial handouts from the centre for survival. If Nigeria were a true federal state, we ought to have state police forces given the humungous population of Nigeria and its large land mass. The fact is, our practice of true federalism will unleash the potential of components units in the country and ignite the rapid development of Nigeria.

However, even if Nigeria were a true federal state, the existence of peace and unity in our country would still be a sin qua non for us to achieve economic and technological advancement. A disunited country, which is at the brink of descending into an anarchic situation, cannot achieve greatness. Nigeria survived a civil war, and surmounted the political imbroglio caused by the annulled June 12, 1993 presidential election.

The cancelled June 12, 1993 presidential election nearly threw our country into a civil war.

So, to placate the indignant Yoruba people over the annulled June 12, 1993 presidential election, Chief Olusegun Obasanjo, a Yoruba man, was helped to become our president in 1999.

Then, the political situation in the country gave rise to the emergence of the unwritten principle of rotational presidency. And since the dawn of the fourth republic, two major ethnic groups had taken turns to rule Nigeria. Chief Obasanjo, a Yoruba man, was Nigeria’s president between

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CHIEDU UCHE OKOYE 1999 and 2007. And, Alhaji Umaru Musa yar’adua, a Hausa/Fulani Muslim, didn’t complete his first term in office as the cold hands of death snatched him. By 2023, Muhammadu Buhari, a northern Muslim, will have led Nigeria for eight years.

So, for the sake of political fairness and equity, which will guarantee us political stability and national unity, the presidential post should be ceded to the Southeast in 2023. The Southeast has not produced the president of Nigeria since the fourth republic was birthed.

More so, the emergence of a Nigerian president of Igbo extraction will lead to the abatement of the struggle and agitation for the creation of the sovereign state of Biafra. A Nigerian president of Igbo extraction will assuage the Igbo people’s feelings of alienation and marginalization caused by the injustices meted out to them overtime. Again, when an Igbo person becomes the president of Nigeria, it will signal and herald the true reintegration of the Igbo people into the mainstream of Nigerian politics. Are Igbo people not being viewed with suspicion and treated with disdain by the rest of Nigerians since the end of the civil war in 1970?

Our abiding by the unwritten principle of rotational presidency and practising of true federalism will lead to the positive transformation of Nigeria.

Okoye is a poet

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Rural entrepreneurship and the economics of insecurity in Nigeria (2) Small Business handbook

Emeka Osuji

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igeria is deep into an armed conflict ; some even say it is actually a full state of war. Unfortunately, there are no trenches, no enemy locations and nothing like “no man’s land”, which we have in real wars. The enemies are essentially virtual. Boko Haram operates from Nigeria’s Sambisa forest in the Savannah, but nobody knows the exact spot. Occasionally we get information on their whereabouts and bomb them out. We actually see the videos of the targets being hit. Those raids may be successful but the only thing they seem to have guaranteed is that the terrorists will regroup soon after.

Their more daring siblings, the herdsmen are roaming the country running riots, in almost every part of the country, killing or kidnapping all those that are foolhardy enough to go to their farms alone. This has created palpable fear among farm families across the country and put a major obstacle in the way of the agrarian masses of Nigeria, to contribute maximally to national output and food security. Meanwhile, most rural dwellers in Nigeria, especially those from the north where these killings have taken root, are predominantly farmers. So, the most pervasive economic activity is put on hold.

Then there are the bandits – that uniquely Nigerian-made terrorist group that is known for precision attacks, even under curfews and lockdown. We can see the internally dis-

placed people all over the place, as evidence of the conflict. We see casualties of Nigerians killed by different terrorist groups that have taken up arms against the state, especially Boko Haram and the so-called herdsmen. We also hear of the casualties being inflicted on the terrorists, which sometimes tell us the crisis may come to an end someday.

There is no doubt that a major conflict is going on and people are being killed and displaced, economically and otherwise. What we do not see however, is a deceleration of the crisis and its effects on rural entrepreneurs. So, society if facing, squarely, the full impact of war on the society.

Sadly, we still run a country where those bestowed with public trust cannot be held to account; where the growth of Internally Generated Revenue (IGR), without reference to its sources and how the collection impacts society, is a trending index of successful governance. Therefore, despite the biting pains of war on the masses, internal revenue officials are making life a living hell for many small businesses. No matter how we explain it, there is something definitely wrong with the human side of any society that conducts itself in that manner.

When conflicts destroy the livelihood of a community, people die twice - first when they lose their businesses and second, when they physically die.

Most Internally Displaced Persons (IDPs)are waiting for their second death. Indeed, more people die economically than physically, in an armed conflict. The number of small and medium enterprises that have been destroyed over the past several years of conflict in Nigeria, especially in the north, is therefore very large.

Conflicts, be they communal, tribal or religious, have a negative impact on every level of economic activity, but the micro-level effects are very telling, especially on the most vulnerable among individuals and their businesses. This

is why public policy should not just focus on the physical reconstruction of damaged community infrastructure but also on restoring the economic system –jobs and livelihoods. According to Baumol, entrepreneurs are “persons who are ingenious and creative in finding ways that add to their own wealth, power, and prestige.” They are driven by the possibility of increasing wealth, which disappeared under conflict situations. He further posits that this category of people can be productive, unproductive or even destructive in an economy, depending on the direction and effectiveness of public policy. Indeed, some of them are now racketeering on farm produce in the Northeast.

The implication of the above is that entrepreneurs, who have played critical roles in uplifting economies, may become unproductive or even dangerous, in the society, if public policy is not applied in such a way as to direct them towards the common good of the society. This happens when rent seeking, which is usually the outcome of ineffective policy design and application, becomes the main driver of private enterprise. Society uses the instrumentality of effective institutions to curb such tendencies. However, where personality cults determine the nature and direction of public policy, effective institutions are hard to build.

Such institutions are necessary to help direct the course of development and to make sure economic agents behave according to set order, more so in a conflict environment. The laxity of public policy, often evident in conflict zones, is largely responsible for the apparent thriving of low level entrepreneurship, often in support of the enemy, and the absence of high level investing, during conflicts.

Much of current discussion of the consequences of the present state of unprecedented insecurity in Nigeria, and even the pandemic, has been largely at the macrolevel level - growth

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Rural entrepreneurs depend on rural credit markets, which vapourise at the first sign of crisis, leaving both entrepreneurs and their lenders in ruins. Tax policy that ignores the positive relationship between conflicts and microbankruptcy is the handiwork of zombies. Taxes are for the living and not living dead

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

Power is nothing without control

I

remember the mid-1990s Pirelli advert where the world-famous Italian tyre brand introduced its iconic slogan for the first time the advert featured my school boy hero and one of the greatest Olympians of all time, the incomparable Carl Lewis. Not only did he sport the perfect “flat top” hairstyle, which I dutifully copied but he specialised in the same athletic events as I did, namely the 100m and 200m sprints and the Long Jump. With his perfect and effortless looking running style, “King Carl” as many of us liked to call him because of his total dominance on the world stage, was the perfect candidate for the advert.

Unleashing his explosive power and speed, he took the bends at breakneck speed and all the while maintained perfect balance. Of course, this impossible feat was only made “possible” by the Pirelli tyre thread which made up the soul of his feet, providing perfect grip. And what was the brand’s slogan? “Power is nothing without control”. The advert was so cool. I thought so back then and I guess I still do. Then, there was another Pirelli advert which featured King Carl but this time, it was a still picture of him in a sprinter’s position at the starting block, wearing a pair of red stilettos. Weird, right? But the significance wasn’t lost on me. Without a moderating influence on power, power can be far more destructive than constructive. Even for the person wielding it.

When God says he created the woman to be a helpmate to man, one of the helps I earnestly believe He has in mind, is to provide a balance.

This could simply be a balanced view on issues or an alternative approach to moderate a testosterone driven rash line of action. It could mean to provide a much-needed eye of compassion regarding a matter. It could on the other hand be to offer a forward focused intervention, required to nurture and build thereby countering the “grab it all now” syndrome which often besets us men. It could even be to massage our male ego while cleverly steering us away from a counterproductive stance.

Of course it would be foolish to say all women are the same, but with the higher propensity for women to show compassion and to care about the welfare of others, (which is what government is meant to be about) I strongly believe a government which lacks a sufficient number of women will be handicapped by having one hand tied behind it’s back. Women by their very nature are more inclined to ensure policies are passed that will provide an enabling environment for their children and future generations to thrive. God is well aware of how boys and men will gladly scatter everything rather than be seen to step down. The intervention of women can stop us from doing what we will almost certainly regret later on, even if we’re not wise or humble enough to admit it. Without that balance in our lives, we’re almost certainly doomed, as we’ll keep taking actions which are so obviously not in anybody’s long term interest, including ours.

A help mate is not a lesser person but someone who compliments you to make you more complete. For those who have watched ralley

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racing, you would have noticed that there are always two people in the racing cars; the driver and the navigator. Should the driver decide to go it alone, there are really only two possible outcomes. One, he would crash out of the race or two, in order to avoid crashing, he would have to drive very slowly. Either way, he can’t possibly win. This tells us very clearly that the navigator is not superfluous. He’s neither unnecessary nor is he a passenger. He’s actually half of a team because without him both the driver’s dexterity and the car’s huge horsepower would be as good as useless.

Without him, the driver wouldn’t know what’s ahead. He wouldn’t know when it’s safe to accelerate or when it’s prudent to decelerate. He wouldn’t know when a bend is coming up or where he can make up for lost time. For all intents and purposes, the power at his feet would amount to nothing if he doesn’t know how best to control it. A sudden rush of blood to the head, causing him to speed up at the wrong moment could land him in a ditch that he won’t be able to get out of. The help mate is therefore not an appendage but a crucial partner in your journey if you’re to have any hope of finishing on time or even finishing at all. She sees what you don’t see and ensures you both cross the finish line. It’s one thing to have the throttle at your feet but it’s another thing to know how to get to where you want to go.

The motive behind having women in government and in positions of authority should not be to merely play to the gallery as that doesn’t do

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projections and recession, inflation and employment, and such economy-wide implications. The impact of the crises on the rural economy, particularly the destruction of the entrepreneurial class and their creative spirit, has not been fully appreciated. Recently, a number of states and the federal government in Nigeria have amplified their tax collection efforts, ostensibly to shore up falling revenues. There is no question about the fact that the government needs revenues to meet public finance needs. It needs to collect all possible taxes, especially when its major revenue source, say oil, is in decline. However, that is not a reason to be insensitive about the economic consequences of the ongoing war, on the rural economy and it and entrepreneurs.

Rural entrepreneurs depend on rural credit markets, which vapourise at the first sign of crisis, leaving both entrepreneurs and their lenders in ruins. Tax policy that ignores the positive relationship between conflicts and micro bankruptcy is the handiwork of zombies. Taxes are for the living and not living dead. Rural entrepreneurs in developing countries face serious socioeconomic challenges. These challenges are greatly amplified in conflict situations, especially where the enemy is literally virtual, as in the case of Nigeria. According to Amnesty International, so far, bandits have killed 1,126 and abducted over 380 Nigerians in the seven northern states. How many thriving enterprises do we reckon may have been erased in these areas? Unfortunately, we are still largely unable to identify those behind Boko Haram, the killer herdsmen and the raging bandit. Rebuilding broken bridges may avail nothing if there is uncertainty as to the identity and location of those who broke it.

Character Matters with Daps

Dapo Akande anybody any good. Neither should it be a cosmetic gesture, as if we’re doing the womenfolk a favour. Instead, it should be because we recognise its necessity as we’ll merely be shooting ourselves in the foot by doing otherwise. If we genuinely desire to make progress as a nation then we must be intentional and we must take deliberate steps that will give us the best chance of success.

I close with this. We should always keep in mind that with the right mindset, there can be great strength in what appears to be weakness.

Equally wise is it to keep in mind, just how brittle and weak power can be when there’s an absence of restraint or a moderating influence. I couldn’t agree more with Pirelli’s submission that power really does amount to nothing without control.

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

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Pricing and incentive mechanisms for the growth in the power sector What works best – regulation or market forces?

Chukwueloka Umeh

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or decades now, Nigeria’s poor power supply has affected her economic growth and the lifestyle of Nigerians to the extent that most citizens doubt if they will ever enjoy 24-hour power supply in their lifetime without having to generate it themselves. Older Nigerians who were around in the days of Electricity Corporation of Nigeria (ECN) may have forgotten that although electricity was not available in every part of the country, the electricity sector worked so well that ECN (a precursor to NEPA), used to send notices of power cuts to Nigerians days before the cut.

The date, time, duration, and reason for the cut would be communicated days in advance.

It was the perilous state of the power sector and the need for a solution that led the government to unbundle it to allow and encourage private investors to come in and salvage the sector which led to the birth of eleven distribution companies (DisCos), generating companies (GenCos) and a transmission company. The jury seems to be out on the performance of some of the investors in the sector and views most of them unfavourably. Several questions remain - How do you expect performance from a manufacturer of a product or a salesperson when he/she has no power to decide the price of his/her products, and also ends up not getting full pay-

ment for products delivered? How can an investor continue to invest in a sector where he has no power to determine his operating environment and is almost an onlooker despite being heavily indebted to banks for loans taken to acquire the business and help it grow?

For there to be stable power supply in the country, market forces need to determine the cost of electricity, and a competitive landscape needs to grow wherein consumers have several choices of whom to buy power from. Deregulation of the power sector is the way to achieve this, not government bailouts or artificially fixing tariff. A complete liberalisation of the power sector is what we need to not only allow for more innovation and private investment, but also create competition amongst the players in the industry which in turn will lead to better service. It should be clear that the epileptic power supply witnessed in the country would become a thing of the past if the government allows market forces to determine pricing in the entire value chain, from gas production and transport to electricity distribution.

Explaining the connectivity A high-level overview of the electricity industry’s value chain would help the reader better understand the challenges faced by some of the investors in the power sector, and the corollary effect on pricing. The value chain, specific to gas-fired power plants, has energy flow starting with gas production and then gas transportation via pipelines or virtual pipelines (trucks). The chemical energy in gas fuel is converted to electricity by generating companies, and this electricity is transported by the Transmission Company of Nigeria (TCN) to the respective eleven distribution companies. The DisCos deliver the transmitted power to homes, businesses and factories, collect money from these

customers and pay TCN and the GenCos, who in turn pay the gas producers and transporters.

The value chain is straightforward, but its state of being broken is the bane of the NESI. Adequate metering remains a major issue across the eleven DisCos, with less than 30% of the populace metered. This means that many power consumers are either consuming power they don’t pay for or paying too much for what they consume, while many other potential consumers are not connected to the national grid at all. Further, out-ofdate infrastructure causes high losses, which means that all the transmitted power cannot get to the DisCos or their customers, and at the end of each month, the DisCos cannot pay the GenCos for the power sold to them. This also means that the rest of the value chain cannot be properly paid for their supply or service or both. With very low cash flow and significant monthly unpaid receivables that continue to grow, it is almost impossible for these companies to make the required investments to upgrade their assets.

Gas producers are unable to increase their gas producing/processing capacity because of a lack of payment. Existing and potential new gas pipeline owners including the government through Nigerian Gas Company (NGC) cannot build significant networks of new pipelines, or properly maintain existing ones.

Several privatised on-grid GenCos with dilapidated equipment are unable to make the investments they promised to make for the same reason. Finally, virtually all the DisCos have not made the expected improvements via the reduction in aggregated technical commercial and collection losses (ATC&C) which they committed to during the privatisation for several reasons. The regulator has been unable, unwilling, or both to

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Value and pricing as a compass for a sustainable industry

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr. Umeh is the Managing Director/CEO of Century Power Generation Ltd and the Group Chief Operating Officer at Nestoil Group.

Making a case for more public libraries

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he library is among the most critical forms of social infrastructure that we have. It is also one of the most undervalued. A public library is a non-profit library that is accessible by the general and is usually funded by the government or from public sources such as taxes. The public library has also been described as a “welfare centre, which provides useful services to the community by fostering education, promoting culture, recreation and dissemination of information to all sections of the society.

As gateways to knowledge and culture, libraries play a fundamental role in society. The resources and services they offer create opportunities for learning, they support literacy and education, and they help shape the new ideas and perspectives that are central to a creative and innovative society. They also help ensure an authentic record of knowledge created and accumulated by past generations. Without libraries, it would be difficult to advance research and human knowledge, or preserve knowledge and heritage for future generations.

One of the significant and fundamental roles of public libraries is education. Public libraries provide books and other materials for people to read and use. These materials are educational and lead to self-improvement. They also help to develop basic literacy skills. The educative role of public libraries has expanded to include supporting both formal and informal education.

Promoting literacy is another function of public libraries. Literacy is the ability to read and write. Public libraries continue to play a major role in fostering literacy in communities and societies, particularly among people that need

special assistance in developing literacy skills.

Public libraries also help to promote lifelong learning. Lifelong learning is the process of continuous and ongoing learning throughout a person’s life in order to enhance continuous development and improvement of an individual’s knowledge and skills. Due to the complex and rapidly changing environment, people need to acquire a variety of skills and knowledge, irrespective of their age, or social or economic status.

Public libraries do not only have educational roles and functions. They can also contribute to the country’s economic development. For example, public libraries can have a significant impact on economic productivity by getting involved in supporting business and economic development through providing effective business services, resources and literacy programs to their business communities. Such businesses and organizations that use public libraries as a resource become more successful, thereby contributing to economic development in their communities.

One of the most important functions of the library is the preservation of our cultural heritage. Perhaps the most deep-rooted of our human instincts is the desire to preserve our culture for future generations. Libraries help to accomplish this objective. Libraries are rich repositories of historically and culturally significant collections, many of which are not available anywhere else.

Without the services of a library, many works that are reflections of our cultural heritage would be lost to future generations.

What are some of the challenges facing public libraries in Nigeria today? One problem faced by public libraries in Nigeria today is their scarcity.

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For example, someone who lives somewhere in FESTAC Town, Lagos would have to travel a long distance to somewhere around Mile 2/Amuwo Odofin, in order to access the services of a public library. This Library (The Borno House Library, which functions under the Lagos State Library Board), seems to be the only functioning library in the entire FESTAC/Amuwo Odofin area, if I am not mistaken. So, it will be appreciated if more public libraries are established across various communities/neighbourhoods.

Another problem is that many public libraries do need renovations. These public libraries are often unattractive and poorly maintained, while in most cases, the infrastructural facilities are inadequate. This could be because the library buildings and the systems that sustain them are underfunded, and probably overrun.

This problem can be tackled by improving funding for the public library system. More public support - such as through the contributions of philanthropists - can be of much benefit in this regard.

Other problems facing public libraries in Nigeria include that the books in stock at the libraries are usually outdated. It is quite rare to find new and current books or journals. Also, reference materials, where they exist, are old and dusty. Audio-visual materials are also usually hard to come by. The quality of manpower is also frequently not up to expectations. These and many other problems are currently plaguing public library system in Nigeria.

A functional library is expected to stock all kinds of items that add to knowledge - from books to audio and visual materials, internet access, artefacts that advance the cultural and

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impose sanctions as stated in the privatisation process. Against this backdrop of challenges in the value chain, it is clear that government regulations have failed to stimulate and catalyse the required private investment and growth in the sector. Continued government initiative will see the sector continue to flounder in its current near comatose state. One can see then that the only viable option for growth is to allow market forces take full control.

Replicating success of the telecoms reforms A good place to start the needed changes would be for the federal government to leverage the deregulation model that was adopted in the Telecoms sector.

This deregulation as we know, resulted in a strong telecommunications industry in Nigeria, the creation of hundreds of thousands of direct and indirect jobs, as well as boosting economic growth in the country. Despite the challenges the sector is facing today with regulations amongst others, the Nigerian Communications Commission (NCC) stated that in June 2020, there were 196,379,542 cell phone subscriptions, 143,725,634 internet subscribers, and 78,784,226 broadband internet subscribers. Further, in the first quarter of 2020, the telecommunications industry contributed 10.88% to Nigeria’s GDP. A cursory review of the telecommunications industry makes it obvious that the only way to allow the power sector grow is complete privatisation and liberalisation.

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DANIEL IGHAKPE recreational needs of the society, etc.

Libraries are essential not only for community vitality but also for buffering all variety of personal problems - including isolation and loneliness. This is especially so, as the rate of unemployment and poverty in the country continues to rise, leading to idleness, among other ills.

Therefore. It is also important to generate more awareness among the populace about the important role that libraries play in modern communities, or the many roles they could play if they had more support. Also, public enlightenment campaigns and other activities that encourage reading and literacy should be encouraged and implemented in various communities.

Libraries play a very healthy role throughout our life. Public libraries are important informational, educational, cultural, and social institutions which play fundamental roles in the development of the society. They are educational institutions, providing educational and literacy programs and supporting lifelong learning. They provide business resources which contribute toward economic development. They help to preserve our cultural heritage, and they also provide free and equal access to high-quality information, to meet the needs and interests of all segments of the community, including national minorities, in accordance with the principle of human rights.

Therefore, the relevant authorities will do well to establish more public libraries, maintain existing ones, and make our public libraries attractive to meet the informational, educational, and recreational needs of the people.

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Wednesday 26 August 2020

BUSINESS DAY

Editorial Time to sack Service Chiefs

Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

There is nothing new any of them will offer that has not been used in the last six years

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

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nsecurity in Nigeria has become a source of concern both to Nigerians and the international community. On a regular basis, several civilians and soldiers are killed by men of the underworld.

Churches, residential buildings, schools, farmlands and mosques are not safe as they’re invaded by terrorists. Some Nigerians in the North are fleeing to neighbouring countries to seek refuge. Soldiers who are supposed to be at the war front are tugging their khakis and resigning over lack of motivation from the service chiefs. In addition, there is limited supply of weapons. At the last count, over 5000 lives have been lost in the last five years and the number increases by the day with no solution in sight.

In the wake of these atrocities, Nigerians of all walks of life have called on President Muhammadu Buhari to sack the Service Chiefs for non-performance. The calls became more strident in the last one month following heightened security situation in the North East zone and Southern Kaduna. Even the National Assembly is not left out having passed a vote of no

confidence on the Service Chiefs.

The Service Chiefs appointed on 13th July, 2015 are; The Chief of Defence Staff (CDS), General Gabriel Olonisakin; the Chief of Naval Staff, Vice Admiral IbokEte Ibas; the Chief of Air Staff, Air Marshal Sadique Abubakar; and the Chief of Army Staff, Lt. General Yusuf Buratai Surprisingly, president Buhari on July 18, 2020 expressed dissatisfaction with the performance of his Service Chiefs when he told them point-blank that their “best is not good enough”. In other climes, the Service chiefs would have been sacked or voluntarily resigned.

Sadly, that has not happened.

Nigerians in 2015 and 2019 voted president Buhari to power in anticipation that as former military head of state and a retired General, he was positioned to deal decisively with all forms of threats to security of the people. But six years down the line, rather than abate, insecurity has escalated thereby exposing great numbers of people to avoidable deaths and loss of property in a manner that history has never witnessed.

While we recognise President Buhari’s prerogative to appoint,

sack or replace service chiefs, at the same time, he swore an oath to protect the lives and property of every Nigerian citizen.

Many factors contribute to the dismal performance. Intelligence gathering is poor. The military is ill-equipped and ill-motivated. The Service chiefs lack fresh ideas about combating the insurgency. Citizens refuse to give vital information to the military authorities on the whereabouts of the criminals. Political interference and corruption are other factors. And for reasons best known to them, many foreign countries refused to sell military equipment to Nigeria. The N1 trillion approved in 2019 by the National Assembly was only released in May this year.

Recently, over 200 experienced soldiers were reported to have resigned. The Nigerian Army would later debunk it, but media reports put paid to the position of the military authorities. And recently, there were trending videos of some Nigerian soldiers cussing and criticising the Chief of Army Staff, for not supplying them the needed weapons and ammunition to combat the Boko Haram terrorists. Most of these videos were made in the Sambisa forest.

The soldiers who made the videos would later bite their fingers as they were dealt with. Not spared is a high-ranking military officer General Olusegun Adeniyi who would never forget what befell him a few days after he appeared in a viral video where he asked the Nigerian Army to empower his team with the necessary weapons to fight the insurgents. Same goes for Lance Corporal Martins who indicted and cussed Buratai in a viral video.

We disagree with the position of the military authority which barred soldiers from complaining because the Nigerian Constitution guarantees everybody freedom of speech. To effectively contain the insurgency across the country, the soldiers must be motivated. First is to supply them equipment and improve their welfare package.

The second motivation is to remove the service chiefs as both junior and senior officers have lost confidence in the military leadership. There is nothing new any of them will offer that has not been used in the last six years.

Whoever eventually becomes appointed as a Service Chief must avoid making the mistakes the present occupiers of the office made.

HEAD, HUMAN RESOURCES Adeola Obisesan

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

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Wednesday 26 August 2020

Harvard Business Review

BUSINESS DAY

13

ManagementDigest

Digital transformation comes down to talent in 4 key areas Thomas H. Davenport and Thomas C. Redman

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ver the years we’ve participated in, advised on or studied hundreds of digital t ra n s f o r mat i o n s.

In doing so, we’ve gained a perspective on just how difficult true digital transformation really is and what it takes to succeed.

It is not for the faint of heart — the unfortunate reality is that, to date, many such efforts, like transformation programs in general, have failed.

Success requires bringing together and coordinating a far greater range of efforts than most leaders appreciate. A poor showing in any one of four interrelated domains — technology, data, process or organizational change capability — can scuttle an otherwise well-conceived transformation. The really important stuff, from creating and communicating a compelling vision, to crafting a plan and adjusting it on the fly, to slogging through the details, is all about people.

