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In fresh assault on top African CEOs, Trump turns gaze on Adesina SEGUN ADAMS

frican finance ministers who form the bulk of the Board of Governors of the African Development Bank (AfDB) have been thrown an unusual challenge by the US government which is seeking a rejection of the report of the ethics committee that investigated and cleared the institution’s head, Nigerian-born Akinwumi Adesina. US Treasury Secretary Steven Mnuchin, in a two-page letter dated May 22 and seen by BusinessDay, asked the continent’s biggest multilateral lender to set aside its ethics committee report exonerating Adesina from accusations by an anonymous group within the AfDB claiming favouritism in Nigerian appointContinues on page 6

Inside

The gloom, doom in Nigeria’s Q1’20 GDP report P. 2 Why inclusion of all countries is critical in global race for COVID-19 vaccine P. 2

Dave Umahi (m), Ebonyi State governor/chairman, Southeast Governors’ Forum, flanked by Ifeanyi Ugwuanyi (l), Enugu State governor; Hope Uzodinma, Imo State governor, and others, during a briefing after an enlarged meeting with stakeholders in Enugu. NAN

Nigeria’s power infrastructure to get urgent makeover ISAAC ANYAOGU

igeria’s power distribution infrastructure is getting a major makeover as President Muhammadu Buhari has directed the Ministry of Finance to release to Siemens AG the government’s share of funding in the power deal agreed last year. According to an April 28, 2020

As Buhari orders payment to Siemens Lack of discipline to enforce, comply with market rules could threaten project – Experts

letter signed by Abdul Mutallab Muktar, senior special assistant to the president, and addressed to the minister of finance, bud-

get and national planning and the minister of power, seen by BusinessDay, the Finance Ministry will pay from the Signature

Bonus Account the negotiated sum of €15,206,166 (offshore works) and N1.7 billion (onshore Continues on page 6

Tuesday 26 May 2020

BUSINESS DAY

news

The gloom, doom in Nigeria’s Q1’20 GDP report DIPO OLADEHINDE, BUNMI BAILEY & MICHAEL ANI

Analysis

ith at least 39 activity sectors recording a growth rate of less than 2 percent out of a total of 52 sectors, Africa’s biggest economy will need more than a miracle to avoid more doom in the remaining months of 2020. Nigeria’s economy slowed to its lowest level in more than a year, recording 1.87 percent in the first quarter of 2020 compared with growth of 2.55 percent in the previous quarter. This development means negative per capita GDP, which implies that Nigerians are growing poorer as the impact of the coronavirus pandemic takes a toll on both the oil and non-oil sectors of the economy. The slower growth in the economy was reported in the oil and non-oil sectors as both sectors eased from 6.36 percent and 2.26 percent, respectively, in the previous quarter to a growth of 5.06 percent and 1.55 percent in Q1 2020, the Abuja-based National Bureau of Statistics (NBS) said on its website on Monday. “Broad assessment of the sectors reveals underwhelming performance in critical sectors with potentials to facilitate diversification,” Damilola Adewale, a Lagos-based economist and independent consultant, said. Other economists have said the lower GDP numbers reflect rising uncertainties in the country, low growth and contraction across many sectors of the Nigerian economy which, more than ever, underscore the need for an urgent set of policies and engagements to rescue the economy. The lower GDP rate is also expected to impact Nigerians’ spending habit after research

has shown most people typically spend more than 50 percent of their incomes on food. This implies that after spending on food, most Nigerians would not have enough money for other important things, such as investment, which is bad for an economy struggling to free itself from toxic oil revenue. Bright side Oil output rose to 2.07 million barrels a day, its highest level since at least the start of 2016, thanks to a ramp-up in production to compensate for the fall in income which was due to tension between

some of the world’s biggest producers and the effect of coronavirus outbreak. Apart from the oil sector, other sectors that did relatively well to rank among the highflyers in first quarter 2020 include financial institution, information and communication, mining and quarrying, and transportation and storage system. Finance and insurance sector, most especially financial institution and insurance, recorded the highest performance of 24 percent and 20.29 percent compared to -9.21 percent and -7.60 percent, respectively, recorded in the corresponding quarter last year.

Telecommunication and information service recorded a growth rate of 9.71 percent in Q1 2020 compared to 10.26 percent recorded in the previous quarter, while information and communication recorded a growth rate of 7.65 percent compared to 10.16 percent recorded in the previous quarter. “The LDR policy engendered strong output performance in the financial services sector while the ICT sector sustained excellent performance,” said Adewale. “Amid the COVID-19 pandemic, the ICT sector will demonstrate remarkable per-

Continues on page 6

eal estate developers, particularly commercial office space suppliers, are becoming increasingly creative and innovative, adjusting and rethinking their product offering to respond to the new normal and the future of work which coronavirus has foisted on the world. The lockdown order given by governments at federal and state levels as part of measures to contain further spread of the rampag-

Godsgift Onyedinefu, Abuja

he race is on and researchers worldwide are working round the clock to find a vaccine against SARS-CoV-2, the virus causing the COVID-19 pandemic. But as the global scientific community edges towards discovery of a vaccine, experts say partnership between scientists and communities across all countries is critical to ensure that solutions are not just developed rapidly but are also globally affordable and accessible by all to effectively fight the pandemic. Thisiscomingamidgrowing concerns that African countries face the risk of being excluded completely when a vaccine is developed or used only as guinea pigs for the richer nations. There are more than 102 candidate vaccines that researchers are working on, nine of which are now being tested in clinical trials in humans, available data show. These projects are in various stages of development, from research to clinical trials. Three coronavirus vaccines have entered phase 2 clinical trials. The top contenders are the Moderna vaccine, Novavax vaccine, Pfizer and BNTECH vaccine, Johnson & Johnson vaccine, Sinovac Biotech, CanSino Biologics, and Sanofi vaccine. The most promising of them at the moment appear to be the US-based Moderna Therapeutics, China’s CanSino Bio’s and Novavax vaccine. Moderna has received approval from the FDA

(US Food and Drug Administration) to conduct the phase 2 clinical trials of its potential COVID-19 vaccine candidate. It also received FDA ‘fast-track’ designation. The phase 2 trial involving 600 healthy volunteers will assess the safety and immunogenicity of two vaccinations of mRNA-127. In Africa, one vaccine trial has so far begun in South Africa and one is one waiting approval in Kenya. But African scientists are worried that wealthier nations may buy up the vaccines when developed, leaving little or nothing for the continent, which, however, is receiving accolades on how it has managed the pandemic against wide expectations. Nigeria’s health authority recently admitted that the country may not have access to the vaccine when developed, explaining that the global supply chain is structured in a way that makes access to therapeutics, diagnostics and ultimately the vaccine needed to fight the pandemic difficult. As at Monday, Nigeria has recorded 7,839 confirmed cases of COVID-19, with 2,263 recoveries and 226 deaths. Chikwe Ihekweazu, director-general, Nigeria Centres for Disease Control (NCDC), noted that Nigeria and indeed Africa have a history of being blocked out of vaccines, or getting it late largely due to affordability, among other issues. He recalled that Nigeria accessed the human papilloma virus vaccine 10 years later, due to the cost.

US tech executives rake in billions amid COVID-19 as they eye Africa for growth … Nigeria presents huge opportunity FRANK ELEANYA L-R: Tunji Bello, Lagos State commissioner for environment and water resources; Joe Igbokwe, special adviser to the governor on drainage and water resources, and Lekan Shodehinde, permanent secretary, Office of Drainage Services, during the ongoing inspection of canals and drainages in Lagos, yesterday.

Developers adjust, rethink products offering as property market faces new normal CHUKA UROKO

Why inclusion of all countries is critical in global race for COVID-19 vaccine

ing virus has revealed a lot of things that are possible, especially with regard to working at home and virtual conferences that have now become the new normal. The implication of this is that the 2,000-5,000 square metres office space, sometimes in two to three floors, may no longer be necessary, just like same size conference and event centres with all their fantastic designs and facilities. “We are already thinking in line with the new normal and preparing to respond to the future of www.businessday.ng

work. Apart from observing all the protocols – washing hands with soap, applying sanitisers, and maintaining social distancing – we are already taking businesses online,” Paul Onwuanibe, CEO, Landmark Group, told BusinessDay in a telephone interview. Onwuanibe confirmed that developers are already adjusting to the new normal and rethinking their product offering for the future of work. He said the company has created a digital office and very soon would come up with a virtual room for

conferences. Landmark Group is the developer of the expansive Landmark Village in Lagos which is mixed-use development and one-stop destination for living, working and leisure. Some of these facilities may be affected by the new approach and attitude to work. On their part, Alpha Mead Development Company (AMDC), the real estate investment subsidiary of Alpha Mead Group, says it is going into land banking which it will operate like deposit banks.

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hile the rest of the world battles the adverse effect of the COVID-19 pandemic, at least three tech executives in the US have had their collective wealth grow by an eye-popping $72.6 billion between March 18 and May 19, as they line up Africa for next growth. A report jointly released this month by Americans for Tax Fairness and the Institute for Policy Studies showed that Jeff Bezos, founder and CEO of Amazon, and Mark Zuckerberg grew their combined fortunes by nearly $60 billion in the past two months. When added with the $25.3 billion earned by Steve Ballmer, who led Microsoft as CEO from 2000 to 2014, the combined net worth of the three executives within these two months comes to $72.6 billion. By percentage points, Zuckerberg has had the best @Businessdayng

two months of all the top 10 billionaires in the United States with a 46.2 percent rise in his fortune – a net worth rise to $79 billion in May from $54 billion in March. Bezos, who remains the richest person in the world with $147 billion net worth, saw his wealth grow by 30.6 percent in the two months. Other tech executives who got richer during the period include Mackenzie Bezos of Amazon ($12 billion); Larry Page of Oracle ($11.19 billion); Sergey Brin of Google ($10.7 billion); and Bill Gates of Microsoft ($8 billion). Beyond tech executives, the total net worth of the over 600 billionaires in the US grew from $2.948 trillion to $3.382 trillion. InMarch,therewere614billionaires on the Forbes list. Within the two months under review, the number of billionaires has risen to 630. In the same period, the number of US citizens filing for unemployment rose to 38.6 million, according to the US Bureau of Labour Statistics.

Tuesday 26 May 2020

BUSINESS DAY

news

In succour to Nigeria, global watchdog says oil demand yet to peak ISAAC ANYAOGU

lobal oil consumption is not peaking any time soon, the head of the International Energy Agency said Monday, providing relief to oil producers like Nigeria sitting on vast oil reserves with their economies struggling due to lower demand arising from the coronavirus pandemic. “In the absence of strong government policies, sustained economic recovery and low oil prices are likely to take global oil demand back to where it was, and beyond,” Fatih Birol said in an interview with Bloomberg News. The world last year consumed nearly 100 million barrels a day of oil but the IEA predicts that global oil demand for May will be about 21 million barrels per day (bpd) less than pre-crisis levels. Birol said that behavioural changes in response to the pandemic are visible but not all of them are negative for oil use. “People are working from home more, but when they do travel, they are more likely to be in cars than public transport,” he said. “Video conferencing will not solve our energy and climate challenges, good government policies might,” Birol said. The Nigerian National Pe-

troleum Corporation (NNPC) had earlier set a target to increase Nigeria’s crude oil reserves from 37 billion barrels to 40 billion barrels by 2020, but a dearth of investment occasioned by poor fiscal and regulatory frameworks has put paid to this ambition. To compound the problem, security and environmental challenges in the Niger Delta, high industrial technical cost, and funding of Nigeria’s own investments have also proved to be a problem. Yet the coronavirus pandemic and the changes it portends, including remote work and reduced travel, have led some in the energy industry to conclude that peak oil is upon global oil demand. But the IEA believes otherwise. Birol compared the current situation with the 2008 financial crisis when oil demand fell before consumption gradually picked up again. He believes something similar would happen again soon and the organisation has said that oil will continue to rise well into the next decade. According to the IEA, global petroleum consumption could possibly reach about 105 million barrels a day by 2030 and about 106 million by 2040 as a lower oil consumption from electric cars will basically be offset by more demand from petrochemicals.

Presidency silent as Abba Kyari’s ghost tears Villa apart Tony Ailemen, Abuja

he last may not have been heard about late Abba Kyari, the former Chief of Staff (CoS) to President Muhammmadu Buhari. Based on the roles he was assigned, Kyari was seen as the de facto President as he took firm control of the machinery of governance. President Buhari had in August last year, directed incoming ministers to pass all requests for meetings with him through his chief of staff, Abba Kyari. The President had while giving closing remark at a presidential retreat for minister’s designate in Abuja, stated, “In terms of coordination, kindly ensure that all submissions for my attention or meeting requests be channelled through the Chief of Staff, while

all Federal Executive Council matters be coordinated through the Secretary to the Government of the Federation, Boss Mustapha.” Until his death on April 18, 2020, due to coronavirus infection, Abba Kyari was seen as the main pillar of the Buhari’s government. Now, indications from the office revealed that several decisions he took did not receive the approval of the President. Expectedly, new Chief of Staff, Ibrahim Gambari, a former diplomat, who may not be disposed to the ways his predecessor acted has decided to do things differently. Gambari on the approval of President Buhari cancelled previous memos by Kyari. Gambari’s action is said to have pitched the new Chief of Staff to the President, at loggerheads with other top government officials, including the Secretary to the Government of the federa-

tion, Boss Mustapha. But sources at the SGF’s told BusinessDay in Abuja that this is farther from the truth. “There is no strain in the working relationship between the President’s Chief of Staff and the office of the SGF. “There is no doubt that President Muhammadu Buhari may have directed his new Chief of Staff to review memos and cancel some appointments. We are all working for Mr President, so his decision on any issue is final,” our source said. When contacted, the special adviser to the President on Media and Publicity, Femi Adesina, declined comments. “The issue has nothing to do directly with the Presidency. The SGF has a Media office, why don’t you get in touch with them.” A similar call put up to Garba Shehu didn’t produce results as he also declined to comment on the issues. Shehu in response said he

would appreciate if he was left out of the conversation. “Please, I will appreciate if I can be left out of this,” he said. Majored Dahiru, an Abujabased public affairs analysts, sees the development as an indictment of the President himself. “The President cannot be completely exonerated” According to him, “If indeed this is true, it means he ( President ) inadvertently created room for what has happened by giving Kyari so much powers. “The Indictment on Abba Kyari who wielded so much executive, shows that he was not the loyal Staff Nigerians thought he was after all Dahiru advised the new CoS, not to fall into similar traps “ He should not repeat the same thing. It is a big lesson for other civil servants to note that power is transient.”

SAN commends Governor Ayade, pledges loyalty Obinna Emelike

he Special Assistants Network (SAN), which consists of all the special assistants to Ben Ayade, governor of Cross River State, has declared its support and loyalty to the governor as the leader of People’s Democratic Party (PDP) in the state. In a communiqué issued by the forum and endorsed by its newly inaugurated executive committee, the forum frowned at the action of some disgruntled elements within the party, who in connivance with some national members in the state, attempted to hijack and alter the list of successful chapter/ ward executives of the party at the just-concluded PDP ward and local government congresses across the 18 Local Government Areas of the state. The forum threatened to mobilise its members and electorates across the state to initiate a recall process of any National Assembly member who is disloyal to the leadership of PDP in the state by invoking Sections 69 and 110, which provide for the manner by which a recall may be effected in the federal and state legislative houses. Speaking on the development, Effiom, chairman of the SAN, disclosed, “The Special Assistants Network (SAN) is ready to activate its political strength across the 196 wards of the state to invoke the provisions of Sections 69 and 110 of the 1999 constitution of the Federal Republic of Nigeria (as

amended) and initiate a recall process of any National Assembly member who is working against the interest of Governor Ayade, who doubles as the leader of PDP in the state. The forum further passed a vote of confidence on the governor for his pragmatic and purposeful leadership style, which has fostered party unity and strengthened internal democracy within the PDP in the state. The forum also noted that Governor Ayade has through his visionary and innovative leadership positioned the state as one of the fastest growing economies in Nigeria with a plethora of completed and ongoing developmental projects spread across the state. Some of the projects include; rice processing factory, garment factory, Paradise toothpick manufacturing company in Yakurr, cocoa processing factory, rice seedling and seed factory and rice mill at Ogoja. Other projects being executed by the governor, according to the forum, include; instant noodles factory, frozen chicken processing factory, pharmaceutical company (Calapharm), and fertilizer company. The forum also commended the Governor for his numerous human development/empowerment strides, especially the inclusion of many youths in his cabinet, the prompt payment of salaries and the G-Money revolution in spite of www.businessday.ng

National Youth Service Corps (NYSC) coordinator in Plateau State, Caroline Embu (2nd l), presenting hand sanitizers on behalf of Jos South NYSC members to the divisional police officer in Bukuru, Umar Giade (r), during the presentation of COVID-19 palliatives to the Police D Division in Bukuru, Jos South Local Government Area. With them is the leader of the corps members, Attang Abasinsuaha (l), with other corps members. NAN

COVID-19: FG, states working on suitable date for schools’ resumption Joshua Bassey

... as Lagos to recruit 2,000 teachers ahead of resumption

agos State government says it is working with the Federal Ministry of Education and the Nigeria Centre for Disease Control (NCDC) to arrive at a suitable time for resumption of schools. And, in what is expected to strengthen education quality in post-COVID-19, the state is also recruiting at least 2,000 teachers ahead of school reopening. The new teachers will make up for those who have retired from the system, as the education sector remains in comatose following the outbreak of the COVID-19 pandemic, which forced shutdown of both public and private schools. It is still not certain when the schools would be reopened. But

the Lagos commissioner for education, Folashade Adefisayo, said officials of the state were having conversations with the Federal Government to arrive at a date, guided by advice from the NCDC. The 2,000 teachers would come in to fill observed gaps and boost the standard of public primary school education in the state. Adefisayo stated this while highlighting Governor Babajide Sanwo-Olu’s administration plans for education during an online discussion tagged ‘Covinspiration Show,’ moderated by a United Nations (UN) youth ambassador, Dayo Israel, to keep the public abreast of the administration’ activities in the last one year. She said the state government

could not unilaterally announce the reopening of schools since the pandemic did not affect Lagos alone. The commissioner hinted that like other sectors already approved by the Federal Government to reopen, the state government was meeting with officials of the federal ministry of education to design guidelines that must be adopted before the schools will be reopened. “We are watching the behaviour of the pandemic to see what happens next and we are working with the Federal Government on the reopening of the schools in the country. This is not a decision that any state can unilaterally take on its own. If we are certain that the children are safe, we will

reopen the schools for learning to resume. “We are working with the federal ministry of education and they are working with NCDC on the guidelines that could be adopted when the need arises for the schools to reopen. “After the protocol is completed and health officials assured us that the coast is clear, we will give the schools some days to adjust their premises in accordance with the guidelines on commencement of academic activities”. The commissioner further noted that the protocol would be enforced by the Lagos State Office of Education Quality Assurance to ensure strict compliance by both public and private schools across the state.

Ethiopian Airlines repatriates 187 Canadians from Lagos IFEOMA OKEKE

thiopian Airlines has repatriated 187 Canadians from Lagos under authority of the Canadian government. This is also as the airline says it has not received any contract for the evacuation of Nigerians from Canada.

...says no contract to evacuate Nigerians from Canada In a statement, Firihewot Mekonnen, general manager, Ethiopian Airlines in Nigeria, says it is the responsibility of the Nigerian government and its agencies to choose partners for such evacuation. According to Mekonnen, “Ethiopian airlines as an airline

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is ready to operate any flight as an evacuation when requested by the respective government and agencies.” Ethiopian Airlines has evacuated 187 Canadians and resident permit holders from Nigeria on 21 May from Lagos airport on B787 to @Businessdayng

Addis Ababa onward transfer to Canada, Mekonnen says. She notes, “Ethiopian Airlines has been operating regular flights between Addis Ababa and Toronto Canada for years and Canadians will be evacuated as arrangements are ongoing.

Tuesday 26 May 2020

BUSINESS DAY

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Tuesday 26 May 2020

BUSINESS DAY

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Tuesday 26 May 2020

BUSINESS DAY

news Nigeria’s power infrastructure to get... Continued from page 1

works) which has been approved as Nigeria’s 15

percent counterpart funding for the concessionary loan. “This signals that the Federal Government is in a hurry to leave a legacy of improved power delivery,” said Chuks Nwani, an energy lawyer based in Lagos. The Federal Government has convinced the distribution companies (DisCos) to sign the concessionary loan agreement as they would enjoy the immediate benefit of improved power distribution assets. It will also obligate them to repay but the Federal Government, by this action, is guaranteeing the whole sum to quickly start development while finalising the agreement with the DisCos, Nwani said. But this raises another concern as industry watchers wonder how the government will negotiate contracts and then seek to impose them on the private sector owners of the DisCos. The federal and state governments own 40 percent stake in the DisCos. However, industry experts say the problem with Nigeria’s power sector is not just about decrepit network infrastructure, it is about discipline in enforcing and complying with market rules. There is an urgent need to fix governance at the public and private aspects of the power sector and the regulator needs to be proactive in fixing the market and enforcing rules, Eyo Ekpo, director, New Frontiers Limited and a former commissioner, Nigerian Electricity Regulatory Commission (NERC), said at a recent power sector webinar organised by PwC Nigeria. The absence of governance and functional electricity market has shut out access to private equity funds, including the pension funds, as invested funds cannot be recovered and created the need for Nigeria to rely on the Siemens funding-type arrangements.