More than anything else, digital transformation requires talent. Indeed, assembling the right team of technology, data and process people who can work together — with a strong leader who can bring about change — may be the single most important step that a company contemplating digital transformation can take. Of course, even the best talent does not guarantee success. But a lack of it almost guarantees failure.

Let’s explore the talent needed in each of the four domains in turn.

TECHNOLOGY From the Internet of Things, to blockchain, to data lakes, to artificial intelligence, the raw potential of emerging technologies is staggering. And while many of these are becoming easier to use, understanding how any particular technology contributes to transformational opportunity, adapting that technology to the specific needs of the business and integrating it with existing systems is extremely complex. Complicating matters, most companies have enormous technical debt; embedded legacy technologies that are difficult to change. You can only resolve these issues with people who possess technological depth and breadth, and the ability to work hand-in-hand with the business.

Challenging as these difficulties are, an even more critical issue is that many business people

have lost faith in their IT department’s ability to drive major change, as many IT functions are primarily focused on “keeping the lights on.” Eventually, however, digital transformation must incorporate institutional IT, so rebuilding trust is essential. This means that technologists must provide, and demonstrate, business value with every technology innovation. Thus, leaders of the technology domain must be great communicators, and they must have the strategic sense to make technological choices that balance innovation and dealing with technical debt.

DATA The unfortunate reality is that at many companies today most data is not up to basic standards, and the rigors of transformation require much better data quality and analytics. Transformation almost certainly involves understanding new types of unstructured data (e.g., a driversupplied picture of damage to a car), massive quantities of data external to your company, the leveraging of proprietary data and the integration of everything together, all while shedding enormous quantities of data that have never been (and never will be) used. Data presents an interesting paradox: Most companies know data is important and they know the quality is bad, yet they waste enormous resources by failing to put the proper roles and www.businessday.ng

responsibilities in place. They often blame their IT functions for all these failures.

As with technology, you need talent with both great breadth and depth in data. Even more important is the ability to convince large numbers of people at the front lines of organizations to take on new roles as data customers and data creators. This means thinking through and communicating the data they need now and the data they’ll need after the transformation. It also means helping front-line workers to improve their own work processes and tasks such that they create data correctly.

PROCESS Transformation requires an endto-end mindset, a rethinking of ways to meet customer needs, seamless connection of work activities and the ability to manage across different silos going forward. A process orientation is a natural fit with these needs. But many have found process management — horizontally, across silos and focused on customers — difficult to reconcile with traditional hierarchical thinking. As a result, this powerful concept has languished. Without it, transformation is reduced to a series of incremental improvements, important and helpful, but not truly transformative.

In building talent in this domain look for the ability to “herd cats” — aligning silos in the direc-

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tion of the customer to improve existing processes and design new ones, along with a strategic sense that knows when incremental process improvement is sufficient and when radical process re-engineering is necessary.

ORGANIZATIONAL CHANGE CAPABILITY In this domain we include leadership, teamwork, courage, emotional intelligence and other elements of change management.

Fortunately, much has been written about this domain for many years, so we won’t review it here, other than to note that anyone responsible for digital transformation must be well-versed in the area. While we have no firm evidence to support this, it seems that those who gravitate toward technology, data and process are somewhat less likely to embrace the human side of change. Of course, in our recommendations above, we have urged leaders to seek those with excellent people skills. If you are unable to find them, a good alternative is to put some “purple people,” those able to work on both sides, on the transformation team.

PULLING IT ALL TOGETHER Technology is the engine of digital transformation, data is the fuel, process is the guidance system and organizational change capability is the landing gear.

You need them all, and they must function well together. @Businessdayng

Consider the “our systems don’t talk” problem, which bedevils most companies and is anathema to digital transformation. But in which domain does it belong? As described above, it is a technical problem, but it also leads to enormous process inefficiencies. Yet it stems from a lack of solid data architecture, and it may involve organizational structure and politics issues that are difficult to change. So one could argue that any domain should take the lead. But the best solution involves the four working together.

Finally, work on technology, data and process must proceed in an appropriate sequence. It is generally accepted that there is no sense automating a process that doesn’t work, so in many cases, process improvement or re-engineering must come first.

On the other hand, some transformations will feature large doses of artificial intelligence.

Since bad data stymies development and deployment of good AI models, in these cases, work on data should come first. Start with your end goals, then develop the sequence of steps best suited to achieving them.

Thomas H. Davenport is a professor at Babson College, a research fellow at the MIT Initiative on the Digital Economy, and a senior adviser at Deloitte Analytics.

Thomas C. Redman is president of Data Quality Solutions.

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Wednesday 26 August 2020

BUSINESS DAY

COMPANIES&MARKETS RusselSmith partners Kongsberg Ferrotech plans robots for subsea repairs in Nigeria ENDURANCE OKAFOR

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igerian integrated oilfield services provider, RusselSmith, has teamed up with Kongsb e rg Fe r ro t e c h, a No rwegian subsea robotics company, to introduce a range of autonomous subsea robotic technologies to the Nigerian market.

Designed to perform inspection, repair and maintenance tasks on subsea pipelines, the robotic solutions are with the distinct advantage of being able to assess and repair subsea pipes in a single operation without divers and other

conventional vessel-supported equipment.

The partnership will see RusselSmith further improving its subsea monitoring, repair and lifetime extension service offerings for rigid and flexible pipes, umbilicals and ancillaries.

Speaking on the collaboration between both companies, Christopher Carlsen, Kongsberg Ferrotech’s General Manager, said: “We are very pleased to collaborate with RusselSmith to introduce our autonomous robotic technologies to the Nigerian market. We believe that these technologies will have a very positive impact on Asset Integrity

Management operations in the country”.

According to RusselSmith’s Divisional Chief E x e c u t i v e, Ef f i o n g O kwong, the initiative is a game-changer for the company’s operations.

“It is also a positive development for the Nigerian Oil & Gas industry because operators in Nigeria now have access to a versatile and effective Emergency Pipeline Repair System that has a small footprint and is also autonomous, ” Okwong said, adding there is growing number of ageing assets in the country that require focused maintenance and life extension efforts.

“Such maintenance efforts can now be further optimized for efficiency and made more cost-effective by adopting robotic solutions like ours, ” he said.

On the environmental front, RusselSmith said it expects there will be a reduction in pollution due to pipeline leaks because operators will be better equipped to maintain p i p e l i n e s a n d re s p o n d quickly to incidents.

“At RusselSmith, our f o c u s re ma i n s o n p ro viding smart technology solutions to help our customers unlock more value from their assets in safe and efficient ways,” the company said.

Covid-19: Schneider Electric distributes 13,000 Meals to underprivileged Children, Widows across Nigeria DIPO OLADEHINDE

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nergy management giant, S chneider Electric, has begun distribution of 13,000 meals to underprivileged children and widows across the country with a kick-off in Amuwo-Odofin community in Lagos State.

The initiative is known as Tomorrow Rising Fund and is in partnership with LEAP Africa – a notable nongovernmental organisation.

The initiative, which is in response to Covid-19 pandemic, gave Schneider Electric staff and Schneider Electric Foundation the opportunity to donate and help alleviate the hardship occasioned by the pandemic in the community.

It also afforded the staff of Schneider Electric the opportunity to be part of the distribution of the meals.

Along with the meals, Schneider Electric also distributed sanitary materials and medical supplies to pregnant women, nursing mothers, senior citizens and people living with disabilities.

It would be recalled that Schneider Electric Foundation had in July created a fund to combat the economic hardship in rural and disadvantaged communities in Nigeria, which will focus on the basic needs, specifically meals and relief items for underprivileged children and communities in response to Covid-19 pandemic.

The donations which came to €11,760.00 in total have been entrusted with LEAP Africa to disburse. The implementation of the project is be done in two phases.

The first will focus on the basic needs like meals and other medical relief items for underprivileged children, women and PWDs in communities across the country.

The second phase, which will be implemented from June to December 2020, will focus on enlightenment where Schneider Electric will facilitate knowledge transfer to its partners via extension of its support to existing education projects in Anglophone Africa. It also plans to promote its campaign on reducing students’ drop out from schools in the region.

Emzor plays major role in eradicating polio from Nigeria

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L-R: Sherif Idi, CMO/ coFounder TAJBank; Sa’idu Umar (Malam Ubandoman Sokoto), sectary to Sokoto State Government; Hamid Joda, COO/founder TAJBank; Aminu Waziri Tambuwal (Matawalen Sokoto), governor, Sokoto State, and Tanko Isiaku Gwamna, chairman TAJBank, at the commissioning of the bank’s branch in Sokoto State.

Japaul Oil switches to mining targets N27bn raise

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ebt-laden Japaul O i l a n d Ma r i time plc has announced plans to raise 27 billion naira ($70 million) in a share offer in November to fund its switch to mining as crude exploration and production activities wane.

The Lagos-based company, which currently provides offshore construction, equipment leasing and oilfield-support services has experienced a decline as oil prices fell in recent years, forcing energy companies to cut back on investments, Chairman Jegede Paul said in an online interview from Lagos.

“The oil companies that we are serving have little jobs to do and the little jobs

that are there, we are all battling to do at prices that are below our costs,” said Paul.

“By the next two years, we will completely be a mineral company.”

Japaul is working with Toronto-based Matrix Geotechnologies Ltd as the consultant for its operations and has obtained licenses to mine gold, lead, nickel and copper it identified in commercial quantities in different parts of Nigeria, Paul said. The company also wants to acquire smaller companies that already have licenses for those minerals to boost its production.

We intend to seek the approval of our shareholders to increase the authorised share capital from 6 billion to 60 billion ordinary and/or

Preference shares and carry out share reconstruction.

“The Directors be, and are hereby authorised to do all things necessary and incidental to the achievement and fulfilment of the above special resolutions including amending the Memorandum and Articles of Association of the company.”

Its shift to other minerals comes at a time the West African nation is seeking to diversify the economy away from dependence on oil, the source of more than 90% of foreign-exchange earnings.

Nigeria started gold refining in June as part of moves to boost its bullion reserves with the Central Bank of Nigeria.

The results of the company for the financial year

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ended in December 2018 showed that revenue fell from N1.9 billion in 2017 to N936 million in 2018. Losses, though lower year on year, remain dire. The firm made a loss after tax of N6.5 billion in 2018, as against a loss after tax of N13.2 billion recorded in 2017.

The company’s auditors, PKF, have flagged the firm’s growing concern assessment as a key audit matter. The group’s shareholder funds have been eroded to the tune of N34.6 billion, as at 31st December 2018.

These have culminated from past operating losses in the last four years. Totalindebtedness stood at N58.35 billion as at the 31st of December 2018 with a gearing ratio of 169:1.

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igeria’s indigenous pharmaceutical company, Emzor Pharmaceuticals Limited, has congratulated Nigerians on the declaration by the World Health Organisation (WHO) that the country has been declared officially polio free. This was validated in the WHO’s announcement of Nigeria being free from Polio on June 19, 2020, in its official website.

The pharmaceutical company was in the forefront of leading the charge in eradicating the disease in Nigeria as the first organisation to initiate the registration and use of Inactivated Polio Vaccines (IPV) in the country and worked with the Paediatric Association of Nigeria to adopt its use in PAN immunisation schedule. This strategy was in line with the company’s commitment to continuously lead the charge in ensuring a sound health for all Nigerians.

It could be recalled that in 2012, Nigeria accounted for more than half of all polio cases worldwide, according to WHO. This created a need for urgent intervention and registration of vaccines and other relevant medication.

Emzor vaccines subsequently registered the Inactivated Polio Vaccine (IPV) as the most promoted vaccine in @Businessdayng

its portfolio with a huge level of investment in line with the vision of Global Polio Eradication Initiative to eradicate the infectious disease. Nigeria was eventually declared polio-free on June 19 by the WHO. Reacting to the news, Chukwu Ekwe, head, Vaccines Sales and Strategy for Emzor Pharmaceuticals, highlighted some of the giant strides the company took to ensure the total eradication of the infectious disease and other strategic plans to sustain the status.

According to Ekwe, “We had made our research and found that Inactivated Polio Vaccine was essential in combating the infectious disease and we sought to introduce and ensure its usage in the country. The Global Alliance for Vaccination and Immunization (GAVI) and WHO, insisted that all countries worldwide must adopt Inactivated Polio Vaccine for the eradication of polio.

“Their endorsement of the IPV for all the countries of the world proved that Emzor was looking into the future when they initiated the registration and use of Inactivated Polio Vaccine. Inactivated Polio Vaccine entered the National Immunization Program in 2014 and now Nigeria has been declared polio free through the use of Oral Polio Vaccine and Inactivated Polio Vaccine.

Wednesday 26 August 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

15

The Companies and Allied Matters Act 2020 - what you need to know Part 2 - partnership structures UDO UDOMA & BELO-OSAGIE

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he Companies and Allied Matters Act (Chapter C20) Laws of the Federation of Nigeria 2004 (“CAMA 1990”) was initially made law in Nigeria in 1990 as a decree of the military government. For thirty years, there were no significant amendments to the CAMA 1990 and so Nigerian companies had to, essentially, rely on a 30-year old law to govern the way businesses operate in our dynamic and evolving global community. However, this all changed on Friday the 7th of August 2020, when President Muhammadu Buhari gave his assent to the Companies and Allied Matters Act 2020 (“CAMA 2020”).

In the course of a 12part series, Udo Udoma & Belo-Osagie will provide a review of the provisions of the CAMA 2020, highlighting changes that have been introduced into the body of Nigerian company law by this ground-breaking legislation.

Ne w e n t i t i e s i n t r o duced Prior to the CAMA 2020, Limited Partnerships (“LPs”) and Limited Liability Partnerships (“LLPs”) were recognised under the Partnership Law of Lagos State 2009, but not by any federal statute or the laws of other states. While the legislative competence of the Lagos State legislature to enact a law regulating partnerships is not in doubt, there was an ongoing debate about the legislative competence of States in Nigeria to enact laws for the formation of corporate entities such as LLPs. There was also the concern about whether the limitation on the liabilities of partners in an LLP registered in Lagos would be recognised in other states of the Federation.

The new CAMA 2020 has introduced a regulatory framework for LLPs and LPs across Nigeria. The LLP is a legal person that can sue and be sued, hold property in its own name and lawfully do all other acts as any other legal person.

LPs do not have the same limited liability status, however, they are permitted to have a general

L-R: Opeyemi Awojobi, sponsorship manager, Tolaram Group; Samuel Ojeifo, Power Oil Health Camp coordinator; Cecilia Bolaji Dada, commissioner, Lagos State Ministry of Women Affairs and Poverty Alleviation; Oluyemi Kalesanwo, permanent secretary, Lagos State Ministry of Women Affairs and Poverty Alleviation, and Omotayo Abiodun, public relations manager, Tolaram Group, during the commissioner’s visit to the Power Oil Health camp in the ongoing Women Assembly Program across all Local Council Development Areas (L.C.D.As) in Lagos State organised by the Ministry of Women Affairs

partner who is liable for all debts and obligations of the partnership, while the limited partners enjoy limited liability.

LPs and LLPs that are already registered in Lagos State may, therefore, need to consider re-registering at the Corporate Affairs Commission in order to avoid any challenge to the validity of such structures under state law.

Limited liability partnerships Features of LLPs: •Corporate personality, limited liability and perpetual succession; •Must have at least two designated partners who are individuals (with at least one of them resident in Nigeria). Where all the partners in the LLP are corporate entities, they may nominate individuals to act as designated partners; •Required to keep proper books of account for each year; •Contributions of partners in an LLP may include cash or other forms of contribution including services or real property; •The rights and interests of a partner are transferrable and, consequently, a change in the partnership will not affect the existence, rights or liabilities of the LLP. Llps compared with companies Similarities: •can sue or be sued in its name; •can hold or dispose of property in its own name; •can choose to have a common seal; •the provisions of the C AMA 2020 relating to reservation of name and change of name also apply to LLPs; •will also be required to file statutory returns; and •may be wound up voluntarily or by the Court (though it’s a simpler process than for companies). www.businessday.ng

Differences: •incorporation process is easier; •no re quirement for LLPs to have a share capital; •flexibility – The operation of the partnership and distribution of profits is as set out in the Partnership Agreement. This may allow for greater flexibility in the management of the business; and •method of dissolution is less procedural (no need to appoint a liquidator etc.)

Limited partnerships Under the CAMA 2020, the regulation of LPs is similar to the regulation of LLPs but with certain differences: •maximum of 20 persons; •must comprise at least one general partner and one limited partner; •general partners are liable for all debts and obligations of the partnership; •the liability of limited partners is restricted to the capital contributed or agreed to be contributed to the partnership under the limited partnership agreement; •the limited par tner does not have the power to bind the firm or participate in the management of the firm, otherwise, he will be liable for all debts and obligations of the firm incurred for the relevant period he acted as a general partner of the firm.

This series was produced by Udo Udoma & Belo-Osagie for general information purposes only and does not constitute legal advice and does not purport to be fully comprehensive. If you have any questions or require any assistance or clarification on how the subject of this guidance note applies to your business, or require any company secretarial or business establishment services, please contact us at uubo@uubo.org

L-R: Muhammadu Muhammed, director-general of NEMA; Sadiya Farouq, minister of humanitarian affairs, disaster management and social development; Grema Ali, acting permanent secretary in the ministry, and Saleh Shinkafi, chief of staff to the minister, at a retreat for NEMA heads of territorial, zonal and operation offices on effective and efficient service delivery of operational level, in Abuja. NAN

Lion Prof. Dayo Fagbohun being decorated with 2Star Diamond of Progressive Melvin Jones Fellow Pin (PMJF) by Lion Taiwo Adewunmi, Past District Governor, 404B2 Nigeria at the just concluded Cabinet meeting held in Osogbo, Osun State.

Lion Prof. Dayo Fagbohun being decorated with 2Star Diamond of Progressive Melvin Jones Fellow Pin (PMJF) by Lion Taiwo Adewunmi, Past District Governor, 404B2 Nigeria at the just concluded Cabinet meeting held in Osogbo, Osun State.

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16

Wednesday 26 August 2020

BUSINESS DAY

Wednesday 26 August 2020

BUSINESS DAY

INSIGHT

17

The future of experience

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n Wednesday June 10th 2020, I hosted a webinar to discuss the Future of Brand and Customer Experience. It was great to discuss with Ifeoma Dozie (Mastercard), Bunmi Adeniba (Unilever), Nkiru Olumide-Ojo (Standard Bank), Angel Mendoza (Rogers and Cowan PMK), Kazeem Abimbola (Connect Marketing Services), Tosin Lanipekun (Advertising Week Africa and Image and Time). We started out by defining the focus area which is Brand Experience and Customer Experience. Modern brands demonstrate the interconnectivity between BX and CX and they understand the equal importance of both. While BX is built through advertising, communications, experiential marketing, etc. CX presents the moment of truth where the consumer finally interacts with the brand and has the opportunity to prove or disprove the claims the brand has made in the BX engagement. At the end of the day, the customer will believe what he has touched and experienced and not what he has read or what he has been told. In the new spectrum, the totality of experience is critical for brand affinity and long-term loyalty.

Every positive interaction reinforces the brand promise and every negative interaction degrades the equity of the brand.

At a time like this, when disruptions are forced upon businesses because of current realities, brand distinctivity becomes even more important because the consumer has less to spend and needs to be sure that what he is buying will deliver value. Strong brands are the growth engines of great economies. With a market capitalization of $1.3 trillion, if Apple were a country, it will be bigger than several African countries by value (measured by GDP).

Right in the middle of the Covid-19 pandemic, within a period of two months, an Indian brand, Jio Platform Ltd. raised close to $20 billion in twelve deals from investors like Google, Facebook, General Atlantic, Abu Dhabi Investment Authority, the Saudi Arabia sovereign fund, etc.

These investments are indicators of the confidence of foreign investors in the Indian economy and the confidence in the vision and execution capacity of Jio Platforms Limited.

Before going into detailed discussions on the webinar, I established that the current times were indeed tough and the impact on the economy are already far-reaching.

I borrowed a leaf from Professor Mark Ritson’s webinar for Marketing Week where he divided the current realities into three stages; the COVID crisis stage, the false pneuma stage and the exogenous recession stage. We are already seeing the effect of the crisis on brands and we also know that a recession has been unleashed on our markets.

The interesting point from Professor Ritson was the reference to the ‘false pneuma’. Essentially, what he was saying is that we should beware of the hyper-merchants who are professing that life will never be the same again. His point was that the development of human instincts and cognitive systems has taken millions of years and will not change substantially. On this part, while I agree with Ritson’s submission that we should not give room for mass hysteria, I also believe that some of the changes that are upon us are not going to be reversed.

The key changes that we see are more in line with an acceleration of digital transformation and its impact on every area of life. So, within the time of this crises, we have seen growth in internet penetration, growth in adoption of e-commerce, growth in the adoption of E-Sports and a change in the established pattern of the consumer journey on his path to purchase. The critical point is that we will need to adapt and re-learn especially in industries like FMCG which are far behind on the digital transformation pathway.

Industries like Banking and Finance, Payment, Telecommunications are far ahead on that pathway. Ritson’s point is that the fundamentals of Marketing will still be the same after the pandemic and that the Four Ps will remain the tactical expression of Marketing strategy. With this backdrop, it was exciting to speak to the members of the panel with their diverse experience from different industries.

Ifeoma started the discussion by explaining the concept of storymaking and Mastercard’s Marketing Strategy. Sometime in 2016, the Global CMO of Mastercard, Raja Rajamannar declared that storytelling was dead and story-making had taken over. Ifeoma explained that the context of that statement was that as opposed to telling stories from the Mastercard brand perspective, the brand moved towards enabling the cardholders, consumers or customers to have experiences

and to share the experiences. It is a natural progression towards creating uninterrupted experiences rather than ad-cluttered formats that inhibit consumer experience.

The end-user must be at the center of the story. When the brand then adds its Priceless property to the experience, it elevates the entire experience to be bigger than what money can buy. This was an evolution from campaign-based marketing to always-on marketing. Would anyone believe that Mastercard is just 53 years old? The Priceless campaign is over twenty years old and it marked a turning point for Mastercard’s brand journey. Priceless has grown from an advertising platform to an experience-led marketing platform. According to Ifeoma, the fact that the experiences cannot be enacted physically currently has not stopped the brand from creating virtual experiences. She spoke about a campaign that is currently running with celebrities like Toke Makinwa, Jay Jay Okocha and Chef Fregz in Nigeria and other celebrities like Camilla Cabello, Bryan Habana, Naomi Osaka in other markets.

Ifeoma also spoke about the growth of e-commerce within the context of the current pandemic.

She spoke to the importance of a painless user experience from order to delivery and how the role of the brand in this context is to make the transaction easy and pain-less. This speaks to our earlier principle about the connection between brand experience and consumer experience and how the consumer sees the total engagement as one. Pandemic or no pandemic, this principle will always hold true. She sees the gains in ecommerce, entertainment and telecommunications enduring. The consumer is going back to the bottom of the Marslow’s hierarchy and looking for safety, convenience and functionality. In conclusion, she recommends that brands must provide seamless and painless transactions.

Nkiru took the discussion back to the platform of principles. In looking at the luxury segment and how the

‘ This principle is not going to change in spite of the current realities. In the luxury segment where bespoke and curated experiences are the order of the day, consumers are currently socializing through virtual luxury experiences until when it is safe again to meet physically www.businessday.ng

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future of brand and customer experience is likely to pan out, she dialed back to the basic principle of social connections. Marslow considers the social stage an important part of psychological development because our relationships with others help us reduce concerns such as depression.

This principle is not going to change in spite of the current realities. In the luxury segment where bespoke and curated experiences are the order of the day, consumers are currently socializing through virtual luxury experiences until when it is safe again to meet physically. Nkiru gave the examples of the Shangai Fashion Week in China which happened in a digital format in March with over 150 designers and brands livestreaming their collections. The event was hosted on Alibaba’s TMall and it allowed consumers to buy as they watched.

She also spoke about the principle of trust especially with consumers elevating safety as a major issue.

Dialing back to Ifeoma’s reference to safety, Nkiru spoke about the impact on the fitness, beauty and wellness sector. Specifically, she thinks that trust is going to be very critical for this sector because some of the players have moved their points of interaction online and even when engagements go back to the physical locations, trust will be an even bigger issue. By coming into your space as a consumer I am saying that I trust you. She believes that the same trust factor is very important in the travel and hospitality sector where we may see a slow return to air travel. The airline sector is big on service, Nkiru believes that those @Businessdayng

service skills can be transposed to other allied businesses. Nkiru emphasized that businesses must continue to flex, learn and continue to reinforce their service plan even within these times. But it is important to keep your ‘head on the customer’s chest’, listening intently and providing the needed empathy. Principles will always endure Bunmi came at the topic from the FMCG angle and according to her, the product experience is the most important at this point. According to her, the brand has one go at consumer attraction right now because there is a lot more pressure on consumer spending. She pointed out that there are some key fundamentals that are now very important. The first one is the packaging which used to be an important but functional device. Right now, the packaging has become extremely important. The quality of experience when the consumer at the stage of buying consideration is now critical. The way the product is on the shelf is also now more important. Every kobo spent by the consumer is a vote that must be taken seriously. Speaking to the consumer journey, Bunmi spoke to the peculiarity of FMCG brands in the consumer path to purchase. She clarified that over 90% of volumes are moved through the general trade and another 10% in the modern trade.