According to the letter, the president has also directed that the relevant agencies immediately conclude the necessary procurement and contracting processes to kick off Phase 1 of the project. He also directed the minister of finance to establish and capitalise a project SPV to engage Siemens to commence the pre-engineering and financing workstreams. For Nigerian EPC contractors who may have been hoping for a slice of the pie, they would have to keep their fingers crossed as the president directed that Siemens AG be charged with nominating EPC partners to perform all onshore works. According to the letter, the objective is “to preserve the integrity and transparency of the procurement process under the government to government framework”. Analysts say the rate of the concessionary loan is low and the terms friendly, but the cost of the network equipment will be out of Nigeria’s control with the way the agreement is structured as Siemens will provide equipment from its factories. The president directed that legal agreement between the project SPV and the Siemens Consortium be reviewed by the attorney general to the federation. In his New Year letter to Nigerians, Buhari said a significant improvement in electricity service supply was expected in the next 12 months (beginning January 1, 2020), banking on new public and private investments into the sector. Buhari also referenced the deal with Siemens signed on July 22, 2019 which will see the German company upgrade transmission and distribution network to double Nigeria’s electricity generation and raise distribution capacity threefold to 11,000MW by 2023. “Consumers will be the biggest winners as it will translate to improved power delivery if all proceed according to plans,” Nwani said.

The gloom, doom in Nigeria’s Q1’20... Continued from page 2

formance in Q2. Huge youthful population, deep mobile penetration and higher data consumption will buoy growth in the second quarter,” he said. Mining and quarrying sector recorded a growth rate of 4.58 percent in Q1 2020 while transportation and storage sector recorded a growth rate of 4.58 percent. Dark side Despite government effort to diversify revenue base, the agriculture sector declined to 2.20 percent in Q1 2020 from 3.17 percent in the corresponding period last year, despite recording 2.31 percent growth in Q4 2019. Ayodeji Ebo, managing

director, Afrinvest Securities Limited, told BusinessDay that the continued decline in the contribution from agriculture should also be a major concern despite the intervention funds and crowdfunding platforms to support the sector. It gets even worse The labour-intensive sectors, such as quarrying and other minerals, air transportation, public administration, coal mining and oil refining, underperformed. Quarrying and other minerals Quarrying and other minerals sector of the economy emerged the worst performer as the sector contracted further by -83.03 percent in www.businessday.ng

A cross-section of non-governmental organisations creating awareness ahead of Wednesday’s Almajiri Child Rights Day 2020, in Kaduna, yesterday.

In fresh assault on top African CEOs, Trump... Continued from page 1

ments and waste of the

bank’s resources. The US executive director of the bank, Steven Dowd, a business executive without prior development finance experience, has since been accused as being the one pushing the claims of favouritism against Adesina. This latest call from the US, AfDB’s biggest non-African shareholder, comes ahead of Adesina’s re-election bid in August. Will the finance ministers set precedence by allowing the US to denigrate the bank’s own ethics committee and its governance process or risk a tiff with the Trump-led US administration, which recently threatened to withdraw funding from the WHO at the time of an unprecedented global health crisis? “We have deep reservations about the integrity of the committee’s process. Instead, we urge you to initiate an in-depth investigation of the allegations using the services of an independent outside inQ1’20 from -5 percent in Q4 2019 and 29.31 percent in Q1 2019. That’s the biggest drop ever in the sector since the state-funded statistical agency started tracking GDP figures. Coal mining The coal mining subsector was the second worst performer, dipping further by -43.41 percent in the quarter from a contraction of -12.32 percent in the previous quarter. On a year-on-year comparison, the contraction reported in the sector in this quarter was a far cry from a growth of 31.10 percent recorded a year ago. The contraction seen in both coal mining and in the quarrying and other minerals sectors culminated into slowing down the growth of the entire mining and quar-

vestigator of high professional standing,” Mnuchin said in the letter to Niale Kaba, chairwoman of the bank’s Board of Governors. “Considering the scope, seriousness, and detail of these allegations against the sole candidate for bank leadership over the next five years, we believe that further inquiry is necessary to ensure that the AfDB’s president has broad support, confidence, and a clear mandate from shareholders,” Mnuchin said. Some critics link the turn of events with US President Donald Trump’s legendary disdain for Africa as demonstrated in his slamming of Tedros Adhanom, the African director-general of the World Health Organisation, just weeks ago. “For Adesina to have been cleared, I want to trust the judgment of the ethics committee,” said Chinedu Ayogu, a researcher at the Department of Political Science, Obafemi Awolowo University, Ile-Ife. “The interference of the US shows their neo-colonialist stance; they love to dictate

the pace of Africa’s progress economically, politically and in other ways.” Ayogu said the US faulting AfDB’s ethic committee’s findings was uncalled for and suggests that the US believes the committee is biased. “It is possible the US has a candidate (to replace Adesina) in mind,” he said. In February, World Bank President David Malpass, who had previously served as Under Secretary of the Treasury for International Affairs for the United States, criticised Adesina’s AfDB for approving loans too quickly thereby worsening Africa’s debt situation. Moussa Faki, African Union Commission chairperson, described Trump’s hammer on WHO as “a campaign by the US government against the WHO’s global leadership”. African leaders, including Nigeria’s, have stood behind the Ethiopian-born WHO director-general. Comments from African presidents suggest an awareness of a subtle attack on Africa, imagined or not. “Under the stewardship of Dr Tedros, the WHO has

shown itself to be a true flagbearer of multilateralism when global solidarity has become critical,” said President Hage Geingob of Namibia. His Rwandan counterpart, President Paul Kagame, questioned Trump’s tirade, saying, “Is it Dr Tedros, WHO, China…under attack or all of them together?… Save us too much politics, Africa does not need it. Who does?” Arunma Oteh, who served as vice president in charge of treasury at the World Bank and worked at the AfDB for years, described Adesina as “a man of integrity and a great leader”. “He remains the best man to lead Africa’s great institution for the next five years,” Oteh said via Twitter on Monday. Adesina is the only candidate for the August election and the letter by the US treasury secretary may have been timed to spoil the atmosphere ahead of the leadership contest. The US, with a stake of 6.5 percent in AfDB, comes behind the biggest shareholder, Nigeria, which has largely refrained from throwing its weight around at the organisation.

rying sector to 4.58 percent from the 6.07 percent in the previous quarter. Oil refining The oil refining subsector was among the poorly performing sectors that contributed to the slowdown of the growth in real GDP. The sector, which is among 12 other subsectors under manufacturing, contracted by -52.81 percent in Q1 2020 from -25.71 percent in Q4 2019 and -49.62 percent in Q1 2019. Air transportation The aviation sector made the list of the five sectors to have performed badly in the latest GDP figures, with the growth in the sector dipping by more than half, due largely to the coronavirus pandemic that made countries restrict movement to and from their coun-

tries, according to analysts who spoke to BusinessDay. The sector expanded at a slower pace by 5.68 percent in Q1 2020, compared with the growth of 14.98 percent reported in the previous quarter. Although the Federal Government enacted a closure of air transportation sometime in March after the first index case was reported in late February, many persons had already cut travels to countries that are known to have a high risk of the virus. Public administration Public administration contracted by -8.72 percent in Q1 2020, from an expansion of 0.06 percent in Q4 2019. That’s its first negative growth in three quarters, as employees in the public sector worked remotely in order

to contain the spread of the pandemic. Omotola Abimbola, macro and fixed income analyst at Chapel Hill, expects both Q2 and Q3 GDP figures would be a lot worse as the country begins to see the impact of the coronavirus-induced lockdown on virtually all sectors of the economy. For him, a recession is more or less guaranteed. “We should expect a steep contraction in both Q1 and Q2 numbers due to an almost economic lockdown that started in April,” Abimbola said. Going forward, Ayodele Akinwunmi of FSDH Merchant Bank said, “We need to see how the country will implement policies that will drive growth.”

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Tuesday 26 May 2020

BUSINESS DAY

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COVID-19: Nigeria must restructure now — Afenifere, Ohanaeze, Mimiko … say only restructuring can end secession agitations Iniobong Iwok

re s i d e n t- G e n e r a l o f Ohanaeze Ndigbo, John Nwodo, elder statesman and Afenifere leader, Ayo Adebanjo, and former governor of Ondo State, Olusegun Mimiko, have asked the Federal Government to take advantage of coronavirus pandemic to restructure the country, saying Nigeria was currently operating an illegal constitution foisted on the people by the military. Speaking at the opening session of a video conference organised by Governance Index, Sunday night, tagged, “Coronavirus Pandemic: Is it time to reevaluate the political structure of the country,” Nwodo said the constitution was given to Nigerians by the military government, which was not elected by the people. He noted that in 1999, politicians went into the general election without knowing the parameters that would guide the democratic process. According to Nwodo, “The military wrote the present constitution for the country after abandoning the agreement the nation’s forefathers had with the British before the independence, which was to operate a regional government.” Nwodo added Nigeria’s political parties operate like companies owned by shareholders, where there is no freedom to choose the candidates of your choice, stressing that the Nigerian electoral system was the most corrupt and the judiciary the most compromised. On his part, Afenifere leader, Ayo Adebanjo, disagreed with Nwodo, but also stressed that if Nigerians were serious about keeping the country together, it was time to restructure and embrace true federalism. The present constitution is an imposed constitution by the Muslim military in the North, which nobody contributed to it, Adebanjo said, stressing that even the then head of state, Abubakar Abdulsalami said he did not know what was in the constitution before he swore in former President Olusegun

Obasanjo. According to Adebanjo, “I will say without any hesitation we are all deceiving ourselves. President Buhari is not interested in keeping this country together, that is why we are having this problem, that is why we are putting square pegs in round holes, and that is why we tell him to keep to the constitution by the appointments he is making, but he said no. ‘’I can only work with people I have confidence in, which is against the federal character principle that the whole country is talking about. Buhari simply turns deaf ears to the agitation for restructuring that has been on for over five years. “Buhari ignored the recommendations of the 2014 constitutional conference, he ignored the manifesto of his own party, and even ignored the recommendations of his own party, that is why I say we are not practising democracy in this country.” Adebanjo further accused elder statesman, Tanko Yakasai, of hypocrisy for saying proponents of restructuring had not explained to Nigerians what restructuring entailed. Recall that during last week’s fourth edition of the video conference also organised by Governance Index, Yakasai had said the agitators of restructuring should come up with modalities for their proposal for proper scrutiny. But Adebanjo said Yakassai was at the 2014 constitutional conference where the case for restructuring was carefully marshalled out, adding that what they were asking for was a country where everybody there would enjoy equity and justice. In his contribution, former governor of Ondo State, Olusegun Mimiko, concurred with both Nwodo and Adebanjo, saying if the country must be kept together, there was need to restructure. “I associate myself with the positions of former speakers, and whether we like it or not in this country, restructuring is an idea whose time has come,’’ Mimiko said.

Odeleye, Giwa-Tubosun nominated for Cartier Women’s Initiative awards for Africa 2020 BUNMI BAILEY

wo distinguished Nigerian women, Funkola Odeleye and Temie Giwa-Tubosun have been nominated for the Cartier Women’s Initiative Awards for Africa 2020. The Cartier Women’s initiative is recognised as one of the world’s most comprehensive and financially rewarding entrepreneurial competitions specifically for women. It is also an annual international entrepreneurship programme that aims to drive change by empowering women impact entrepreneurs in the seven continents of the world where three candidates are shortlisted par continent from a pull of entries globally. Odeleye, the co-founder/ CEO at DIYlaw, a legal tech-

nology company committed to empowering Nigerian entrepreneurs through the provision of accessible and affordable legal services and free legal and business resources, and Giwa-Tubosun, founder/CEO of LifeBank, a healthcare technology and logistics company that facilitates the transmission of blood from labs across Nigeria to patients and doctors in hospitals, are among the three finalists that were selected from Africa this year. The winners are set to be announced in June. The Cartier Women’s Initiative, founded in 2006, is a programme open to women-run and women-owned businesses from any country and sector that aim to have a strong and sustainable social and/or environmental impact. www.businessday.ng

Some violators of interstate travel prohibition order appear for trial before a Kaduna State Mobile Court during the visit of the state commissioner for business, innovation and technology, Idris Nyam, to Kaduna-Katsina border, on Sunday.

Here’re four best performing sectors in Q1’2020 ENDURANCE OKAFOR

n the first three months of 2020, the Nigerian economy reported its worst growth in one year at 1.87 percent. Although the performance from the early effects of the Covid-19 disruption is still better than the figures from the 2016 recession. The slow growth, which is 0.23 percentage points less than the 2.10 percent reported in the Q1 2019 and 0.68 percentage points worse than the 2.55 percent reported in Q4 2019, was fuelled by the poor performance recorded in both oil and non-oil sectors of the economy. Of the 18 sectors of the Nigerian economy covered by the National Bureau of Statistics (NBS), the following industries reported the highest growth in the first three months of 2020 and thus emerged as the best performers. Financial and Insurance

While many industries have been disrupted by the outbreak of coronavirus, Nigeria’s financial industry is one of the few that is less hit by the pandemic. The financial and insurance sector grew by 13.19 percentage points year-on-year in Q1 2020. From a contraction of 7.60 percent in Q1 2019, the sector leveraged contactless payment, increase in deposits and transactions to post a growth of 20.79 percent in the first three months of 2020, the fastest expanding sector in the review quarter. Meanwhile, financial institutions were responsible for most of the sector’s growth as it reported a growth expansion of about 33 percentage points, from -9.21 percent in Q1 2019 to 24 percent in the corresponding quarter in 2020. The insurance sub-sector, on the other hand, recorded a marginal growth increase of 0.36 percent as it expanded from

the 2.58 percent reported in Q1 2019 to 2.94 percent at the end of March 2020. Mining and Quarrying With an expansion of almost 6 percent year-on-year, the Mining and Quarrying sector of the Nigerian economy was the secondfastest-growing industry in the quarter under review. The sector grew from a contraction of 1.37 percent in Q1 2019 to 4.58 percent in the corresponding quarter of 2020. Despite reporting slow growth in Q1 2020 compared to the 4.43 percent in Q4 2019, the sector was able to leverage the performance of Metal Ores, Crude Petroleum and Natural Gas to post one of the highest year-on-year expansion. Public Administration This sector was the third fastest-growing in the first three months of 2020 with after growth printed at -8.72 percent yearon-year compared to the -14.21 percent in the corresponding

quarter of 2019. Even though the Q1 2020 growth was worse than the Q2, Q3 and Q4 figures of 2019 put together, the sector leveraged base effect to secure the third position on the list of best-performing sectors Human Health and Social Services The list of best-performing sectors wouldn’t have been complete without the health industry as it is one of the most important parts of any economy at this time when millions around the world are battling to either survive the Covid-19 infection or are depending on the industry for support to survive the deadly virus. The Human Health and Social Services reported a growth of 1.22 percentage points in the first three months of 2020. From the -0.16 perecnt reported in the first quarter of 2019 the sector after contracting by 0.56 percent in Q4 2019 expanded and report a growth of 1.06 percent in Q1 2020.

DoGood.Africa supports 150 households COVID-19: Private school owners seek stimulus packages from government with COVID-19 relief packages BUNMI BAILEY

oGood.Africa, a registered non-profit social enterprise, has supported 150 vulnerable households in Shomolu, Lagos by providing basic staple food to low income families, complementing the efforts of the government in the fight against COVID-19. The Foundation took up the noble and selfless cause to cushion the effect of the lockdown on vulnerable households. According to Peter Oke, co-founder of DoGood.Africa, they adopted a door-to-door delivery method in a bid to avoid flouting social distancing guidelines. “We were able to reach 150 households across 25 different streets last month. We also targeted elderly women as direct beneficiaries to almost completely eliminate giving multiple beneficiaries from the same household. This organised method was received and commended by the residents,” he said. Oke also noted that the initiative, amongst other laudable relief efforts by the private sector and civic society, was designed to encourage vulnerable com-

munities to follow the lockdown and social distancing guidelines, enabling Nigeria to get ahead of COVID-19. The lockdown of economic and business activities affected Nigerians especially the lowincome households as most of them rely on their daily income to cater to their needs. Also, most families did not have the financial capacity to stock up on food and other essential items required for survival in an extended lockdown. The Foundation mobilised resources to provide relief to the households. Ezekiel Alabi, project lead, DoGood.Africa, commented on the achievement of the nonprofit’s N1.5 million fundraise target in six days as against the initial goal of 10 days due to the incredible support received from their benevolent donors. “We also received Personal Protective Equipment (PPE) donated by MedPlus and other individual donors. The food relief packages contained local staple food items such as rice, beans, garri, semovita, palm oil, vegetable oil and spices sufficient to feed a household of five members for up to 10 days assuming they had two meals daily,” Alabi said.

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IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

ssociation of Private School Owners of Nigeria (APSON) has asked for stimulus packages from government at all levels to help cushion the negative effects of Coronavirus pandemic on its members. Godly Opukeme, national president of the association, made the call on Monday in a statement made available to newsmen in Benin City. Opukeme said the stimulus package became necessary following the disruption and the redundancies caused by the pandemic and indefinite closure of non-essential businesses including private and public schools. He said the closure of both public and private institutions in the country as well as nonessential businesses come with life-threatening pains for members of the union. He said the stimulus pack@Businessdayng

age will go a long way to help private school owners stay afloat during and after the COVID-19. “The stimulus package will help to keep private school owners overcome the challenges and keep their teachers in business, pay their annual renewal fees (dues, rates and rent) and ward-off potential threats to its survival for optimal productivity in the post COVID-19 era. “The stimulus package for private schools teachers would enable them and their immediate families survive the economic hardship and experience in the post COVID 19 era,” he said. Opukeme, who however, lauded the federal government’s efforts at curtailing the spread of the disease, noted that the body is in full support of the government for shutting down schools nationwide in response to the sprea

Tuesday 26 May 2020

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Tuesday 26 May 2020

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The need to transform your businesses to succeed in the post COVID-19 environment NNAEMEKA OKEREKE

“The principles of yesterday no longer apply… we must think in terms of tomorrow”- American Air Force General Henry Arnold he world as we know it is changing. Different countries have instituted stringent containment measures to slow the spread of the COVID-19 pandemic. Human relationship is changing as we are advised to curb our desire for social contact by limiting group interaction and practicing social distancing. A recent study by Harvard University warns of the need to maintain social distancing measures into 2022 given the likelihood of seasonal variation in how the virus manifests unless interventions such as vaccines and/ or drug therapies become available. The virus has revealed the risks most economies face from an overdependence on the global supply chain and its distribution networks. The New York Times and the Peterson Institute for International Economics reports that the European Union and member countries have imposed emergency export restrictions on protective medical equipment to other countries who badly need them to fight the COVID-19 pandemic, citing supply shortages. Policy makers in North America and Europe are beginning to examine the deficiency in the diversity of suppliers- the point of failure of globalisation- and are leaning towards a greater national economic flexibility, or regional emphasis on production. The Bank of America reports that 80 percent of the multinational corporations investigated plan to re-shore part of their production. These measures are akin to an experiment to redefine globalisation. Today the world over, we are seeing evolving customer expectations, growth in new marketing and sales channels, and fundamental shifts in technology

and markets, triggered by new competition and the coronavirus pandemic. Business leaders are in uncharted waters and are facing greater pressure and even less time to digest these rapid, and dynamic changes wherein a move in the wrong direction can be quickly overwhelming. Most are in problem solving mode to realign their strategies which have been upended by today’s issues. These businesses must brace up to the knowledge that today’s competitive advantage can and is becoming obsolete. This is not the time to simply pursue an agenda that is focused on downsizing, portfolio rationalisation, and process redesign. As important as these activities are, they are limited in driving any business to the pinnacle of the industry. The businesses that will survive are those who seek and exploit the opportunities within this crisis, with quick, robust initiatives that are perfectly executed to get it to the future. This future is not years away, separated from the present by a line. Competing for the future goes beyond outrunning opponents to a prize. Today, businesses are forced to contend with “non-traditional” competitors who, not bugged down by convention, develop more innovative ways to solve problems. Does this mean turning our backs on today’s systems and processes? Of course not. The linkage between the present and the future assures that tomorrow is built on the realities and decisions of today- resources, environment, people, and technology. However, their disconnect suggests that tomorrow’s competitive advantages will be different. Therefore, businesses must go beyond benchmarking existing’s products and processes towards creating their own road map to the future, ensuring that their employees are adequately skilled, processes are properly engineered, product portfolio are correctly aligned, and resources are appropriately allocated. A failure to foresee and share in the opportunities of the future will have significant economic implications for businesses and nations. Globally, we stand on the verge of

a revolution as profound as that which gave birth to modern industry. Industry structures are changing, and entirely new industries are been born. Opportunities that at first seem niche could prove to be pioneering for tomorrow’s mass market. The level of change across different industries- education, retail, healthcare, financial services, telecommunications, energy, manufacturing, and others- will vary significantly. Businesses must proactively invest resources in building new competencies to exploit the opportunities that will arise in their industries. The real issue is whether these investments happen- in crisis atmosphere – or stems from management’s opinion of the future. A business that wants to control its own destiny must first understand how to control the destiny of its industry. As important as business level transformation is, it is a secondary challenge to industry transformation. Many businesses have lost industry leadership because they failed to invest in controlling the destiny of their industries. They are therefore playing catchup by adapting, using dimensions established by industry interlopers. Therefore, to transform the industry and create new forms of competitive advantage, business leaders must fundamentally reshape industry boundaries and change the rules of engagement. The goal is to exploit the changes in the competitive environment to grow the market and make the competition irrelevant. However, new realities have seen a lot of uncertainty and significant changes, much widespread than expected which has created a structural challenge that requires new skills and competencies. In recent years, the unprecedented advancement in technology has changed how we behave, how we learn and how businesses operate. Businesses are becoming virtual and employees come together only when needed, where it is needed and with what is needed via portable communication devices. Companies like Amazon, Google, IBM, and Microsoft are facilitating this new structure, having made significant investments in cloudbased services and tools to support the gradual changes that businesses were

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This future is not years away, separated from the present by a line. Competing for the future goes beyond outrunning opponents to a prize. Today, businesses are forced to contend with non-traditional competitors who, not bugged down by convention, develop more innovative ways to solve problems

predicted to face. Business leaders can only take advantage of these changes and get to the future first if they: (1) understand the nature of competition for the future; (2) can perceive tomorrow’s opportunities; (3) have the resources to get to the future faster than the competition, without taking undue risks; and (4) can energise their team for the intellectually and emotionally challenging journey to the future. Employees are watching to see if their leaders ‘have their back’ in navigating this crisis. They are used to hearing all the talk about the importance of human capital. However, they are torn between being the most valuable assets and the most expendable assets. Therefore, business leaders must manage information around change properly because invariably, bad news known is better than worse news imagined. A Nigerian financial institution attempted to take advantage of the recent containment measures and economic crises to drive its transformation plans towards a more digital institution. In the operational sense, it made perfect sense. However, emotionally it could undermine efforts to promote loyalty among those remaining as the most talented people anticipate the massacre and flee for safety. Most managers tasked with managing organisational transformation forget to ask, “Transform to what?”. “What is the future state of the business?”, “How do I balance the operational vs emotional arguments of the decision?”, “How do we know when we have started cutting muscle?”. They tend to simply focus on efforts that are more about catching up to the past than about leading the business to the future. To compete successfully for the future, managers must first understand that competing for the future is profoundly different from competing in the present. It is not enough to be efficient.

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Sailing through the deep blue sea of COVID-19 pandemic – Bold reforms non-negotiable

he combination of the March OPEC+ kerfuffle and the coronavirus pandemic resulted in an oil price drop so severe that some traders paid buyers to take oil off their hands in April. Many analysts believe this shock may trigger a deep recession in many countries, including Nigeria, which relies on the commodity for the bulk of its revenue, Federation Account Allocation Committee (FAAC) to sustain activities in the states. This monthly bazaar is a symptom of the country’s oil dependency. These allocations are controlled by the movement in oil prices which showed the vulnerability of public revenue to global oil market developments. The volatility of oil prices has recently been worsened by a supply glut due to low demand occasioned by the lockdowns that have occurred in the wake of the coronavirus pandemic and price war among some of the oil producers. This led to the drop in the revenue shared by the FAAC. For instance, revenue dropped to N581.566 billion in February 2020 from N647.353 billion in January. The country escaped the downturn at the start of March as the lockdown only started grinding economic activities to a halt from the middle of the month before COVID-19 struck. March’s allocation “rose” to N780.926 billion as almost all components of revenue including VAT, gross statutory revenue, Petroleum Profit Tax, Companies Income Tax, Import and Excise Duties, Oil and Gas Royalties, rose. Some may point to the FAAC

“rise” in March, but the devaluation of the naira between February and March effectively gave the FG more naira to spend. As context, Nigeria recorded 1.419mbpd in August 2016 during the throes of the last recession. Average crude oil lifted in 2016 was 1.62mbpd and 1.83mbpd in Q3 and Q4, respectively. At the beginning of this year, the country was producing 1.8mbpd, but recently, about 70 percent of April loading cargoes have yet to find buyers. Some March cargoes remain unsold and with the agreed cuts under the OPEC+ plan, the country is effectively selling below 1.2mbpd at $12 per barrel. Nigeria may still be in trouble even as many countries have started opening their economies to business amidst fears of a second wave of coronavirus infections. From all indications, Nigeria will earn little from crude oil this year, which brings to fore how untenable its current economic arrangement is. It’s likely to experience a significant revenue shortfall throughout 2020, with the worst yet to come. FAAC numbers for February might represent the are beginning of this new normal. Nigeria’s total oil earnings in 2016 were N3.5 trillion compared to a N9.72 trillion projection. At the period when the country witnessed the height of the last recession that made people lose over a million jobs, the FG share of oil revenue was only N697 billion, an amount not enough to meet its personnel cost of N1.6 trillion. This was despite the currency devalu-

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ation that allowed the FG to squeeze in some exchange rate gains. Now, the pandemic has brought international trade shuddering almost to a complete halt meaning that even So, the tariffs on imports that necessitated Nigeria closing its land borders will rarely come in. Nigeria is about to face a worse situation that can only be compared with 2016 when 33 states could not meet recurrent expenditure obligations without resorting to borrowing and 26 states could not pay salaries. It is necessary that the monetary and fiscal authorities quickly put together a financial support programme for the “working poor” especially frontline health workers before everything falls apart. Most health workers in Nigeria are under the employment of state governments, who, aside from Lagos and probably Ogun, rely on funds from FAAC to pay their workers including those in the health sector. Going by the situations, states cannot continue to depend on a federal revenue sharing mechanism from everdwindling sources. The Minister of Health Minister, Osagie Ehanire, in late March, said 40 health workers tested positive for the coronavirus. Nigeria needs to take advantage of this present global challenge and do what it should have done two decades ago; cutting down the size of government, reducing the Exclusive Legislative List, privatising the ports, pushing judicial reforms, passing the remaining parts of the PIB, enacting sensible regulation in

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Cheta Nwanze power, mining and agriculture. The country’s precarious middle class was also left out of all the government’s interventions, which targeted key economic sectors and some sections of the very poor. That demographic makes up much of the country’s consumer spending. A plunge in their income will tip enough sectors into the red to guarantee a recession. The CBN needs to empower Big Finance to lend at friendly rates to small, medium and big businesses. This effort would go a long way to control the bleeding of many working-class and professional jobs. All of this will require more borrowing, which will be justified if results on the ground stand as evidence. If the CBN can put together a N1trillion bailout package for big businesses, then there should be a serious conversation in this country about what we are going to do for our health workers and the middle class. Whichever way Nigeria survives this crisis will largely depend on getting those answers right. Cheta Nwanze is the lead partner at SBM Intelligence and heads the company’s research desk.

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Madagascar’s COVID Organics: A miracle product? STRATEGY & POLICY

MA JOHNSON

t last, it appears that something good has come out of Africa. It is a herbal product called COVID Organics. With respect to COVID Organics, some say that Africa’s light is shining due to luck. Irrespective of views on the herbal drink, all we know is that Madagascar has refused to be intimidated by its small size and backwardness. Madagascar, a tiny African country has developed COVID Organics from its natural resources in response to the rampaging coronavirus that has claimed more than three hundred thousand lives worldwide with millions infected. Currently, the herbal product is controversial because the World Health Organization (WHO), European and American pharmaceuticals, have not accepted COVID Organics as a cure for the pandemic. In response to the scepticism with which WHO and others are treating the COVID Organics, Andry Rajoelina, the President of Madagascar, says “No country will keep us from going forward.” Andry Rajoelina, is so proud of the “efficacy” of the product that he was seen drinking the herbal product in the media. The herbal remedy, according to reports, is being handed out free of charge in the country’s streets and schools despite questions surrounding the “miracle remedy”. Anyway, Madagascar is recommending the herbal drink to other African countries as a cure against the virus attack. Nigeria, and a few other African countries, have taken delivery of consignments of the drug. But the authorities in Nigeria have stated that all herbal or traditional medicines should be sent to all statutory regulatory bodies for thorough scientific verification. This to my mind is the right thing to do.

Due to the need to be scientific in solving societal problems, governments in most developing countries including Nigeria have invested so much in establishing Research and Development (R&D) institutions for many decades. They have also, formulated policies to guide their investments in R&D so that expected benefits are not too far from the actual. Today, Nigeria has more than 30 research institutes all of which are funded by the Federal Government. In addition, the nation has more than 100 universities, all of which offers courses in sciences and some of them in different engineering fields. Some of the universities are even designated as university of technology. Although, the literacy rate in Nigeria is still low relatively, some public affairs analysts are of the view that there is no country in Africa or in the Middle East or anywhere outside the developed nations of the world that has the broad base of educated leadership in business, in the universities ….that Nigeria has. Without any iota of doubt, all our efforts give an impression that our nation is aware of the importance of science and technology in national development. The question we should ask is this: Why was Madagascar with barely six universities and one research institution able to produce and launch into market the COVID Organic, when Nigeria is still carrying out tests of some drugs? The solution is in a process persuaded by the ideas of men with energy and commitment. And the source of high-risk capital married together in a haphazard manner to produce the consequential “miracle remedy” within the Madagascar economy. In the case of Nigeria, it was 45 years ago, that the first science and technology policy was formulated. Since then the concern of experts and policy analysts is that not much has been achieved despite Nigerian government’s investment in R&D. With investment in R&D, the expectation is that it would make the country break out of recessionary cycles, enhance international competitiveness, contribute to and in some instances, drive economic growth and a means of generating jobs which should be the concern of any caring government. But these aspirations are only on paper, as much has not been achieved. The above stated expectations have

been elusive, though some scientists say the funding of research institutes in Nigeria is very poor. But why has the expectations been elusive? Science has remained a consumption item in Nigeria rather than an investment item since it has not brought any significant impact on the economic development of the country. Science as it were has not been able to give birth to the muchneeded development and the promised eventual liberation from poverty. Our researchers are working and one must commend their efforts. But you will find out that most of our research findings are virtually in the laboratories. It takes more than scientific research to get a product to an innovation stage. Innovation is achieved only when a new product or an improved product reaches the market stage while the extent of its impact on the economy depends on the degree and rate of its diffusion. Apart from the quality of researchers; vibrancy of the capital goods sector; and a significant level of foreign direct investments; a suitable business environment is one of the critical factors influencing the extent to which scientific inventions reach the innovation stage and rate of adoption by other firms in the country. The market has a role to play in the innovation process. It is only when a product is in the market that it is considered an innovation. And it is the market, based on the forces of demand and supply that will determine whether the product will remain or not. So now that COVID Organics has entered into the African market, can we say it is an innovation. The herbal drink is in the market to compete with other yet-to-be approved drugs for the treatment of the coronavirus. It is the market that will determine the acceptability or otherwise of the herbal drink. As part of the controversies, there are reports that some African countries have expressed their intentions to conduct a scientific test of the herbal drink in order to confirm its effectiveness. These countries, argue that it is likely that the herbal drink may harm the health of their people, particularly that of children. It is equally possible that those who consume the herbal drink may not have health complications arising for the use of the herbal drink. But why has Nigeria not produced a drug or vaccine to combat the dreaded Coronavirus despite her abundant

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Our researchers are working and one must commend their efforts. But you will find out that most of our research findings are virtually in the laboratories. It takes more than scientific research to get a product to an innovation stage

Johnson is an author and a retired naval engineer who has passion for African development and good governance

Logistics supplier selection for Nigerian businesses: Aggregator vs independent truckers

his article reflects the views of a management level executive for a local supply chain firm servicing modern trade retail outlets for FMCGs in Nigeria. Selection of logistics service providers is highly critical for any supply chain related enterprise. Selecting and maintaining strong and economically sound relationships with logistics service providers have a direct effect on the output and service levels of an organisation as these vendors are an integral part of the distribution networks and often have direct supplier or customer insight, in some cases more than the company itself. With the advent of aggregators such as Kobo 360 and Lori Technology, a firm’s decision may tilt towards signing up with a trucking aggregator platform or contracting independent truckers on a need basis. There are several factors to consider, a change from the existing mode of business is a difficult process as the abandonment of a critical service provider with a long history of relationship has its drawbacks.

Long-time partners would have organisational learning and experience of interaction with suppliers or customers accumulated over time. Also, the service requirements are well known to the seasoned vendor. Relationships between companies and trucking partners may come to a crossroad where a change is imminent as a result of poor service, changed market conditions, change in management even a change in operations on both sides. Also, a new entrant to the logistics market with advertised value offerings may entice stakeholders. In the current logistics space in Nigeria one may have to decide between the aggregator model and the regular truck for hire business. The highlights of observations with both models are as follows; Aggregator trucking partner model Aggregators provide a better structure on services; the relationships tend to last longer and have a critical role in the architecting of supply chains. Personal relationships are solidiwww.businessday.ng

fied for the ease of daily operations Information systems on the aggregator platforms are mutually supporting providing insight for both parties There is a pool of vehicles hence availability is not a major concern, expanded contract also leaves room for changes in asset sizes and routes The company bears liability for goods in transit and takes some of the risks of business There is a higher chance of structuring beneficial payment terms. Billing practice from these logistics service providers might show a more flexible acceptance over time. Major findings are that contract-bound services and cost structures seem to drift into less transparent and informal patterns of interactions over time though this is wearing on the business relationship. Independent trucking model The market can affect relationships by redefining the context of the business relationship for instance during off-peak periods it is possible to negotiate better rates with independent

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mineral, agricultural and forest resources? Some economists say it is because our economy does not react to policy stimulus. Even before the arrival of COVID-19 in 2020, Nigeria’s economy was hovering around 2.2 percent growth since 2016. This sluggish growth in the midst of abundant resources calls for concern. There is concern because despite CBN’s banned importation of 41 items in 2016 and supply of US dollars to the market to strengthen the Naira, the country has not seen any appreciable growth. Now that most developed economies are in recession, one only hopes that Nigeria’s economy will not remain inert for many years to come as there is dwindling foreign exchange earnings from the export of crude oil to support importation. In spite of the risks and costs of innovation and the uncertainty of its diffusion, if one looks at innovations generally, we will observe that they are not necessarily the result of formal applications of applied science alone but sometimes the product of inspired amateurs, great determination, intense curiosity, quick wits, clever fingers, luck, capital and a backer to survive the period of experimenting, testing, improving which are as important as scientific training. As Nigeria continues searching for an herbal remedy or orthodox drugs to treat COVID-19 patients, Madagascar’s herbal drink ought to motivate and spur our scientists to continue their efforts in coming up with a globally accepted drug that will prevent and cure the pandemic. We appreciate the efforts of our scientists, but as the saying goes, there is always room for improvement. Bearing in mind current economic realities of the country, one would be waiting to see how funding of research institutions in Nigeria would be improved. And when the upgrade of physical and social infrastructure would impact the economy positively because of the complex interactions among scientific research, technology, industry and the society. A multidisciplinary approach is always better in solving problems of any society. Thank you!

Amanda Etuk truckers against contractual rates signed with aggregator platforms. However, there is a limit to fleet size per trucker. The relationship is usually unstructured and may be beneficial or unprofitable depending on the key persons involved in the transaction. The payment terms may be less favourable as independent truckers are mostly unable to finance long term logistics agreements without frequent financial pay-outs from the buying company. There is also more exposure to risk in these dealings Anyhow, buyers of logistics services should from time to time, test models, services and potential new relationships and innovation. Etuk works for a logistics and supply chain firm in Lagos partnered with FMCGs

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Tuesday 26 May 2020

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Digital financial inclusion in Africa (2) Rafiq Raji

Curbing predatory digital lending in Kenya ighty-three percent of Kenyans are now engaged in the formal financial system from 27 percent in 2006. Mobile money, financial innovation and supportive government policies have been attributed for this remarkable success. Kenya’s pioneering M-Pesa mobile money service, launched in 2007 and a huge factor in this remarkable feat, exemplifies why this is the case. For instance, it enjoyed an initially carte blanche telecoms-led regulatory regime from the outset. And just a year after launch, the 2008 electoral violence in Kenya made the service the only channel for payments to rural areas and elsewhere. An adaptable customer-centric business model and emotive marketing have also been attributed. Unsurprisingly, Kenya is currently enjoying a boom in digital mobile lending, the ideal next stage after the more than average coverage of payments. According to the 2019 FinAccess household survey, about 14 percent of Kenyan adults have taken a digital loan, via mobile banking or an app, at one point or another. There have been some downsides, however. With loans easily accessed by the press of a button, what should ordinarily be good news on financial inclusion, is increasingly becoming a source of concern. Digital loan defaults are on the rise, almost 30 percent of total defaults, according to the recent FinAccess survey. When asked, 26 percent of mobile phone banking loan defaulters attribute a lack of understanding of the terms for why, with another 28 percent saying they failed to meet their obligations because interest or repayment rates went up. For digital app loan defaulters, 7 percent and 12 percent attributed these reasons respectively as well. Unsurprisingly, the Central Bank of Kenya (CBK) has raised concerns about the seemingly predatory practices of digital lend-

ers, as mostly poor customers, who are charged exorbitant interest rates, increasingly find the debt burden beyond their capacity. Digital loans are the most used type of loans in Kenya, with 8 loans per borrower on average; significantly higher than 1.2 loans per borrower for commercial banks. Digital borrowers attribute convenience for their preponderant patronage. That is, even as their trust for digital banks is no more than that for traditional ones; which is very little. The demographics of Kenyan digital borrowers are distinctive: male (60 percent), urban (67 percent) and young, aged below 35 (62 percent). Digital borrowers reportedly borrow more, sell assets, or cut expenditure on crucial needs to repay loans at significantly higher levels than traditional borrowers. So, even as financial inclusion has been increasing, too much acclaim, the financial health of Kenyans has been decreasing, with only about a fifth of the adult population believed to be in good financial health. Additionally, regulatory authorities find mobile lenders are increasingly used as conduits for money laundering. To address these concerns, the central bank and finance ministry plan a law to sanitize the system. But is not there a risk that in doing so, the very elements that have made the Kenyan financial inclusion revolution remarkable may be hamstrung in the process and perhaps cause a reversal of fortunes of some sorts? I use the decision tree framework to answer this question (see link in footnote for figures & references). For Kenya, the supply constraint on financial inclusion through digital credit services relates to predatory practices of digital lenders. While banks also provide digital loans and follow the same rules as they would ordinary loans, nonbank digital lenders do not have similar but clearly positive constraints. Kenya’s low domestic savings is more than offset by its relatively easy access to international finance in both its public and private sectors. Its financial markets are quite efficient and relatively advanced for the continent. And it has no controls on the flow of capital in and out of the country, having abandoned its restrictive foreign exchange laws since 1993. The predatory practices of digital lenders suggest no fear of punishment on the part of the

perpetrators. It is abundantly clear such negative behaviour would likely change in the face of stricter regulations. Thus, the analysis does support the need for the robust rules the Kenyan financial authorities are looking to put in place. The evidence also suggests limited choice for consumers or probably cartel behaviour. There is certainly abundant room for more competition. A digital lender which abides by the type of strict rules banks are subjected to, would clearly have a competitive advantage in the current no-holds barred regulatory environment. Because even when the new rules are in place, firms which hold themselves to a higher standard would likely get rewarded via customer loyalty and perhaps even great influence with the authorities. Otherwise, Kenya’s digital infrastructure is above-average by the continent’s standards, the spread of internet coverage is wide and data subscription costs are relatively low. Institutional quality and governance are average but about the best in East Africa. Tax policies and the like are no more distortionary than would be the case for peer African countries. With every Kenyan expected to have a digital identification number and related biometric data in the not too distant future, due-diligence and Know-Your-Customer (KYC) issues should hardly be significant constraints thereafter. There is clearly ample demand for digital

credit services in Kenya; especially among male and young urbanites. But it is quite clear the high cost of credit acquisition is a major drawback. Still, even as prohibitive digital lending rates of more than 40 percent a month in some cases should ideally be a huge disincentive, there is still buoyant custom; albeit default rates have naturally been rising. There is clearly a need for greater financial and digital literacy. Still, even if digital borrowers understand the often-obscure fine print, they probably have little choice in the matter. Stricter regulations make sense. In sum, the analysis suggests that with more robust rules and lower costs, greater financial deepening in Kenya via digital credit services, as has been recorded with digital payments, would likely be achieved. It also shows a potentially lucrative gap for more responsible firms to take advantage of. Edited version of article was first published by Nanyang Business School’s NTU-SBF Centre for African Studies. References & figures available via link viz. https://nbs.ntu.edu.sg/Research/ResearchCentres/ CAS/Publications/Documents/NTU-SBF%20 CAS%20ACI%20Vol.%202020-21.pdf “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

Do Nigerians really hate tax?