There is a lot more experimentation going on, but people are shopping closer to their place of residence. She sees a growth in the ecommerce sector but believes that the end to end consumer experience needs to be interrogated especially with logistic problems in the market. She believes that it is important to have an industry conversation on logistics and customer service and delivery on customer expectation. The buyer is very wary of his money and he will be very cautious about what he buys at any point in time. Consumer experimentation has risen and the sales of smaller product packs has

gone up not necessarily in the low end of the market but because the consumer wants to lower his risk at trial before he decides to buy bigger packs. This is seen even more in the ecommerce space where buyers are lowering their risk at adoption and putting a small amount on the line until they are confident about the experience.

Bunmi concluded her contribution by speaking to the importance of consumer data and what she described as human to human marketing. Companies are now looking at proxy data like phone usage data, consumer purchase data. Brands are doing a lot of social listening and experimentation. Data enables brand owners flex their spend and move their money to the most relevant consumer connection platforms.

This is a time when brand owners are looking at different trends and data inputs which probably did not make sense before now.

Angel Mendoza talked through the hockey stick graphs for viewership engagement being witnessed in e-sports especially at the peak of the lockdown. Mendoza explained that e-sports had evolved from three years ago when it was difficult to even understand what you were selling. Today, a lot of brands are getting involved in esports and taking advantage of the current upscale. The easiest way to get involved is through influencers. The second way that brands are getting involved is through tournaments, both online and physical. The benefit that tournaments have over leagues is that in tournaments you have a spike in viewership and engagement and you have the brands presented upfront. However, if you are sponsoring a tournament, you see the engagement go up and down and you get a spike around the finals. The third level of involvement is at the level of the league. Angel gave the example of the work he does with Mastercard in League of Legends where the brand builds activation

opportunities around specific season phases. The major challenge for brands is how to build a long-term plan. It is easy to do something today but how do you build a sustainable plan around e- sports?

The biggest challenge for brands is still understanding how to get involved and how to reach and engage the community. This community is different and cannot be reached through traditional advertising.

To reach the audience, you need to work with influencers, teams or league managers. You also need to create content, experiences and other assets to mine the opportunities. In Nigeria, the top five games on mobile are Pubg, Call of Duty, PES 20, Clash Royale and Brawlstars while FIFA, Call of Duty and NBA2K are the leaders in the console space.

Some of these games are simulations of on- the-field or on-the court sports like FIFA for football and NBA2K for basketball. This shows a transfer of passion from the ‘reallife’ passion points to the virtual gaming or e-sports life. Just like every other medium, there is a lot of work to do in understanding the consumer and how to reach them without interrupting their engagement with the game. It is not about logo display, it is about deep engagement. As internet penetration deepens, the opportunity to create engagements in the e-sports space will increase. The growth in this space is just starting in this market.

Kazeem Abimbola looked at some of the challenges facing agencies working in the experience space and the opportunities presented in the new reality. He spoke about www.businessday.ng

opportunity to build layers of intelligence especially because data has become even more relevant in these times. As Bunmi had explained, Brand Managers are looking for value and demonstrable returns on spend as budgets dwindle. Marketing departments will yet demand for more accountability and return on investment. He explained that the situation provides an opportunity for experience agencies to learn new skills and deepen their knowledge in some critical areas as digital transformation is accelerated. He gave an example of his business and the changes that are happening very quickly. He spoke specifically about the route to market and how technology is shaping the shopper marketing practice. He specifically spoke about the role of data analytics and artificial intelligence and how these are helping to reduce the decision-making time for brand owners and allowing them to respond to changes in consumer behaviour. Apart from innovation built on data and technology, he also explained that agility has now become a key currency in the agency world. Kazeem clarified that while agencies are ramping up their digital competence, they also need to understand that at the bottom of the pyramid and in rural markets, data and intelligence will be important but the adoption of digital technologies is still slow. The penetration of smart phones in Nigeria is still less than 20% and while this represents a challenge it also represents an opportunity. In creating brand experience for this ‘excluded’ audience, relevance and relatability will continue to be key. He opined that the current situation will eventually change and that physical experiences will still come back because human beings are naturally social animals. While digital platforms and tools will be adopted faster by the affluent audience, at the bottom of the pyramid, the consumers will adopt at a slower pace. Creativity will continue to occupy the center

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stage in brand experience and ideas that are created will be more channel neutral than in the past ensuring that those ideas can be expressed through multiple channels.

Kazeem spoke about certain developments and specific techinfused products in the modern trade and open market space. He spoke specifically about helping brands to keep their shelf space and optimize their product replenishment cycle without the lost time and opportunity to sell. He also spoke about a data-driven cross-selling solution for new customers in the insurance and banking industries.

He gave these examples to show how technology has become very critical in building experience but he also spoke about the importance of consumer knowledge and intelligence in optimizing brand investment. The brand experience agency today is different from the one from old especially with the skills that have now become important. In conclusion, Kazeem counseled that the new model is a combination of partnership and collaboration. Some of the infrastructure that will be needed will be beneficial as industry-wide investments.

Tosin started off by speaking to Advertising Week Africa, the international thought leadership platform for advertising, media, technology and marketing professionals. He spoke about the postponement of the event and the trajectory for such events all over the world especially since traveling and congregating had been affected by the Covid-crises. He spoke about the evolution of such events and how they are still finding a way to deliver on the benefits and core values without bringing people together physically. So, Advertising Week Asia and Pacific was just ending in Japan and though the event was virtual, the organizers tried to replicate some of the physical experiences on a digital platform. Tosin concluded as some of the panelists that there is an intrinsic value to

He explained that rather than separating experience into buckets of physical or digital experiences, the first question to ask is, what is the value the brand is seeking to deliver and how do you tie it back to your strategic objectives

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physical events and that value will never go away. The essence of having brand experience to stimulate the five senses will never go away.

It may be hindered right now, but it will surely come back. Tosin reemphasized the imperative of learning and re-learning, delivering value to clients and understanding utility.

Tosin also spoke about the role of experience design in creating unique experiences and understanding that at the heart of experience is delivering value and utility to consumers. He explained that rather than separating experience into buckets of physical or digital experiences, the first question to ask is, what is the value the brand is seeking to deliver and how do you tie it back to your strategic objectives. So, the pandemic has accelerated the move to digital but also the move to some interesting areas like tele-medicine and the interesting opportunities to create engaging brand experience. The second insight is around packaging and how this can be a potential area to increase engagement as Bunmi had said earlier. The third insight in these times is demonstrating empathy. To further break this down, Tosin spoke about the example of Union Bank and the programme called the Rise Challenge. The idea behind the programme is to reward those who have been resourceful and started a business in the midst of the pandemic. This is in line with the bank’s brand purpose. Another example he gave was the example of Orange, a telecoms company in Poland who came up with a product called Flex. Flex is delivered digitally from end to end, from tariff changes to customer service to product purchase. The product brought in an improvement of 80% in revenue in the month of April alone. Finally, Tosin gave the example of Tesla in China where the company has reinvented the car buying process and they have gone with a full digital process. They opened with Alibaba on the platform Tmall to open a virtual showroom and between December 2019 and March 2020, Tesla sales in China went up by 60%.

This was the second time one of the panelists would be talking about AliBaba and Tmall.

In conclusion, there are some principles that are timeless and there are some things that will continue to change and evolve. But the brands that will continue to win are brands that are connected to their audience in multiple ways.

They are brands that have a core principle shared by the consumer and understand the importance of building deeper relationships.

Brands that understand that experience is a key part of the engagement construct and are willing to continue to innovate and evolve. Innovation with data at the core, empathy at the heart and creativity as a pillar.

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Wednesday 26 August 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

What consumers will want to see from insurers post covid-19 era - NAICOM Modestus Anaesoronye

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o gain the confidence of the insuring public into trusting insurance and making it part of their financial planning tools, service intermediaries particularly brokers must operate professionally and ethically.

Industry regulator, the National Insurance Commission (NAICOM) said this has become necessary to encourage the consumers stay with insurance and patronize it.

Sunday Thomas, commissioner for Insurance/ CEO NAICOM made the remark at the Nigerian Council of Registered Insurance Brokers (NCRIB) 2020 CEOs’ Empowerment Series held in Lagos.

Thomas stated that as the insurance industry positions itself for Post COVID-19 era, the demands of the insuring

public will require sound work ethics for us to optimize performance.

He stated that as intermediaries, business sincerity and customers’ satisfaction must be central to broker’s core business principles.

The Commissioner tasked the brokers on business etiquette and ethics in all their professional dealings, stressing that unprofessional conduct of a few amongst the brokers is posing great danger to the collective integrity as an industry.

“Over the years, a lot has been put into improving the fragile image and perception of insurance in this country.

It is high time we all rise up to the menace of unethical business behaviour in our sector.

Thomas stated that the Commission was adjusting to the challenges and opportunities which the COVID-19 pandemic has imposed on the socio-economic and busi-

ness environment.

He stated that due to the pandemic, the commission has to review and extended the ongoing recapitalisation in recognition of the current realities.

The pandemic has led to fast tracking of the commission’s automation for prompt service delivery. The E-Portal for regulatory submission of various applications by operators and obtaining Eapprovals is in the final stage.

He said the Framework for Digitalization of operations (such as IT Standards, Web Aggregators, Regulatory Sandbox, etc) of regulated entities is in progress,” he added.

Thomas said this year has no doubt been a very challenging one for the insurance sector, individual households and the economy at large as a result of the COVID-19 pandemic, stressing that however, to individuals in the insurance sector, what this situation has thrown up is that there must

be a paradigm shift from the usual way of business practice.

“It is therefore imperative on us to embrace and align our businesses to the new world order if we must be seen to be relevant,” he said.

He congratulated the President and Chairman of the governing Council of the Nigerian Council of Registered Insurance Brokers and members of her team for organising the programme notwithstanding the precarious prevailing global atmosphere.

“The will to hold this year’s CEOs’ Retreat and your ability to adapt to current realities in the wake of the Corona-Virus (COVID-19) is commendable. One of the most affected businesses are the service businesses requiring physical contact which our beloved profession falls within given that most often than not, product distribution require face to face contact for us to get the buy-in of our potential clients,” he posited.

FBNInsurance unveils payment channels in repose to new work order Modestus Anaesoronye

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BNInsurance Limited, a foremost insurance company in Nigeria and a member of the Sanlam Group has upgrading its digital capabilities and platforms to adequately serve its customers, especially its payment channels in line with the new normal.

In view of the COVID-19 outbreak, most companies globally are adapting to the new norms of working and seeking alternative ways of reaching their customers.

Various payment channels have been introduced to its esteemed customers to ensure premium payments are made with ease and on time so that customers continue to enjoy the benefits of the various insurance policies held.

In a briefing with pressmen, Val Ojumah, managing director and CEO of FBNInsurance outlined some of the payment channels available to customers: FBNInsurance Customer and Financial Advisor (FA) Apps, E-Insurance on their website, POS at their Aba, Onitsha, Warri and Ikeja Retail offices. Other alternative payment channels include USSD, ATMs, Web payments, Money Agents, Bank Payment/Online Transfer, Di-

rect Debit/Standing Instructions, FirstBank First BAP platforms amongst others.

‘Through our online platforms, we can show customers that we will fulfil our promises to them by insuring their most valued assets and safeguarding their future. The introduction of various payment channels to our customers is one of the few innovations being pioneered by the insurance company. I urge our customers to use these alternative payment channels to generate e-receipt(s) for every payment made and send to insuranceinfo@fbninsurance.com for ease of payment reconciliation,” he explained.

In recent times, FBNInsurance has been keen to develop and improve its digital capabilities – something that particularly impressed the award judges. In 2019, the firm launched its internal Financial Advisor App to support its agency workforce, complete with artificial intelligence capabilities that can recommend cross-selling opportunities. It is just one of a few innovations being pioneered at FBNInsurance.

This singular effort recently earned FBNInsurance the 2019 Best Insurance Company in Nigeria at the World Finance Global Insurance Awards.

African Alliance earns certification on business continuity management

When the Governing Council of the Nigerian Insurers Association led by its chairman, Ganiu Musa paid a courtesy visit to Femi Gbajabiamila, speaker of House of Representatives to improve engagements between the Association and the Lawmakers as the industry pushes some legislative interventions to improve and create opportunities for growth of the industry.

Allianz Nigeria partners with GIDN to provide insurance solutions Modestus Anaesoronye

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llianz Nigeria Insurance Plc. a local operating entity of global Insurance giant, Allianz Group has announced its partnership with Get it Done Now Limited (GIDN), developers of the GIDN Platform.

The aim of the GIDN platform is to connect customers with verified service providers while Allianz Nigeria provides insurance products to registered customers and service providers on this platform through a redirected link.

“Through this strategic

partnership, we contribute our own quota to a stable and viable economy by providing bespoke Insurance products to mitigate business risks of the registered service providers” said Walter Bossman, chief marketing and strategy officer at Allianz Nigeria.

“We are indeed excited to partner with Allianz Nigeria.

This partnership aligns with our goal of providing a safe and secure platform for users and providers to transact.

We also believe that adding Insurance services from Allianz to our platform is a great way to build trust among customers while adding credibility to the small busiwww.businessday.ng

ness owners” added Alberto Rodriguez, co-founder of GIDN. “For us at Allianz Nigeria Insurance Plc, digital transformation has moved from being a vague and futuristic concept to an immediate term action especially in this unprecedented times. Insurance is gradually moving away from the conventional method of physical sales to technology driven sales” said Dapo Odunuga, unit head, Infrastructure Technology at Allianz Nigeria.

In view of the new normal imposed by COVID - 19 and the strategic vision of Allianz to secure the future of its stakeholders, this initiative

provides another avenue for customers, service providers and the general public regardless of location buy Insurance solutions with their mobile phones.

GIDN is the developer of an easy to use mobile application that provides a platform for customers to search, find and book verified professional service providers.

Allianz Nigeria Insurance plc is a composite Insurance company licensed to transact Life and Non-Life Insurance business in Nigeria, delivering a range of retail products such as Motor, Life, Home Insurance and corporate products to over 30,000 customers.

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igeria’s foremost life insurer, African Alliance Insurance Plc, has been awarded the ISO 22401:2012 certificate for Business Continuity Management (BCM). The certificate which was awarded by the Professional Evaluation and Certification Board (PECB) signifies that African Alliance has met the requirements for BusinessContinuity Management (BCM).

ISO 22301:2012 is a globally recognized Business Continuity management standard developed and published by the International Standards Organization (ISO). This standard provides a model that organizations of all types and sizes can use in building an effective Business Continuity System.

ISO 22301 specifies the requirements for a management system to protect against, reduce the likelihood of and ensure a business recovers from disruptive incidents.

“We promised our stakeholders that we would be with them for life, the achievement of the ISO certificate for Business Continuity Management @Businessdayng

further validates that promise.

It is another testament to our unflinching commitment to providingour customers the best of us come rain or shine,” said Olabisi Adekola, the firm’s executive director, Finance, who also doubles as the Business Continuity Management Leader.

“Recall that at the start of the global pandemic, African Alliance was one of the earliest to activate its Business Continuity plans which enabled us to effectively deliver on our various commitments to our esteemed customers nationwide with very little disruption,” Adekola added.

In his statement, Bankole Banjo, the firm’s brand, media and communications manager said “For 60 years and counting, we have navigated the murkiest of waters and survived it all. The achievement of the ISO 22301 accreditationtherefore provides further assurance that African Alliance has a robust program in place to maintain business continuity, even under the most unforeseen and challenging conditions.”

Wednesday 26 August 2020

BUSINESS DAY

BANKING

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

Financial sector grows 28.41% in Q2 on increased electronic transactions Stories by HOPE MOSES-ASHIKE

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he National Bureau of Statistics (NBS) on Monday released its second quarter report for Gross Domestic Product (GDP), which is a monetary measure of the market value of all the final goods and services produced in a given period.

The report revealed that financial institutions grew by 28.41 percent in the second quarter (Q2) of 2020 compared to 24.00 percent in the first quarter (Q1) 2020, and -3.52 percent in corresponding quarter of 2019, helped by increased patronage of electronic banking during the Covid-19 pandemic lockdown.

Nigerian banks recorded a total of N11.44 trillion worth of financial transactions on the Point of Sales (PoS) and instant payment and electronic bills platforms in March, the latest data from the Nigeria Inter-Bank Settlement System (NIBSS) indicated.

Analysts at FSDH research said the fastest growing sectors are financial institutions and telecoms.

These are the best perform-

ing sectors during the lockdown. The use of digital platforms and services has spiked during this period.

“Every cloud has a silver lining. The Financial services sector and the Telecoms sector represent the silver lining in this cloud occasioned by COVID’19,” Uche Uwaleke, a professor of capital market at Nasarawa State University Keffi, said.

Following the surge in internet banking and etransactions generally due to lockdowns and movement

restrictions, Uwaleke said it is expected that the banking sector, which dominate the financial services sector, should witness strong growth.

He noted that most of the Central Bank of Nigeria (CBN) COVID-19 interventions have passed through the banks.

Financial and Insurance sector grew by 18.49 percent in in the second quarter (Q2) of 2020 from 20.79% in the first quarter (Q1) of 2020 and -2.24 percent in the corre-

sponding period of 2019.

The Finance and Insurance Sector consists of the two subsectors, Financial Institutions and Insurance, which accounted for 89.82% and 10.18% of the sector respectively in real terms in Q2 2020.

As a whole the sector grew at 20.82% in nominal terms (year on year), with the growth rate of Financial Institutions as 30.94% but –28.15% growth rate recorded for Insurance. The overall rate was higher than that in

Sterling Bank’s alternative finance launches energy package for homes, businesses

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terling Alternative Finance (SAF), the noninterest banking division of Sterling Bank Plc, has introduced to the market, Altpower - a clean and affordable energy solution for homes and businesses across the country.

The energy solution will provide consumers with flexible and pocket-friendly options. It comes with a financing option that eliminates the high entry cost barrier hindering the uptake of alternative energy solutions for most Nigerian homes and businesses.

Mohammed Yinusa, head of digital business, Sterling Alternative Finance, who disclosed this in a statement in Lagos, said Altpower was designed to provide accessible alternative (solar/renewable) power solutions to homes, businesses and public institutions in the country through monthly or instalment-payment plan.

According to him, “Alt-

power offers a more reliable and affordable energy source to underserved homes and businesses as well as those living and doing business in communities that do not have any access to electricity. It is a reliable, accessible and affordable solution that is scalable to meet every customer’s desired energy needs.”

Listing available options, he urged individuals and businesses that need reliable and affordable power solutions to visit Altpower.ng to start enjoying uninterrupted power sup-

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ply through buy outright, lease to own or Power as a service (Paas) subscription.

The buy outright option is for customers possessing the financial ability to make full payment for the equipment of the alternative energy package of choice. However, the lease to own package allows customers that cannot afford to pay at once to spread payment for up to a year without interest.

For both category of customers, Altpower curates all the energy products the customer needs to ensure that he has uninterrupted power supply. These energy products range from inverters to batteries, UPS, surge protectors, solar home systems among others.

Mohammed Yinusa said a customer who opts for Power as a service (Paas) would have solar powered inverters delivered and installed without making an advance fee or payment, adding that the customer will only be required to

pay a monthly rental fee.

He said Paas, “gives this category of customer more than power as he also gets free installation, maintenance, device to visualize and track his power usage without paying a deposit. Customer do not have to worry about owning and maintaining the equipment or fixing any issue that might arise in the course of usage.”

Citing the benefits of Altpower, head of digital business said the solution would immediately eliminate the cost associated with powering diesel or petrol generators and its accompanying noise pollution.

Other benefits are access to clean and sustainable energy, effective monitoring and efficient use of power. The power and solar powered solution allows customers to charge their batteries when there is sunlight or use power from the grid when sunlight is not available, thereby making it a win-win solution.

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Q2 2019 by 19.85% points, and lower by –3.14% points than the preceding quarter.

Quarter on Quarter growth was 0.49%. The sector’s contribution to aggregate nominal GDP was 3.76% in Q2 2020, higher than the 3.03% it represented a year earlier, and higher than the contribution of 3.57 % it made in the preceding quarter.

Ayodeji Ebo, managing director, Afrinvest Securities Limited said the strong growth in financial institutions despite the lockdown in Q2:2020 can be attributed sustained loan growth of the banks. This uptrend started in Q1:2020 due to the effort of the CBN to ensure banks create more risk assets. Surprisingly, the number of online transactions dropped 20% from 135 million in March to 107 million during the lockdown in April 2020.

Growth in this sector in real terms totaled 18.49%, higher by 20.73% points from the rate recorded in 2019 second quarter, but down by –2.30% points from the rate recorded in the preceding quarter. Quarter on Quarter growth in real terms stood at –0.16%. The contribution of Finance and Insurance to real GDP totaled 4.00%, higher than the con-

tribution of 3.17% recorded in the second quarter of 2019 by 0.83% points, and higher than 3.81% recorded in Q1 2020 by 0.20% points.

Uwaleke said the negative growth in real GDP in Q2 2020 was expected. “This appears to be in line with global expectations as we have seen similar trends recently in countries like UK and Japan.

I am also not surprised about the huge size of the contraction put at 6.10%. As a matter of fact, because it is based on year-on-year, when one considers the 2.12% positive real GDP growth this same period last year, the decline in GDP comes to as high as 8.22%,” he said.

Continuing, Uwaleke said “I think this is going to be the worst this year. A negative real GDP growth is also most likely to be recorded in Q3 2020 but the size will be smaller as the economy gets restarted and crude oil price gradually picks up”.

To ensure, the impact of these economic headwinds is moderated, he said it is important to increase the size of the various interventions by the government and the CBN and ensure they are well targeted and implemented.

FMDA denies signing MoU with Chartered Institute of Stockbrokers

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he Financial Markets Dealers Association of Nigeria (FMDA) faulted an incorrect report published in one of the national dailies claiming that it signed Memorandum of Understanding (MoU) with four other professional bodies to float the Chartered Institute of Securities and Investment of Nigeria (CISI).

In a statement, FMDA said: “We wish to strongly state our utmost displeasure in the incorrect presentation of facts as this misrepresents the position of the Financial Market Dealers Association (FMDA) which has been clearly stated and communicated to the Chartered Institute of Stock Brokers (CIS) to the effect that the @Businessdayng

Association will not accede to signing the MoU from the Chartered Institute of Stock Brokers. This is for clarification and record purposes to the general public and all stakeholders,” it said.

The FMDA was created to develop financial market infrastructure, human capital and promote professional and ethical standards in treasury activities in Nigeria.

Whilst the FMDA has reviewed its journey at periodic intervals vis-a-vis its goals, one clear objective that cuts across the past and the future is the growth and development of the financial markets as well as the protection of the interest of its members in the exercise of their dealing/ trading activities including its value chain.

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Wednesday 26 August 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Nigeria’s financial industry outshines 45 sectors to post highest GDP growth …expands by 28% in Q2 Stories by Endurance Okafor

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ith 28.41 percent G D P growth in t h e s e cond quarter of 2020, Nigeria’s financial institutions under the Financial and Insurance sector topped the gainers’ chart as it outshined 45 others to emerge as the best performer.

The s econd-quar ter growth by the financial institution industry is 31.93 percentage points higher than the -3.51 percent that was reported in the comparable quarter of 2019, as analysed from NBS Monday GDP report.

While Nigeria’s financial institutions posted highest GDP growth in more than four years in Q2, the impact of the global disruptions resulting from the COVID-19 public health crisis, plunge in oil prices disrupted 19 sectors to post contraction in the review quarter.

According to Yinka Ademuwagun, Research Analyst, United Capital the CBN’s Loan to Deposit Ratio (LDR) policy which penalises banks for not lending to the private sector is one of the key drivers of the industry growth.

“The driver of the financial institutions is credit level to the private sector.

In Q2-2020, credit to the private sector expanded by 17.0%yoy. This continues to reflect the Impact of the CBN LDR policy,” Ademu-

wagun said.

Accounting for 89.82 percent of the Finance and Insurance Sector, Nigeria’s financial institution industry is joined by the insurance sector (10.18%) to make up the country’s financial industry.

A breakdown of the NBS report reveals that in real terms the Finance and Insurance on year-on-year reported a growth of 18.49 percent, higher by 20.73 percentage points from the rate recorded in 2019, but down by –2.30 percentage points from the rate recorded in the preceding quarter.

Quarter-on-quarter, the industry growth rate stood at –0.16 percent as its contribution to the Nigeria economy stood at 4 percent, 0.83

percentage points higher than the contribution of 3.17 percent recorded in the second quarter of 2019.

“Banks continued to expand their loan books as they tried to meet the CBN LDR requirement,” Ayorinde Akinloye, a research analyst at CSL stockbrokers said.

In a bid to improve lending to the real sector of the Nigerian economy the Central Bank of Nigeria for the second time, last year upwardly reviewed deposit money banks’ portion of minimum loanable deposits to 65 percent.

The decision, which is subject to quarterly review was informed by appreciable growth in the level of the banking sector’s gross

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credit following the pronouncement of a 60 percent minimum Loan-to-Deposit Ratio (LDR) in July 2019 and the need to sustain the momentum, the apex bank said in a circular on September 30 2019.

Meanwhile, Nigeria’s big banks received a combined N16.22 trillion from customers through deposits across various account types in the first three months of 2020 as business activities almost came to a halt due to the coronavirus pandemic.

The total deposit collected by the tier-one lenders in the review quarter was 12.72 percent above the N14.39 trillion recorded in the comparable quarter of 2019.

Industry analysts expect

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Nigeria’s financial industry to leverage the new normal of online shopping and digital financial services to post higher growth in 2020.