t is on record that the Federal Inland Revenue Service (FIRS) doubled the number of taxpayers from 10 million in 2015 to 20 million in 2019. Nonetheless, with Nigeria’s economically active population at 115.5 million, there is still a substantial number of non-taxpayers, which stands at 82.7 percent. As such, since 2015, the FIRS, in collaboration with Nigeria’s federal government, has introduced some measures and schemes to improve tax compliance and increase tax revenue. One of such schemes was the Voluntary Assets and Income Declaration Scheme (VAIDS) – a tax amnesty scheme offered to tax defaulters to pay taxes on all prior undeclared income and assets. That way, the defaulters would avoid penalty payments and prosecution, while the government recovers substantial revenue. However, according to the World Bank, at the end of the amnesty period only 8 percent of the targeted amount was achieved. In addition, data from the United Nations Economic Commission for Africa (UNECA) show that in 2018 Nigeria’s estimated VAT Gap (the shortfall between potential and actual VAT collections) was one of the largest in Africa at 71.2 percent compared to South Africa, which has the lowest at 13.3 percent. Nigeria’s VAT Gap was only better than that of Uganda (71.4 percent), Eswatini (86.1 percent) and Central African Republic (CAR- 92.2 percent). Following from these pieces of evidence it is easy to conclude that Nigerians hate tax: but how true is this? Do Nigerians really hate tax or do they have other more pressing concerns that need addressing, first, to enhance tax morale

and compliance? On the contrary, a recent study on tax responsibility of small business owners in Nigeria reveals that Nigerians do not actually hate tax, as often assumed. Most of the small business owners in the study were cognizant of their tax responsibilities. However, their perceptions of their tax responsibilities vary. Some taxpayers think they owe it as a duty to pay their taxes whether or not they see any benefits, while others think they need to be convinced that their taxes would be put to good use before payment. The former exhibited high tax morale, while the latter displayed low tax morale. A unique distinction between the two groups is how they see the relationship between tax compliance and accountability. On one hand, taxpayers with high tax morale perspective believe that tax compliance should take precedence before demanding for accountability. On the other hand, taxpayers with low tax morale perspective believe that accountability enables trust in the tax system, which in turn enhances tax compliance. In that regard, taxpayers with high tax morale perspective tend towards voluntary tax compliance, while taxpayers with low tax morale perspective tend towards enforced tax compliance. The study also found that people relate to taxation from other different perspectives – e.g. as a development, legal, and or moral issue. These perspectives, also, manifest in different ways in relation to their tax morale. Where morale is high, a person who sees taxation as a development instrument complies first and asks for accountability later; a person, who sees

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taxation as a legal matter, complies with the spirit of the law, and the person who sees taxation as a moral issue, aims to do the right thing without any set conditions. Where morale is low, a person who sees tax as a development instrument asks for accountability first before compliance. In the same situation, the person who sees tax as a legal matter, focuses on the letters of the law to explore loopholes; and the person who looks at it from a moral perspective finds justification in doing the right thing with a caveat – as long as it pays. In addition, the study reveals that tax morale can have implications for trust in the tax system. The latter (i.e. trust in the tax system) is said to enhance voluntary compliance and tax revenues. Therefore, it is in the interest of the tax authority to build trust through such mechanisms as education, awareness creation, transparency, accountability, enabling environment, care, et cetera. Trust building can be either weak or strong; and this matter. As trust is built, it will over time diminish low morale and reinforce high morale through the strong transmission path. However, where the trust building mechanisms are weak, they will immediately reinforce low morale and over time erode high morale. It is, therefore, in the interest of tax authorities to build trust through strong impact mechanisms. As such, government accountability is paramount to building trust. How taxpayers perceive public accountability in the utilisation of taxes influences their tax compliance perception. Tax authorities – i.e. FIRS – should pay attention to this, as it would help them develop appropriate strategies to improve transparency and public accountability in the use of tax revenue. Im-

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Kenneth Amaeshi, Bongo Adi & Godson Ikiebey proved transparency and public accountability can only contribute to improved tax compliance and increase in tax revenue. In sum, Nigerians do not necessarily hate tax. They just want to be convinced that their taxes would work. Given this scenario, it is in the interest of the government to demonstrate tax accountability and transparency to enhance tax compliance in the country. This responsibility should not be abandoned to a specific agency. It will require an integrated approach across all the agencies of the government. If possible, the government should create a tax accountability desk or office within the ministry of finance or ministry of budget and planning to facilitate and coordinate tax transparency and accountability in the country. The different views of taxpayers in the paper demonstrate that taxpayers are not a homogenous group, as often assumed. The study shows that understanding the diverse and nuanced discursive views of taxpayers would enhance tax authorities, in this case the FIRS, with the capability to develop a social approach to driving tax compliance and increase Nigeria’s tax revenue. This approach accounts for tax morale, trust in tax, accountability and effective tax communication. Amaeshi is a professor of business and sustainable development at the University of Edinburgh and tweets @ kenamaeshi Adi is a development economist at the Lagos Business School, Pan-Atlantic University Ikiebey is a sustainable development expert and tweets @ ikiebey

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Tuesday 26 May 2020

BUSINESS DAY

EDITORIAL Frank Aigbogun

Support Nigeria’s informal sector to spur development

editor Patrick Atuanya

Ensure transparency, effectiveness and innovation

Publisher/Editor-in-chief

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

Bashir Ibrahim Hassan

he COVID-19 pandemic has brought negative economic consequences in the form of job losses, threatened the sustainability of firms and depressed growth in GDP. Nigeria has the challenge of a large informal sector that is most vulnerable to the effects of the pandemic. Nigeria’s informal sector is also the employer of the largest number of citizens. The Federal Government and other stakeholders must roll out measures to provide temporary support to the informal sector. Nigeria must design and roll out measures to support targeted groups and individuals in this sector. It is a tall order. The context is that the informal sector is a significant contributor to the Nigerian economy, accounting for a substantial portion of employment and national GDP. According to the International Monetary Fund (IMF), the informal sector accounts for approximately 65 percent of economic activities in Nigeria. In sub-Saharan Africa,

the informal sector contributes about 72 percent to employment, excluding agriculture. Including agriculture should put figures at around 90 percent. According to the IMF, “Substantial and timely support is crucial. Policies could include cash transfers or in-kind support to vulnerable households, including informal workers.” Nigeria seems to have initiated such steps upon the commencement of lockdown measure. However, we have reasons to believe that the process was not transparent enough and lacked effectiveness, orderliness, and innovation. It has been nothing short of bedlam. Palliatives to the vulnerable seem to have ceased with the easing of the lockdown. We urge a reignition of these measures more transparently and effectively as this will go a long way to lessen the burdens of economic entities in the informal segment. Failure to pay attention to the needs of the informal sector will worsen what is already a precarious economic situation for Nigeria grappling with high unemployment

and poverty rates. The National Bureau of Statistics (NBS) put Nigeria’s unemployment rate at 23.1 percent. Also, half of Nigeria’s population currently live below the poverty line ($381.75) according to the NBS report in 2019. The effect of the pandemic is not only limited to the informal sector. According to the Nigeria Employers’ Consultative Association (NECA), the umbrella organisation of employers in the Organised Private Sector, Nigerian employers are fighting to keep staff on their payrolls amid the financial pain inflicted by the COVID-19 pandemic. Some organisations can only afford to pay 50 percent of staff salaries while some have halted halt recruitment processes, dashing the hopes of graduates and other job seekers. The IMF in its recent report, COVID-19: An unprecedented threat to development, stated that a more supportive monetary stance and injection of liquidity could also play an essential role in sustaining firms and jobs by enabling demand. Financial sector supervision should

aim to maintain the balance between preserving financial stability and sustaining economic activity. The depth of the impact and the speed of recovery would depend mainly on what the authorities do. Central to this is support for the informal sector, given the size and significance of that sector. Job losses pose an unimaginable threat to the security of the nation. We saw a snippet of such consequence when hoodlums called “one million boys” took to the streets disturbing the peace of neighbourhoods amid the lockdown imposed by the federal government. We must minimise job losses in the informal sector even as the big corporates contemplate a reduction in staff numbers. The Nigerian federal government cannot afford to battle insecurity while trying to combat the pandemic effect on the economy and health fronts. GDP measures economic activities. Households and firms in all forms drive these business activities. Showing concern in their survival will positively impact on economic growth and development.

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

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Tuesday 26 May 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

GSK’s 2019 profit hits N917m amid rising cost of sales

onsumer and Healthcare giant, GlaxosmithKline Nigeria plc has released its full year 2019 financial result for the period ended 31st December 2019. Figures from the result s h ow t hat re v e nu e i n creased 12.76 percent to N20.76billion in full year 2019 from N18.41billion in full year 2018, while Cost of Sales increased faster at 17.78 percent to N14.7billion in 2019 from N12.48billion in 2018. Selling and distribution expenses increased slightly at 7.4percent to N3.32billion fro m N3 . 0 9 b i l l i o n , ad ministrative expenses reduced to N1.93billion from N2.24billion. Net profit increas e d 48.6percent at N917million from N617million in 2018. THE company also announced a proposed final dividend of N0.55 kobo per 50 kobo ordinary share from the profit for the year ended 31st December 2019.

Revenue from consumer healthcare segment consisting of oral care, over-thecounter (OTC) medicines and nutritional healthcare stood at N6.27billion from N6.45billion while revenue

from pharmaceuticals segment consisting of antibacterial, vaccines and prescription drugs was N14.48billion from N11.95billion. Investment income through its Interest in-

of wellness and respiratory product to the local partner in the first instance from third quarter in 2021. In 2016, GSK Nigeria that it had received a nonbinding offer from Suntory to acquire GSK Nigeria’s drinks business, which bottles and distributes the Ribena and Lucozade brands. GlaxoSmithKline Consumer Nig er ia Plc was incorporated in 1971. 46.4percent of its issued shares are held by GlaxoSmithKline United Kingdom through its wholly owned subsidiaries, Setfirst Limited and SmithKline Beecham Limited as at 31 December 2019., while an equivalent of 53.6 per cent are held by Nigerian shareholders. The principal activities of the company are manufacturing, marketing and distribution of consumer healthcare and pharmaceutical products. Shares of GSK Traded at N7.15 on Friday and has gained 17.21percent since the beginning of the year.

BANKING

Here are Ten major points to know about how Ardova Plc in first quarter 2020 igures from Nigeria’s listed downstream firm Ardova Plc has revealed how the firm performs in the first quarter of 2020, which is its first financial statement since it officially changed its name from Forte Oil. For many, Ardova Plc is not a name that rings a bell most especially after it changed its brand name from Forte Oil five months ago but the company is gradually rising from obscurity to arguably a major player in the downstream sector. Profit After Tax The company’s Profit After Tax which is the net amount available for the shareholders after all taxation related expenses have been deducted decreased by 85 percent to N497 million from N3.3 billion in the corresponding quarter last year. Earning Per Share Ardova Plc announced an 85.0percent decline in EPS to N0.38 per share in its unaudited first quarter 2020 results.

healthcare supply chain operating model and also announced Fidson Healthcare as preferred local contract manufacturing partner. This would see GSK transfer the manufacturing

L-R: Idowu Oguntona, managing director, Lagos Bus Services Limited; Uwuadileke Chinedu, 10-millionth passenger and winner of the one-month free ticket; Adetoun Gaji, head of corporate services, Lagos Bus Services Limited, and Aluko Kayode, operations manager, Lagos Bus Services Limited, at the LBSL’s commemorative celebration of the 10-millionth passenger Milestone in 10 months of operations, held at Berger Station.

ENERGY

DIPO OLADEHINDE

come on short term deposits declined sharply t o N 2 2 7 . 5 m i l l i o n f ro m N380.53million. The healthcare company last year announced changes in its consumer

The decline in earnings was magnified by a base effect driven by the huge one-off disposal gain of N2.7 billion recorded in first quarter of 2019. On adjusting for the one-off gain, normalised EPS would be lower by 24.0percent YoY. Profit Before Tax Excluding the one-off disposal gain of N2.7 billion recorded in the first quarter 2019, profit before tax would be 27.6percent higher YoY at N580.3 million while unadjusted pretax earnings is 81.5percent lower YoY. Turn over Ardova grew turnover by 22.3percent to N52.1 billion in first quarter 2020, mainly supported by a 24.6percent increase in fuel revenue to N47.8 billion and a marginal increase in lubricant sales. Analysts at CSL Stockbrokers said revenue growth was driven by improved product supply and greater market penetration for white products. Notably, revenue rose across PMS (34 percent YoY), ATK (+276.0% YoY), and Lubricants (+0.1% YoY) subsegments in Q1’20.

Gross Profit Gross profit, which is the profit a company makes after deducting the costs associated with making and selling its products decreased by 9 percent to N2.7 billion from N3 billion in the corresponding period last year. PMS Growth Growth in PMS volumes reflected greater retail presence while the traction in ATK was driven by recent partnerships with international aviation lines. Interest Expense Interest expense declined by 76.1 percent year on year in Q1 2020 due to past deleveraging efforts and overall moderation in yields in Nigeria. Total Borrowing Total borrowings stood at N5.5 billion against N19.8 billion in first-quarter 2019 while normalised interest cover printed at 4.7x (vs. 1.7x in Q1’19) at the end of the review period Cash from operations Net cash from operations increased to N6.4 billion in first-quarter 2020 was driven by improved liquidity management.

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FCMB flags off ‘top-5-in5” initiative, expresses commitment to SME’s growth MICHAEL ANI

eading financial services provider, First City Monument Bank (FCMB), has continued to blaze the trail with innovative and value-added offerings to boost the productivity and overall performance of businesses. The latest is an initiative tagged, “Top-5-In-5”, a digital video knowledge sharing and capacity building series designed to give Small and Medium Scale Enterprises (SMEs) practical insight into different areas of business to inspire them to operate optimally and successfully. FCMB indicated that the “Top 5-in-5” initiative is one more way it aims to add value to Nigerian SMEs and ensure they can truly #ThriveWithFCMB. In a statement, the Bank explained that the series will run for an initial period of 7 weeks, with a new episodereleased every week. Each episode will feature accomplished thought leaders and experts across diverse areas of business who will deliver 5 quality tips in 5 minutes, to help SMEs explore

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solutions to specific challenges or pain-points. The impressive line-up of experts showcased in the series includes Bisi Adeyemi, Managing Director of DCSL Corporate Services Limited; Kelvin Balogun, Senior Partner at Verraki Partners; Aramide Abe, CEO/ Founder Naija Startups and Bukola Smith, Executive Director, Business Development, FCMB. Other thought leaders are Yomi Badejo-Okusanya, Managing Director, CMC Connect; Omotolani Tayo-Oshikoya, Chief Operating Officer, TISV Digital and James Ilori, Managing Director, FCMB Asset Management. Some of the topics are, Building A Sustainable Business that Outlives You; Differentiating Your Business Through Innovation and Raising Funds For Your Business. Other topics include Making Your Network Work For Your Business; Growing A Thriving Side Hustle and Diversifying Your Investment Income. The videos and other information on the series, including a section that offers viewers the opportunity to download useful resources, can be accessed via the microsite https://top5. @Businessdayng

fcmb.com/. Despite the challenges of the environment, particularly the COVID-19 pandemic, FCMB has remained resilient and has sustained the tempo of its support to businesses. As the number one Bank for SMEs in Nigeria, the financial institution has championed and executed several initiatives in this regard, thereby enhancing customer experience. Among these are series of free online trainings, capacity building and empowerment programmes. For instance, in April FCMB organised a BEST Masterclass Webinar on “Turning Challenges Posed By COVID-19 Into Opportunities”. In addition, the Bank has organized various webinars in partnership with the International Finance Corporation (IFC), the most recent of which held on Tuesday, May 12 with the theme “Adjusting Your Business Plan During Crisis”. FCMB has also gone further to support borrowing business customers by providing payment moratoria (loan repayment holiday) during this period to ensure that they can survive, pay their workers and remain in business.

Tuesday 26 May 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

CSR

May & Baker’s interventions on COVID -19 Pandemic SEYI JOHN SALAU

igeria’s pharmaceutical manufacturing giant, May & Baker Nigeria Plc has made donations of hand sanitizers to various institutions across the country including some Police commands in Lagos and Ogun states, the Nigerian Prisons and several other stakeholders. The donations were made on behalf of the company by Mr. Eugene Olewuenyi, Communications Consultant accompanied by Ms Binta Yusuf, Personal Assistant to the Managing Director/CEO. Olewuenyi said the donation is part of the company’s corporate social responsibility and one of the company’s ways to intervene against the Corona virus pandemic. While receiving the hand sanitizers at the Nigerian Correctional Service, Deputy Controller of Prisons in charge of the Kirikiri Custodian Centre, Rev. Ben-Rabbi Freedman said the donation by May & Baker is unique because it touches directly on a highly vulnerable segment of the society . He thanked May & Baker for the donation of cartons of the product and assured that the product will reach those for whom it was intended.

May & Baker is a leading local manufacturer of Hand Sanitizers in Nigeria with the brand name “Smartans”. In a separate statement, the Managing Director /CEO of May & Baker, Mr. Nnamdi Okafor said that the company re-activated its’ hand sanitizer production line within 72 hours of announcement of the COVID -19 index case in Nigeria. He stated that the company’s major goal was to join in the battle against this invisible enemy called COVID-19 with a first objective of forcing down the criminally inflated pricing of hand sanitizers to a point where most Nigerians can afford them. He further stated that it was critical that the pandemic is contained in Nigeria before it goes out of control considering the poor state of our healthcare facilities and opined that good personal hygiene is central to this strategy. This he said informed the company’s decision to donate this product direct to certain institutions that are central to this battle and also some vulnerable groups like the police and prisons/prisoners. He said the company has also taken steps to ensure that “our stakeholders such as staff, visitors and customers have the product for their personal and family hygiene

He said the company took steps to ensure compliance with World Health Organisation’s (WHO) guidelines on personal hygiene including hand washing, use of hand sanitizers and social distancing among all staff and visitors to its premises. In another unique contribution to the fight against COVID -19, the company has mass produced chloroquine tablets for clinical trials following the indication that chloroquine could be useful for the management of the Coronavirus disease. At the wake of the spread of the disease in Nigeria, the National Agency for Food and Drug Administration and Control, (NAFDAC) contacted May & Baker to mass produce emergency stock of chloroquine for possible clinical trials. Okafor said the company has already produced large stock of chloroquine in response to the NAFDAC request. This has already been made available to some health institutions in Nigeria and countries in the Economic Community of West African States (ECOWAS). Chloroquine has long been used for the treatment of malaria. It was a flagship product of May & Baker until some years back when the federal government stopped the use of the drug in treatment of malaria in Nigeria.

Basheer Mohammed (l), federal commissioner, National Commission for Refugees, Migrants and Internally Displaced Persons, presents to a female beneficiary some Covid-19 palliatives in Anyingba, Dekina Local Government Area of Kogi.

Adewoye Oyekanmi (l) secretary/solicitor, Niki Manufacturing Company Ltd, and Uyi Oduwa-Malaka (r), special adviser to the governor and chairman, strategic planning and programme management, during the presentation of food items donated by the company to the state government, at Government House, Benin City.

TECHNOLOGY

Thrive Agric leveraging technology to curb food insecurity post COVID-19 GBEMI FAMINU

hrive Agric, a technologically inclined agricultural enterprise is making moves to combat the projected food scarcity and insecurity challenges post COVID-19 with the use of technology and digitalization in line with global best practices and through its “One farmer at a time” approach, Due to the impact of the Coronavirus pandemic on all sectors of the economy, economic experts project that the downturn on agriculture will result to a surge in food scarcity and insecurity, rising from wasted harvest, labor limitation, restrictive market access among others. For a country like Nigeria that lacks the necessary measures and basic infrastructure to evade or handle occurrences like this, implementing financial interventions and benefits packages introduced by more developed economies in their agricultural sector will

pose a problem. Uka Eje, Chief Executive Officer (CEO), Thrive Agric said the startup is moving to provide a solution to sustainably match food production against a rising population and to foster a fast and effective demand and supply chain between the market and the local farmer. “The goal of the business is to make Africa the food basket of the world by providing smallholder farmers with access to high-quality farm inputs, finance, data-driven advisory and premium markets for their produce. By the end of 2020 the brand plans to leverage on Technology to connect over 250,000 farmers to finance, insight and distribution for their harvest, the brand infuses both digital technology (micro-loan platforms and datadriven advisory) and farming technologies (machinery, soil test, and precision extension farming systems) into agriculture.” Eje said. He further said that Thrive www.businessday.ng

Agric plans to channel credit facilities to its network of farmers along with its bank partners, providing for the farmers as input loans. In addition to the finance and insight, the organisation expects to significantly improve the local farmer’s yield by connecting them to existing premium markets which will double their income, adding that this would also help solve the impending challenge that would face food security during and post COVID-19. Speaking on funding, he said the company has been a beneficiary of various investment platforms like Ycombinator, Jack Ma, Google, Berrywood and other angel investors, as a result, the company is able to develop a proprietary platform customized to the local needs of its target market. Eje added that Thrive Agric has been engaged by the World Bank and the World Food Program, charting the digital agricultural and economic conversation in Africa.

L-R: Bolaji Abimbola, communication lead, Mask4AllNG initiative; Lanre Oyegbola, strategic team lead, Mask4AllNG initiative; Josaih Balogun, baale of Oko Oba, Agege, and Bountiful Busayomi Adelanwa, member, execution team, Mask4AllNG initiative, during the flag off of the free mask for vulnerable communities by Mask4AllNG held at Eid Ground Oko Oba, Agege in Lagos.

L-R: Seriki Adamu Jibril, seriki for the blind; Seriki Ahmadu Gaya, Seriki for people with leprosy, destitute Home, Yaba, Lagos receiving COVID 19 food items palliatives from Alhaji Dr Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria ABCON and Alhaji Gbadamosi Muritala, National Treasurer during the presentation of the food items to the Destitute Home in Yaba, Lagos on Wednesday.

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Tuesday 26 May 2020

BUSINESS DAY

property&lifestyle Demonstrating care beyond housing delivery in time of crisis CHUKA UROKO

ealth, it is said, is wealth. There is a strong correlation between health and housing. Both have chicken and egg relationship, meaning that whenever there is crisis that threatens health, as it is now with Coronavirus, housing and its suppliers must show care and concern. And that, exactly, is what many of them have been doing in varying degrees in the last couple of months. When President Muhammadu Buhari ordered total lockdown on Lagos, Ogun and the Federal Capital Territory (FCT), Abuja, beginning from Monday, March 30, 2020 as part of efforts to control the spread of Coronavirus in Nigeria, the hearts of many individuals, especially in Lagos, were jolted. The reason was simple. Lagos is a city where approximately 6 million out of its 20 million population are in the informal sector, earning daily wages. These include the hairdressers, petty traders, vulcanizers, printers, welders, bakers, hawkers, transporters

and other artisans. Besides, it is estimated that 1.7 million of the city’s population live in poverty. Well aware of the implication of the lockdown order on these residents, corporates and other organisations joined efforts to combat the disease. While some embarked on aggressive public enlightenment on how to keep safe and avoid contracting the disease, others provided palliatives, in terms of food materials, to assist the residents to cope with the presidential order. One of such companies

was Propertymart Real Estate Investment Limited, a leading real estate company, which provided both public sensitisation and palliatives. As an organisation alive to its moral and ethical obligations to its immediate community, the company embarked on a public sensitisation and awareness campaign on COVID-19 in Shangisha and its environs. The staff of the company educated people on personal hygiene, social distancing, and other measures to avoid contracting the virus. They emphasised the need

to maintain good personal hygiene, avoid touching their faces and to wash their hands regularly with soap. The company also advised them to comply with all laws set out by the federal and state governments to curb the spread of COVID-19. A healthcare kit containing sanitisers and medicated soap, among others, were distributed to people by the company. To further mitigate the negative impact of the pandemic on homes in the neighbourhood, the company

Makinde sees nexus between governance and FM in creating, maintaining sustainable environment CHUKA UROKO

he Oyo State governor, Seyi Makinde, says there is a strong link between governance and facilities management (FM) in their respective roles in creating and maintaining livable and sustainable environment. The governor who was a keynote speaker at the 2020 edition of the Nigeria Facilities Management (FM) Roundtable, explained that, as with governance, people hardly commend facilities managers when things are going right, but immediately the ball drops, everyone remembers the facilities manager. The Nigeria FM Roundtable is an annual thought leadership, business-to-business, and policy roundtable sponsored by Alpha Mead Facilities, the FM Subsidiary of leading total real estate solutions company, Alpha Mead Group, in commemoration of World FM Day. This year’s edition which had as theme, ‘Managing the Environment in a Time of Pandemic: People, Places, and Technology’, was a virtual gathering in deference to the ravaging coronavirus pandemic. It had over 400 participants from 17 countries of the world. Femi Akintunde, Group

•Makinde

•Akintunde

Managing Director of Alpha Mead, in his opening remarks, explained that the essence of this year’s roundtable was to ensure that the voices of FM professionals were heard, and that the profession play a significant role in Africa’s recovery agenda. “As a leader in the industry, we appreciate that our position comes with a lot of responsibilities. This includes showcasing the successes of FM in our clime, creating a platform to raise the standards of our profession, and positioning FM as one of the key players in Africa’s economic growth agenda,” he said. Makinde commended Alpha Mead for its leadership of the facilities management industry in Nigeria, and also the FM professionals for their contributions to the health, safety and productivity of people during this period of the pandemic.

He noted that, globally, technology was playing a critical role in helping to manage people and restructure the environment to effectively control and contain the spread of the COVID-19 pandemic, pointing out that FM was playing a critical role behind the scene. “I have repeatedly said in Oyo State that we will be following the dictates of science, data and logic in our fight against COVID-19. Science requires that we isolate infected people, logic dictates that we must consider our socio-economic factors before deciding on our control and containment measures, and data will continue to help us improve on our environmental strategies for a prosperous state. If we do not take these things into consideration, our strategies will fail”, the governor warned. One of the things people have complained about

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in the management of the COVID-19 pandemic in Oyo, according to the governor, is the enforcement of directives. “But we know that social distancing is not innate to people. So, rather than a hard stance, logic is guiding us to invest in sensitization and ensuring that people get the right incentives that will make them adhere to the guidelines,” he said. He noted that government has been having a running battle with space during the period, adding that rather than take up the various offers for existing spaces to be adopted as is for isolation centres, his government is taking a different approach with considerations for the longer term. “We are taking the difficult route of redesigning places to be able to handle both management and control of COVID-19 cases. This is an expensive and time-consuming effort, but we remain committed to our promise to the people”, the governor assured. Mutiu Sunmonu, chairman of Alpha Mead Group, had noted that although the global theme for the World FM Day is ‘Celebrating the Environment’, current realities have necessitated the need to contextualize the theme.

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shared foodstuff to well over 200 households. Representatives of the company also visited the palace of the Oba of Shangisha, Oba Jamiu Adetola Ajibola Lawal and left food items for his household, meaning that nobody was left out of the palliative, as even security guards in some premises got food items. “This is a thoughtful gesture, and we express our gratitude to Propertymart. They could have chosen to go elsewhere, but they decided that their immediate community should benefit first. God will continue to prosper the company,” said one of the beneficiaries. Abimbola Arasi, Propertymart’s Business Head, explained that the gesture was a continuation of their corporate social responsibility initiatives. He explained further that the company which has delivered over 6,000 housing units and serviced plots to families and individuals in Lagos, Ogun and the FCT, Abuja, couldn’t just sit back and failed to provide relief to people. “Shangisha and environs are our immediate commu-

nity. Though no one expected the pandemic, we just can’t be unfeeling while people struggle to make ends meet as a result of the disruptions this crisis has caused in their daily lives and businesses,” he said. Arasi also explained that Propertymart began its response to the health crisis with sensitisation campaign, educating people about the deadly nature of the virus and how to avoid contracting it. “You know, some people assumed it was a hoax, and we needed to let them know it was real and dangerous. That was why we embarked on the enlightenment campaign before the food relief. “Upon the realisation that people might be running out of food items in their houses, we also decided to intervene in that area. We are happy that the lockdown is being gradually relaxed. This will enable people that have exhausted their stock to restock,” he said. Arasi added that even after the pandemic is defeated, Propertymart will not shirk its responsibilities of assisting its immediate community and others that might need help.

Here’s what Family Funds is doing to raise capital to build for low income earners CHUKA UROKO

espite the pains of the coronavirus pandemic, authorities of Family Homes Funds (FHF) says it is looking beyond the traditional equity and debt to enable it to raise capital to build affordable housing for low income earning Nigerians. The Fund is innovating around raising capital of its own and therefore it is planning, over the next few months, to visit the capital market with infra-credit. It is also planning to raise Sukuk bond close to N50billion to finance some of its programmes. In addition, the Fund will be going to the traditional capital market to raise capital. “Beyond that, we are raising capital from development finance institutions; we have funding agreements and partnership with Shelter Afrique and a whole range of organizations,” Femi Adewole, the Fund’s MD/CEO, said in Abuja recently. Adewole noted that a vast majority of Nigerian families have their household income below N100,000 monthly. Such people are only able to afford houses built specifically to address their needs and income level, he said, adding that it is that category of Nigerians that the Fund is providing housing for. @Businessdayng

“FHF is specifically targeted at housing solutions for Nigerians who are earning less than N100,000 per month as household income. Our social Rental Housing fund is designed to enable people at the bottom of the housing ladder to enter a home of their choice in the location of their choice with very minimal capital commitment,” he said. Adewole revealed that, over the last nine months, they have committed about N60 billion to building about 14,000 homes across nine states in the North, East, West, South And North Central geographical zones of the country. Funding, he said, is critical to actualize the goal of affordable housing and FHF is fashioning out innovative solutions that are result-driven in terms of finance, housing delivery and design standardization for projects it handles. As a federal government intervention for affordable housing delivery, the Funds has the mandate of delivering 500,000 housing units in five years. Part of that mandate is also to create 1.5 million jobs. To actualize this along with reducing the cost of housing, Adewole disclosed that the Fund is working with agencies like NBRRI and other major manufacturers of building materials like cement with the aim of achieving at least 35 percent of building inputs being manufactured locally by 2021.

Tuesday 26 May 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Covid-19: Oil companies face maintenance worry on Nigerian oil assets DIPO OLADEHINDE

he effect of the coronavirus pandemic is causing maintenance worry for most oil and gas companies operating in Africa’s biggest oilproducing country, storing up problems for an industry already reeling from slumping prices. Apart from the IOCs, there are at least 50 small to mid-sized Nigerian producers pumping between 1,000 and 100,000 barrels each day whose operation has been hit by an unprecedented global pandemic which has also snarled the supply of spare parts and has prevented maintenance workers from doing their job. The industry typically takes advantage of periods of slow demand to do repair work but with oil prices nearly halved since the start of the year, this is no

ordinary trough. Companies, many of them lumbered with high debts, are slashing all but the most essential work. Some units were shut down for maintenance but the work never started,” Amanda Fair fax , dow nstream oil market analyst at Genscape, a firm that monitors field activities with cameras said at a webinar event. For oil companies, asset maintenance is not just an

obligation, but also a significant economic opportunity. “When done well, companies can achieve the operational efficiency needed to weather volatile and uncertain oil markets by extending the life of their steel assets,” Kelvin Atafiri who runs Cavazanni Human Capital Limited, an investment firm exposed to the oil and gas sector said. Oil and gas companies

Renewable energy to boost employment as FG reverses VAT imposition STEPHEN ONYEKWELU

nvestors in Nigeria’s renewable energy sector can now heave a sigh of relief as the Federal Government of Nigeria recommends that eight imported items be exempted from value-added tax. This will boost economic activities in the sector and drive employment. Wind-powered generators, solar powered generators and solar cells whether or not in modules or made up into panels are among the eight renewable energy equipment that made the list of recommended items for VAT exemption in the number 18, volume 107 of the Federal Republic of Nigeria Official Gazette. Others are photosensitive semiconductor devices, solar DC generators of an output not exceeding 750 Watts (W); solar DC generators of an output exceeding 750 W but not exceeding 75 kW. Solar DC generators of an output exceeding 75 kW not exceeding 375 kW and solar DC generators of an output exceeding 375 kW

also made the list. “A big thank you to the Federal Government of Nigeria, the Ministry of Finance and the Legislature, for pulling this through,” Adetayo Adegbemle, executive director PowerUp Nigeria said. Last year, experts under the platform of Environmental Rights Action/ Friends of the Earth, Nigeria (ERA/FoEN), called on the National Assembly to make laws for more relaxed fiscal policies for renewable energy products. Godwin Ojo, executive director of the organisation, said the reduction in taxes will facilitate growth in the sector. Since January 2018, the Nigerian Customs has been demanding payment of 5 percent duty and an additional 5 percent VAT on solar panels imported into the country citing obedience to Federal Government’s fiscal policy, which contradicts the country’s power aspirations. Beyond pursuing climate goals, many governments are prioritising renewable energy as a driver of ecowww.businessday.ng

nomic growth through the creation of job opportunities a scenario that holds many lessons for Nigeria currently struggling with a rising unemployment rate. In highly populated countries like China, Brazil, United States and India the rise of decentralised renewable energy as a solution to electrification problem is also bringing with it a solution to high unemployment. As global energy transformation continues to gain momentum, this employment dimension ensures socio-economic sustainability and provides yet another reason for countries to commit to renewables a situation Africa’s largest economy has been struggling with rising unemployment in the past four years can learn from. “The present FG increased Import Duty and imposed VAT on renewable energy products in 2015. This of course, led to difficulties in the clearing of imported products at the port, with its attendant increase/ rise in renewable energy products in the market,” Adegbemle said.

involved in exploration and production spent an average of $80 billion a year on maintenance between 2015 and 2019, according to Rystad. “When the virus and the quarantine measures have been eased and it is safe to get back to work, it doesn’t mean the same work can be done with the same intensity because the weather windows could be missed and that can push maintenance even to

the next year,” said Matthew Fitzsimmons, Vice President of the Oilfield Service team at research firm Rystad. Also, the lockdown in Italy, which has suffered one of the worst virus outbreaks globally, has reverberated across the energy sector because the country is a leading valve manufacturer, which is an ever increasing need in the oil and gas sector most especially upstream firms. An industry source in Milan told Reuters that until recently less than 10 percent of Italian producers remained active, struggling to supply even strategic valves to overseas clients. Italy eased its coronavirus lockdown early in May, giving factories the green light to restart production lines. One energy company in Nigeria said it was hoping to receive valves from its Italian supplier soon as they had been first in line when the shutdown began, the source said. But others are

less optimistic. A maintenance and development operation at an onshore field in Nigeria was delayed for months as the local oil firm could not receive equipment on time, a company source told Reuters. Oil companies across Nigeria have also struggled to move workers to where they are needed due to lockdowns that vary by state, and regulations from the petroleum regulator limiting the number of workers at any oil site is also complicating operations. Rivers state, home to the oil hub of Port Harcourt, is under a lockdown so strict that the governor arrested 22 oil workers who landed there, despite federal government permits allowing them to travel. The Rivers movement restrictions have also trapped pipes and other needed materials that are needed at oil fields outside the state, industry sources told Reuters.

Explainer:

Why has the pump price of diesel remained same despite oil crash? ISAAC ANYAOGU

ithin the past three months, the oil market has been hit by the twin combination of a price war among producers and a deadly pandemic that only weeks ago took the market into negative territory where producers had to pay buyers to take the WTI crude grade. The governments of many countries responded to the outbreak of COVID-19 by instituting lockdown to contain the spread. Therefore factories and businesses have closed, airlines, subways and even vehicular movement was curtailed. This led to fall in demand for refined petroleum products. Therefore prices of refined products dropped on account of slow demand. The Federal Government even cut the retail price of petrol from N145 to N125 and started talking of removing subsidies. But the price of diesel in Nigeria seems insulated from the upheavals in the oil market. This drew the ire of private sector operators who use the bulk of diesel imported into the country. The misalignment of pump price of diesel in the country with current realities of low oil price in the global market, prompted a petition by the Nigerian Association Of

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Chambers Of Commerce, Industry, Mines And Agriculture (NACCIMA) representing the organised private sector, to the president through the Babatunde Irukere, director general of the Federal Competition and Consumer Protection Council FCCPC, seeking an investigation into “the excessive price of automotive gas oil (ago)/diesel despite decline in international crude oil prices.” “Our investigations reveal that AGO/Diesel has continued to retail at a pump price as high as N226.50 (Two Hundred and Twenty-Six-naira, Fifty Kobo) in several filling stations across the Country, which is apparently at odds with the market dynamics that should determine pricing at the present time,” NACCIMA said. Diesel is a major cost component for the manufacturers and household consumers. It is used to power the generators, to bring alive the machinery, computer servers and mobile phone towers that run Nigeria’s economy, and serves as an intermediate input/cost element in production. The change in price invariably affects productivity, competitiveness and profitability. The pump price and availability of AGO/Diesel indeed affects both the micro and macro economy of every nation and Nigeria’s Dieseldependent economy is no @Businessdayng

exception. “In view of the foregoing, we hereby appeal for you to use your good office to urgently investigate the Downstream Sector of the Petroleum Industry in Nigeria to clarify the correlation between the prevailing pump price of AGO/Diesel and the landing cost, with a view to ruling out the possibility that the pricing may be unfavourably skewed against the end-user on the supply chain,” NACCIMA said. However, operators in the downstream sector have a different explanation for the situation. According to Huub Stokeman, managing director of OVH Energy Marketing Limited in a webinar, the major reason is that diesel stock do not clear as fast as petrol because it accounts for only 5 percent of refined products sold at filling stations. The use of diesel is mainly by businesses for their power plants and large generating sets so consumption volumes are much smaller than petrol and so are profit margins. Diesel importers also say it takes sometimes as long as four months to clear a stock which means that before an inventory clears, the cyclical boom and burst in the oil sector would have impacted the market and temporary gains from crude price decline would have been eroded.

Tuesday 26 May 2020

BUSINESS DAY

POLITICS & POLICY

The Almajirai ‘uncensored’ movement and the Yobe example ZEBULON AGOMUO

he competition among some Northern states in the last few weeks has been intense. The offloading of street urchins popularly known as the Almajirai into states within the region or other states in the south has continued to dominate the media space. No day ever passes without a case of trailer-load of these children being dumped in one state or the other. Ogun, Lagos, Ondo, Enugu, Imo, Abia, Edo and Rivers States have cried out over the invasion of their domain by the uninvited guests. Recently, Taraba State in the North East rejected 100 Almajiri children dispatched by a North Central Nasarawa State. This happened at a time a frosty relationship was breeding between Kano and Kaduna over the repatriation of over 160 of the urchins to Kaduna. The bone of contention was that Kaduna alleged that Kano deliberately dumped coronavirus-infested children in her domain, a situation the government described as health risk. It said that when subjected to test, a number of the children tested positive for the novel pandemic. The outcry that has greeted the presence of the children in some states is also based on the understanding that they are purveyors of the dreaded virus as a result of their roving nature that has no regard for social distancing or observance of other protocols expected of every citizen at this time. There are also concerns that members of the Islamist sect, Boko

Haram and other bandits may have taken advantage of the chaos in society to infiltrate other states in the south. Observers say that some of the boys that were moved in trailers under the cover of the night cannot be said to be Almajirai as they appear very energetic and well-kitted. Many analysts have expressed the view that some bandits operating in parts of the North may have relocated to south to spy out vulnerable areas to ply their wicked trade. Some observers have expressed concern over the unexplained exodus to the south of the Almajirai who are being offloaded in other states in the cover of the night. Kenneth Mbah, a legal practitioner, who spoke with BusinessDay wondered why the Nigeria Governors’ Forum (NGF) has not been able to address what he de-

scribed as “worrisome development” since it is the governors themselves that champion the repatriation. “I should expect the Governor Kayode Fayemi-led NGF to discuss the ugly development. Is there a sinister motive? What is also baffling to me is that the Federal Government has maintained sealed lips over the unauthorised movements at a time when interstate movements were said to be illegal. A responsive government should have spoken out considering the apprehension the movements are causing in the polity,” Mbah said. Kayode Ojo, a school principal, wondered why and how the Almajirai are having easy ride into strange states and environment, whereas most Nigerians have been banned from moving from their states. “Today, there are many Nigerians stranded in their villages where they had gone

for burial or marriage ceremonies from Lagos, and they were there when the lockdown was announced, then the extension and now worsened by the ban on interstate movement. These people were cut off from their loved ones in Lagos, not to talk of business. They are afraid to risk their lives trying to return to their base by all means. But it does not take the trucks bringing these Almajiri children any stress to invade other states. This is where the allegation of security personnel being complicit makes sense to me. “On a regular basis, these days, trucks of Almajirai are being intercepted all over the place. All the states in the South East and South-South are crying over the invasion of the aimless children into their territory. I really do not understand what is going on in Nigeria,” Ojo said. Last Wednesday, North-

ern governors insisted that they would continue to repatriate Almajirai to their respective states, irrespective of the advice by members of the National Assembly that such action could worsen the Covid-19 pandemic in the country. However, Yobe State government in the North East, which is currently battling with too many unexplained deaths in the state, and which has been an epicentre of the Boko Haram insurgency, said it was not going to move the Almajirai in the manner other states are doing. It said what was uppermost in its plans was to provide better education and living condition for the children. Speaking on a television programme recently, the Yobe State Commissioner for Health, Lawan Gana said the state government was mindful of the fact that the Almajiri children deserved love, care and deserved to be treated with dignity. Gana said that the decision of the Governor Mai Mala Buni administration in Yobe against repatriating the Almajirai from the state contrary to the Northern governors’ agreement to do so was to “avoid unnecessary distortion in the system.” “One of the things we are doing is working towards improving education- not only the Western education but also the Quranic education. We are looking at a situation where when you have an epidemic, moving out people from places that are infected to places that are not infected, may not necessarily be a good idea,” Gana said. According to him, “A typical example – the Almajiris

that were repatriated from Kano to Kaduna, so many of them tested positive for Covid-19, same also those that were taken to Jigawa State. If pro-active measures were not taken, they would have been left to go into the society and then, of course, they would continue to spread the disease.” The commissioner explained that the “real thing is that when you have an epidemic, you should avoid a situation where you move people en masse from one state to the other. So, the approach is to do these things in a systematic manner in order not to create a panic in the system.” The Commissioner further said: “We also need to understand that these are children and we should really need to be careful in whatever action that we want to take so that they don’t feel as if they were being neglected. We must avoid the negative consequences of these actions. This does not mean that we have allowed things to go on in a haphazard manner. No; but we are actually working, doing things in such a way that will make sense and will not create unnecessary distortion in the system.” In the last two months, there have been the back and forth movements of these children from one northern state to the other. It appears that rather than accepting them, the states are re-routing them to the south where they currently constitute a huge nuisance. The concern is that apart from exacerbating the Covid-19 situation in the country, the forced relocation of the children could worsen ethnic conflict in the country.