“With the COVID-19 epidemic posing significant concerns and online shopping becomes an increasingly attractive option for consumers. Ultimately this leads to increased EPayments revenue for the banks,” a Lagos-based analyst 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.

Technomic, a consulting and research firm said 52 percent of consumers globally are avoiding crowds and 32 percent are leaving their house less often because of coronavirus.

While Nigeria is gradually reopening its economy to withstand the shock of COVID-19, the new normal of contactless transaction

@Businessdayng

and online shopping has been described by analysts as a culture that will remain even after COVID-19 is long gone.

Before Nigeria recorded its first COVID-19 case in February, the e-commerce industry in Africa’s most populous country was described as one on a growth trajectory as McKinsey projected 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 more than 40 percent Nigeria has about 190 million mobile phone subscribers, as compiled from data by Nigerian Communications Commission (NCC).

Also, 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 e-commerce industry, as compiled from industry sources.

Wednesday 26 August 2020

BUSINESS DAY

AGRIBUSINESS

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In association with

ag@businessdayonline.com

How year-long border closure boosts productivity, spurs investment in rice production Josephine Okojie

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he decision

by Federal Government to shut down the countr y’s land borders with its West Africa neighbours over a year ago has boosted agricultural productivity and spur investments in rice production.

Since the border closure, Nigerians shifted their consumption preferences from foreign brands of par-boiled rice to locally produced varieties.

The situation has also made farmers and millers ramp up their production to meet the ever-increasing demand for rice - key staple in the Nigerian diets.

T h e c o u n t r y ’s r i c e production has increased significantly as shelves of traders across the country are now dominated by local brands of par-boiled rice.

“Since the border closure, lots of farmers who have abandoned growing rice have returned and even

other farmers are shifting to rice cultivation because the market is there now and it is profitable,” Muhammed Augie, former chairman, Rice Farmers Association -Kebbi chapter said. “ Nig e r i a n s a re n ow changing their preference to local brands and consuming it more,” Augie said.

Data from the Thai rice exporters association shows that Nigeria imported a total of 2,796 metric tons

in the half-year 2019 and 1,192 metric tons in the corresponding period of 2020.

This indicates a decline of 1,604 metric tons in 2020 when the policy became effective.

T h e re s i l i e n c e t h a t t h e c o u n t r y ha s b u i l t unwittingly against the COVID-19 pandemic in the area of rice production is a testament of the Anchor Borrowers Programme and

border closure policy.

Despite food pr ices making rapid climbs in the country owing to COVID-19 restrictions to contain the spread, local rice prices were relatively stable when compared to other grains and this is relatively due to the large supply.

The increasing demand for rice in the country has also created investment opportunities for potential investors.

Maize import ban: Sentiments, facts, and the way forward Ayodeji Balogun

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hen it comes to policies and programmes that can potentially impact a vast majority of people’s livelihood and the economy of any nation, data, not sentiments, should drive the conversation and influence decision making.

T h e re c e n t C e n t r a l Bank of Nigeria (CBN) decision to restrict Forex for the importation of maize has raised concerns and opinions from stakeholders standing for or against the decision. Irrespective of sentiments driving this debate, local far mers, processors, and millers want a deal that works for them – a fair market price for their farm produce and affordable raw material to create finished products from maize.

Maize is one of the most important cereal crops in sub-Saharan Africa (SSA), and a staple food for more

than 1.2 billion people in SSA with more than 300 million Africans depending on this crop as the primary food crop.

Maize in Nigeria which is mainly produced by smallholder farmers. Each farmer cultivates an average of 0.65Ha Maize, which has become indispensable for food security in Nigeria, with much of the maize produced consumed by the commercial sectors.

According to a USDA report, fifty percent of maize is consumed by the animal feed sector, with poultry claiming 98percent of Niger ia’s total feed between 2005 and 2010. It is obvious why the CBN ban on Maize import stirred up different reactions amongst stakeholders.

An analysis done by our research team at AFEX of a 15-year price trend of the FAO price data for the commodity reveals a three-year cycle of highs and lows. For instance, the prices of farm produce www.businessday.ng

are usually high in yearone; motivating farmers to produce more of that same crop in the following year and triggering a supplydemand imbalance leading to a fall in commodity price.

When this happens, farmers’ natural response is to shift farming focus to another crop in the next farming season, a decision which then creates further scarcity and hikes in the price of the farm produce.

This cycle continues.

Through interventions like the CBN maize

aggregation scheme, a doubled-pronged solution to this imbalance is pursued. Funds and credit provided by the bank, allows processors to buy commodities at a marketfair price, and soft loans to farmers create a balance in the supply-demand dynamics. A stable market enables farmers to produce crops that those who need them can afford them.

T h e C B N ’s t i m e l y decision to stop maize importation will avert an impending maize surplus

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“Lots of youths made investments in rice production owing to the border closure policy. Some invested in the aggregation of paddy for millers while others in the cultivation of the crop,” said a rice dealer who does not want his name mentioned on print.

“A n y n e w e n t r y o f farmers into farming wants to cultivate rice because of the huge market now. We are now consuming our rice and this is market for farmers,” he further said.

“This is the best time to invest in the rice value chain,” he advised.

The United States Department of Agriculture (U SDA) puts Niger ia’s m i lle d r i ce 2 0 1 8 /2 0 1 9 production at 4.78 MMT, up over 2.5 percent from 2017/18 figure of 4.66 MMT. The agricultural sector grew 1.58percent in the second quarter of 2020 despite the disruptions of the COVID-19 pandemic on economic activity that plunge d the countr y’s economy contracted by

6.1percent.

But exp er ts say the country can only sustain the progress made thus far when prices of local brands become price competitive and lingering structural problems such a s i n s u f f i c i e nt s u p p l y chain integration, lack of capacity for farmers and infrastructural deficit which remains a threat to local production are addressed.

According to them, the country will eventually reopen its borders, saying when local brands become price competitive it is a disincentive for importers.

“The prices of local varieties have to reduce further. Before the border closure, imported brands were selling for N13,500 even after paying traffics, bribing the customs and transportation,” said an expert who spoke on anonymity.

“The government needs to provide key infrastructure to drive down production cost as well as ensure that farmers yield per hectare increases,” he added.

in the market that could negatively affect the market price for local farmers discouraging them from farming maize in the next planting season. If this happens, an impending maize deficit will be unavoidable; hence, the need for the hard call made by the regulatory body.

O n e o f C BN ’s ro l e s as a policymaker in the agro-sector is to protect the farmers’ economy and livelihood. The regulatory body has to choose between protecting the livelihood of 20 million farmers or saving the businesses of corporate entities that are likely to make losses in a single quarter of their financial year as a result of the ban.

Even though this may seem a difficult decision to make, protecting the livelihood of 20 million smallholder farmers is by far, a more proactive way to stabilize the economy.

As a commodity exchange, we recognize the temporary losses made

by some stakeholders. We believe that putting the majority of everyday farmers first is of great importance, hence our support for the CBN inter vention. We believe that the CBN ban is for the overall good of the economy and farmers.

The ban on maize has i t s at t e n d a nt b e n e f i t s as it will increase local production, place more money in the pockets of farmers, and create a more stabilized economy. Also, a data-driven approach is the only way to make informed and impactful decisions. As a country, the only way forward is to improve our capacity to obtain data and ensure data and not sentiments influence policies.

Ayodeji Balogun is the CEO of AFEX where he is leading a team of experts leveraging technology, innovative finance, and inclusive agriculture to connect smallholder farmers to commodity and financial markets.

@Businessdayng

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Wednesday 26 August 2020

BUSINESS DAY

feature

HERBERT WIGWE: Citius, Altius, Fortius Bayo Akinloye “I cannot change the world overnight. But if I can empower even one youth today, tomorrow, they could join me in empowering others. With time we could change the world,” says Herbert Wigwe, the Group Managing Director and Chief Executive Officer of Access Bank.

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t 54, only a few on earth today have achieved in their lifetime what winsome, wondrous and wise Wigwe has achieved. Precocious and perspicacious, as a wunderkind, Wigwe has always had a head for numbers, playing “mental mathematics” with friends, solving random mathematical questions; without the aid of a calculator.

At 16, he became interested in finance largely influenced by the story of Michael Milken, high-yield bonds (junk bonds), among others. Today, Wigwe sits atop the biggest bank in Africa’s biggest economy and most populous black nation on earth.

Unassuming, unpretentious, and undeterred, the Access Bank boss remains a larger-than-life character.

He p o s s e s s e s t h e s k i l l s, shrewdness, and sentiments that people in high places crave. In this universe, Wigwe is king. How he and his partner, Aigboje Aig Imoukhuede contributed their quota to build the GTBank brand, acquired Intercontinental Bank, and turned Access bank from the fringe to total transformation and made a business behemoth that acquired one of the most forward-looking banks in Nigeria, Diamond Bank, should be a case study in national and international business schools.

Young and vibrant, athletic in heart and body, as a younger man, Wigwe enjoyed running. He’s built to last. Like an Olympian, he has stood tall, eyes on the prize, and always rising above limits.

Citius, Altius, Fortius: Wigwe is always faster, higher, and stronger.

Access Bank, one of the largest financial services groups on the African continent, recently executed a merger that has greatly increased its scale, retail expertise, and footprint, with more than 10 million mobile customers. With Wigwe’s adrenaline-like drive, the bank’s digital transformation journey has enabled the bank to remain agile and consolidate its position in this space.

Its strategy is digitally-led, supported by collaborations with reputable fintechs, and the effort to transition to digital has been massive. He has led the training and re-skilling of staff because they need to demonstrate strong digital skills to adapt to the new world.

Wigwe has led the bank’s transformation in using AI for insights and decision making.

He understands that as a CEO to thrive in a fast-paced and dynamic environment, he must be digitally and technology savvy, understanding the implications of new technologies for industries and businesses.

The Access boss has embraced, sought and created change with a passion, ‘tragile’ in his approach – maintaining the right balance between the traditional way things are done and still be agile.

Following its merger with Diamond Bank in March 2019, Access Bank today is the largest bank in Nigeria and Africa’s leading bank by customer base as it operates through a network of more than 600 branches and service outlets, spanning three continents, 12 countries, and over 40 million customers. The bank employs over 28,000 people in its operations in Nigeria, subSaharan Africa, and the United Kingdom, with representative offices in China, Lebanon, India, and the UAE. In all this success story is the indefatigable Aigboje Aig-Imoukhuede. Together, have strode the financial industry like colossuses since 2002.

He admitted, “It is never one person’s effort. It’s the effort of a group of people. It’s the effort of a strong team. Yes, we both came in. But there was also a strong team that we brought in.”

Wigwe added, “My partner and ‘brother’ shared so much in common with me. His aspiration was the exact mirror of what I really wanted to do for myself.

When the idea came up, it didn’t take one second for us to say, ‘Let’s do it.’”

When the duo left GTBank and decided to take on a bank ranked www.businessday.ng

65th out of the 89 banks in the country at the time, their confidence was built on the fact that they had done it before. Wigwe had worked in an entrepreneurial environment. Taking on Access was not a big deal to him.

At a young age, Wigwe has acquired the experience and fortitude to deal with a situation like acquiring Access. “I had the experience a couple of times. I had the opportunity of working in a bank, that didn’t go well very early in my career, having trained as a chartered accountant,” he explained.

He had started a bank from a plain balance sheet and grew it into one of Nigeria’s corporate success stories. So, coming into Access bank was nothing new to him. The only difference was that as young men they were at the forefront of everything. That made some people doubt them.

Wigwe was not ready to doubters define them. “ There w ere people who thought, ‘How are these guys going to pull it together?’ Young people don’t work together very well. They are likely to quarrel.’

Some also said, ‘It’s just a matter of time, something will happen.’”

Even some consulting firms were not going to take their mandate because they felt Wigwe and Aig-Imoukhuede were a bit too young for what they wanted to do.

Yet, the duo, then in their 30s, driven by conviction and camaraderie rose to the very top turning a seemingly impossible venture into mission accomplished.

“Within us, we didn’t feel we were too young because we knew there were people who had done it at that age. Perhaps with smaller businesses or with smaller banks.

We felt we were so better trained

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than most people who had done it before.

“We were infinitely confident in our capacity to what we were doing. So age was a number, but if you look at our track record up until that time, we were not 35,” recalls Wigwe.

But their impact was more immediate, reflected in the bank’s performance in the first year, when its balance sheet grew by 100 percent, with an impressive N1 billion profit before tax. This figure was more than the cumulative profit made by the bank in the previous 12 years of operations.

Not many business duos have endured as Wigwe and Aig-Imoukhuede and their relationship seems destined for eternity.

Wigwe’s leadership is exceptional. When he ran a small bank with Aig-Imoukhuede, he knew every member of staff by name. Will he be able to do so with Access Bank that has 29,000 employees?

“I’m still trying to know their names and faces,” he admits. “I’m also still learning how to navigate such a massive institution.”

Wigwe is a man of the people, for the people and with the people.

“I miss spending time with people,” he admits. “But because we are growing across the continent and across the world, each time we set up a new subsidiary, I go there and spend time with them.”

For him being able to create leadership with a human face is of high value. “It is why some banks are failing and others are blooming. It is all a function of leadership.” It is true that there are many young Nigerians doing great things in the business world, but Wigwe and Aig-Imoukhuede are a world apart in their conviction and vision. They have become genuine role models for Nigeria’s teeming youths.

At 54, Wigwe is at the peak of his career and leadership, intervening in critical moments for the country with his bank championing the financial sector interventions in the formation of the Coalition against COVID-19 (CACOVID), and the takeover of the renovation of the National Theatre as one of many creative hubs planned around the country.

About 20 years ago, it was extremely difficult to do deals of $1bn. To put together that sum of money for any corporate organisation, one had to travel all over the world. Today, people do deals worth billions of dollars in the comfort of their homes and offices. Therefore, Wigwe, believe that the larger the institutions, the larger their capacity to support the country to grow.

“As long as it’s done for the right reasons, even if it’s a merger, the creation of large African champions who can truly have a significant impact on the country is critical,” says Wigwe.

It is little wonder that Access Bank was awarded at the 2019 World Finance Award ‘Best @Businessdayng

Digital Bank in Nigeria,’ ‘Best Mobile App in Nigeria,’ 2018 CBN ‘Sustainable Bank of the Year,’ and ‘2018 Global Banking and Finance Review ‘Best Investor Relations Bank in Nigeria,’ ‘Bank of the Decade,’ and Wigwe honoured ‘Banker of the Decade,’ by THISDAY Newspapers this year.

Wigwe attended Federal Government College (FGC) Sokoto before moving to FGC Warri and graduated in 1982. Thereafter, he studied Accountancy at the University of Nigeria Nsukka (UNN) in 1983 where he studied Accountancy, graduating in 1987.

Wigwe became his professional career Coopers and Lybrand Associates Limited and was promoted within a year. In 1989, Capital Merchant Bank as a credit analyst. In 1990, he won the British Council Scholarship to study at North Wales University (now Bangor University) and earned M.A in Banking and Finance in 1991. He has an MSc in Financial Economics from the University of London and is an alumnus of the Harvard Business School Executive Management Program.

Wigwe is not only an entrepreneur and businessman. He is also a philanthropist. In 2015, under the aegis of Access Bank Plc; he launched the W-Initiative.

A scheme meant to support and encourage more women to venture into business.

The W-Initiative also supports a Maternal Health Scheme. This provides women facing fertility issues with support. The Scheme gives women support for fertility issues such as In Vitro fertilization (IVF), Intrauterine Insemination (IUI), Endometriosis, Hysterectomy, and many others.

Wigwe is also passionate about the arts. At the 2015 edition of Africa International Film Festival (AFRIFF), the NollyFund was announced. The NollyFund is a brainchild of Access Bank and the Bank of Industry (BOI).

The NollyFund is a loan scheme designed to help Nollywood stakeholders with the production and distribution of films.

NollyFund has an initial program limit of N1 billion and a single limit of N50 million for individual loans. Notable beneficiaries of the fund include the veteran filmmaker, Kunle Afolayan who obtained a loan for his movie, the CEO. The CEO is pegged the best pan-African film to come out of Nigeria in recent years.

In Early 2016, Herbert launched his own charitable foundation, The HOW Foundation with the aim of using this medium as a way to continue to make a positive impact outside of his work environment. Wigwe’s foundation reflects his key passions around youth empowerment, leadership, and mentorship, malaria, prostate cancer, and children.

There’s only one way forward for the debonair, dependable and dexterous Wigwe: Citius. Altius.

Fortius.

Wednesday 26 August 2020

BUSINESS DAY

23

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

NPA promises to back LADOL Free Zone to become more productive amaka Anagor-Ewuzie

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he Nigerian Ports Authority (NPA) has reiterated its commitment to support the Lagos Deep Offshore Logistic Base (LADOL) to become more productive in its maritime, health, agriculture and logistics operations in Nigeria.

Onari Brown, executive director, Marine and Operations of the NPA, made this promise during his familiarisation tour to the LADOL Free Zone together with Fumilayo Olotu, Port Manager of Lagos Port Complex, Apapa.

Brown, who expressed satisfaction with the infrastructural development in LADOL, said the Free Zone’s heavy lift capacity makes it a destination of choice.

“I am really impressed with what I have seen today, and I think we will be more supportive. Now that I have seen, I think we will engage more and also talk more,” Brown said.

Brown, who was particularly happy with the investment in agriculture, noted that food insufficiency is one of the major things that can cause crisis in a country.

“Somebody that has eaten well could wait for better times to come but when somebody is on lockdown and does not have food in his house, he will leave that house and go out to look for food,” he said while commenting on LADOL’s agric initiative.

In this time of COVID-19,

he said, Nigerians have come to realise that the country cannot rely on crude oil, and there was need to grow the maritime sector.

According to him, throughout the period of the COVID-19 lockdown, when airports were closing down, no country thought about shutting down their seaports and that was what sustained the fight against COVID-19.

Brown however stated that NPA will always be supportive to operators and all its partners to enable Nigeria’s maritime sector develop further.

Ayodele Durowaiy, assistant general manager, Operations, who noted that going into agro-business now will help the economy, expressed happiness over LADOL’s vision to expand beyond West African Sub Re-

gion to the whole continent.

“In terms of stakeholder engagement, management at the highest level will continue to drive this process and we are happy with the leadership role that LADOL is playing particularly in Lagos district,” he added.

Amy Jadesimi, managing director of LADOL, who spoke on LADOL’s corporate social responsibility (CSR), said since inception, the company has engaged with local communities to create an understanding and work with them on a meritocratic basis.

“We give job opportunities to those that are qualified for it, but a lot of Nigerians have not had the experience for the specialised jobs we do here. But, we are not looking for somebody who necessarily has 10 years’ experience in a field. We are

looking for young people who are hardworking, honest, and ready to jump in with both feet,” she said.

Jadesimi however stated that many of LADOL’s staff has been with them for over a decade and they come from the local community.

“LADOL provides a lot of employment and training. I also want to thank all the staff and management of LADOL who worked so hard as a strong team to enable us pass through the COVID-19 pandemic. I have to say across Nigeria, we saw many examples of how this crisis has brought Nigerians together and renewed our focus for self-sufficiency,” she said.

On LADOL’s Isolation Centre, she said the company will make it available to other terminal operators who need the facility.

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he National Inland Waterways Authority (NIWA) has commissioned a 36-seater ferry boat at Yelwa - Yauri, Kebbi State.

George Moghalu, managing director of NIWA, thanked God for the opportunity to procure the 36-seater ferry boat on behalf of Senator Bala Ibn Na`Allah as part of his constituency project.

He acknowledged the kind support given to NIWA by the Yauri Emirate Coun-

amaka Anagor-Ewuzie

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ollowing the recent hike in the Peak Season Surcharge on Nigeriabound cargoes, maritime media under the auspices of the Shipping Correspondents Association of Nigeria (SCAN), has urged the government to be sincere with the planned disbursement of the Cabotage Vessels Financing Fund (CVFF) in order to grow indigenous vessel ownership.

“With the nation’s huge cargo advantage, it should be able to not only retain the huge expenses on patronage of foreign vessels but significantly dictate how its shipping affairs are run,” said a statement by Yusuf Babalola, its president.

According to him, there is also need for the provision of scanners, to be used by the Nigeria Customs Service (NCS) to ease cargo clearance at ports. “ No n a t i o n s e r i o u s about efficient cargo han-

dling still prides itself with 100 percent physical cargo inspection. Also, cargo haulage to and from the port must be made less cumbersome to truckers in order to reduce cost,” he said.

He however urged the Federal Government and heads of maritime agencies to end the entrenched corruption on the port roads, over which truck owners and drivers have repeatedly stopped work to protest the extortion by security operatives.

Babalola however commended the recent synergy among the heads of Nigerian maritime agencies in their efforts to ensure ease of doing business in the sector.

“Already, issues such as maritime security, multimodal transportation and ports/cargo clearance issues, among others are receiving attention, and if implemented with due commitment, the hopes of making the nation’s ports, the sub-regional hub would be realised soon,” Babalola noted.

NIMASA promotes nine directors, 586 others amaka Anagor-Ewuzie

L-R: Funmilayo Olotu, manager, Lagos Port Complex, Apapa; Onari Brown, NPA executive director, Marine and Operations; Amy Jadesimi, managing director, LADOL, during the visit of Onari Brown to LADOL’s Free Zone.

NIWA commissions 36-seater boat in Kebbi state amaka Anagor-Ewuzie

Maritime media tasks FG on scanners, Cabotage fund, others

cil in fulfilling its official responsibilities even as he applauded the Senator for his commitment and desire to create the enabling environment for water transportation to grow.

“The importance of water transportation cannot be over emphasised because it facilitates the movement of both cargoes and personnel.

It also helps to strengthen our economy and at the same time, enables tourism,” Moghalu stated in a statement signed by Jibril Darda`u, acting general manager, Corporate Affairs of NIWA. www.businessday.ng

He appealed to Kebbi State Government to encourage NIWA by assisting it to ensure companies, organisations and the public that are using NIWA’s Right of Ways, which is 100 metres perpendicular from the point of River, to pay their legitimate fees.

Senator Bala Ibn Na`Allah, who promised to bring more developments to his people, said the ferry being commissioned was just the beginning as two more ferries are on their way coming from Lagos and China.

In addition to Jetties built before in the Area, the Sena-

tor said that he was perfecting plans in conjunction with NIWA, to build a ferry terminal.

Muhammed Zayyanu Abdullahi, Emir of Yelwa – Yauri commissioned the new ferry for the use of his people and there was a boat ride in compliance with the Covid-19 safety protocols.

Earlier, Moghalu paid a courtesy visit to the Emir of Yauri, where he raised three critical issues in the areas of litigations, clearing of water hyacinth/removal of wrecks and the development of the inland waterways for the optimum benefit of his people.

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he Governing Board of the Nigerian Maritime Administration and Safety Agency (NIMASA) has at a meeting in Lagos chaired by Asita O. Asita, approved the promotion of 595 staff, including nine directors.

According to a statement by Phillip Kyanet, Agency’s spokesman, nine deputy directors were elevated to director position on grade level 17, while 45 assistant directors were promoted to deputy directors, and 71 grade level 14 officers were promoted to assistant directors.

Those promoted to dire ctor include Jidda Aishatu, head, ISPS Unit; Egbuche Rita, head, Mar i n e Ac c i d e nt Inve s t i gation Unit ; Audu Sani, head, Eastern Zone; and Olamide Odusanya, head, Internal Audit.

Others include Anselm @Businessdayng

Nwanze, head, HSE Unit; Egejuru Victor, head, Legal Services Unit; Bolaji Kehinde, head, SERVICOM; Kabiru Murnai, head, Reform Coordination Unit ; and Felicia Mogo, head, Marine Environment Management Department.

Phillip Kyanet, Agency’s spokesman, was among the newly promoted deputy directors.

Bashir Jamoh, directorgeneral of NIMASA, congratulated the promoted staff and charged them to bring their wealth of experience to bear on their new positions.

“To whom much is given, much is expected. This promotion was intended to reinvigorate the attitude of staff to work and bring about more commitment towards transforming the fortunes of the maritime sector,” Jamoh said.

He added that well-motivated staffs are the driving force for the maritime industry transformation for economic development.

24

Wednesday 26 August 2020

BUSINESS DAY

TRANSPORTation Motoring

RailBusiness

ModernTravel

Roads

Nord assembly plant opens to meet Nigeria’s automotive demand ....All models will bring lower total cost of ownership, says CEO MIKE OCHONMA Transport Editor

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he quest for the federal government to position the country among the automobile manufacturers in Africa is yielding positive results following the emergence of Nord Automobiles Limited.

With a mission to roll out a wholy Nigerian model of cars, for Nigerians and assembled

by Nigerians, the current Nord assembly plant is located on a 2,100 square meters of land space in Sangotedo in Lagos, while and another one recently acquired and occupying 3,400 square meters of land at Epe is currently undergoing construction for the assembly complex in readiness to meet the growing automotive market and increasing customer demand.

According to Oluwatobi Ajayi, chairman and chief executive of Nord Automobiles Limited, the aims and objectives of setting up the assembly which huge capital investment to solve the Nigeria’s vehicular and mobility needs of both the low and middle income earners, including corporate organisations by making it normal for hardworking Nigerians to buy and use brand new vehicles.