Ondo APC crisis: We’re yet to withdraw our case against party exco in court - Unity Forum KORETIMI AKINTUNDE, Akure

eactions have continued to trail the withdrawal of a case in the suit No. FHC/AK/CS/10/2019, filed by the embattled factional Chairman of the All Progressives Congress (APC) in Ondo State, Idowu Otetubi, challenging the composition of the state executive committee of the ruling party. Otetubi, one of the party chieftains, had dragged to court, the APC executive

members led by Ade Adetimehin, challenging their composition in 2019. Addressing journalists in Akure, Otetubi said he decided to withdraw the case in court because of his desire to “promote peace and reconciliation within the APC, Ondo State Chapter.” Reacting, one of the members of the Unity Forum, Tolu Babaleye said the aggrieved group was not moved by Otetubi’s decision to quit their midst and withdraw the case. www.businessday.ng

He said that the group would appoint a new acting chairman to replace Otetubi and his Secretary, Gani Muhammed who is now Special Adviser to Governor Rotimi Akeredolu on Media and Publicity. According to Babaleye, Otetubi and Muhammed are just two out of the 13 plaintiffs in the suit, saying: “No retreat, no surrender! We shall take our party back from these usurpers.” “As much as I respect the rights of Hon. Idowu Otetubi

to withdraw his support for anyone or pledge his support for any other person at anytime, he should also respect the rights of others to press home with their political rights and entitlements moving forward. “I wish to state it categorically that there are 13 plaintiffs who are suing in representative capacity for and on behalf of all the 203 wards Excos, 18 LG Excos and State Executives of the APC faction of the Unity Group in Ondo State. Idowu Otetubi and

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Gani Muhammed are just two out of the lots,” he said. He further said: “I spoke to Hon. Otetubi when I read the news item and he offered his explanation and apologised to me and I appreciated his frustrations, especially when he told me about how he was abandoned and the recent threat to his life. “Otetubi has the right to withdraw his name but he cannot discontinue the suit without the consent of other plaintiffs (Claimants) in the suit and those who @Businessdayng

gave them consent from all the 203 wards and 18 LGs in Ondo State. “The reason why those holding sway in the state are desperate at buying anybody buyable is the fear of direct primary. We are aware of all the undercurrents and quest for indirect primary. “Let me assure our teeming supporters in the Unity Group in Ondo State that the case is still on and alive in court. It is adjourned to June 11 at the Federal High Court Akure.”

Tuesday 27 May 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Beijing seeks to reassure business over Hong Kong security law But investors fret about threat to city’s autonomy from law that has sparked new pro-democracy protests HUDSON LOCKETT, DANIEL SHANE AND SUE-LIN WONG

hina has sought to reassure international investors that a proposed national security law that critics say gravely threatens Hong Kong’s autonomy would instead improve the business environment in the Asian financial hub. Speaking a day after pro-democracy protesters returned to the streets of Hong Kong following a hiatus during the coronavirus epidemic, Xie Feng, China’s foreign ministry commissioner in Hong Kong, said the proposed legal changes would restore calm following a year of unrest. “The international community can rest assured about the legislation for Hong Kong,” said Mr Xie. “The legislation will alleviate the great concern among the local and foreign business communities about the violent and terrorist forces attempting to mess up Hong Kong . . . and will create a more law-based, reliable and stable business environment for foreign investors.” The speed of the announcement from Beijing last week that it planned to impose the new legislation on Hong Kong caught many investors by surprise and has raised concerns over the city’s future as a global financial hub. The proposal to draft the law is expected to be passed by China’s rubber-stamp legislature on Thursday. It would prohibit treason, secession, sedition and

Police fire tear gas at protesters during demonstrations against a proposal to enact new security legislation in Hong Kong © AFP via Getty Images

subversion, and permit China’s state security services to maintain a formal presence in the semiautonomous territory. Hong Kong is required to implement an anti-subversion law under its mini-constitution, the Basic Law, which grants the city a high degree of legal and political autonomy from Beijing. Critics say Beijing’s plan to instead impose the law on the city threatened to undermine rule of law in the territory. On Sunday, police fired tear gas and arrested about 180 people among the thousands who marched to protest against the new law. Mr Xie told a gathering of Hong

Kong’s diplomatic community, chambers of commerce and journalists that the proposed legislation was also aimed at improving the state of Hong Kong’s economy, which fell into recession for the first time in a decade last year. “Only in this way can Hong Kong strengthen its status as an international financial, trading and shipping centre and can Chinese and foreign business here have a more profitable future,” Mr Xie said. Investors are scrambling to figure out the implications of China’s move to impose the law. Th e A s i a n f i na n c i a l hu b’s benchmark Hang Seng index dropped as much as 1.8 per cent

on Monday morning, before recovering those losses to close 0.2 per cent higher. “It’s quiet. It’s really quiet,” Andy Maynard, a Hong Kongbased strategist at China Renaissance, said of trading activity on Monday. “People are pretty much sidelined . . . liquidity is not that great and turnover is down significantly.” Mr Maynard said traders were holding their breath for potential retaliation from Washington against a backdrop of rising USChina trade friction. The Hang Seng index plunged 5.6 per cent on Friday after Beijing announced the proposed legislation. Some investors in the city had

rejigged their portfolios in recent weeks out of concern that political tension could flare up again. Is it just going to be a Sword of Damocles hanging over Hong Kong, or are they going to take the idea of national security so broadly as to arrest any opposition? Richard Harris, Hong Kong investor Ronald Chan, founder of Hong Kong-focused fund Chartwell Capital, said he had significantly reduced his allocation to the city’s stocks ahead of the security law announcement. He is instead holding more cash and looking at opportunities in Japan. “We all knew this was going to happen. We have done what we can to hedge the market and brace for the storm ahead,” Mr Chan said. “The national security law could be the breaking point between China and the US.” Other investors said that the city’s market was likely to perform poorly until there was further clarity on how the law would be applied. “The security law news will lead to general Hang Seng index underperformance until we see how far the Chinese Communist party are prepared to take this,” said Richard Harris, a Hong Kong-based investor and former Citigroup and JPMorgan director in the city. “Is it just going to be a Sword of Damocles hanging over Hong Kong, or are they going to take the idea of national security so broadly as to arrest any opposition? That’s going to take time to become visible.”

Citi investment bank boss predicts resurgence of offices Paco Ybarra says bankers need face-to-face contact despite coping during lockdown LAURA NOONAN

he benefits to banks of having their staff work from home will “erode over time”, Citigroup’s investment banking boss Paco Ybarra warned as he made the case for offices hollowed out by the coronavirus pandemic. Even with most staff working from home, investment banks have been able to complete deals such as the £31bn Liberty Global Telefónica merger and profitably navigate some of the most volatile and active markets in recent memory. That has prompted some executives including Barclays’ boss Jes Staley to predict the demise of the industry’s iconic skyscrapers. “I am very cautious about this,” Mr Ybarra said in an interview. He argued that banks had been able to make the most of remote working because of “capital that we have accumulated before” when people met face to face. “At some point, you would see depreciation of that capital and then you would start seeing problems,” he added, pointing to the

Paco Ybarra argued that banks have been able to make the most of remote working because of “capital that we have accumulated before” when people met face to face © Micha Theiner

potential for difficulties with onthe-job learning and people’s ability to relate to each other. “Some of the feeling that we have about how well this thing works, I think will erode with time.” The longtime fixed income trader said there was “definitely still a need for the office”. Still, Citi will consider having some staff work from retail branches and satellite offices rather than its main offices in London and New York, which Mr www.businessday.ng

Ybarra said would welcome just 5 per cent of staff back during their first phase of reopening. The banker, whose division generates two-thirds of Citi’s profits, also predicted more flexible arrangements, such as staff working two days from the office and three days remotely. “It will be trial and error,” he added. “This is like an experiment that no one signed up for but we all go through.”

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The back-up offices, Citi’s traditional Plan B in the event of a major business disruption, are under review. “We will have to rethink . . . maybe we don’t need that,” Mr Ybarra said, adding that the regulatory requirement was to have “operational resiliency” which could also be achieved through people working from home. Citi grew trading revenues faster than any other Wall Street bank in the first quarter, partly as a result of Mr Ybarra’s efforts to boost Citi’s equities business, where first-quarter revenues rose 41 per cent. Across the Institutional Client Group, which Mr Ybarra runs, risk weighted assets increased by around $100bn to around $900bn. Analysts have argued that big banks will benefit from the crisis by picking up share from weaker rivals. “I don’t think I would describe it as we’re seeing this moment of weakness out there and we are going to go in for the kill,” said Mr Ybarra, who was promoted to run the investment bank last year. “Going through one of the worst recessions in history you have to @Businessdayng

be careful.” He believes that while periods of high volatility will persist because of coronavirus, the peak for banks was the first quarter, when investors were doing their most significant repositioning. While he expected Citi to gain share over the crisis, he was also conscious that some of the market gains won by big banks in the first quarter could recede over time, as volatility calms. Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here. He is fixated on how negative rates — already “one of the biggest problems European banks have” — could affect his business. “It’s not like anyone said, this is a great tool we want to use. Negative rates happen when nothing else works,” Mr Ybarra said. “The US appears much more determined to avoid negative rates (than the UK) and have been very clear when they have talked, but I would not take that as a guarantee that it will not happen.”

Tuesday 27 May 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Companies ditch commercial paper to lock in longer-term debt Coca-Cola, PepsiCo and Pfizer among groups reducing reliance on short-term funding ERIC PLATT AND COLBY SMITH

ommercial paper has lost its fizz. Dozens of blue-chip companies including CocaCola and PepsiCo, which have long relied on the market to raise cash, are paying off tens of billions of dollars of borrowing in favour of new longer-term facilities. The withdrawal from the $1.1tn commercial paper market, typically used by companies to finance payroll, inventories and other short-term obligations, came swiftly after fears over coronavirus took hold. Along with the two beverage giants, pharmaceutical group Pfizer, theme park operator Walt Disney and cigarette maker Philip Morris International have issued longer-term debt to pay off commercial paper (CP) borrowing. In total, more than 40 companies have raised a combined $97bn in debt this year, in part to refinance CP, according to data provider Refinitiv. That marks a record high and comes close to surpassing the $105bn borrowed in all of 2008 and 2009 during the previous financial crisis. In turn, CP issued by companies outside the financial

Coca-Cola has long relied on rolling over short-term debts © Bloomberg

industry has dropped to its lowest level since 2016, figures from the US Federal Reserve showed last week. The move by corporate treasurers to secure other sources of funding was prompted by turmoil in the CP market in March, when some investors refused to lend for maturities longer than five days. Companies at first drew down credit lines with banks to bolster their cash reserves, and then began to

issue longer-term bonds after a series of interventions from the Fed helped to stabilise credit markets. The Fed’s backstops included the CP market, where it launched a facility to lend to companies on a short-term basis. But advisers on Wall Street warned that another market downturn could cause funding to dry up once more. “We don’t have the ‘all clear’ signal just yet so the practical

path is to go out and obtain [long-term financing],” said Kevin Foley, global head of debt capital markets at JPMorgan Chase. “[CP] was the first market impacted and companies are not going to look prudent to go right back to it, if you have these other options.” Disney, which raised $11bn through bond markets in May and had $8.5bn of CP outstanding in late March, said it had

judged it “appropriate to term out some debt given the attractive level of rates and the uncertainty that remains in the financial markets given Covid-19.” The sharp drop in US Treasury yields has also encouraged companies to shift from CP, which has maturities of up to 270 days, to longer-term debt. Meghan Graper, head of US investment-grade syndicate at Barclays, noted that several companies that have refinanced CP have secured record-low costs of borrowing in the bond market. Pfizer’s new $750m five-year bonds carried an annual coupon of just 0.8 per cent, for example. The drugmaker had more than $14bn of CP outstanding on May 1, with an average annual interest rate of 1.43 per cent. Other highly rated corporate borrowers in the CP market have secured 90-day funds at annualised interest rates of between 0.15 per cent and 0.48 per cent over the past fortnight. “Overall it is more efficient to finance for two to five years than it is to do so in the commercial paper market,” said Guy LeBas, a strategist at Janney Montgomery Scott. “With the yield curve so low in absolute terms, from a treasurer’s standpoint, it is a lot safer to secure funding [elsewhere].”

Companies line up to sell stock as US IPO market reopens Backlog formed while Covid-19 outbreak kept new share sales on hold RICHARD HENDERSON AND MILES KRUPPA

burst of US stock market listings is expected in coming months after coronavirus forced a pause in new launches. Six companies have filed plans to float in the US in the past two weeks, surpassing all the filings in April, according to data provider Refinitiv. The list includes online car dealer Vroom and fintech provider Shift4 Payments, and bankers say a smattering of other large companies could soon join them. While many companies have binged on debt to tide them through the coronavirus shock over the past two months, private companies put off plans for initial public offerings. Some companies whose listings have been hotly anticipated, such as short-term rental site Airbnb, have obtained the funds they need through rounds of private funding. That could soon

change. The market for public equity sales “is picking up sooner than anticipated,” said Neil Kell, chairman of global capital markets for Bank of America. “You’re going to see a wave of IPOs come to market that are larger rather than smaller because in volatile markets investors want more liquidity. This is not a market where the marginal, smaller IPO will get done.” New listings had come to a www.businessday.ng

standstill as the stock market fell dramatically in March and volatility spiked. Only recently has the Cboe’s Vix, a measure of expected gyrations in the benchmark S&P 500 index, fallen below 30 — still high but far below the record 85 hit in March during the most intense phase of the coronavirus-induced sell-off. New listings could be welcomed by investors, even if volatility remains elevated.

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SelectQuote, an online insurance comparison platform, sold shares on Wednesday, raising $570m. The IPO was the largest in the US since the start of February and shares in the company ended their first day of trading up 35 per cent. “We’re seeing signs of the IPO market reopening and it is being led by growth equity,” said Paul Abrahimzadeh, co-head of North American equity capital markets for Citi. “With yields at record lows, capital that has the ability to flow between asset classes is moving into equities.” The trouble facing many groups, including some in dire need of cash, is that the drop in business and consumer spending caused by coronavirus has weakened first- and secondquarter revenues, prompting some to postpone a listing altogether. So far just 34 companies have floated in the US this year, raising $9bn — the lowest tally since 2016, according to data @Businessdayng

from Refinitiv. The drop has squeezed fees for underwriters on Wall Street and stands in stark contrast to last year, when deals from ride-hailing groups Uber and Lyft sent the total for the same period to $25.5bn. Used-car retailer Vroom, which filed for its IPO on 18 May and is backed by T Rowe Price, the US fund manager, and Bill Gates’ Cascade investment office, disclosed it had furloughed one-third of its staff this month and initiated salary cuts for remaining employees. The company recorded widening net losses of more than $140m last year on revenues of almost $1.2bn and came into May with about $160m of cash on hand. Other companies that have registered to list this year include Warner Music and Albertsons, the supermarket chain — two groups that filed paperwork prior to the market sell-off and are still actively planning an IPO in coming months.

Tuesday 26 May, 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Education for the handicapped suffers neglect, BusinessDAY investigations revealed • As 19 million handicapped children stay out of school • National policy on education says they are entitled to free education at all levels MARK MAYAH

ducation for the handicapped, despite its entrenchment in section eight (8) of the National Policy on Education has continued to be a neglected arm of education in the country, Businessday investigation has revealed. Out of about 19. 2 million handicapped children who are of school age throughout the country, only about 150,000 of them are enjoying any form of special education while about 19 million handicapped still require such education. Data from the Special Education Unit of the Federal Ministry of Education, indicates that many States of the federation and Abuja have not shown much interest in the education of the handi-

Adamu Adamu, education minister

capped. A statistical study carried out by the unit in 2018 states in part: “Special Education in Nigeria may yet commence the necessary metamorphosis towards rationalisation of

objectives and harmonisation of modalities. “ This will be achieved through national workshops and seminars that will come out with innovatives, scientific and grassroots -oriented

LASG move to boost learning outcomes among primary school pupils • Introduces Read Aloud Lagos initiative KELECHI EWUZIE

s part of its sustainable solutions to improve learning outcomes in schoolsl as well as reading culture among school pupils, Lagos State Office of Quality Assurance has launched an initiative tagged Read-Aloud, Lagos. The government observes that considering the danger and complexity of things occasioned by the Covid-19 pandemic, it has become necessary to create and stimulate interests of school children in reading books. Abiola Seriki-Ayeni, director-general Office of Education Quality Assurance (EQA), explained that the Read-Aloud, Lagos was an initiative of the Office designed to encourage all children within the primary school age bracket in the State to enjoy reading, increase knowledge, and improve their comprehension. She further said the initiative will also encourage literacy learning, enhance child’s brain to associate with books and print with pleasure as well as extend reading attention span According to Seriki-Ayeni, “As an education Quality Assurance person, I was moved by the conviction that children

performs better when they are led in the act of reading by someone else. Therefore, Reading-Aloud is singlehandedly the most important activity for building the knowledge required for eventual success in reading”. She noted that the programme was initiated to bridge the identified reading gap among school pupils, revealing that the information available to the office shows that there have not been enough time allotted to reading during school hours and outside school. Speaking on the objective of the programme, the Director-General stated that “Children should have models on how to pronounce words and enjoy stories and think critically, hence this initiative, to help our leaders of tomorrow.”

Folasade Adefisayo, Lagos education commissioner www.businessday.ng

Seriki-Ayeni stated that the read aloud project would feature a Special edition on the Children’s Day celebration where different dignitaries including Mr. Governor of Lagos State, Babajide Sanwo-Olu, and the Honourable Commissioner for Education, Folashade Adefisayo would virtually read to children online, through social media platforms, Radio and TV and the website of the office. While celebrating the children on the special day through the launch of the Read-Aloud, Lagos, the Office of Education Quality Assurance will be advocating for students/pupils safety and also educating for the awareness and importance of a healthy childhood. While practically demonstrating the pattern the “reading to students” would take, she disclosed that plans have been concluded to begin the programme officially by June 1st, 2020 after a special edition that would be held on Children’s Day, stressing that the “Read-Aloud, Lagos” will be a continuous virtual engagement of targeted children and this initiative would be made accessible in different languages and through various channels of communication. Continuous virtual engagement of targeted children.

guidelines for the coordination of special education development in Nigeria. “It is hope that the newly established Joint Consultative Reference Committee will marry the different implementational approaches as well as the varying socioreligion-cultural thoughts in Nigeria into the long-soughtfor realistic special education guidelines.” Education for the handicapped, apart from the apparent apathy of the supposed implementaters, suffers lack of uniform guidelines on teacher/pupil ratio, Businessday research also showed. It was found out that, whereas in some states, the teacher/ pupil ratio stood at 1:1; others it was up to 1:50; 1:30; 1:25; 1;19 and 1:16. Education watchers, however urged the three tiers of governments to instill effort to revitalise primary educa-

tion in Nigeria through the improvement of the learning environment; the provision of more books and employment of teachers; it will be necessary to look into the plight of handicapped children of school age. The National Policy on Education and the Nigerian Constitution guarantees the right of education at all levels for the handicapped children, irrespective of tribe,religion and natural endowment. The National Policy on Education, according to our findings categorises special needs persons “based on visual impairment,hearing impairment, physical and health impairment, intellectual disabilities, emotional and behavioural disorders,as well as speech and language impairment. Others in the category of special needs person, according to the policy document last revised in 2013, are

with learning disabilities, the gifted, talented and abino. The policy also makes education free at all levels for persons with special needs. Based on data, our correspondent obtained from the Federal Ministry of Education, special needs schools either exist as full fledged special schools or inclusive schools. Businessday gathered that the highest number of fullfledged special needs schools are in Kano state with 153. It is followed by Kaduna State with 79 and Lagos with 75. States with the least number of full-fledged special needs schools are: Borno (4), Bayelsa (5) and Zamfara (7). The handicapped fall into the category of children who, as of right, should receive education. More attention is therefore required in this regard for the handicapped if the constitutional directive is not to be flouted.

24-Year-Old Ekiti Indigene Bags PhD In Law In American Varsity MARK MAYAH

n Indigene of Ekiti State, Dr. Damilola Arowolaju, bagged a PhD in Law from The George Washington University, Washington DC, United States of America. Damilola who hails from Omuo Ekiti, in Ekiti East Local Government area of Ekiti State is the son of a former Special Adviser to Governor Segun Oni on Due Process; Dr. Bayo Arowolaju He was decorated with the honour at the University’s virtual convocation ceremonies held on Thursday, May 21, 2020. Damilola was also the President of the 2020 PhD graduating students, which further made his honour more grandiose. The former Special Adviser who confirmed this to journalists in Ado Ekiti on Saturday was elated that his son could be decorated with such a high academic honour at the age he secured admission to the University of Lagos where he studied Sociology.

Damilola Arowolaju

He said: “My baby, Dr. Damilola Arowolaju with the grace of God just graduated with a PhD in Law from The George Washington University School of Law, Washington DC, USA. “He gave an address to the fellow graduands as the President of the GW Bar Association. Graciously, he did this at 24 years of age, when I was just entering the University in Nigeria for my first degree. May our children be higher and be more successful than us all. Amen “ I a m ove r w h e l m e d , speechless and flabbergasted by this outstanding feat. I am excited and more motivated to do more to uplift humanity”. Arowolaju appealed to the Ekiti State Governor, Dr. Kayode Fayemi to rejig and

expand the scope of the State’s Scholarship Board to be able to benefit the children of the poor who are outstanding in their academics . In a video clip containing his speech to the graduands, Damilola said he shall continue to promote justice for all manners of men, irrespective of creed, race and class. The young academic added that no sacrifice is too much to make to protect human rights and promote self respect among humanity, describing these as the best way to entrench equality in the system . “Justice means making huge sacrifices that would guarantee all constitutional freedoms for all and sundry. “When I say justice, I mean for both innocent and guilty. The one that brings equality, stability and raise the hope for a better society. That is what we should all pursue using morality and the instrumentality of Law. “My graduation today is a result of the sacrifices made by my parents to ensure that I excel in my academic pursuit”, he said.