Oluwatobi Ajayi stated that, the models that will

be rolling out of the new assembly plant will include the Nord Tank Pick-up, Max

Pick-up, Flit bus, Aso truck, Lasgi big bus, A3 sedan, A5 SUV, Yarn family/business

shuttle, Tripper bus, Bolt bus, Ben SUV, Urban sedan among many others that are in the

pipeline. The mission of the company he disclosed is to “grow together efficiently” with the economy and people of Nigeria.

The Nord CEO who spoke to our correspondent following the news making the rounds on the emergence of Nord assembly plant on social media recently described Nord as a brand that takes the needs of Nigerian environment into consideration during the assembly of the vehicles.

In the words of Oluwatobi Ajayi who was listed among Forbes 30 most promising young entrepreneurs in Africa in 2018 as well as 10 most influential entrepreneurs under 40 in Nigeria by the Business Insider Magazine, pointed that he nurtured the dream to give Nigerians the best of automobiles in 2016 while he was the Managing director of Jetvan Automobiles Limited.

All the vehicles being offered he assured are durable and elegant, and yet competitively priced. They have low total cost of ownership compared to the competition.

That is why we are confident that the Nord vehicles would soon be a household names in Nigeria.

The company’s operations focuses on delivering quality expertise in the value chain of the entire auto assembleage which includes the design, sourcing, development, as-

sembling, distribution, marketing, provision of sales and after-sales service of their unique Nigerian branded automobiles.

In terms of foreign partnerships, Nord Company is collaborating with some of the biggest automotive firms in Europe and Asia, which offers the company an edge in its pursuit to deliver durable, safe, reliable and affordable vehicles for Nigerians and give buyers of the brand good value for money.

The journey to the realisation of setting up the Nord automobile assembly plant he disclosed followed several inspection visits, series of discussions and subsequent approvals from the relevant supervising federal government’s ministries, departments and agencies.

These include the federal ministry of trade and investment, the National Automotive Design and Development Council (NADDC), federal ministry of finance, budget and national planning, and the Nigerian Custom Service (NCS).

Incorporated in 2017 is a Nigerian automotive manufacturer/assembler with headquarters in Lagos, Nigeria with http//nordmotion. com as its official website, Nord Automobiles Limited was born out of the need for a remarkable made-in-Nigeria automobile brand, the chief executive said.

FAAN opens EOI for airport limousine services at MMIA, Nnamdi Azikiwe airports MIKE OCHONMA

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ederal Airports Authority of Nigeria is seeking the service of qualified/ competent Companies to operate Airport limousine services for executive and VIP passengers at Murtala Muhammed International Airport, Lagos and Nnamdi Azikiwe International Airport, Abuja, in compliance with the National Open Competitive Bidding (NOCB) procedures stipulated in the Public Procurement Act 2007 and its extant guidelines.

Henrietta Yakubu, general manager, corporate affairs of FAAN told BusinessDay on Monday, that the plan in in tandem with the new standarisation move under her of FAAN to sanitize to the nation’s airports especially now that government is reviewing escort services used by VIPs and other high profile citizens.

According to information from the bureau of public procurement website, the objectives of the proposed service include the provision of twenty four

(24) hour professional and impeccable transportation service to the satisfaction of executive and VIP air passengers at the airport, carrying out of regular and effective maintenance and servicing of fleet of vehicles, ensuring adequate security for the passengers, provision of personnel with sound mental and physical state of health and ability. Such employees must be proficient in reading, writing and speaking English Lanwww.businessday.ng

guage, provision of conducive ambience at the operational base, including lighting and cleaning of environment and provision of First Aid Box. In terms of logistics, interested companies shall, at its own cost, provide all the approved vehicles, communication gadgets, office furniture and equipments and any other materials necessary for the provision of the services, and a comprehensive insurance policy.

Such company shall provide welfare amenities such as reasonable rest periods and facilities which sustain morale and create a sense of loyalty and shall be responsible for the training and discipline of its staff. Security Clearance: Employees must also undergo criminal indices check/background checks for the purposes of security clearance.

To be eligible to apply for the services, applicants shall provide of evidence of com-

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pany’s certificate of incorporation (or business registration) with the corporate affairs Commission (CAC), including certified true copy of memorandum and articles of association, forms CAC2 & CAC7 (where applicable), There shall be evidence of company’s income tax clearance certificate (TCC) for the last three years (i.e. 2017, 2018 and 2019), current pension compliance certificate, current industrial training fund (ITF) certificate of compliance, current Nigeria Social Insurance Trust Fund (NSITF) compliance certificate. All these requirements must carry a valid till 31st December 2020.

Others are evidence of registration on the national database of federal contractors, consultants and service providers by submission of interim registration report (IRR) expiring December 31, 2020 or valid certificate issued by the bureau of public procurement (BPP).

Sworn affidavit from court of competent jurisdiction @Businessdayng

in Nigeria (federal or state), including stamped passport photograph and signature of deponent/declarant, disclosing whether or not any officer of the relevant committees of the Federal Airports Authority of Nigeria (FAAN) or bureau of public procurement (BPP) is a former or present director, shareholder or has any pecuniary interest in the bidder and to confirm that all information presented in its bid are true and correct in all particulars.

It shall also indicate if the director(s) has/have never been convicted by any court of law, that the firm’s director or the company is not bankrupt and whether the company’s audited accounts have been audited for the last three (3) years 2017, 2018 and 2019.

Evidence of financial capability to execute the project by submission of Reference Letter from a reputable Commercial Bank in Nigeria, indicating willingness to provide credit facility for the execution of project when needed among other requirements.

Wednesday 26 August 2020

BUSINESS DAY

25

feature

UBA’s ongoing digital transformation establishes dominance across Africa …with first rate services

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an African Financial institution, United Bank for Africa has invested significantly in cutting edge technology in a bid to boost its overall service offering to customers, a development that has proven its unalloyed commitment to ensuring premium services thus affirming its dominance across Africa.

For a bank that has scored many firsts in the industry and is ranked among the top three banks in effective use of social media in Nigeria in a social media report by Alder Consulting; a bank that has invested heavily in building a robust and secure e-banking platform that supports its ebanking operations globally through strategic partnerships with various local and international organizations, you could only expect the bar to keep going higher.

Beyond being active on Twitter, Facebook, Youtube, Instagram, Google Plus, and also running a corporate blog, Africa’s global bank is continuously innovating and developing strategies aimed at making banking seamless and effortless for millions of its existing and potential customers, while also ensuring utmost safety of their transactions.

It was, therefore, not surprising that UBA would score yet another first with the introduction a Mobile App, that is capable of revolutionizing the way banking is done in Africa.

To reinforce its commitment to first-rate experience, the bank introduced numerous unique features on its mobile app and other digital platforms that set it apart and allow customers carry out banking transactions seamlessly across all channels.

Disclosing these features in a recent online press conference, intended to keep customers informed about the bank’s efforts in enhancing their experience through its digital platforms, Sampson Aneke, Group Head, Digital Banking, United Bank for Africa noted that the bank has taken steps ahead of its peers to navigate alternate banking channels in a bid to serve

Kennedy Uzoka

its customers better amid the Covid-19 pandemic and beyond while bracing for the challenges of the new normal as a result of the pandemic.

“In recent times, we carefully observed what people encountered after the day the Federal Government eased the lockdown intended to flatten the Corona Virus curve (COVID 19), it was a terrible experience, where customers crowded many banks to access their funds. So we on our own decided that to use that experience to further improve on our alternative channels in a bid to enhance customers experience,” Aneke said.

He continued, “what our customers will be getting now is an enhanced value that places us firmly ahead of our contemporaries in service delivery. Today, as we speak, they do not necessarily need a card to withdraw cash from any UBA ATM. “Simply dial *919*30*Amount# for a cash withdrawal code, you will be required to create a onetime pin (OTP), then enter the PIN to get a Paycode directly from your UBA Account to Withdraw the cash. At the ATM, www.businessday.ng

enter your Paycode, OTP, Pin, Amount and Phone Number to get your Cash,” he added.

Aneke also explained that henceforth, there will be a new mobile app of the bank which will prompt users to use their device enabled biometrics, adding that the menu has been reduced and divided into sub-menus to enable users view Transaction History, Net worth, Trends amongst others at a glance. “With the new interface, the user can now see all the transfer options including the saved beneficiary option at a glance and can even order food for delivery via the app,” he said.

“Customers who subscribe to the lifestyle offering on the app will enjoy access to the free online medical doctor, a great response to the new norm created by Covid-19 pandemic. In addition, we introduced a refreshed version of the mobile app that allows for group transfer projected to empower micro, small and medium enterprises (MSMEs) transfer to telephone numbers. This innovation was conceptualised to enhance financial inclusion across Africa

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against the background of the challenges of the COVID-19 pandemic. The new feature also allows a customer transfer to telephone numbers”.

Other features of the app, as highlighted by Aneke, include the live chat option, where users can communicate on the go with dedicated staff trained to assist with any enquires and challenges; biller validation; as well as group transfer – a new menu where users can create groups, save members and transfer funds to up to 100 members on the group. This Group Beneficiary transfer feature which does a single lumpsum debit and multiple credits to beneficiaries irrespective of banks where their accounts are domiciled, makes the upgraded UBA app, the first app in Africa to be able to pay salaries, thus addressing a major need in the MSME space.

“Another exciting feature that we have already started receiving rave feedback from our customers for, Is the one that enables users make Loan Requests via Click Credit(For Salary Account Holders) or Quick loans which is available @Businessdayng

to both savings and current account holders. Our customers have already started to enjoy these services, and I can tell you that they are very pleased with these new offerings,” Aneke said.

Also speaking, Group Head, Consumer & Retail Banking, Jude Anele said in addition to the revamped offerings UBA has put in place to prioritise customers and give them increased value is that the bank is now offering 1.58 percent monthly interest rate on its Quick Loan service to customers, known as Click Credit “We are offering this to salaried employees and Small and Medium Enterprises (SMEs) who are qualified to obtain the Quick Loan,” Anele said.

According to him, any salaried customer or SME is qualified to access the loan for a period of 12 months, six months and three months and the loan is renewable.

He affirmed that customers can get up to N5 million in 1 minute or less with super-fast loans like click credit using the bank’s unrestricted and secured access to clients accounts anytime, anywhere, on their computer, tablet, smart phones, or any internetenabled device.

This is coming on the heels of the banks response to help its customers survive and navigate the ongoing Coronavirus pandemic which has ravaged the entire world subsequently leading to a new normal.

UBA in its audited results for the full-year ended December 2019, recording impressive growth across top and bottom lines.

According to the 2019 financials filed at the Nigerian Stock Exchange (NSE) on Friday February 28, 2020, the Africa’s global bank’s gross earnings grew by 13.3 percent to N559.8 billion, compared to N494.0 billion recorded in the corresponding period of 2018. The Bank’s total assets also grew significantly by 15.1 percent to an unprecedented N5.6 trillion for the year under review. This is the first time the Bank’s gross earnings and assets will respectively cross the N500billion and N5trillion marks.

26

Wednesday 26 August 2020

BUSINESS DAY

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Still on Nigeria’s troubled timber We drew attention to this problem in the past. But the problem is still there. Deforestation is still recklessly going on – illegal felling of trees is going on with impunity. We can therefore not ‘sidon look’. Nigeria is said to be number one destroyer of primary forests in the world and has joined the likes of countries like Indonesia and North Korea, known for getting rid of their green forest. SIAKA MOMOH brings you, once again, the story of Nigeria’s troubled timber.

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igeria’s timber resource is in trouble, and by extension, the nation’s forest industries are in trouble too. Nigeria, which is said to be number one destroyer of primary forests in the world, has joined the likes of countries such as Indonesia and North Korea, known for getting rid of their green forests.

Primary forests Food and Agricultural Organisation (FAO) records show that between 2000 and 2005, Nigeria lost 55.7 percent of its primary forests, defined as forests with no visible signs of past or present human activities. Logging, subsistence agriculture, and the collection of fuel-wood are cited as leading causes of forest clearing in Nigeria.

The FAO records – a report - further reveal that primary forests are being replaced by less biodiverse plantations and secondary forests.

It argues that due to a significant increase in plantation forests, forest cover has generally been expanding in North America, Europe and China while diminishing in the tropics.

According to the FAO, deforestation accounts for 87 percent of total carbon emissions of Nigeria and its wide biodiversity of 899 species of birds, 274 mammals, 154 reptiles, 53 amphibians and 4,715 species of higher plants will also be strongly affected by the negative impacts of deforestation.

Deforestation Deforestation is a process where vegetation is cut down without any simultaneous replanting for economic or social reasons. It has negative implications on the environment in terms of soil erosion, loss of biodiversity ecosystems, loss of wildlife and increased desertification among many other reasons. This clearing of the green forest also has an impact on social aspects of the country, specifically regarding economic issues, agriculture, conflict and a lot of damage has been done to Nige-

ria’s land through the processes of deforestation, notably contributing to the overwhelming trend of desertification.

Forest industries The Nigerian forests support a wide range of forest industries, which include both the formal and informal sub-sectors. Agreed that these industries put a lot of pressure on the forest resources of the nation, but with good forest management, our timber resource will not face the kind of dilemma that it is facing now. The formal sector is essentially wood- based and is fairly well developed and comprise mechanical wood industries, including sawmills, veneer and plywood manufactures, particle board, paper and paper board manufactures. Furniture manufacturing is also carried out at a secondary level. The informal forest sector comprises an informal wood based sector which is the country’s largest user of wood, (most of which are burnt as fuel) and the non wood forest products sector.

Death of forests The way we are going, if we are not careful, our forest will be-

come extinct and the economy will suffer for it. According to an investigative report published in International Centre for Investigative Reporting (ICIR) in September 18, 2016, there is a mad rush for our wood by the Chinese who are exporting our wood illegally with the connivance of Nigerians who have responsibility to protect this valuable commodity. According to the report, “In Nigeria, where forestry matters are handled by state governments because they own all the forestry estates in the country, logging of timber, including rosewood, is banned or allowed only under license, but traders

have a free reign in the forests across the country because of poor regulations, monitoring and local corruption. From a net importer of timber in 2011 and a marginal exporter of rosewood logs in 2013, posting a mere 30,866m3, Nigeria was by the end of 2014, according to Chinese Customs records, exporting 242,203m3 of rosewood to China, an 18 fold increase.By the end of 2015, Nigeria had become the single largest exporter of the ornate logs to China, accounting for 45 % of total imports to the country. Unbelievable as it appears, it means that by the end of 2015, 30 containers (20 ft) of

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rosewood were leaving Nigerian ports for China every day “Most of the exported wood from Nigeria is illegal as investigations by the icirnigeria.org showed massive unrestrained felling of trees in many states with specific ban on logging activities.

In other states where logging is allowed only with the possession of a license obtained from the forestry department, timber merchants feeding the export trade to China have ignored or boycotted official channels and directly source their timber from the forest using local youths.”

The report adds: “In Cross Rivers and Taraba states for instance, the logging, trading in and export of all species of timber is banned by the state governments but the two states have suffered greatly from the activities of illegal timber traders. In Kogi, Ekiti, Ondo and other states where a permit is required by law to fell trees, trees are freely harvested illegally from the forest without any official sanctions…”

Oku-Iboku and Iwopin paper mills question How do we successfully bring the likes of Oku-Iboku and Iwopin paper mills back on stream if we are faced with this serious deforestation problem? There are reports that these paper mills established in the mid 1970s are bracing up for reopening under new managements. How are we sure of their sustainability when the source of their raw material is under threat?

No doubt, the government department in charge of forestry should be held culpable for its failure to implement any forest management policies in efforts to curb deforestation since the 1970s.

Very few steps have been taken to try to lower the deforestation rates and stop illegal logging.

Solution How do we make amends? Any solution to the problem of deforestation in Nigeria must be an approach that incorporates Continues on page 27

Wednesday 26 August 2020

BUSINESS DAY

Editor’s Note

HR Matters with Shuaibu Idris mni FIoD mcipm

Covid secured work place: preparing for the new normal ii

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background to this subject was provided in the first slot of the piece discussing it and the stage for detailed discussion was set. Today we would continue the discussions on the subject matter given that it’s burning and strategic to mankind in general.

The labour force usually consists of workers in the formal and informal sectors, with majority of Nigerian workers in the informal sector. These are the small business owners, artisans and traders. Majority of these classes of people have their businesses closed during the pandemic, and access to basic things like food, shelter, and health-care may be very difficult.

A good number of the formal sector workers, such as those working in oil and gas companies, telecommunications, financial services, real estate, hospitality, etc, may get to retain their positions at work, post pandemic period. For those that find themselves in the job search market, it is best they proactively update their resumes, look for work elsewhere and take whatever comes their way. These types of jobs should be considered as stepping stones, untill one is able to get back on track with a desired job.

Safety for Frontline workers These are the workers involved in the care value chain of COVID-19 victims.

This is a very challenging period for them because they are at risk of contracting the infection, due to their exposure. It is expected that the various state governments provide safety gear / Personal Protective Equipment (PPE) for these workers. In addition, workers in essential services like supermarkets, traders (particularly food), drug stores, etc, also need to wear PPE to protect them-

selves, as they will be exposed to a lot of people, and thus stand the risk of infection from contacts with customers and co-workers. They may also be challenged by transportation to commute them back and forth from work place and home.

As we all know, the pandemic has caused shutdown of offices, businesses and restaurants as well as worship centres. Thus as a result of the stay at home order in effect in most countries, businesses are challenged in the following ways: Loss of income Companies and businesses that stay shut this period will lose a lot of money. Some of these businesses include hotels, travel agencies, Laundromats, schools, retailers/ wholesalers of non-essential items. This is because there has been zero patronage, so they are not making a sale, or providing a service. The UK renowned Clothing retailer, Primark, now makes zero sales in a month, due to store closure as a result of COVID-19. The company was previously making about £650m monthly sales in its Europe and US locations.

Staff Lay-Off or Right sizing This will become inevitable for majority of the companies worldwide. They may need to shed weight, to manage their losses, re-strategize and reposition for the future.

Create alternative work arrangements These include equipping staff to work from home, and working shift hours. These can be challenging because the company may not be ready to undertake the financial commitment in securing equipment needed to WFH. Those that are working shifts may need to stay close to work and worry about exposure to the virus from commuting. Businesses that want to go this route need to deter-

mine that it is a cost effective measure.

Indeed, the effect of the pandemic is not all gloom as it presents quite a few opportunities. Some of these include: Increase in sales of PPE businesses For these businesses, it is not all bad news. Manufacturers and dealers in PPE from surgical masks, hazmat suits, hand sanitizers, etc, will experience an increase in revenue and profit.

Research & Development Opportunities This will exist in pharmaceuticals industry particularly for vaccines and treatment drugs. This singular opportunity will open up a can of others to include funding, testing, laboratory supplies and equipment, etc.

The Nigerian Presidential Task Force on Covid 19 has commenced a gradually relaxation of the lockdown order largely arising from pressure as well as a feel that the country is on top of the challenge pose by the virus.

Offices, Shops, Restaurants etc would be opened for normal businesses. One may ask, are we going back to our normal ways of doing things prior to the pandemic? If no what would be the nature, form and scope of the changes that would be made in our new life style? Indeed, given that no cure has been found for the virus nor a vaccine developed to prevent infection from the virus, health practitioners warned us to trade on the path of caution. However, the relaxation of the lockdown is largely so as to avert other crisis such as ‘Hunger virus’.

In the first part of this topic published earlier, a glossary of mankind’s experiences with epidemic and or pandemic was provided.

History almost always repeats itself. This axiom makes it mandatory that we as human beings should, if not must, learn from history hence the

Still on Nigeria’s troubled timber Continued from page 26

and aggressively targets all aspects that are related to the problem. We must start thinking of areas of energy alternatives, improved technology, forestry management, economic production, agriculture and security of the locals that are dependent on the land. One aspect that is very crucial is the need to vigorously engage in replanting of trees that have been cut down.

Taking a cue from Gabon

which is currently engaged in sustainable management of its forest resources; the country has one million hectares of forestry registered under sustainable management permits, including more than one third which has received international certificates (FSC, OLB, Keurhout and ISO).

Forestry is the main private sector employer in Gabon accounting for 30,000 jobs. Timber exports are the second largest source of income accounting for about

6 percent of GNP. But Gabon now wants to emphasize value added production by seeking to industrialize its wood sector by dedicating 1000 hectares to wood processing in its Nkok Special Economic Zone.

Gabon is currently involved in what it calls ‘Gabon Emergent’ something akin to Nigeria’s Transformation Agenda. The early results of Gabon Emergent are already visible. This writer was in Gabon and saw it happening.

need for strategic approach to understand, appreciate and manage the new ways of living on planet earth, what some people tagged as the ‘new normal’.

We would conclude this topic I our next piece with suggestions to Managers, Administrators and Human Resources Officers on areas to pay attention to in order that organisation’s most valued assets; human capital, are covid-secured and remain so for ever even without vaccination against the virus.

Keep a date with us please.

“Sometimes, the bravest thing you can do is to never look back.”

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t is traditional with us on this platform to harp continuously on issues affecting us that refuse to respond to our call for remedy. For us there is no overkill writing on such issues repeatedly. Nigeria’s troubled timber is one of such issues.

This is why we are bringing to the fore again this week, as our cover, the story on this threatening issue.

The International Grains Council placed Nigeria’s 2018/19 maize production estimate at 11.0 million tonnes, which equates to a 16.1 percent share of Sub Sahara Africa’s maize harvest. And according to the Maize Farmers Association of Nigeria, the production of the commodity increased from eight million tonnes to 20 million tonnes between 2015 and 2018. About 50 percent of the maize produced is consumed by the

Siaka Momoh animal feed sector, with poultry claiming as much as 98 percent of the total feed produced in Nigeria.

Yet maize is in short supply.

What do we do? Enterprise Strokes has a story on this.

Read the stories listed here and others in your insightful magazine this week.

Welcome on board.

For sponsorship, advert placements, comments and content contributions, send messages to email: siakamomoh@yahoo.com; twitter: @momoh_lcc3; Mobile Phone: 0806 139 6410.

Maize supply and food security

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aize is in short supply and this is affecting the production and price of chicken, eggs and maize-based products manufactured by the likes of Nestle, NASCO and others. The existing ban on importation of maize by the Federal Government is not helping matters.’

The trending COVID-19 stories have no doubt shut down a myriad of other stories relating to the economy so to speak. This is the case across all media platforms – the traditional print, the electronic media, and the popular social media inclusive. Such is the case that the worrisome story concerning our troubled maize, which is very much linked with food insecurity, is not receiving desired attention.

Maize is in short supply and this is affecting the production and price of chicken, eggs and maize-based products manufactured by the likes of Nestle, NASCO and others. The existing ban on importation of maize by the Federal Government is not helping matters. It would be recalled that in October last year, President Buhari ordered the closure of Nigeria’s land border to checkmate the influx of expired food items and enhance the country’s capacity in the production of its own food. This policy has earned praises for government from farmers across the country whose margin numbers have improved greatly since the policy came into being.

This is good news.

FAOSTAT 2014 record on maize states that it is the second most cultivated crop in Nigeria in terms of area harvested with 5.8 million Ha, second to

Cassava’s 7.1 million Ha. Nigeria and South Africa are the largest producers in Africa. The International Grains Council placed Nigeria’s 2018/19 maize production estimate at 11.0 million tonnes, which equates to a 16.1 percent share of Sub Sahara Africa’s maize harvest.

According to the Maize Farmers Association of Nigeria, the production of the commodity increased from eight million tonnes to 20 million tonnes between 2015 and 2018.

And about 50 percent of the maize produced is consumed by the animal feed sector, with poultry claiming as much as 98 percent of the total feed produced in Nigeria. Maize therefore is important to the animal industry, especially for poultry farmers. By extension therefore the price of maize is bound to affect greatly the cost of production of animals, especially now that it is in short supply. Reports have it that a tonne of maize which used to sell for N97,000 has climbed to N165,000, while soybean has increased from N110,000 per tonne to N123,000 within the last few months.

Oyedeji Kolawole, CEO of Satin Farms and Agricultural Services, Agric Settlement, off Badagry Express Road, laments that before COVID-19, business was promising, “but now, we are clueless”. He argues that pre COVID-19, Re-

turn on Investment was close to 20%, “but now it is close to nothing, if not 0%”. This, according to him, is because, the inputs, particularly maize, is not affordable.

Kolawole says farmers are not growing maize as a result of the activities of Boko Haram’s insurgency and that poultry feeds manufacturers compete with baby foods and other maize-based foods manufacturers like Nestle, NASCO and others for limited supply of locally produced maize. Input price has gone up by 100% and egg price is up by 10% he says. Poultry owners cannot increase price like input producers do because eggs are perishable products that must be offloaded speedily.

The way out of this problem, Kolawole says, is that ban on importation of maize should be relaxed; that government should give maize producers and poultry farmers a time frame for backward integration.

Kolawole is singing the same song the Poultry Association of Nigeria (PAN) Delta State chapter is singing.

The Delta state chapter of the PAN in June asked the Federal Government to permit the importation of maize into the country. Yes. The FG should let maize grains come in but the relaxation like has been suggested, should have a time frame, The numbers we have on maize production now are good but they are not good enough. But the clear point here is that the potentials for bigger production are there.

All we need is a friendly policy and the political will. We did it for cement. We did it also for rice. We can do it for maize too.

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Wednesday 26 August 2020

BUSINESS DAY

In celebration of Nigeria’s 60th independence, BusinessDay’s Women’s Hub presents WOMEN CHAMPIONS. You get to nominate your women champions. Regular women doing phenomenal things.

From the 36 states of Nigeria including Abuja, there are various women giving their bit to the society, doing outstanding things. Their desire is to make Nigeria a better place and with little or no support, they are undaunted yet driven by their desire to be a caring shoulder to others.

To this end, BusinessDay’s Women’s Hub will publish 60 of these women who will be selected from all the entries received all over Nigeria. 60 because it is the 60th Independence of our great country, Nigeria.

Are you the one we are looking for? Do you know someone in this category? Please nominate yourself or someone you know by posting https://businessdaymedia.typeform.com/to/Kk0cllHH in Google which will take you directly to the link to fill the form or visit www.businessday.ng and on the main wall of the website, you will be prompted to click the notification on the flier, so you can fill the form.

Entries are open and will close on the 15th of September, 2020 For sponsorship or partnership, please reach out to wc@businessday.ng or call 09073237917 www.businessday.ng

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Wednesday 26 August 2020

BUSINESS DAY

NEWS

Norway shows Nigeria how to boost oil investment with tax relief DIPO OLADEHINDE

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he decision of Norway to grant tax relief packages to Equinor and other companies hit by low crude prices is expected to increase oil and gas investment within the region, a development that holds lessons for Africa’s biggest oil-producing country.

Nigeria is an oil-producing country like Norway but that is where the similarity ends. Norway is a nation of five million people who have invested the revenues from its 1.64m barrels per day (bpd) production through its Sovereign Wealth Fund while Nigeria shares its own oil revenues.

The move by Norway to grant tax incentives to spur investment and safeguard jobs is expected to increase investment in oil and gas activity by at least 1.6 percent this year compared to 2019, the latest investment survey by Statistics Norway revealed.

The survey also revealed total investments in oil and gas activity in Norway in 2020, including pipeline transportation, is expected to hit $20.57 billion.

Following the oil price collapse, Norway, at the end of April, approved some measures to support the oil and gas industry and the supply chain, including introducing temporary changes to the tax system to help companies preserve liquidity and continue with their planned projects.

“To encourage activity and safeguard jobs in this difficult situation, we are proposing some temporary amendments. In practice, these will mean that tax bills are postponed and companies’ liquidity is improved.

This will enable oil and gas companies to make more investments,” Norway’s Minister of Finance Jan Tore Sanner said at the time.

According to estimates from Rystad Energy, the temporary tax relief package for the petroleum industry is set to improve exploration and production companies’ short-term liquidity and reduce breakeven prices for future development projects by about 40 percent on average.

The support package will also help Norwegian harshenvironment floater demand rise in 2020 and maintain stable levels in the years

to come.

Apart from Norway, other oil-producing countries like the United States, Brazil and the Organisation of Petroleum Producing Countries (OPEC) members have been launching salvos of fiscal relief to their upstream sector, while Nigeria has remained silent in this respect.

The pattern of intervention in many other oil-producing countries ensured that the upstream segments of their oil industries are alive and well. For instance, Russia permitted the delay in dividend payments for the state-controlled Gazprom and Rosneft.

Unlike their international counterparts with huge balance sheet, firms like Aiteo E & P Ltd, Seplat Petroleum Development Company and at least 50 small to midsized Nigerian producers pumping between 1,000 and 100,000 barrels each day faces an existential threat.

Most analysts and chief financial risk officers (CFOS) have asked the Federal Government to play similar role like their global counterparts who have rolled out measures to protect companies deemed critical to national security.

NANS urges govt to reopen schools MARK MAYAH

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ational Association of Nigerian Students, NANS, Joint Campus Committee (NANS JCC), in Lagos State has called on the government to reopen all schools without further delay.

Chairman, Lagos NANS JCC, Ogunsanya Rasheed, in

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This is to notify the general public that Hashim Mohammed as written in my BVN and Mohhamed Hashim Safiyah as written in my voters’ card refers to same and one person. That I now wish to be known and addressed as Safiyah Hashim Mohammed All former documents remain valid. Banks and general public should take note.

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a statement on Tuesday, said reopening the schools would not only keep the students busy but also bring those already disillusioned with education back on track.

He said with over 4.1 million students in Lagos State, inclusive of those in primary, secondary and in tertiary institutions, keeping them productively busy was important.

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He therefore appealed to the government to provide the enabling environment for schools to reopen in a safe condition. He noted that the provision of educational facilities in the 10 tertiary institutions in the state was paramount to giving quality education to students and that it would be the vocal point of NANS rebirth in Lagos State.

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Wednesday 26 August 2020

BUSINESS DAY

POLITICS & POLICY Edo 2020: Opposition yet to explain why Obaseki shouldn’t be re-elected - Prince Akenzua, Enogie of Obazuwa

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he Enogie of Obazuwa in Ovia North Local Government Area (LGA) of Edo State, His Royal Highness (HRH) Prince Edun Akenzua, has said that persons opposed to the re-election of the Edo State Governor and candidate of the People’s Democratic Party (PDP), Godwin Obaseki, have not been able to show tenable reason for their decision.

The traditional ruler said this while receiving Governor Obaseki, who paid him a courtesy visit in his palace, as part of his ward-to-ward re-election campaign in Edo South Senatorial District, on Tuesday.

Receiving the governor who was accompanied by his deputy and running mate, Rt. Hon. Comr. Philip Shaibu, and other members of the Edo PDP Campaign Council, Prince Akenzua hailed the governor’s landmark achievements across the various sectors of the state, praying that the ancestors of the land grant the governor victory at

L-R: (on the podium): Matthew Urhoghide, Senator representing Edo South; Gideon Ikhine, deputy directorgeneral, Edo State PDP Governorship Campaign Council; Dan Orbih, chairman, Edo State PDP Campaign Council; Godwin Obaseki, Edo State Governor and candidate of the PDP, and other party leaders, at Obaseki’s reelection campaign rally, in Uhiere Ward 7, Ovia North East LGA, on Tuesday, August 25, 2020.

the poll.

According to the royal father, “Some people have said that they do not want you to come back, sadly, none of them has come to tell us what the Governor has not done, what he should have done or

tell us what he shouldn’t have done that he did. So, we are very happy with him.

“Since you came into office, almost four years ago, we, the Enigies in Ovia North East Local Government Area (LGA) are particularly happy

with your government.”

He warned that those who are bent on subverting the will of the electorate in the forthcoming election will have the ancestors to battle with.

“We can only pray that God

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s part of its campaign strategy, the Edo State Chapter of the People’s Democratic Party (PDP) has installed electronic billboard to televise the former national chairman of the All Progressives Congress (APC), Adams Oshiomhole’s attestation to the credibility and integrity of Governor Godwin Obaseki during the 2016 governorship election in the state.

The South-south acting chairman of the party, Dan Orbih commissioned the electronic billboard located at the defunct African Continental Bank (ACB) building in Ring road, Benin City.

Orbih, who is also the PDP state campaign council chairman for the September 19, governorship election, said the electronic billboard will help to broadcast all accolades, votes of confidence poured and passed on to the governor as the APC candidate during the 2016 by the former governor,

Adams Oshiomhole.

He also disclosed that the electronic billboard will help to showcase to the people of the state all the governor’s campaign tour in the 192 wards across the 18 local government.

“We are here this evening to commission the electronic board as part of the party and the governor’s campaign innovation.

“This electronic board will televise most of the governor campaigns’ jingles, all that the former national chairman

R-L: Tokunbo Abiru, a former group managing director/chief executive officer, Polaris Bank Limited, and aspirant for Lagos East senatorial by-election and Chairman, All Progressives Congress (APC), Lagos State, Tunde Balogun at the presentation of his nomination form for election at the APC Secretariat, Acme, Lagos… yesterday www.businessday.ng

next four years, if I am given the chance, we will be able to construct roads that will connect our communities. We will rejig the economy of Ovia North East; this place used to be the state’s economic hub, logging timber and forestry in the late 60s which built our wealth as an empire.”

Obaseki noted that “Today, deforestation has occurred and we practically don’t have forest left. What we have done is to do a forest audit to see what we have left and how to use the degraded land for cultivation of valuable crops like oil palm and rubber.

“I have over a 100 people in the whole of Ovia North East doing the survey because we have investors who are lined up. We also have the Central Bank of Nigeria (CBN) behind us to ensure that we use all the land that is available for cultivation of oil palm.

“We believe if we are able to do this in the next three to five years, we will regenerate the economy of Ovia North East which will improve the living standards of our people.”

Kogi guber: Supreme Court slates August 31 for judgment

PDP installs digital billboard to broadcast Oshiomhole’s attestation on Obaseki’s credibility Idris Umar Momoh, Benin

and our ancestors will accompany you and your team,” he added.

Earlier in his remarks, Obaseki said his government carried out a forest audit in the state as part of measures to reclaim the natural habitat for economic benefits.

He decried the activities of poachers over the years and disclosed steps to regenerate the forest as well as expand oil palm cultivation.

The PDP candidate also sought the support and prayers of the people ahead of the election in his bid to consolidate on the achievements recorded by his administration in the first term.

He explained: “We have done a forest audit to see what is left and use it to regenerate the forest that used to be the hub for timber. We are not here to campaign to you but to let you know that over the last four years, we have started a redesign of Ovia North East Local Government Area, first by bringing in some basic and key infrastructure which the people have been lacking.

“I assure you that in the

of APC said about the governor, and also where sometime people will be to watch some of the party’s campaign visit across the 192 wards and 18 local government.

“So that even if you are not able to go with him, you can have a very good view of some of his activities in the course of our campaign activities.

Some persons don’t actually have access to watch and listen to the campaign in their homes but where ever they pass through the ring road they will be able to watch the campaigns.”

According to him, “This is quite commendable and I believe that it is a new chapter in the campaign arrangement to reach out to more people.”

While commenting on the former governor’s allegations that Governor Godwin Obaseki masterminded the suspension of the Onojie of Uromi, he however, advised those in the position of leadership especially the politicians not to take any action or decision they will not be able to stand by on after leaving office.

He alleged that the former chairman of APC, Adams Oshiomhole during his tenure as governor of the state unilaterally suspended the traditional ruler, but the suspension was however, lifted by the incumbent governor.

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Felix Omohomhion, Abuja

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he Supreme Court will on August 31 deliver judgment in the suits challenging the election of Kogi State, Governor Yahaya Bello.

The two appeals fixed for judgments are that of the People’s Democratic Party (PDP) and its governorship candidate, Musa Wada and the Social Democratic Party (SDP) and its candidate, Natasha Akpoti.

A seven-man panel of the apex court on Tuesday led by the Chief Justice of Nigeria (CJN), Justice Ibrahim Tanko Muhammad, fixed the date to deliver judgments in two separate appeals challenging the victory of Bello shortly after taking the submissions of lawyers to parties in the separate suits.

At the hear ing, PDP and Wada’s lawyer, Jibrin Okutepa (SAN), pleaded with the apex court to allow the appeal to succeed and to grant the reliefs sought by his clients.

However, Governor Bel@Businessdayng

lo’s lawyer, Joseph Daudu (SAN) and that of the Independent National Electoral Commission (INEC), Alex Izinyon (SAN) opposed and urged the court to dismiss the appeal for lacking in merit.

Daudu pleaded with the apex court to affirm the concurrent decisions of the Court of Appeal and the state governorship election petition tribunal.

The CJN after taking arguments announce d that the court will deliver judgment in the matter on Monday August 31.

In the second appeal filed by the SDP and its governorship candidate Akpoti, the apex court also announced its decision to give final verdict on the same day with that of the PDP. While arguing their briefs, the two appellants pleaded with the panel of the apex court to set aside the findings of the Court of Appeal and the tribunal and allow their appeal to succeed.

Izinyon and Daudu in their separate arguments pleaded for outright dismissal of the appeal.

Wednesday 26 August 2020

BUSINESS DAY

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News Import waivers boost modular refineries...

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entirely wiped out by ex-

Bello Matawalle (l), governor, Zamfara State, presents Gold bars to President Muhammadu Buhari, during a meeting on the Solid Minerals and Mining Potentials in Zamfara State at the Presidential Villa, Abuja, yesterday.

Here’s what Nigeria must do in five...

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underlying economic challenges.

While analysts expect Nigeria’s economy to report less contraction in the

third and fourth quarter of this year, it is almost inevitable that the economy will post negative full-year growth.

On what Nigeria can do to boost economic rebound, Oluebube Ezeoke, a senior analyst at Enzo, Krypton and Company, says Africa’s largest economy would have to bring down food inflation, the key driver of Nigeria’s inflation.

“The agricultural sector will need a revamp to keep the rising food inflation down.

The financial services sector is also a point to focus on as there is prospect for growth,” Ezeoke states.

According to Ezeoke, “A lot of people are scared to put their money into the economy because of the uncertainties surrounding exchange rate.

So, there need to be more incentives to attract inflows into the economy.”

While Gbolahan Ologunro, an analyst at Lagos-based CSL Stockbrokers, believes government can do very little to mitigate the decline in the remaining quarters because oil prices are not within its control and OPEC has put a peg on oil production, he explains that while there have been policies to drive the oil sector, “there is no incentives and coordination about how output can be increased.”

Yinka Ademuwagun, research analyst, FMCGs, United Capital plc, thinks that lifting the last layer of the Covid-19 restrictions, the dusk-to-dawn curfew (10pm – 4am) targeted at night-time economy, and limitations of gathering more than 50 people will create a further boost for the economy.

“We believe the government or monetary authorities will need to go beyond pumping or injecting liquidity to stimulate growth across sectors,” Ademuwagun says, adding that the Nigerian government would need to “concentrate on driving productivity across sectors by

leveraging technology.”

He also recommends that thegovernment“shouldrefocus on the attainable milestone of further improving ease of doing business within the country.”

The International Monetary Fund (IMF) recently revised downwards its projection for Nigeria to -5.4 percent from a -3.4 percent projection in April 2020. According to the IMF, the forecast was influenced by the larger than expected storms to global value chains due to the coronavirus, affecting global demand for goods and services.

The Washington-based organisation expects poorer nations dealing with the disease to have longer economic recoveries as lockdowns continue in the worst-hit to global GDP since the financial crisis in 2008.

“Even oil-dependent Nigeria, which because of the oil price plunge should be hit worse than many in Africa, has outperformed most developed market economies in Q2 2020,” Charlie Robertson, tweeted on Monday. He thinks this could indicate a positive signal for other subSaharan African economies.

While this may be the case, Nigeria’s GDP contraction does not fully represent the sufferings of Nigerian households. The Nigerian economy now can be best described as a stagflated economy, a condition described by slow, declining or contracting economic growth and relatively high unemployment, or economic stagnation, which is at the same time accompanied by rising prices (i.e. inflation).

The NBS recently reported unemployment rate rose to 27.1 percent while inflation accelerated to 12.8 percent.

According to a World Bank report that assesses economic and social developments in Nigeria, the country’s economy would contract by 3.2 percent this year. This was on the assumption of a yearly average oil price of $30 per barrel. It also assumes Covid-19 would have started easing out by the second quarter of 2020.

Based on the World Bank’s projection, BusinessDay’s analysis expects Nigeria to see a slower contraction by 3.85 percent in Q3 and Q4, respectively, to validate a full-year contraction of -3.2 percent in 2020.

CITN, in PH, strategises on post-COVID... Retail industry woes deepen as...

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CITN was behind 90 percent of tax and finance laws being rolled out in Nigeria including the 2019 Finance Act. The Covid-19 issues have necessitated amendment of the Finance Act and suggestions would be tabled from the Port Harcourt meeting, she said, adding that their members are right now offering free tax advice because firms can hardly afford payment.

In her contribution, a council member, Justina Okoro, said the retreat was to first look at the journey so far as an institute and what they needed to do next to impact positively on Nigeria and the economy.

“This retreat is to look at strategies and understand the meaning of strategy as a cause of action that is deliberately

and strategically deployed to achieve a particular outcome.

It is a focused cause of action in certain areas of policy.

“Our leaders need to be focused in their plans of action.

You need to decide what you want to achieve at the end of your tenure so that at the end of it, the people are better for it. This is same with corporate organisations. They must not be distracted in what they set out to achieve. So, you must have a vision, a mission, and strategy to achieve them.

“CITN wants to be the foremost tax institute in Africa and theworld,andsohowtoachieve this, say in 2030. Nigeria set certain targets for 2020; so, did we achieve them, and if not, is it late? The nation can always try again. It is to re-plan and refocus onhowtoachievewhateverthat was intended,” Okoro said. www.businessday.ng

Continued from page 2

income dipped by 30.32 percent to N38.44 billion as at June 2020, from N55.17 billion, according to data gathered by BusinessDay. The country’s gross domestic product shrank 6.1 percent in the three months through June from a year earlier, compared with growth of 1.87 percent in the previous quarter, according to the NBS. The average industry net profit margins fell to 46.68 percent as at June 2020, from 59.37 percent the previous year; what this means is that many consumer companies are struggling to turn each naira invested in sales into higher profit.

Unilever Nigeria plc and International Breweries recorded losses, but the Flour

Millers bucked the trend as the border closure imposed by the government to curb importation and boost local production forced consumers to patronise their products.

Analysts at United Capital in a recent report say they are more bullish on stocks of Flour Mills and Dangote Sugar due to the nature of their product portfolios in essential items.

However, they expect earnings for the brewers to remain pressured or depressed due to continued restriction on social gathering and weekend parties.

“Looking beyond the third quarter 2020, we have a moderate outlook for topline performance across the sector,” said analysts at United Capital.

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ploitative charges required to settle various port officials and security personnel to get into the ports to take out containers.

An operator told BusinessDay that while he spent about N500,000 to bring a container from China to the Apapa port, he spent over N1.2 million to take the same container out of Apapa port to Sagamu.

“The government says it is promoting ease of doing business but the situation at the ports is worsening the ability to do business and enriching fraudulent security officials,” an importer told BusinessDay on the condition of anonymity.

Hundreds of trucks, some bearing containers queue up for months to get access into the ports and companies hard pressed for time pay a premium to get ahead, creating a racket for security agencies tasked with orderly movement into the ports.

Some operators, BusinessDay learns, now move their containers through barges from Orile into the Apapa port in order to bypass the long queues to get into the port. This has raised cost for importers as statistics show that it costs more than N1.2 million to transport a 40-foot container from Lagos to Benin City.

Meanwhile, four modular refineries including Waltersmith Refining and Petrochemicals, OPAC, Edo Refineries and Petrochemicals could start producing refined products before the end of the year.

Waltersmith Refining and Petrochemicals modular refinery has a capacity to refine 5,000bpd, and a secured key equity investment from the Nigerian Content Development and Monitoring Board (NCDMB) is expected to be launched in September.

The company’s refining business is divided into two phases: Phase 1 is the delivery of 5,000bpd modular capacity refinery located near the existing flow station and will process the around 6,000bpd currently produced by the upstream business to the readily available market in the south-eastern part of Nigeria, the company said.

“It is expected to contribute about 271 million litres of refined products including Diesel, Naptha, HFO, and Kerosene annually to the domestic market and create both direct and indirect jobs, particularly within the host communities,” according to a statement from the company published on its website.

The second phase is the @Businessdayng

delivery of 25,000bpd crude and condensate refinery, which is an upgrade on the 5,000bpd modular refinery.

The project is still at an early stage of development but is designed to produce the following products: gasoline, diesel, LPG, kerosene, and aviation fuel.

OPAC Refinery, being constructed in Delta State, promoted by Pillar Oil Limited, Omsa Limited, and Astek Limited, is also expected to be completed before the end of the year. The refinery upon completion will be able to process at least 7,000bpd.

Pillar Oil will be supplying about 350,000 tons of crude per annum to the refinery once the facility begins operations.

OPAC will produce naphtha, kerosene, diesel, and fuel oil fractions upon completion. The refinery will have a storage depot for crude and finished products.

The Niger Delta Petroleum Resources Limited 1,000bpd refinery located in Rivers State could see its capacity upgraded to 5,000bpd.

The plant, which produces only diesel, in 2014 the company celebrated the 1,000th Diesel Truck Load Out from the Mini Refinery.

Currently, an expansion of the plant is ongoing to increase processing capacity to 11,000bpd, the company said on its website.

Aside from this, the 6,000bpd Edo Refinery and Petrochemicals, a private modular refinery located at Ologbo, Ikpoba Okha Local Government Area of Edo State is billed for commissioning next month.

The Edo Refinery and Petrochemicals is owned by AIPCC Energy Limited, a joint venture between AFCOM and Peiyang Chemical Equipment Company of China (PCC) and was built at the cost of $10.2 million. It produces diesel, Naptha and Fuel oil (LPFO).

When completed, the Edo Refinery and Petrochemicals aims to supply 20 percent of Nigeria’s diesel, save over $350 million in foreign exchange yearly, earn over $125 million from export of Naptha and meet Nigeria’s 100 percent LPFO demand.

BusinessDay’s analysis shows that only these refineries out of the 45 modular refinery licences approved by the Federal Government look set to be completed, though many of these licences would expire this year.

All the licences issued to date have a combined capacity to refine 2.15 million barrels of crude oil but challenges including an inefficient port make it unlikely that they will be constructed.

Wednesday 26 August 2020

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NEWS

WHO declares Nigeria, Africa Passage of PIB will spur activities With N50,400, Lagos residents can get COVID-19 test in private labs in energy sector- Neconde free of wild polio virus GODSGIFT ONYEDINEFU, Abuja

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he independent Africa Regional Certification Commission for Polio Eradication (ARCC), an organ of the World Health Organisation (WHO) on Tuesday officially declared the African region free of wild poliovirus.

This marks the eradication of a second virus from the continent since smallpox 40 years ago.

The African region became eligible to be certified free of wild poliovirus, after Nigeria, the last wild poliovirus endemic country, recorded no new cases in three years, the requisite period since it last reported cases of wild poliovirus.

President Muhammadu Buhari officially received a poliovirus-free status certificate from WHO on Tuesday.

“Today is a historic day for Africa. The African Regional Certification Commission for Polio eradication (ARCC) is pleased to announce that the region has successfully met the certification criteria for wild polio eradication, with

no cases of the wild poliovirus reported in the Region for four years,” said Rose Gana Fomban Leke, ARCC chairperson.

The ARCC’s decision comes after an exhaustive, decades-long process of documentation and analysis of polio surveillance, immunisation and laboratory capacity of the region’s 47 member states, which included conducting field verification visits to each country.

In 1996, African Heads of State committed to eradicate polio during the 32nd ordinary session of the Organisation of African Unity (OAU) in Yaoundé, Cameroon. At the time, polio was paralysing an estimated 75,000 children, annually, on the African continent.

In the same year, Nelson Mandela with the support of Rotary International jumpstarted Africa’s commitment to polio eradication with the launch of the Kick Polio Out of Africa campaign. Mandela’s call mobilised African nations and leaders across the continent to step up their efforts to reach every child with polio vaccine.

JOSEPHINE OKOJIE

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econde Energy Limited, an independent oil, and gas firm, says the passage of the long-awaited Petroleum Industry Bill (PIB) into law will cause a paradigm shift that will spur development in the country’s energy sector.

Chichi Emenike, head of gas ventures, Neconde said the declaration of 2020 as a gas year to spur attention to gas prospects, can be used to cause economic recovery post Covid-19 if there are enforceable laws to regulate the way of doing things in the sector.

She spoke at a recent webinar on ‘gas as a new frontier for economic growth,” saying the country cannot afford to continue with flip-flop legislation in its oil and gas sector when other countries have put in place valuable statutes that have strengthened their oil and gas industry.

According to Emenike, aside from the willingbuyer-willing-seller approach that will drive the

www.businessday.ng

sector with appropriate gas pricing, the full liberalisation of the sector should be considered by the government in order to attract the much needed investments on key gas infrastructures across the country.

She commended the Federal Government for inaugurating the Nigerian Gas Transportation Network Code (NGTCN), saying the initiative would liberalise the gas market and address infrastructure constraints in the sector.

On the country’s gas flare regulations/commercialisation programme, she expressed optimism that the move would enable various gas-to-power projects which would make the country attain the global terminal date for gas flare by 2030.

Emenike, who also spoke on Neconde’s contribution to the country’s gas sector, said the firm currently has 80 million standard cubic feet of associated gas and intends to grow the same to 100 million standard cubic feet in the nearest future.

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CALEB OJEWALE & MICHAEL ANI

T

here are now 10 private laboratories accredited for Covid-19 test in Lagos, Nigeria’s bustling commercial hub, and they are offering the service at N50,400 per person, whether those desirous of the test exhibit symptoms or not.

“Living or working in Lagos? You can now get tested for Covid-19 regardless of your symptoms,” according to a notice on the website of the Lagos State Biobank.

“Register to schedule a test for yourself or for a group.”

Lagos State had earlier accredited seven private laboratories for COVID-19 testing. An updated ‘List of accredited private laboratories for COVID-19 testing in Lagos’ seen by BusinessDay includes Synlab, 54 Gene, Medbury Medical, ClinaLancet, Biologix Medicals, 02 Diagnostic, Vcare Diagnostics, Clinix Healthcare, Afriglobal Medicare and Reddington Zaine Laboratories.

Even though the testing is to be done by a selected private lab, the notice on

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the website of the Lagos State Biobank shows booking and payment could be done through an online portal created by the Lagos State Biobank.

Further checks by BusinessDay, however, showed some of the laboratories accepted direct booking, at least as seen on Synlab, 54Gene, and Medbury Medical website.

Clarifications under the Lagos Biobank website’s Frequently Asked Questions also shows the tests can be conducted in less than five minutes and results ready within 24-48 hours, same as what was found on websites of some private labs.

Those who test positive are to be counselled and informed of next steps by one of the agency’s counsellors, according to information on its website.