LASU partners other varsities, organisations to win $2.5 M partnership grant MARK MAYAH

agos State University, partnered by some universities and collaborating institutions has won $2,496,128.00 partnership grant in the October 2019 Competition of the Social Sciences and Humanities Research Council, Canada. The Social Sciences and Humanities Research Council

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(SSHRC) is the federal research funding agency of the Canadian Federal Government that promotes and supports postsecondary-based research and research training in the humanities and social sciences. The announcement was disclosed on the SSHRC website (https://www.sshrc-crsh. gc.ca/results-resultats/recipientsrecipiendaires/2020/partnership_grants_2020-subventions_ @Businessdayng

partenerial_2020-eng.aspx). The winning proposal titled “Vulnerability to Viability (V2V): Global Partnership for Building Strong Small-Scale Fisheries Communities”, had as lead applicant Dr. Prateep Nayak of the University of Waterloo and Prof. Akintola, S.L and Dr. Fakoya, K.A of the Department of Fisheries, of Lagos State University as coapplicants.

Tuesday 26 May 2020

BUSINESS DAY

‘We must harness the power of home working tech, not be slave to it’ Change driven by coronavirus demands new management focus on physical and mental wellbeing ANDREW JACK

ince BP scaled up the use of remote working software during the coronavirus lockdown, Richard Heron has focused on mitigating the downsides. As chief medical officer at the oil major, he has tracked a three-fold growth in the past three months in the volume of online meetings using the Microsoft Teams platform and instant messages across the business. “The conundrum is harnessing the power of technology while not becoming a slave to it,” Mr Heron says. “We should be helping people to take a break from their workstation rather than facilitating them spending more time on the laptop.” Video conferencing, electronic messaging and remote access to data have helped many people to work from home, and in some ways to be more in touch with their customers and colleagues, supervisors and senior executives. Yet Mr Heron cautions that more managers should be tracking their use to limit the impact on physical and mental health. His warnings reflect wider concern. Technology has offered the means to maintain and even boost productivity and is providing new tools to improve staff welfare. But it also brings untested and potentially negative consequences, many of which are only now becoming apparent. Neil Greenberg, a professor of mental health specialising in the military at King’s College London, jokes that technology has transformed remote working lives to the point that “people are now questioning whether they are working from home or sleeping in the office”. “Coronavirus has brought forward two years of technological change in two weeks,” he says. “From a mental health viewpoint, what hasn’t worked is understanding how to use it properly. We’ve got used to the technology; now we have to adapt to psychologically sound ways of working.” The first problem is tackling the pressures on physical health from makeshift home working. A survey by the UK’s Institute for Employment Studies of more than 700 employees since the start of the lockdown found that over a third reported extra aches, pains

or discomfort in their neck or back than usual. “People are often working on a laptop at their kitchen table,” says Will Ponsonby, president of the UK’s Society of Occupational Medicine. “That brings lots of challenges: laptops were not designed to be worked on for eight hours a day.” He recommends that employers provide staff with — or let them claim for — suitable equipment, from computer keyboards, screens and mice to ergonomically designed desks and office chairs. Medical specialists point out that physical complaints such as musculoskeletal conditions are often both a contributor to, and

a proxy for, underlying mental health conditions. They point to the need for screen breaks and exercise to change posture and interrupt intense computer-based work. London-based Pinky Lilani, who campaigns for diversity and kindness in the workplace, argues that working remotely has further increased the need for demonstrations of kindness. “I make five calls to people every day to find out how they really are,” says the founder and chair of Women of the Future. “Technology can be so impersonal.” Emma Russell, senior lecturer in occupational and organisational psychology at the Univer-

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The most important thing for wellbeing is people’s relationships with their manager: a feeling of being valued, treated well and of fairness – Will Ponsonby, president of the UK’s Society of Occupational Medicine

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sity of Sussex, stresses that online video conferencing tools like Zoom impose additional stressful “emotional labour” on employees as they concentrate on their own on-screen reactions and those of colleagues. She recommends establishing clearly defined times during the day — and ideally in different places at home — to separate work and personal life; regular screen breaks; and new codes of “social etiquette” that may include turning off video during conferences “so people don’t feel the need to constantly regulate their behaviour”. Work by Ms Russell’s colleague Chidiebere Ogbonnaya suggests that the impact of home working varies widely. Some people may welcome it, including many with introverted personalities. However others, such as those who are less well organised, report higher degrees of mental health stress than with office-based supervision. The most important thing for wellbeing is people’s relationships with their manager: a feeling of being valued, treated well and of fairness Will Ponsonby, president of the UK’s Society of Occupational Medicine Digital tools can help those working from home, with a growing range of apps offering mindfulness and cognitive behavioural @Businessdayng

therapy and resources such as the Big White Wall, which provides online support for anxiety, depression and mental health problems. Yet Jim Woods, the founder of Better Space, which offers online employee wellbeing resources, stresses that “there is no one-sizefits-all solution”. He says that most individual tools, such as meditation apps, will appeal to a relatively small proportion of staff and that use typically declines over time. Mr Woods suggests companies should give employees budgets to draw on a wider range of options from which they can choose over time. Dr Ponsonby warns that apps cannot be a substitute for better workplace relations. “The most important thing for wellbeing is people’s relationships with their manager: a feeling of being valued, treated well and of fairness,” he says. “Managers are disappointed because they want a quick fix.” He and others point out that while technology may have eased the difficulties of home working in the short term, the long-term consequences are unclear. As Octavius Black, chief executive of the Mind Gym, a performance management consultancy, says: “There is a risk of productivity collapse as people burn out, can’t cope, feel exhausted, and opt out. Companies won’t notice until quite far down the road, and will find it hard to recover.”

Tuesday 26 May 2020

BUSINESS DAY

How illness gave an executive education student a healthy perspective Serious family medical problems changed Aude Mouline’s outlook on life and work PATRICIA NILSSON

ust a month before I was due to start my executive education course at Essec business school near Paris, I found out I had pancreatitis. I needed two operations in 24 hours and the doctors told me to prepare for the worst. I was only 34 and faced the prospect of leaving behind my two children. It was very difficult. But everything worked out fine and I left hospital a week before my course started. I was very weak because I had lost so much weight, but I was sure I would be able to pursue my education. Why? For my children, because I was always telling them never to give up and I wanted to make them proud. As Oscar Wilde said: “Shoot for the moon. Even if you miss, you will land among the stars.” My father had a career in French diplomacy, so I have lived all over the world; I was born in the French South Pacific territory of New Caledonia. Before moving back to Paris, where my family lives, I spent eight years in Costa Rica, running a small, 21-room hotel in a town called Jacó on the Pacific coast. But I wanted to work on something bigger and experience something else. I decided to go back to school and learn from the best. I chose Essec because it is one of the most selective French grandes écoles and is known for its excellent pedagogical approach. It also has quite an amazing alumni community. With its mix of many different cultures, it represented the life I had led, travelling all over the world. My programme focused on the management of organisations; I specialised in marketing and business development. I had been working in marketing and sales development for 15 years, learning through experience, but now I wanted

Inspired by adversity: Aude Mouline may consider changing career to health fundraising in the future © Marie-Melodie Ramirez/Mister K

to learn best practice. During my studies I learnt that my son had neurofibromatosis, a genetic condition Doing the course has certainly helped — after graduating last October I was hired as director of sales at Le Cordon Bleu culinary arts and hospitality management institute

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During my studies I learnt that my son had neurofibromatosis, a genetic condition www.businessday.ng

in Paris. The institute told me when it hired me that the skills I had developed in planning and structuring projects were especially important to it. There were about 30 people on the programme and we had three days of courses every other week for a year. My favourite class was marketing, with Frédéric Oble, Essec professor of marketing. He was very human in the way he taught. He was always telling me, “Your idea is great but you need to go further”. I use that thinking a lot in my current job. Then we had a year to write our theses. I was planning to write mine on the hospitality industry, but during my studies I received some more difficult news. I learnt that my son had neurofibromatosis, a genetic condition, so I decided to do my research on the Children’s Tumor Foundation. This is

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a New York-based organisation that supports research, expanding knowledge and advancing care for people with neurofibromatosis. I wrote my thesis on the opening of a branch of the foundation here in France and the differences between these types of organisations in France and the US. It was important to me, but it was also a very difficult time: I had to study, I had my full-time job and I had my two children. Without my teachers at Essec I would not have been able to finish the thesis. Doing this for my son was my way of helping myself feel better. My son is doing really well today — he plays football and loves it. He still needs checkups every six months, but the disease was isolated and will not spread, touch wood. But I felt I needed to help the foun@Businessdayng

dation that helped us, and am now one of its senior advisers. Last year, I helped it host a dinner in France attended by former French president Nicolas Sarkozy. It was very important to me. In the future, I may want to change career and work in health fundraising. I would like to give back a little, because I think we were lucky — and not everybody gets lucky. Hippocrates, the physician from ancient Greece, said everyone has a doctor in them — we just need to help them in their work. We can all make an active contribution to medical research and help support patients. What is happening right now with Covid-19 is a good example of that. We need to be a better community and I think we are going to learn from what is going on right now.

Tuesday 26 May, 2020

BUSINESS DAY

Media business Media agencies place staff on compulsory leave without pay

FoodCo raises competition bar, opens online supermarket

… Over effects of Covid-19

oodCo Nigeria Limited, a diversified consumer goods company with interests in retail, quick service restaurants, manufacturing and entertainment, has announced the unveiling of FoodCo online. Nigeria’s first true online supermarket. The eCommerce platform integrates a shopping and payment portal, as well as an extensive variety of stock, taking the in-store experience online for customers who prefer to shop from the safety and convenience of their homes. Solomon Huesu, Marketing Manager of FoodCo, said in a statement that the launch of the online supermarket opens up a new vista in the Nigerian consumer retail space and underlies FoodCo’s commitment to driving innovation in the space to meet the lifestyle demands of the contemporary shopper. He said: “FoodCo is always innovating its business to fit the realities of today’s shopper. The FoodCo eCommerce platform has been in the works and with the challenges imposed by the COVID-19 pandemic, we thought it necessary to move the launch

Daniel Obi

o m e ma rke t i ng communication agencies have placed a number of their staff on compulsory leave without pay. Others who are in salary areas are contemplating similar actions or slashing salaries as implications of Covid-19 upend the sector. “We have placed a number of our staff on compulsory leave without pay as clients’ jobs have diminished”, following the pandemic which is ravaging economies, a CEO of a media agency based in Lagos told BusinessDay recently. Marketing communication agencies are not alone in this quagmire as other major sectors are hard hit by the Covid-19 effects. They are aviation, vehicle transport business, hospitality, travel and tours, event centers and the downstream oil sector. Many airlines, both local and international have grounded their fleet while commercial vehicles both inter and intra city busses have stopped operation on account of rules and lockdown targeted at checking

the spread of Covid-19. The Nigerian hospitality sector, which is still recovering from the traditional lull in business between January and early February of every year, is facing even more difficult challenge occasioned by the coronavirus (Covid-19) pandemic. From occupancy rate of between 50-60 percent in late January, hotels are now recording below 25 percent, the worst in the history of the sector due to lockdown over coronavirus. The pandemic is also affecting the downstream sector, according to sources. The operators are battling with

fundamentals such as low margins, source of forex, rate of forex and transportation logistics. Education sector is also affected. What all this means for marketing communication industry is that media agencies, both creative, PR and outdoor, among others that have clients in these sectors as primary source of business sustenance are also in for hard time. This is in addition to heavy burden placed on them by the difficult operating environment occasioned by slow economic growth at 2.27%, marketing communication budget cut, multiple taxa-

tion, delayed payment by clients and competition. A recent survey by Kantar revealed that Nigerians are increasingly concerned about the coronavirus situation and its implications on the economy. With 5,200 cases and 170 deaths and several weeks of lockdown, the socio-economic effects are hard-hitting. This unease is evident in latest Kantar report which indicates that about 150 million Nigerians out of about 200 million population are afraid of national financial breakdown followed by economic recession and hardship occasioned by Covid-19.

Covid-19: Paga, Khan Foundation mobilize support for Makoko community

s the coronavirus pandemic continues to affect income, individuals and communities across Nigeria, mobile payments company, Paga and Khan Foundation, a social impact conglomerate, have leveraged their ongoing partnership to provide Covid-19 relief to families and individuals living in Makoko community of Lagos. Over the last two years, Paga and Khan have built a viable relationship aimed at supporting the Makoko community. Through this collaboration, Paga is ensuring that essential materials such as food, sanitizers and handwashing equipment are accessible to hundreds of Makoko residents. In a

bid to further reducing the spread of the virus through cash, Paga has increased its Agent network presence in the community to promote access to digitized payments, signing up over 80 customers in a week. “As a company focused on financial inclusion, our brand ethos is deeply rooted in making life possible in

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communities we operate in. It makes us happy to know that through this crisis, we can reach hundreds of people and be their strength in navigating the pandemic. Our goal is to do more and give back to communities where we live and work and to provide support to people who have been affected the most by the COVID-19 pan-

demic”, said Daniel Oparison, Head, Growth, Brand Strategy and Marketing, Paga. Prior to COVID-19, Paga has supported Khan Foundation in the construction of four schools, provided educational materials and paid tuition for students up to 1 year. In addition to its response to the pandemic, Paga helped in facilitating health and hygiene sensitization before the virus started to peak. As infection rates increase across Lagos and around Nigeria, organizations such as Paga are doing their part to mitigate the spread of the disease, practising social distancing, reducing the use of cash and enabling digitized payments.

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date forward to ensure that our customers do not experience frustrations in shopping for their favourite groceries, meals, household items and other essentials. “The online supermarket offers a seamless customer experience that complements our in-store offering, in addition to delivering on the FoodCo guarantee of best quality at an affordable price. It also boasts the most extensive range of supermarket products across all categories, giving access to thousands of top quality products from our stock to users on the platform. This is currently unparalleled in the country and that makes us the first true online supermarket in Nigeria,” he added. The eCommerce platform is complemented by FoodCo’s Home Delivery Service, launched about a month ago, which gives customers the option of having their shopping delivered to their doorstep within two hours of placing an order. The Service is currently the fastest within the industry and observes strict quality assurance protocols that ensures that all deliveries are safely and hygienically packaged and delivered.

Eat’n’Go foundation strengthens fight against covid-19 …reaches over 6500 essential workers across Nigeria

ith the continuous increase in number of confirmed Covid-19 cases across Nigeria, Eat’N’Go Limited, the master franchisee for Domino’s Pizza, Cold Stone Creamery and Pinkberry Gourmet Yoghurt has said that through its foundation, it will continue to provide maximum support to the federal government in the fight against Covid-19. Since the launch of its charity initiative during the pandemic, Eat’N’Go has catered to the feeding of over 6500 essential workers with products worth over N23

million, and has continued to reaffirm its commitment to reach even more people across the nation, according to a statement. Patrick McMichael, Chief Executive Officer, Eat’N’Go Limited, while commenting on the organisation’s support said in the statement“we acknowledge that this is a tough period for all Nigerians and the government and we cannot over emphasis how unprecedented these times are. Lots of businesses have been hit, the economy is almost at a halt, and most disheartening is the loss of some of our brothers and sisters.

Organisers of LaLiga reiterate commitment to societal development in Nigeria

panish football league, LaLiga has reiterated its commitment to societal development through football amidst the global Covid-19 crisis. Under the global ‘LaLiga se juega en casa’ strategy (meaning ‘LaLiga is played at home’), over 1.2 million euros has been raised for the @Businessdayng

acquisition of medical equipment, among other things. Among the most innovative and followed actions were the macro charity music concert LaLiga Santander Fest and eSports tournament LaLiga Santander Challenge, which drew an audience of over 61 million from all over the world.

Tuesday 26 May, 2020

BUSINESS DAY

Marketing & Pr

Data traffic has increased by 30% over pandemic - CEO, Spectranet Ajay Awasthi is the CEO of Spectranet, an internet service provider operating in Nigeria. In this interview, Awasthi says that the lockdown over Covid-19 has presented more challenges than opportunities. He however said the company which has won several awards is ensuring utmost commitment to customer service excellence. Excerpts This lockdown over covid-19 pandemic presents huge opportunities for telecom and e-commerce companies as virtual communication and online transactions have become the order of the day, do you agree and how is Spectranet faring? he lockdown has presented more challenges than opportunities. Spectranet being a 24x7 service provider, the challenges are pretty much unique and related to ensuring site uptime in remote corners, ensuring call center operations with strict distancing rules, attending to customer complaints in their premises. All this needs to be done while ensuring safety of our people. Cost of operations has gone up significantly as urgent network upgrades have to be done to ensure uncompromised customer experience while browsing. We have also seen an upsurge in call center volumes with customers enquiring about where to renew. This means deployment of more manpower. Humbling to mention that team Spectranet, with its utmost commitment to customer service excellence, has fared well in countering these challenges in double quick time In terms of traffic, how is your network coping with your consumers? The Data traffic in the network has increased over 30%. While this is a happy situation to be in, the sudden increase in traffic poses a challenge in terms of keeping up with the quality of service. In order to ensure that our customers experience is not compromised, Spectranet has acted fast and invested significantly to enhance capacities on the access and backhaul

Ajay Awasthi

network. What are the major areas or products you have received the largest traffic on your network? The traffic for Video applications (like Netflix , You tube) has shown a significant increase and so has the FaceBook related traffic. Also, we have observed trends wherein the traffic during night time has started overtaking the daytime traffic. We are happy that our Mega Value Plans offering anytime data plus free and truly unlimited night time browsing, are becoming a big hit with our customers. With the closure of business

premises, how have your consumers being able to recharge their modems? Being a technology company Spectranet has been investing heavily in building up Digital channels. Our customers can effortlessly pay through any of our digital channels available on Self Care . Telcos may be making money from this lockdown, but in terms of telecom equipment importation and network rollout, how will it affect telcos like Spectranet? In order to increase our access and backhaul network capacities, as mentioned earlier, we had to invest

significant amounts and incur extra costs for ensuring 24X7 availability of network and call center operations. To sustain this growth in traffic. fresh equipment is required to be imported. With tight FOREX supply, we are finding it extremely difficult to get access to FOREX to pay for this equipment. This will result in delayed projects and consequent degradation of services. Have you experienced challenges like refueling your base stations or movement of your essential staff from law enforcement agencies? Telecom being one of the essential services, the law enforcement agencies have been extremely cooperative. This has helped us in keeping the vital operations like re-fueling of cell sites, carrying out repair and maintenance work going without any hindrance. What lessons can we learn from the current situation to get things done better as businesses and as a country? This pandemic has completely changed the way work used to be done and transformed how companies engage and interact with their customers. Digitalization is the way forward. It is not only more cost efficient but also act as a turbo charger for productivity. Critical to add that a move towards Digitalization will also need robust framework for data security and privacy related concerns. How does the naira value affect your business? Devaluation of Naira has certainly increased the cost of doing business. All the dollar denominated CAPEXes have suddenly got inflated by the devaluation. Similarly, cost of importing modems and other devices have increased. The devaluation is going

to put significant financial burden on smaller operators. What strategies is Spectranet putting in place to remain up and doing this period? This pandemic has completely changed the way work used to be done and transformed how we engage and interact with our customers. Digitalization is the way forward. It is not only more cost efficient but also act as a turbo charger for productivity. Being a technology company Spectranet has been investing heavily in building up Digital channels. The pace of digitalization needs to be hastened up now. Going forward, what is the fate of Tier 2 operators in the country? Spectranet by virtue of its robust network with industry leading uptime figures, excellent customer service and an extremely strong brand, will continue to play its role as a leading Internet Service Provider. Our recent diversification into FTTx an WTTx based Fixed line services has further strengthened the position of the brand as numero uno in the industry. We will continue to invest in cutting edge technologies to offer high speed broadband in Nigeria, at par with international broadband standards. The recent devaluation of Naira, though, has put additional financial burden on the company.Devaluation of Naira has certainly increased the cost of doing business. All the dollar denominated CAPEXes have suddenly got inflated by the devaluation. Similarly, cost of importing modems and other devices have increased. The devaluation and scarce availability of FOREX is going to hamper expansion of operations in a significant manner for smaller operators.