“Currently the practice is to self-isolate at home if you are asymptomatic or have mild symptoms. If however you become sick, you can proceed to any of the Lagos State Isolation Centres,” the Lagos State Biobank indicated.

Wednesday 26 August 2020

BUSINESS DAY

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NEWS

Market leaders, block makers hail Dangote Cement season 2 promo

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arket Leaders and Traders Association of Nigeria (MLTA) has commended Dangote Cement for staging the “Bag of Goodies Season 2 Promo” during this period of Covid-19 lockdown.

President of the association, Christopher Okpalla, who spoke in Lagos, described the promo as a higher version of corporate social responsibility that is worth emulating by other companies.

Okpalla said that the promo was capable of tackling the issue of poverty in the lives of the winners. “There is a serious need to discourage poverty in Nigeria. If people are poor, they will be forced to go into crime, and you never can tell who will be their victim in the long run.

I want other prominent Nigerians to emulate Dangote and invest their wealth in the country, instead of taking it abroad to keep in foreign banks. This will help alleviate poverty in Nigeria,” he added.

He commended the company for using the promo as a form of palliative to ameliorate the challenges of Covid-19 on consumers of Dangote Cement.

He stated: “It is accepted to me because it is attached to the term palliative. It is good. If Dangote is going to work out on a long-lasting promo to improve the lives of 21 million citizens through various prizes won, for me,

it is a welcome development and we will give him all the support.”

Also, the national secretary of Block Makers Association, I.I. Aina commended the Dangote Cement’s management for investing on its consumers through the promotion. He said that the company has proven to be truly Nigerian company for always having the interest of the block makers at heart.

He expressed the hope that block makers would form the bulk of the star prize winners in the season 2 promo.

Meanwhile, a block maker based in Lanlate, in Ibarapa East local government area of Oyo State, Ojediran Kayode Stephen has emerged the first N1 million winner in the “Spell Dangote and be a millionaire” promo. He said he got the winning letters from among the 500 hundred bags of cement, which he bought to make blocks for customers. Apart from the N1 million, Ojediran said that he also won several recharge cards and extra N2000 in the promo.

Another winner, the managing director of Afolabi Adefila Block Industry, said that he has been a user of Dangote Cement since the inception of his business, which he started several years ago. According to him, he buys over 300 bags of Dangote Cement weekly for his block factory located in Lagos.

L-R: Edward Amana, chairman, Implementation Committee on Transition from Analogue to Digital Broadcasting (Nigeria DigiTeam); Lai Mohammed, minister of information and culture, and Grace Isu-Gekpe, permanent secretary in the ministry, during a meeting of the Minister with the Nigeria DigiTeam, in Abuja, yesterday. NAN

What bank takeover of electricity bills collection means for Nigeria’s power sector DIPO OLADEHINDE

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he decision to mandate commercial banks instead of the Electricity Distribution Company (Discos) to take full responsibility for collections is expected to dent the liquidity challenges facing Nigeria’s electricity supply industry.

The 11 DisCos are struggling to meet their obligations to the Nigerian Bulk Electricity Trading Plc (NBET) and Market Operators (MO) as shown in their inability to remit about 60 percent of the market invoice to the rest of chain.

In a circular titled: ‘DMB Led Electricity Market Collections,’ addressed to all banks, the Central Bank of Nigeria (CBN) directed that

all DisCos collections and remittances to both NBET and TCN will now be the responsibility of only banks that have agreed to provide guarantees to DisCos. The circular further directed commercial banks to warehouse all collections, whether energy or non-energy of the DisCos, in an account in the name of the DisCo. It also sets out guidelines for the management of inflows received through collection agents, of the various DisCos. What does this mean?

By this move, the CBN and the Nigerian Electricity Regulatory Commission (NERC) seek to guarantee that cash flows from collections are available to pay down loans and other obligations to market stakeholders.

Recall, CBN provided

funding to DisCos in 2015 through its Nigerian Electricity Market Stabilisation Facility (CBN-NEMSF), designed to fund market shortfalls arising from poor collections. The DisCos repay the central bank through monthly deductions from their collections.

“CBN’s circular is an attempt by fund providers in the power sector to have clear visibility over collections of distribution companies and possibly control how the money is disbursed to all stakeholders,” Charles Akinbobola, an energy analyst at Sofidam Capital said.

NERC had issued minimum remittance orders for each DisCo in 2019 requiring DisCos to meet a minimum remittance to the market from collections received when customers pay for elec-

tricity.

“It is unclear how working capital requirements of DisCos will be catered for in the event of a shortfall,” Akinbobola said.

The latest NERC report revealed out of a total invoice of N671 billion for energy received from NBET for services provided by Market Operator’s only 31 per cent (N206.7billion) of the invoice was paid by Discos creating a total deficit of N464.3 in 2018.

Since the privatisation of the distribution and generation segments of the nation’s power industry some seven years ago, the industry has been enmeshed in crisis of insufficient revenues, weak cash flows, high leverage, and low liquidity due largely to unreflective tariffs and low generating capacity.

Poultry farmers groan as cost of feeds decimates industry Maturing government bills worth JOSEPHINE OKOJIE & BUNMI BAILEY N481bn to boost market liquidity

A

deleke Ademola, a poultry farmer in Ikorodu, Lagos, can barely sleep every night as he tries to figure out what next after shutting down his poultry farm over the recent hike in the prices of feeds.

The 62-year-old saw more than 1,000 crates of eggs got spoilt when the Covid-19 pandemic forced the government to impose lockdowns. That loss translated into a million naira.

Ademola, a poultry farmer for 12 years is now struggling to keep his business afloat, as he can no longer afford to feed his 5,000 layer birds and additional 1,000 boiler birds in his battery cage farm following a surge in the prices of poultry feeds by an average of 27 percent across the country.

“It has been difficult for poultry farmers since the virus outbreak. We suffered heavily during the initial lockdown, and now that we

are supposed to recover, prices of feeds are rising,” Ademola says.

“I lost about N2million during the lockdown, so where will I get additional money to sustain feeding my birds when the demand for eggs is still quite low,” he says, adding that he shut down his farm and disengaged the services of his five employees.

His situation is similar to what millions of poultry farmers are going through since the surge in maize prices – a key input in the production of poultry feeds. Many of them have been forced to shut down with their employees losing their source of livelihoods.

The situation will result in a massive loss of jobs in the sector which was among the subsectors that created most jobs in the country in 2019, according to data from the Manufacturer Association of Nigeria (MAN).

“Poultry farmers are shutting down as most of them are struggling to survive owing to the high cost of production,” Raymond

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Isidinso, an executive of the Feed Industry Practitioners Association of Nigeria said during a Channels TV programme.

“The feeds industry is also under serious threat and this is because of the shortfall in supply of maize and rising production cost.

Maize has assumed a strategic status in the country,” Isidinso said.

He noted that the government did not put in place any plan before enforcing the FX ban on importers of maize, saying this has led to a spike in the prices of the crop.

He called on the government to stabilise the situation for farmers by releasing maize from the strategic reserves or give licenses for the importation of maize to augment for the shortfall.

The prices of maize in Africa’s most populous country has surged by 80 percent in the last two months owing to a shortfall in supply and FX restriction for importers of the grain.

HOPE MOSES-ASHIKE

... Naira stable across markets

igeria’s financial market liquidity is expected to improve following maturing government instruments worth N481.02 billion expected to hit the market this week.

A breakdown of the expected inflows show that N283.42 billion would be maturing from Open Market Operation (OMO) and N197.6 billion from the Nigerian Treasury bills (NTBills) across the 91, 182 and 364-day tenors at the Primary Market Auction on Wednesday.

Consequently, yields in the secondary market are to remain subdued due to improved system liquidity, which stood at N420.1 billion as at Friday.

“We maintain that investors take advantage of the more attractive instruments along the yield curve along with possible com-

mercial paper offerings,” analysts at Afrinvest Securities Limited said.

Last week, the NT Bills secondary market traded on mixed sentiments, as market players traded calmly due to the pressured liquidity levels at N88.0 billion at the start of the week. Although this was sustained as the week progressed, pocket-sized demand driven activity was however witnessed on the longer-end of the curve as its average yield fell 70bps Week-on-Week to 2.1 percent from 2.8 percent the previous week.

Consequently, average yield across all tenors declined 7bps W-o-W to settle at 1.5 percent from 1.6 percent the previous week.

Particularly, the most demand was witnessed at the long-dated maturities including the 29-Apr-21 and 13-May-21 bills that con-

N

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@Businessdayng

tracted 77bps and 71bps W-o-W respectively.

At the foreign exchange market, naira was stable across market segments on Tuesday as the dollar was trading at N476 and N477 on the black market and retail Bureau.

The FX market opened on Tuesday with an indicative rate of N385.64k, which signaled an appreciation of N0.74k when compared with N386.38k opened with on Monday at the Investors and Exporters (I&E) forex window, data from FMDQ revealed. Naira closed flat at N386.00 per dollar on Monday. Analysts at FSDH research said most participants maintained bids between N384 and N386.00 per dollar.

The foreign exchange daily turnover declined by 87.87 percent to $7.20 million on Monday from $59.34 million recorded on Friday last week.

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Thursday 26 August 2020

BUSINESS DAY

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Wednesday 26 August 2020

BUSINESS DAY

35

NEWS

BusinessDay postpones virtual agribusiness summit to September 3 JOSEPHINE OKOJIE

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usinessDay has postponed its first virtual annual Agribusiness and Food Security Summit that will bring policymakers, leaders, and industry stakeholders together to advance agribusiness in the country.

The summit, which was earlier scheduled for Thursday, August 27, will now hold on September 3, 2020.

The summit with the theme ‘Interventions-atRisk: The Outlook for Smallholder Farmers Assistance, Empowerment, and Integration’ will assess the sustainability and scalability of intervention programmes and policies of the government for smallholder farmers from a business standpoint.

Participants drawn from government, research institutions, banks, investors, project owners, project developers, commercial farmers, international partners, and the agro-processing industry will dissect the real issues of agric intervention programmes and recommend concrete steps that should be made so that the country realise its full agricultural potential.

The audience will get to learn from the insights shared, and also interact with these entities and other participants at the summit.

Focus areas for this year’s

summit include a review of the Agricultural Promotion Policy (2016-2020) and its impact on states. Discussants on the panel will review the accomplishments of the APP, where it stumbled, why, and how improvements can be made.

The second panel will focus on the performance of the Anchor Borrowers Programme (ABP) – the most high-profile agricultural intervention programme in Nigerian history. Discussants on the panel will examine the financial and non-financial performance of ABP. The third panel will focus on how the country can achieve efficiency and raise the resilience of its backward integration programme.

Discussants at the forum will look at the challenges facing multinationals that were required by the government to locally source the agricultural raw materials they use for production.

It will also look at what the multinationals are voluntarily doing to support the most vulnerable link in their supply chain, that is, the smallholder farmers.

A number of the issues they face are quality standards mismatch and the high cost of local sourcing versus importation among others.

The last panel focus will be on the reputational future of agritech start-ups in the country.

L-R: Tunde Mabogunje, Lagos/Ogun regional director, Dangote Cement plc; Oguntade Bukayo, representing, National Lottery Regulatory Commission (NLRC); Adeyemi Fajobi, national sales director, Dangote Cement Plc; Benjamin John Tosin, winner of one million naira, receiving his cheque; Kayode Akinbamidele, head trade marketing, Dangote Cement plc, and Femi Alabi CEO, Royal Gates Enterprises, a leading distributor of Dangote Cement, during the cheque presentation in Abeokuta, Ogun State.

Edo modular refinery applies to NNPC for crude supply GODFREY OFURUM, Aba

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do Modular Refinery being developed by Edo Refinery and Petrochemical Company Limited (ERPC) with support from the Edo State Government has applied to the Nigerian National Petroleum Corporation (NNPC) to supply it crude for use in the phase one development of the facility.

The ERPC, in a statement by its chairman, Michael Osime, said the refinery has reached an advanced stage of development where the operators now have to introduce hydrocarbons to the facility.

Osime said discussions are also ongoing with margin-

al field owners for crude supply as the refinery is designed to use various grades of crude.

He noted that while the Operation and Management (O&M) of the facility is being carried out by Peiyang Chemical and Equipment Company of China (PCC), there are plans to train Nigerians over a short period of time to take over the operations of the facility, especially with the development of a fabrication yard and other key capacity building initiatives built into the Memorandum of Understanding (MoU) signed between the Edo State Government and Tianjin University, with PCC as the holding company.

AIPCC Energy Limited,

Insurers seek legislative support to enhance Sanwo-Olu constitutes boards of industry contribution to economy Lagos tertiary institutions industry needs a number MODESTUS ANAESORONYE

I

nsurance industry contribution to the national economy currently standing at 0.3 percent to the GDP could be enhanced if legislative bottlenecks facing the sector are addressed, the Nigerian Insurers Association (NIA) said.

The NIA said one of the bottlenecks in the sectors is consolidated Insurance Industry Bill which has been at the National Assembly for upward of years.

Ganiyu Musa, chairman of the NIA during a courtesy visit to the House of Representatives sought the support of legislators to assist the insurance industry overcome its present challenges through legislations that will expand the frontiers of insurance to enhance its contribution to the national economy.

He said the visit was to improve engagements between the association and the lawmakers as the

of legislative interventions to improve and create opportunities for Insurance growth.

Musa requested the lawmakers to remove obstacles militating against the growth of the insurance Industry in Nigeria.

On the Insurance Bill which is currently with the National Assembly, the NIA chairman said industry looks forward to the house to give the bill that will propel the insurance industry to take its rightful place in the financial services sector, a speedy deliberation and passage.

He drew the attention of the speaker, Femi Gbajabiamila to the need to protect the industry from incursions, adding that the support of the legislature was critical to resolving the challenges.

“We need to upscale our engagements so that we can jointly resolve some of the issues facing the industry.”

G

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overnor of Lagos State, Babajide Sanwo-Olu on Tuesday inaugurated the governing councils of the Lagos State University (LASU), Lagos State Polytechnic (LASPOTECH), Adeniran Ogunsanya College of Education (AOCOED) and Michael Otedola College of Primary Education (MOCPED).

Those for LASU include Gbolahan Elias, Adebayo Ninalowo, Shafiudeen Amuwo, Adenike Yomi-Faseun, Adetugbobo Hakeem, Sule Tolani, Folashade Adesoye, Karl Tokun Toriola, Kunle Soname, Ifeanyi Chukwuma Odili, Adebayo Akinsanya, Mojisola Tolagbe Taiwo, Moronke Williams, Anuoluwapo Esho and Foluke Kafayat AbdulRazaq.

Those for the governing council of AOECOED include Nuru Olasupo, Riskat Akiode, Olaolu Mudashiru and Wole Ajifowoke. For LASPOTECH, they are Rasheed Kola Ojikutu, Awonuga Abiola Olawunmi, Saabi Olakunle Alaba, Habeeb Aileru, Adesegun Ogunlewe, Iyabo Kuteyi

, Nurudeen Oluseni Olaleye and Olayinka Babalola. Those inaugurated for MOCPED include Sekinat Yusuf, Victoria Mopelola Perigrino, Folashade Agbalajobi, Toun Adediran, Johnbull Adebanjo and Waliu A. Ipaye.

Sanwo-Olu at the swearing in charged members of the councils to see their appointments as a call to service for the advancement of tertiary education in the state.

The governor noted that tertiary education was critical in nurturing components that help to ensure that individuals become innovators and wealth creators “who will contribute greatly to the acceleration of our economy.

“It is in the realisation of this that we have selected all of you here, professionals, professors, academicians, technocrats, businessmen, public officers with a high level of integrity and competence who have distinguished themselves in their various area of calling and we have no doubt that we have chosen rightly.”

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which is developing the refinery, is a joint venture between PCC and African Infrastructure Partners Limited (AIPL).

“Following the gains in the first phase of the refinery, AIPCC Energy Limited has commenced plans to build 30,000 barrels per day refinery as an expansion. The Peiyang Chemical Equipment Company Limited and AIPCC Energy Limited are committed to providing most of the funding for the expansion,” Osime said.

“On expansion, the refinery would increase the refining capacity in Nigeria and meet 18 percent of the local demand for diesel in Nigeria,” he said.

Edo Modular Refinery

is an offshoot of the Governor Godwin Obaseki-led administration’s drive to recalibrate the state’s economy for industrial growth.

The project benefitted from a N700m project support fund and an MoU with Tianji University, which paved the way for its accelerated development.

The N700m investment was sourced from the setting up of Edo Investment Scheme Limited, a Special Purpose Vehicle (SPV), to hold N2 billion investment funds in which the Ministry of Finance Incorporation (MOFI) and the Edo State Oil and Gas Producing Areas Development Commission (EDSOGPADEC) are to hold shares of 20 percent and 80 percent, respectively.

You’re wrong to demote director, Appeal Court tells EFCC FELIX OMOHOMHION, Abuja

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he Court of Appeal Abuja on Tuesday affirmed the judgment of the National Industrial Court in Abuja, which reversed the demotion of the former commandant of the Economic and Financial Crimes Commission (EFCC) Academy, Ayo Olowonihi.

The appellate court in a unanimous decision held that the appeal by the EFCC against the judgment of Justice Musa Kado, lacked merit, and accordingly, dismissed it. Justice Musa Kado, in a judgment delivered on February 26, 2019, agreed with the complainant that, his demotion did not follow due process, unlawful, illegal and should be set aside.

The judge having set aside the demotion ordered the EFCC to reinstate Olowonihi back to his position as detective commandant, grade level 17. @Businessdayng

The EFCC had demoted Olowonihi from grade level 17 to 16/7 in 2017, two years after he was recalled from suspension without pay.

Not satisfied with the commission’s decision, he had instituted a legal action at the industrial court, challenging his demotion and also prayed the court to order his reinstatement as well as payment of his entitlements held during the period of his unlawful suspension.

In the suit marked: NICN/ ABJ/347/2017, the claimant in a 62-paragraph affidavit deposed to in support of the suit said he was not given fair hearing before disciplinary action was taken against him.

Among the issues his lawyer, Joash Amupitan raised for determination by the court include; whether the EFCC staff regulations handbook 2007 used for the discipline of the claimant was validly made, having not been approved by the commission.

Wednesday 26 August 2020

BUSINESS DAY

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Live @ The Exchanges Market Statistics as at Tuesday 25 August 2020

Top Gainers/Losers as at Tuesday 25 August 2020 2020 LOSERS

GAINERS Company BUACEMENT

Opening

Closing

Change

Company

Opening

Closing

Change

N38.9

N40

1.1

BETAGLAS

N61.55

N55.4

-6.15

ASI (Points) DEALS (Numbers)

JBERGER

N16.5

N17

0.5

CILEASING

N4.4

N4

-0.4

FLOURMILL

N18.5

N18.7

0.2

VITAFOAM

N5.45

N5.15

-0.3

VOLUME (Numbers)

WAPCO

N11.5

N11.7

0.2

MAYBAKER

N3.03

N2.73

-0.3

VALUE (N billion)

NEM

N1.87

N2.05

0.18

GUARANTY

N25.2

N25

-0.2

MARKET CAP (N Trn)

25,291.73 3,713.00 251,339,756.00 1.168 13.194

Global market indicators FTSE 100 Index 6,037.01GBP -67.72-1.11%

Nikkei 225 23,296.77JPY +311.26+1.35%

S&P 500 Index 3,429.90USD -1.38-0.04%

Deutsche Boerse AG German Stock Index DAX 13,061.62EUR -4.92-0.04%

Generic 1st ‘DM’ Future 28,082.00USD -157.00-0.56%

Shanghai Stock Exchange Composite Index 3,373.58CNY -12.06-0.36%

Stock market gains N33bn as investors fail SFS REIT proposes N7 distribution to unitholders to price in Nigeria’s negative GDP growth

S

Stories by Iheanyi Nwachukwu

E

quity traders on the Nigerian Stock Exchange (NSE) ignored the negative news on the nation’s GDP growth in the immediate past quarter as they rather focused on bargain opportunities in value stocks seen trading at record lows.

At the close of trading session on Tuesday August 25, the market’s benchmark performance indicator increased by 0.25 percent following bargains on industrial and insurance stocks.

Investors gained about N33billion at the close of remote trading session on the Nigerian bourse.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) and Market Capitalisation increased from 25,229.12 points and N13.161trillion to 25,291.73 points and N13.194trillion respectively.

BUA Cement Plc recorded the highest rally after its share price moved from

Ibrahim Boyi, executive commissioner corporate Services, Securities and Exchange Commission; Frank Aul, head, finance and accounts SEC; Lamido Yuguda, director general, SEC and Ahmed Idris, accountant general of the Federation during a Senate Public Hearing Interactive Session on the 2021-2023 Medium Term Expenditure Frame work and Fiscal Strategy Paper at the National Assembly.

N38.9 to N40, up by N1.1 or 2.83 percent. Julius Berger Nigeria Plc increased from N16.5 to N17, up by 50kobo or 3.03percent.

Flour Mill Nigeria Plc rallied from N18.5 to N18.7, up by 20kobo or 1.08 percent; Lafarge Africa Plc moved up from N11.5 to N11.7, adding 20kobo or 1.74 percent; while NEM Insurance Plc rose from N1.87 to

N2.05, up by 18kobo or 9.63 percent.

In 3,713 deals investors exchanged 251,339,756 units valued at N1.168billion. Transcorp, UBA, Wema Bank, Zenith Bank and Sterling Bank were actively traded stocks on Tuesday August 25.

Nigeria’s economy contracted by 6.1percent in the second quarter (Q2) of 2020

from a year earlier, National Bureau of Statistics (NBS) said earlier this week.

With the negative GDP growth, Africa’s largest economy is now a short crawl away from another recession.

This month, the stock market has increased by +2.42 percent, while this year it has decreased by -5.

78percent.

NSE strengthens investor protection with upgrade of X-Whistle ....says complaints, tips, referrals received led to investors’ restitution of N1.4bn in 2019

T

he Nigerian Stock Exchange (NSE) has upgraded its whistleblowing platform, X-

Whistle.

X-Whistle which was first launched in 2014, is a webbased whistleblowing portal that empowers a whistleblower – an employee, investor, compliance officer, Issuer, stockbroker or any member of the public – to report possible violations of the rules and regulations of The Exchange, the securities law and fraud related to activity within the capital market.

The upgraded X-Whistle, accessible via, https://bit. ly/X-Whistle, boasts an improved user interface and easier navigation to enhance user experience. Some of the

new features include a single repository for complaints, tips and referrals; and the ability to generate detailed and varied reports with analytics for proper tracking.

Speaking on the development, the Chief Executive Officer, NSE, Oscar N. Onyema, noted that, “This upgrade affirms our commitment to upholding market integrity, protecting investors and building a world-class capital market that is fully digitized.

www.businessday.ng

The X-Whistle has, therefore, been enhanced to ensure that all stakeholders are better able to sound the alarm on market violations in a quick, easy and seamless manner. We believe that the updates we have made to the X-Whistle will enhance market integrity and encourage accountability, while improving the experience of stakeholders in our market.”

On her part, the Executive Director, Regulation Division, NSE, Tinuade Awe, stated, “The Exchange is pleased to introduce the upgraded XWhistle to the market with robust features that will allow people with information about misconduct to come forward to report it and to provide all stakeholders with

the means of expressing their concerns in a responsible and effective manner. In 2019 alone, the complaints, tips and referrals received have led to investors’ restitution in excess of N1.4billion. The X-Whistle will, therefore, further equip The Exchange with the tools required to properly assess reports, carry out the necessary investigations and resolve issues efficiently.”

The Exchange said it remains committed to providing a dynamic and robust capital market regulatory regime for the benefit of all its stakeholders. The NSE therefore encourages all stakeholders to blow the whistle via X-Whistle in order to rid the market of infractions and misconduct. ​

https://www.facebook.com/businessdayng

FS Real Estate Investment Trust (SFS REIT) has announced that a distribution of N7.30 per N100 ordinary share, subject to approval will be paid to unitholders whose names appear in the Register of Members as at the close of business on Friday, September 04, 2020.

On Friday, September 25, 2020, distribution will be paid electronically to unitholders whose names appear on the Register of Members as at Friday, September 04, 2020, and who have completed the e-dividend registration and mandated the Registrar to pay their distributions directly into their Bank accounts, according to a corporate actions announcement signed by its Company Secretary, TOLG Nominees.

Unitholders who are yet

to complete the e-dividend registration are advised to download the Registrar’s EDividend Mandate Activation Form, which is also available on the website of the Registrars.

Unitholders with dividend warrants and share certificates that have remained unclaimed or are yet to be presented for payment or returned for validation are advised to complete the e-dividend registration or contact the Registrar.

Managed by SFS Capital, the SFS REIT is an alternative investment, which pools funds for the primary purpose of investing in incomegenerating real estate, such as residential homes, shopping malls, offices, warehouses etc while taking advantage of tax exemptions. It is Nigeria’s first publicly quoted REIT.

EY holds Africa Tax Summit 2020

E

Y Africa has concluded all necessary arrangements towards hosting one of the biggest Tax Summit in the Continent. This year’s edition, which promises to be very interactive will be hosted through virtual and is scheduled between August 27-28, 2020.

The Summit with its theme ‘Reshaping the Africa Tax Agenda’, will focus on the intersections of tax, trade and COVID-19 in Africa and how tax policy can adapt through and beyond the health pandemic.​It is a conversation on the questions that tax functions should be asking about economic and trade outlook on the continent. It is hoped that the Summit will inspire those in charge of African tax functions to use the tax revenue and policy considerations emerging from COVID-19 and AfCFTA to position them better to support their organisation’s trade within and beyond the continent.

The two-day interactive event will feature speakers from business, government, multilateral organisations and EY subject-matter professionals from Nigeria, Zimbabwe, Ghana, South Africa, United States, Europe and beyond.

On-demand technical break-

@Businessdayng

out sessions on key tax policy updates from countries across the continent will also be available.

According to EY, before COVID-19, African governments were focused on changing the tax narrative in reaction to dwindling tax receipts and preparation for the emerging changes to existing international tax order. In addition, trading under the African Continental Free Trade Agreement (AfCFTA) was to commence on 1 July 2020, ushering in a new age of economic cooperation through a common market of more than 1.2 billion consumers. AfCFTA implementation is now suspended until 2021.​ “​As African governments continue to grapple with the health and negative economic impacts of COVID-19, and businesses try to contain, manage, and rebuild their finances, operations, and supply chains, there lies opportunities for tax administrations and the tax profession to collaborate and address needed reforms to tax policies, the role of digitization and technology in enhancing the interaction between tax administrators and taxpayers, and prepare Africa to take advantage of the inevitable shift in trade routes”, EY stated.​

Wednesday 26 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

37

38

Wednesday 26 August 2020

BUSINESS DAY

LIVE @ THE EXCHANGES Market Statistics as at Tuesday 25 August 2020

Top Gainers/Losers as at Tuesday 25 August 2020 2020 LOSERS

GAINERS Company BUACEMENT

Opening

Closing

Change

Company

Opening

Closing

Change

N38.9

N40

1.1

BETAGLAS

N61.55

N55.4

-6.15

ASI (Points) DEALS (Numbers)

JBERGER

N16.5

N17

0.5

CILEASING

N4.4

N4

-0.4

FLOURMILL

N18.5

N18.7

0.2

VITAFOAM

N5.45

N5.15

-0.3

VOLUME (Numbers)

WAPCO

N11.5

N11.7

0.2

MAYBAKER

N3.03

N2.73

-0.3

VALUE (N billion)

NEM

N1.87

N2.05

0.18

GUARANTY

N25.2

N25

-0.2

MARKET CAP (N Trn)

25,291.73 3,713.00 251,339,756.00 1.168 13.194

Global market indicators FTSE 100 Index 6,037.01GBP -67.72-1.11%

Nikkei 225 23,296.77JPY +311.26+1.35%

S&P 500 Index 3,429.90USD -1.38-0.04%

Deutsche Boerse AG German Stock Index DAX 13,061.62EUR -4.92-0.04%

Generic 1st ‘DM’ Future 28,082.00USD -157.00-0.56%

Shanghai Stock Exchange Composite Index 3,373.58CNY -12.06-0.36%

Stock market gains N33bn as investors fail SFS REIT proposes N7 distribution to unitholders to price in Nigeria’s negative GDP growth

S

Stories by IHEANYI NWACHUKWU

E

quity traders on the Nigerian Stock Exchange (NSE) ignored the negative news on the nation’s GDP growth in the immediate past quarter as they rather focused on bargain opportunities in value stocks seen trading at record lows.

At the close of trading session on Tuesday August 25, the market’s benchmark performance indicator increased by 0.25 percent following bargains on industrial and insurance stocks.

Investors gained about N33billion at the close of remote trading session on the Nigerian bourse.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) and Market Capitalisation increased from 25,229.12 points and N13.161trillion to 25,291.73 points and N13.194trillion respectively.

BUA Cement Plc recorded the highest rally after its share price moved from

Ibrahim Boyi, executive commissioner corporate Services, Securities and Exchange Commission; Frank Aul, head, finance and accounts SEC; Lamido Yuguda, director general, SEC and Ahmed Idris, accountant general of the Federation during a Senate Public Hearing Interactive Session on the 2021-2023 Medium Term Expenditure Frame work and Fiscal Strategy Paper at the National Assembly.

N38.9 to N40, up by N1.1 or 2.83 percent. Julius Berger Nigeria Plc increased from N16.5 to N17, up by 50kobo or 3.03percent.

Flour Mill Nigeria Plc rallied from N18.5 to N18.7, up by 20kobo or 1.08 percent; Lafarge Africa Plc moved up from N11.5 to N11.7, adding 20kobo or 1.74 percent; while NEM Insurance Plc rose from N1.87 to

N2.05, up by 18kobo or 9.63 percent.

In 3,713 deals investors exchanged 251,339,756 units valued at N1.168billion. Transcorp, UBA, Wema Bank, Zenith Bank and Sterling Bank were actively traded stocks on Tuesday August 25.

Nigeria’s economy contracted by 6.1percent in the second quarter (Q2) of 2020

from a year earlier, National Bureau of Statistics (NBS) said earlier this week.

With the negative GDP growth, Africa’s largest economy is now a short crawl away from another recession.

This month, the stock market has increased by +2.42 percent, while this year it has decreased by -5.

78percent.

NSE strengthens investor protection with upgrade of X-Whistle ....says complaints, tips, referrals received led to investors’ restitution of N1.4bn in 2019

T

he Nigerian Stock Exchange (NSE) has upgraded its whistleblowing platform, X-

Whistle.

X-Whistle which was first launched in 2014, is a webbased whistleblowing portal that empowers a whistleblower – an employee, investor, compliance officer, Issuer, stockbroker or any member of the public – to report possible violations of the rules and regulations of The Exchange, the securities law and fraud related to activity within the capital market.

The upgraded X-Whistle, accessible via, https://bit. ly/X-Whistle, boasts an improved user interface and easier navigation to enhance user experience. Some of the

new features include a single repository for complaints, tips and referrals; and the ability to generate detailed and varied reports with analytics for proper tracking.

Speaking on the development, the Chief Executive Officer, NSE, Oscar N. Onyema, noted that, “This upgrade affirms our commitment to upholding market integrity, protecting investors and building a world-class capital market that is fully digitized.

www.businessday.ng

The X-Whistle has, therefore, been enhanced to ensure that all stakeholders are better able to sound the alarm on market violations in a quick, easy and seamless manner. We believe that the updates we have made to the X-Whistle will enhance market integrity and encourage accountability, while improving the experience of stakeholders in our market.”

On her part, the Executive Director, Regulation Division, NSE, Tinuade Awe, stated, “The Exchange is pleased to introduce the upgraded XWhistle to the market with robust features that will allow people with information about misconduct to come forward to report it and to provide all stakeholders with

the means of expressing their concerns in a responsible and effective manner. In 2019 alone, the complaints, tips and referrals received have led to investors’ restitution in excess of N1.4billion. The X-Whistle will, therefore, further equip The Exchange with the tools required to properly assess reports, carry out the necessary investigations and resolve issues efficiently.”

The Exchange said it remains committed to providing a dynamic and robust capital market regulatory regime for the benefit of all its stakeholders. The NSE therefore encourages all stakeholders to blow the whistle via X-Whistle in order to rid the market of infractions and misconduct. ​

https://www.facebook.com/businessdayng

FS Real Estate Investment Trust (SFS REIT) has announced that a distribution of N7.30 per N100 ordinary share, subject to approval will be paid to unitholders whose names appear in the Register of Members as at the close of business on Friday, September 04, 2020.

On Friday, September 25, 2020, distribution will be paid electronically to unitholders whose names appear on the Register of Members as at Friday, September 04, 2020, and who have completed the e-dividend registration and mandated the Registrar to pay their distributions directly into their Bank accounts, according to a corporate actions announcement signed by its Company Secretary, TOLG Nominees.

Unitholders who are yet

to complete the e-dividend registration are advised to download the Registrar’s EDividend Mandate Activation Form, which is also available on the website of the Registrars.

Unitholders with dividend warrants and share certificates that have remained unclaimed or are yet to be presented for payment or returned for validation are advised to complete the e-dividend registration or contact the Registrar.

Managed by SFS Capital, the SFS REIT is an alternative investment, which pools funds for the primary purpose of investing in incomegenerating real estate, such as residential homes, shopping malls, offices, warehouses etc while taking advantage of tax exemptions. It is Nigeria’s first publicly quoted REIT.

EY holds Africa Tax Summit 2020

E

Y Africa has concluded all necessary arrangements towards hosting one of the biggest Tax Summit in the Continent. This year’s edition, which promises to be very interactive will be hosted through virtual and is scheduled between August 27-28, 2020.

The Summit with its theme ‘Reshaping the Africa Tax Agenda’, will focus on the intersections of tax, trade and COVID-19 in Africa and how tax policy can adapt through and beyond the health pandemic.​It is a conversation on the questions that tax functions should be asking about economic and trade outlook on the continent. It is hoped that the Summit will inspire those in charge of African tax functions to use the tax revenue and policy considerations emerging from COVID-19 and AfCFTA to position them better to support their organisation’s trade within and beyond the continent.

The two-day interactive event will feature speakers from business, government, multilateral organisations and EY subject-matter professionals from Nigeria, Zimbabwe, Ghana, South Africa, United States, Europe and beyond.

On-demand technical break@Businessdayng

out sessions on key tax policy updates from countries across the continent will also be available.

According to EY, before COVID-19, African governments were focused on changing the tax narrative in reaction to dwindling tax receipts and preparation for the emerging changes to existing international tax order. In addition, trading under the African Continental Free Trade Agreement (AfCFTA) was to commence on 1 July 2020, ushering in a new age of economic cooperation through a common market of more than 1.2 billion consumers. AfCFTA implementation is now suspended until 2021.​ “As African governments ​ continue to grapple with the health and negative economic impacts of COVID-19, and businesses try to contain, manage, and rebuild their finances, operations, and supply chains, there lies opportunities for tax administrations and the tax profession to collaborate and address needed reforms to tax policies, the role of digitization and technology in enhancing the interaction between tax administrators and taxpayers, and prepare Africa to take advantage of the inevitable shift in trade routes”, EY stated.​

39

Wednesday 26 August 2020

BUSINESS DAY

LIVE @ THE STOCK EXCHANGES Prices for Securities Traded as of Tuesday 25 August, 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. 227,489.44 6.40 -1.54 118 9,439,268 UNITED BANK FOR AFRICA PLC 224,006.21 6.55 0.77 249 33,170,930 ZENITH BANK PLC 532,170.57 16.95 0.59 291 10,434,455 658 53,044,653 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 179,476.46 5.00 1.00 135 3,053,049 135 3,053,049 793 56,097,702 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,397,761.64 117.80 - 68 247,449 68 247,449 68 247,449 BUILDING MATERIALS DANGOTE CEMENT PLC 2,300,468.50 135.00 - 48 59,872 LAFARGE AFRICA PLC. 188,461.21 11.70 1.74 69 1,122,325 117 1,182,197 117 1,182,197 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 226,551.16 385.00 - 22 32,585 22 32,585 22 32,585 1,000 57,559,933 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 1 5 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,163.30 40.65 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 10,139.42 3.80 - 0 0 1 5 1 5 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,692.74 115.05 - 0 0 0 0 0 0 1 5 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 9 5,757,684 OKOMU OIL PALM PLC. 75,358.89 79.00 - 18 7,820 PRESCO PLC 49,000.00 49.00 - 13 80,100 40 5,845,604 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 -3.17 7 522,509 7 522,509 47 6,368,113 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 202.36 0.52 - 13 1,386 S C O A NIG. PLC. 1,903.99 2.93 - 1 150 TRANSNATIONAL CORPORATION OF NIGERIA PLC 23,169.35 0.57 1.79 315 94,882,104 U A C N PLC. 15,559.00 5.40 -1.82 49 518,859 378 95,402,499 378 95,402,499 BUILDING CONSTRUCTION ARBICO PLC. 169.29 1.14 -9.52 1 100,000 1 100,000 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 26,928.00 17.00 3.03 49 352,991 ROADS NIG PLC. 165.00 6.60 - 0 0 49 352,991 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 17,075.17 0.92 - 6 64,268 6 64,268 56 517,259 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,655.07 0.85 - 18 421,698 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 33,512.86 15.30 -0.65 100 2,107,928 INTERNATIONAL BREWERIES PLC. 99,389.65 3.70 -1.33 168 3,709,551 NIGERIAN BREW. PLC. 287,888.47 36.00 - 51 149,538 337 6,388,715 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 150,000.00 12.50 - 70 187,524 FLOUR MILLS NIG. PLC. 76,677.10 18.70 1.08 68 6,315,602 HONEYWELL FLOUR MILL PLC 7,375.08 0.93 1.09 33 813,300 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 730.62 4.10 - 5 54,230 NASCON ALLIED INDUSTRIES PLC 26,494.38 10.00 - 16 88,695 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 192 7,459,351 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 14,649.98 7.80 - 43 179,754 NESTLE NIGERIA PLC. 931,371.10 1,175.00 - 53 85,348 96 265,102 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 12 16,500 VITAFOAM NIG PLC. 6,441.85 5.15 -5.50 29 452,380 41 468,880 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 15,881.91 4.00 - 46 749,686 UNILEVER NIGERIA PLC. 86,175.08 15.00 - 71 463,030 117 1,212,716 783 15,794,764 BANKING ECOBANK TRANSNATIONAL INCORPORATED 73,398.20 4.00 - 51 1,402,395 FIDELITY BANK PLC 51,864.89 1.79 1.13 28 828,273 GUARANTY TRUST BANK PLC. 735,779.48 25.00 -0.79 252 4,808,925 JAIZ BANK PLC 17,383.91 0.59 3.51 18 863,989 STERLING BANK PLC. 33,108.98 1.15 -2.54 49 9,632,791 UNION BANK NIG.PLC. 157,252.07 5.40 - 21 201,251 UNITY BANK PLC 6,546.03 0.56 -1.75 8 287,200 WEMA BANK PLC. 19,672.98 0.51 -1.92 33 14,551,015 460 32,575,839 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 2 3,227 AIICO INSURANCE PLC. 10,197.18 0.90 1.11 35 1,052,126 AXAMANSARD INSURANCE PLC 18,165.00 1.73 1.17 10 296,547 CONSOLIDATED HALLMARK INSURANCE PLC 3,960.67 0.37 - 0 0 CORNERSTONE INSURANCE PLC 11,263.16 0.62 -1.59 26 1,137,644 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,416.73 0.33 3.03 35 3,391,674 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 - 1 21,428 LINKAGE ASSURANCE PLC 3,900.00 0.39 - 1 29,605 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 - 5 50,494 NEM INSURANCE PLC 10,825.03 2.05 9.63 8 159,096 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 3,307.82 0.52 -1.89 10 1,586,819 REGENCY ASSURANCE PLC 1,600.50 0.24 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 2 1,609,500 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 8,157.17 0.34 6.25 13 402,880 148 9,741,040 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,743.97 1.20 -1.64 40 3,613,440 40 3,613,440

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,671.82 1.36 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 9,000.00 4.50 - 48 302,428 CUSTODIAN INVESTMENT PLC 28,821.13 4.90 1.03 15 1,070,905 DEAP CAPITAL MANAGEMENT & TRUST PLC 450.00 0.30 - 0 0 FCMB GROUP PLC. 40,595.56 2.05 -0.49 34 2,317,002 ROYAL EXCHANGE PLC. 1,234.89 0.24 - 2 30,833 STANBIC IBTC HOLDINGS PLC 362,421.37 34.50 - 22 143,028 UNITED CAPITAL PLC 18,300.00 3.05 -1.61 117 8,274,833 238 12,139,029 886 58,069,348 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 0 0 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,345.44 4.00 - 13 61,639 GLAXO SMITHKLINE CONSUMER NIG. PLC. 6,098.97 5.10 - 26 371,900 MAY & BAKER NIGERIA PLC. 4,709.89 2.73 -9.90 41 1,670,152 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 3,513.44 1.85 -4.64 15 322,016 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 95 2,425,707 95 2,425,707 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 7 1,517,200 7 1,517,200 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 764.87 0.26 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 12 3,024 TRIPPLE GEE AND COMPANY PLC. 247.48 0.50 - 0 0 12 3,024 PROCESSING SYSTEMS CHAMS PLC 986.17 0.21 4.76 20 6,926,534 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 20 6,926,534 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,428,097.57 380.00 - 7 1,137 7 1,137 46 8,447,895 BUILDING MATERIALS BERGER PAINTS PLC 1,753.43 6.05 - 8 20,375 BUA CEMENT PLC 1,354,574.16 40.00 2.83 52 869,382 CAP PLC 11,305.00 16.15 - 29 321,585 MEYER PLC. 265.62 0.50 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 89 1,211,342 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 3,082.31 1.75 -7.89 17 227,185 17 227,185 PACKAGING/CONTAINERS BETA GLASS PLC. 27,698.45 55.40 -9.99 14 254,266 GREIF NIGERIA PLC 388.02 9.10 - 0 0 14 254,266 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 120 1,692,793 CHEMICALS B.O.C. GASES PLC. 1,814.83 4.36 -3.33 7 164,874 7 164,874 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 7 164,874 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,377.79 0.22 4.76 30 1,213,332 30 1,213,332 INTEGRATED OIL AND GAS SERVICES OANDO PLC 29,213.82 2.35 -0.43 48 898,423 48 898,423 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,104.17 175.00 - 26 57,727 ARDOVA PLC 16,411.26 12.60 - 23 110,395 CONOIL PLC 10,582.77 15.25 - 23 76,447 ETERNA PLC. 2,477.87 1.90 - 12 270,288 MRS OIL NIGERIA PLC. 3,794.59 12.45 - 6 10,048 TOTAL NIGERIA PLC. 27,161.75 80.00 - 26 19,105 116 544,010 194 2,655,765 ADVERTISING AFROMEDIA PLC 887.81 0.20 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 24 29,712 24 29,712 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,473.82 3.75 - 18 204,362 TRANS-NATIONWIDE EXPRESS PLC. 361.01 0.77 - 0 0 18 204,362 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 3,763.54 2.43 - 0 0 IKEJA HOTEL PLC 1,746.19 0.84 - 2 14,000 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 2 14,000 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 181.44 0.30 - 0 0 LEARN AFRICA PLC 848.60 1.10 - 5 137,000 STUDIO PRESS (NIG) PLC. 1,064.85 1.79 - 0 0 UNIVERSITY PRESS PLC. 586.72 1.36 - 9 210,602 14 347,602 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 663.08 0.40 - 5 64,120 5 64,120 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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BUSINESS DAY Wednesday 26 August 2020 www.businessday.ng

US-China: Is Huawei ‘too big to fail’?

Washington’s latest sanctions have been likened to a ‘death sentence’ on the telecoms group but some say that is premature Kathrin Hille in Taipei, Nic Fildes in London and Qianer Liu in Shenzhen

F

or Guo Ping, chairman of Chinese technology group Huawei, Monday was a day like any other.

In a speech in the southern Chinese city of Shenzhen, he painted a rosy picture of how Huawei’s technological prowess and leadership in 5G telecoms equipment would transform the company’s hometown into a global digital showcase city.

Hours later, that promise was shattered — shot down by an announcement from the US government that it will use the global dominance of American technology to cut off all supplies of semiconductors to Huawei.

In boardrooms and government offices around the world, the new rules sparked frantic discussions about whether the move would deliver a fatal blow to the $122bn company, how quickly Huawei might fold, and what the collapse of the world’s largest telecoms equipment provider would mean for networks in 170 countries that run on its hardware.

While some analysts spoke of it being a “death sentence”, others wondered what lengths Beijing would be willing to go to protect a company at the heart of recent US-China tensions.

One European telecoms executive calls the prospect of the leading supplier in the market collapsing “catastrophic”. Networks are already having to shoulder the cost of reducing the amount of Huawei equipment under growing political pressure in western countries from Australia to the UK. The burden of a Huawei collapse is most likely to be felt by incumbent telecoms companies like BT, Deutsche Telekom and Swisscom, argues one executive, given their use of the Chinese company’s kit in broadband networks.

But for Washington, this is the climax of a 15-year battle against Huawei that began when the company tried to enter the US market for the first time in the early 2000s.

Longtime observers say the US is getting close to a goal that has proved elusive. “How do you kill Huawei?” asks Duncan Clark, chairman of China technology and telecom advisory company BDA, of the US dilemma. “Like with a worm, you cut off the head and it keeps going.”

Driven by the belief that Huawei could enable the ruling Chinese Communist party and its military to spy on other countries and their companies, undermine their national security and steal their commercial secrets, the US government used every option open to it. It stopped Hua-

wei acquisitions of American companies and assets through its national security review for foreign investments. It leaned on leading US telecoms operators not to work with the company and it conducted a Congress-led probe into the firm. It pursued a criminal prosecution which put Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, under house arrest in Canada, awaiting the outcome of an extradition hearing.

Last year, the administration started targeting Huawei with sanctions, two earlier rounds of which proved porous. This time, industry experts say it is hard to see how Huawei can wriggle out of Washington’s noose.

“Handsets and base stations require semiconductors. These two business lines make up 90 per cent of Huawei’s business; without being able to manufacture these products, the company would no longer look like Huawei,” says Dan Wang, technology analyst at Gavekal Dragonomics, a research firm, in Beijing. Earlier this week, Mr Wang called the new US rules a “death sentence”.

November hope Death, however, is not imminent. Huawei has been building stockpiles of chips since Washington stepped up the pressure on the company two years ago. While industry experts say that reports

about it having amassed two years of inventory are overblown, they believe that Huawei has enough chips to keep it going for another six months.

That would take it past the US election in early November, and the inauguration of the next US president. Some analysts say the possibility that Donald Trump, whose administration has zeroed in on China as a threat to America, might be voted out of office offers a glimmer of hope to Huawei due to Democratic nominee Joe Biden’s record of a less confrontational stance towards China.

Even the latest rules allow for issuance of temporary licences under which chip supplies could resume.

But those hopes are slim. “A lot of people in the Chinese government are looking at [Joe Biden’s lead in the] Florida polls right now. But long-term thinkers in China understand that the policy space for Biden will be limited as well,” says Hosuk Lee-Makiyama, director of the Brussels-based European Centre for International Political Economy, who as a trade lawyer previously investigated Huawei for the EU. He adds that any potential honeymoon period for Beijing with an incoming Biden administration is unlikely to last because China cannot reverse the key policies and laws which

‘‘

Handsets and base stations require semiconductors. These two business lines make up 90 per cent of Huawei’s business; without being able to manufacture these products, the company would no longer look like Huawei

have hardened western governments’ stance against Huawei and China more broadly. At its core is Beijing’s national security law, which requires companies and citizens to assist the security services in whatever they may demand and which has fed fears of spying. Another issue certain to continue to trouble relations is Beijing’s move to curb Hong Kong’s autonomy, civil rights and rule of law.

Under that scenario, Huawei’s future looks dark. Washington last week stopped rolling over temporary licences for US companies to sell chips to the company.

Rules imposed in May, and the additions that followed this week, mean that no company anywhere in the world can sell chips to Huawei directly or indirectly if they were designed using software tools made by US companies including Cadence and Synopsys, or manufactured using equipment from US suppliers such as Applied Materials or LAM Research.

Taiwan Semiconductor Manufacturing Corp, the world’s largest contract chipmaker on whom most chip design houses rely to produce their semiconductors, will stop shipping to Huawei on September 15, the deadline imposed in May. Monday’s additional restrictions also block supplies of any other chips, be it memory chips from South Korea’s Hynix or semiconductors from Dutch company NXP. “None of these companies is free from US content, the door is slammed shut,” says a European trade official in China.

The prospect that British chip design company Arm will be taken over by Nvidia of the US has added to Huawei’s predicament. A person at HiSilicon, Huawei’s chip design affiliate, says that if the deal happens, all of the Chinese company’s chip design would be in trouble because its designs are based on Arm-licensed blueprints.

Some of the company’s almost 200,000 employees are putting on a brave face. “I feel that everyone is quite calm because we still have a lot of projects on hand which are not finished yet, and governmental projects are also coming,” says an employee at Huawei Cloud, adding that the division remains viable.

But experts challenge such claims. Mr Lee-Makiyama says the cloud business, which is much more profitable than Huawei’s devices arm, is in as much trouble as the rest of the group because the server hardware that any cloud services run on needs semiconductors, while much of the cloud software is American, including databases from Oracle and virtualisation services from VMware.

Some observers believe the Chinese government will step in.

“Huawei is too big to fail,” says a semiconductor industry executive in Taiwan. “Beijing will surely help them.”

Building an industry The question is how. Mr Wang contends that money — Beijing’s time-tested approach to the tech industry — will not do the trick.

“The company declared around $53bn in cash and short-term investments in its last annual report, so it has substantial resources. What it lacks are chips.

In the short term, it’s not possible to create a semiconductor supply chain that does not touch US technology,” he says.

Some believe Beijing will force Chinese chipmakers — which also continue to rely on US software and equipment — to supply Huawei. “They can reorganise the domestic chip industry in whatever way they like,” says the Taiwanese executive. “You could form an intermediate layer between suppliers and Huawei, and it may be possible to hide your tracks a little.”

However, such a high-risk scheme, in violation of American sanctions, could undermine Beijing’s ultimate aim to build its own semiconductor industry. Trade lawyers predict that any Chinese chipmaker trying to ship to Huawei in violation of US rules will quickly be targeted by US sanctions, hampering Beijing’s quest for technology self-sufficiency.

Customers across Europe are already weaning themselves off Huawei’s equipment — the result of the political pressure exerted by the US. “There is a much bigger risk to using Huawei now due to the microchip sanctions,” says one executive at a leading European telecoms company that has used a large amount of Huawei equipment in the past. “[Huawei’s struggles] will change the balance of power. We need someone like Samsung to step in fast [to supply equipment],” he adds.

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