How Covid-19 pandemic has affected the film industry Olabisi Aguda

he COVID-19 pandemic has unarguably affected every sector of the economy. Banking, oil & gas, tourism, telecommunication, education, energy, even the film, entertainment and media industry have been directly or indirectly affected by the pandemic. Prior to this global health challenge, the News Agency of Nigeria (NAN) reported that in Nigeria, cumulatively, the cinemas earned over N3 billion in the first half of 2019 and over N1.2 billion in July and August of the same year. To lend credence to the report from NAN, a report

compiled by the Cinema Exhibitors Association of Nigeria (CEAN) confirmed that last year alone, “Nigerians spent almost N7 billion to watch films in the cinemas.” However, with this health challenge (COVID-19), it is uncertain that the large amount earned last year would be the same this year. This is not just in Nigeria alone but globally and this may in turn affect the number of television content that are produced this year, and this would adversely affect the entire chain of film or content distribution. Cinema and pay-Television broadcast operators are the worst hit in the content distribution chain. By observing the physical distancing guideline, cinemas are closed, and families have no option but to stay www.businessday.ng

at home and with limited content in circulation, pay-Television broadcast operators are forced to repeat programmes across their channels. For example, sports content such as football is huge in Nigeria. But owing to the pandemic, organisers of notable leagues across the globe had to cancel their games until there is an improvement on the COVID-19 challenge. But all thanks to SuperSport; a big sports content provider on DStv and GOtv platforms. Late March this year, the company launched the Relive campaign; an exciting TV sports show created to highlight the greatest stories in sport. Soccer, golf, UFC lovers will get to see exciting matches, documentaries, and interviews from the past. Besides the shortage of content

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created by COVID-19, a major reason why repeats are necessary is that it gives people a chance to catch up on exciting and memorable clips they might have missed. Different channels have different levels of repeats – a kid’s channel may repeat far more shows than a channel for other audience. Despite the health challenges, pay-TV companies like MultiChoice have promoted local content. Example is The Mercy and Ike reality show which is making waves on social media and because of the love of the programme, there is a repeat broadcast on Africa Magic Showcase on Mondays and Fridays. While on Africa Magic Urban a repeat broadcast is scheduled on Mondays and Tuesdays for those who missed the @Businessdayng

Sunday show. We cannot shy away from the fact that programme repeats are an integral part of the television environment. For those who are not aware, the cost of content acquisition and movie rights is based on a model whereby programmes and movies are purchased for a certain number of screenings. This allows for the movies or programmes to be shown at different time slots to allow viewers a choice of when they would like to access the programming. It is also vital to understand that repeats in the case of a multi-channel environment allow subscribers not to miss out .They also enable subscribers to plan their viewing time more effectively. Aguda is a media analyst

Tuesday 26 May 2020

BUSINESS DAY

BDTECH

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Understanding how Internet Service Providers estimate data usage and how to manage mobile data Jumoke Akiyode Lawanson

ue to the Coronavirus pandemic and lockdown of states across the country, Nigerians are staying at home and making use of more telecommunications services than ever before, to stay in touch with friends, family, colleagues, work and the world at large. As a result, telecom consumers seem to have observed that their mobile internet data and call credit becomes exhausted faster than it used to before the lockdown. The Nigerian Communication Commission (NCC) has also revealed that there has been a significant surge in amounts of complaints from consumers about fast internet data depletion and poor quality of data services. After carrying out investigations on complaints from consumers, the NCC decided to educate Nigerian telecommunication network subscribers on why and how data usage and charges are estimated by Internet Service Providers (ISPs) in Nigeria. According to the regulator, activities that use up the most data include; downloading and watching videos online especially on sites Like Netflix and YouTube, sending and receiving emails with large attachments, software updates and virusdefinition updates, going on Social Media sites such as Facebook, Snapchat, Instagram,Twitter, Tik Tok etc., playing games on a website or via a downloaded app, remote security cameras, data sent between sites on a Virtual Private Network (VPN) and mobile App online notifications from social media, social marketing sites etc. In a comprehensive report listing answers to frequently asked questions, the NCC said; “Your data consumption depends on a large number of factors, including the nature of technology (2G, 3G, 4G

or 5G), the quality of the network, the speed of download, the type of websites you visit, the specifications of your handset, and so many other factors that contribute to your data consumption.” “For instance, two handsets can use different amounts of data to download or stream the same video on YouTube,” the NCC SAID. The following approximations give an estimation of data usage. Please note that these are mere estimations provided by an operator based on typical/average file sizes. One hour of social media = 200mb One hour of browsing = 60mb One hour of instant messaging with video calls = 140mb One hour of streaming music = 60mb One hour of streaming videos = 350mb (Non HD) and 1GB (HD) one email sent or received with attachments = 500kb One minute of connected game play = 60mb The commission suggests that mobile network consumers can bet-

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ter manage their data by disabling mobile data when it is not needed, using data compression in browser or by reducing video streaming quality from video sites such as YouTube, Netflix, Hulu, Showtime, etc. – you can use from 1080p or default/ auto setting to 240p for optimal viewing and lower data consumption. This may however affect the quality of your experience. It is also possible to stretch your data by deactivating all cloud storages except when / where necessary, by not breaking or interrupting downloads in-between video sessions and by turning off automatic updates for apps for mobile devices, laptops and personal computers. Wherever there is Wi-Fi available, use the hotspots to save your mobile data – you should however note that there are data security risks to using open/free Wi-Fi connections and your passwords and personal data are often exposed on such connections. Mobile data users can also limit sending and receiving files and push notifications, delete email

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messages that won’t send and are no longer required, send big files when connected via Wi-Fi or use Wi-Fi for big files, monitor time spent on Social Media and closing apps when you’re done using them can also reduce data usage. Luckily, new smartphones have settings to help manage mobile data usage and avoid wastage. Your smartphone’s default settings are typically configured to get the best possible experience, which comes at the cost of your data usage. You can change those settings to manage your data usage in the following ways: By manually capping mobile data: To do this, go to Settings > Network & Internet > Data Usage > Billing Cycle By Manually setting Data Saver Activate data saver: Locate “Data Usage” on your device and activate “Data Saver”. This will help cut down your data usage by preventing apps from using data in the background. Disable auto-update on your App store: Disable multimedia autodownload on your social media

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apps turn off your data when it’s not in use. Stop Apps from automatically synching: to do this, Go to Setting > Apps & notifications > Select App > Select Disable Background Data. Don’t Stream it, Download It. It is more advisable to download video or audio content to save data than to stream it online. Additionally, smartphone users can set data alert notifications on their phones and avoid multiple configuration of the same email address on mobile phones. For instance, do not configure your Gmail address on your email app as well as Gmail app at the same time on the same mobile phone. If you have Android 8.0 or later, your phone should come equipped with Data Saver mode, which kicks in when you are not on Wi-Fi and ensures that apps and services that are not being actively used won’t be able to stream data in the background. It is very easy to turn Data Saver mode on and off. To do this, • Go to Settings • Go to “Network & internet” > “Data usage” • Select “Data Saver.” Toggle “Use Data Saver” on. There may be specific apps that you want to allow to use background data, even when Data Saver mode is on. For example, you may want to get Twitter notifications no matter where you are. If you set a data limit, you can set your phone to issue a warning if you’re nearing your data limit before the end of your monthly billing cycle. You can even set a limit beyond which your phone will not use any data. To do this, go to Settings, go to “Network & internet” > “Data usage” > “Data warning &limit”, then tap on “App data usage cycle.” This will let you set the day that your account starts its monthly cycle. Back up and toggle “Set data warning” on. You can then enter the data limit - say, 4GB — that you want for your phone.

Tuesday 26 May 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Jeff Bezos trillionaire tale and Nigeria’s e-commerce Aliyu Yakubu, Guest writer

merica’s Jeff Bezos, founder of e-commerce giant, Amazon, is becoming a trillionaire in the midst of COVID-19 global pandemic. This is both good and bad news. Good news because it is the reward of foresight and tenacity. Bad news because in the midst of the same pandemic, his e-commerce counterparts in Nigeria are counting losses. The difference is not in the business dexterity of Bezos nor in the poor marketing skills of the Nigerian counterparts. The difference, unfortunately, is how the two governments reacted to the pandemic and its attendant lockdown. While the US government gave a clear signal to e-commerce companies in America to move freely during lockdown to make delivery in anticipation of a surge in online shopping, the Nigerian government did the opposite. It locked down e-commerce activities by not clearly classifying e-commerce companies and their workers under ‘essential services’. This is the difference between a 21st century policy-smart government and other governments. The US government anticipated a spike in online sales during the lockdown and gave free access to Amazon and other e-commerce workers. The Nigerian government was too happy to lock down ecommerce firms alongside other businesses. Now, for the smartness of the US government, Bezos is walking his way to

trillions. Imagine the tax that would add to US government purse. Imagine the number of jobs it will save when other companies around the world have either furloughed their staff or have sacked them outright. This is a case of the absence of critical and strategic thinking in the Nigeria public ecosystem. Stakeholders say our leaders need to be intentionally progressive, as it is wrong to lock down a critical driver of the economy at a time when no-movement for the populace has been declared. This move has been described as a function of low appreciation and lack of understanding of what e-commerce really means and how it works. In the wake of the lockdown, somebody ought to have anticipated that Nigerians would resort to making online purchases, hence the overriding need to categorise e-commerce

workers as persons on essential duty. The nature of e-commerce is that it’s unobtrusive, does not draw physical crowd yet it effectively services clients from its backend through the delivery channels. In this way, issues of non-compliance with social distancing and other precautionary protocols do not arise. The paradox of the Nigerian e-commerce story during the pandemic is that they were lumped with other regular businesses and clamped with the same lockdown measure. Their staff were treated as nonessential duty persons. It took some explanation for them to be allowed to do their businesses during the lockdown. In some states, it was practically impossible as e-commerce delivery workers were either harassed or turned back from performing their duties. For instance, some delivery staff of Konga, Africa’s fast growing e-commerce company, were either ha-

rassed or turned back from making deliveries. Delivery men were harassed while moving items inter-state. There were also reported cases of harassment within some metropolis. Lagos was no exception. In Rivers State, not a single Experience Store was opened during the lockdown. Strict enforcement by the state government meant no e-commerce delivery man was allowed movement even within the metropolis. As many already know, it is not possible to build economies when you shut down all channels of trade. In the western world and Asia, persons on lockdown turned to online purchases to restock. Their governments clearly exempted ecommerce outfits from the list of companies that must remain shut for as long as the lockdown lasted. The net result is beginning to show in the balance sheet of Jeff Bezos’ Amazon. Comparisun, a company

which allows small- to medium-sized firms to compare different business products, projects that Bezos will by 2026 emerge as the world’s first ever trillionaire, an honour he won’t be sharing with anybody, not even with Bill Gates of Microsoft whose fortunes keep growing with the birth of more technologies. Their projection shows Bezos reaching trillionaire status by 2026. The company said their projection is based on taking the average percentage of yearly growth over the past five years and applying it to future years. Comparisun shows Bezos’ net worth grew an average of 34 percent over the last five years. As of Thursday May 14, Bezos’ net worth was estimated at $143 billion, according to Bloomberg’s Billionaires Index, which tracks the worth of the world’s richest people daily. Compared to last year, Bezos’ worth has surged by more than $28 billion. He profited heavily from the coronavirus pandemic. Shoppers denied access to physical stores turned to online stores to make purchases from groceries to gaming machines, toys for the kids and big toys for the parents. The lockdown was the appropriate time to change household electronics for most parents, just anything to fight the boredom. In Nigeria, there were cases of security men delaying delivery for days by ‘impounding’ vehicles and keeping them for as long as they wished. Delayed delivery makes nonsense of e-commerce. One of the unique selling points of on-

line shopping is prompt delivery of goods. Once purchased goods are delayed, the suspense dies and so does the utility of the goods. Unfortunately, this was what Nigeria’s e-commerce companies suffered during the lockdown. At a time they were supposed to win more patronage and disciples into the e-commerce family, they got stuck in resolving issues of violation of lockdown rules while their counterparts in Europe and America simply worried about their balance sheet. Now, the difference is clear. Bezos and others are smiling to the bank; their Nigerian counterparts are counting losses. Lesson: When next you lock down a state or city, make sure that e-commerce workers are exempted. However, beyond Nigeria e-commerce fraternity, Jeff Bezos himself must learn the lessons of his capitalist expansionism. When the news of his impending trillionaire status broke, Twitter went agog. Elizabeth Warren, business woman and Democratic presidential candidate tweeted: “While Bezos is on the track to become a trillionaire in the middle of a pandemic, Amazon is ending overtime pay for warehouse and delivery workers on the frontline. This is immoral.” While many congratulate Bezos for his feat, Nigerian government should also be reminded that ecommerce deserves a better deal next time. Aliyu Yakubu is an e-commerce enthusiast and freelance writer based in Abuja, Nigeria.

VerifyMe partners Jobberman to boost capacity in last-mile authentication ... to deepen agent network to 1000 in every state Jumoke Akiyode-Lawanson

erifyMe Nigeria, popular digital identity and KnowYo u r - C u s t o m e r (KYC) technology company, has entered into a partnership with Lagos-based job portal and career platform, Jobberman, to boost capacity and create jobs despite current COVID-19 challenges. The partnership will see Jobberman recruiting verification agents from each state and local government

area en masse to create over 30,000 jobs potentially. VerifyMe believes that this initiative marks Nigeria’s most significant investment in capacity building in last-mile authentication and underlies VerifyMe’s commitment to building the trust infrastructure in Africa. According to Esigie Aguele, CEO, VerifyMe Nigeria: “We are happy to announce this partnership with Jobberman aimed at boosting capacity for our last-mile verifications across the country but also to create jobs and provide www.businessday.ng

opportunities to people from all walks of life. This is coming on the heels of our growing stakeholder interest in identity verification and KYC as a standard for regulatory compliance and an anti-fraud measure and lending. Expectedly, VerifyMe has seen significant demand for services in eKYC, biometric verification, and Anti-money laundering and CBN complaint verifications.” “Additionally, this partnership is significant as it marks a departure from the common verification indus-

try practice. The status quo is to recruit unskilled or lowskilled personnel to carry out these critical investigations with grave implications for the integrity of the data being provided,” he said. “We are optimistic that this collaboration between VerifyMe and Jobberman, two market leaders with proven expertise and pedigree in their fields, will empower all stakeholders to build the trusted relationships they need to guarantee their business transactions,” Aguele said. Speaking for Jobberman,

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Hilda Kabushenga Kragha, CEO, Jobberman, said: “We are excited about partnering with Verifyme on this monumental project which will employ 36,000 young people across the country. Jobberman has set an ambitious goal of linking three million Nigerian youths to jobs in the next five years, and this partnership is a firm step forward in this direction.” VerifyMe Nigeria is building Africa’s digital trust infrastructure with a hybrid of technology and an AntiMoney Laundering (AML) and CBN Tier III compliant @Businessdayng

system of processes. VerifyMe says it’s suite of services gives decision-makers the tools to evaluate customer suitability for financial services and more. Currently, over 10,000 corporate organisations, including banks and government agencies, use VerifyMe’s digital trust infrastructure for their business. VerifyMe’s ID Verification capabilities include direct access to Nigerian Identity Management Corporation (NIMC), Bank Verification Number (BVN) and Drivers’ License databases.

Tuesday 26 May 2020

BUSINESS DAY

news Okowa not chairman NEC sub-committee on COVID-19 economic growth – DTSG Francis Sadhere, Warri

lisa Ifeajika, chief press secretar y to G ov e r n o r I f e a n y i Okowa of Delta State, has debunked media reports that the governor has been appointed to lead National Economic Council (NEC) sub-committee on post-COVID-19 economic growth. He said in a statement in Asaba on Monday that the report that had been circulating in the mainstream and social media, and had attracted a myriad of inquiries and goodwill messages was untrue. Ifeajika explained that NEC, headed by Vice President Yemi Osinbajo, recently created a sub-committee chaired by Okowa, to liaise with the Presidential Task Force on COVID-19 on the modalities for lifting the national lockdown and re-

opening the economy. He pointed out that setting up of sub-committees to deal with pressing national issues such as COVID-19 was a routine of NEC, and therefore, not something deserving of media frenzy. The CPS, however, stated that Okowa was mindful of the earnest desire of Nigerians for life to return to normal as quickly as possible, but that it had become necessary to set the record straight and correct the wrong impression the reports had created about the ‘appointment’. “The media and the public are please requested to take note of this clarification and take appropriate steps to stop the misinformation. “The governor urges Nigerians to continue to pray for divine intervention to resolve the current health crisis, while also maintaining the necessary safety protocols and guidelines,’’ he said.

Kano releases 294 prison inmates in the spirit of Sallah celebration Adeola Ajakaiye, in Kano

n compliance with the directive of the Federal Government geared at reducing overcrowding of inmates in the Correctional facilities across the country, occasioned by the rising incidence of Covid-19 pandemic, Kano State government has released 294 inmates of the GoronDutse Correctional Centre. The release of the prisoners, who are mostly convicted inmates, was effected Sunday at the instance of Governor Abdullahi Umar Ganduje, to coincide with the celebration of this year’s Eid-Fitir. Goron-Dutse Correctional Centre, one of the two prisons in the state, is located in the ancient district of Kano City and is known to be overstretched presently with mostly awaiting inmates. Speaking while presiding over the release of the prisoners, Governor Ganduje, said the move was influenced by a recent directive by President Muhammadu Buhari to all governors to decongest the Correctional Centres, as part of the measures aimed at ensuring that social distancing protocol was observed in the face of the ravaging Covid-19. “I am glad to be here today to carry out the directive of Mr President, concerning the decongestion of Correctional Centres across the country, as a way of strengthening social distancing protocol in our prisons. In line with this directive, we are releasing a total 294 inmates based on the recommendation of the State Chief Judge and Grand Khadi. “I can well describe today, as a day of happiness for all of us, I mean the government and people of the state, as well as all the inmates that are being released today. We hope that you will be of good character in your

life henceforth. “For those of you who are still going to remain here, I am advising that you should continue to observe all Covid-19 protocols. Wash your hands with soap and running water, use of sanitiser is necessary and the use of face masks,” the governor cautioned. In his remarks, before the prisoners were released, the comptroller of the Goron-Dutse Correctional Centre, Magaji Ahmad Abdullahi, commended the state government for the gesture, which according to him would go a long way in reducing overcrowding in the prison. Abdullahi, particularly, thank Governor Ganduje for the recent donation of a 30-hectare piece of land to the Federal Government for the construction of a modern Correctional Centre, noting that work at the new prison now stood at 90 percent completion. The comptroller also commended other efforts of the governor concerning the upgrading of the one of the NCS’ Satellite Centres to in Karaye, and Farinruwa to full-fledged ‘Custodian Centre’. Governor Ganduje, who performed the task of releasing the inmates immediately after observing the usual Eid-Prayer at Kofar Mata Eid Ground, was accompanied by the deputy governor, Nasiru Yusuf Gawuna, Emir of Kano, Aminu Ado Bayero, among other top government functionaries. Also speaking at the occasion, the Secretary to the State Government, Usman Alhaji and the Commissioner of Justice, Ibrahim Mukhtar, both respectively, provided more insight into some of the measures put in place by the government of the state in making the state more secured. All the released inmates were each given the sum of N5,000 to be used as transport money to their destinations www.businessday.ng

‘UK-Nigeria trade relations remain strong despite global pandemic’ Innocent Odoh & HOPE MOSES-ASHIKE

rade relations between the United Kingdom (UK) and Nigeria have remained strong despite adverse effects and disruptions in the global economy occasioned by the dreaded Covid-19 pandemic. This was the crux of the third Ministerial Meeting of the UKNigeria Economic Development (EDF), which held May 19, 2020, to underscore the priority of both governments to keeping the flow of bilateral trade going and maintain existing investments throughout the crisis as much as possible, as the Covid-19 continue to affect supply chains and disrupt trade and global investment flows. Attended, via video conference by Minister of Industry, Trade and Investment, Adeniyi Adebayo, and the UK’s Minister for International Trade, Ranil Jayawardena, the meeting highlighted critical barriers requiring prioritised action that could boost trade between the two countries.

...Nigeria to benefit from UK £1bn market risk appetite Part of the trade-related priorities singled out for further discussion was the importance of maintaining the freedom of movement of goods and simplifying and automating import/ export procedures in line with World Trade Organisation’s commitments to ease cross border trade and increase trade revenues - also boosting Nigeria’s ability to take full advantage of the Africa Continental Free Trade. According to Adebayo “Making our trade processes more efficient is a priority for us. Reducing the administrative bottlenecks, speeding up steps through technology and innovation are necessary if Nigeria is to meet the standards set by the WTO. Therefore, I am pleased, and look forward to, working with the UK to not only enhance our cross border trade methods, but assist with identifying and bridging gaps to develop our Single window in accordance to global standards.” Ranil Jayawardena stated the UK Government’s commitment to help reduce poverty through

trade and technical assistance, commending the move made by Adebayo to dialogue with UK business leaders and take stock of the challenges limiting their ability to effectively play their role in reaction to the pandemic. Jayawardena said: “The Coronavirus pandemic highlights just how important it is to keep trade flowing and supply chains open so we can all have the essential supplies we need in this difficult time. As part of keeping trade flowing, this week we announced our UK Global Tariff policy and through the UK Generalised Scheme of Preferences (GSP) Nigeria will continue to benefit from preferential access to the UK market to support trade.” He also emphasised the role of the private sector, while speaking on the mutual value of a public-private partnership in shaping the economic landscape in the days ahead, noting the critical service export finance presented as a means of maintaining the flow of goods and services. The UK’s Export Finance

agency (UKEF) currently has a £1 billion market risk appetite for Nigeria that has remained largely untapped, and both ministers used the forum to discuss the possibilities of leveraging the fund for Nigeria. A spokesperson for the UK’s Department for International Trade also commented on other areas that the UK had been supporting Nigeria towards better trade efficacy, like meeting the trade facilitation requirements set by the WTO through several projects offering technical assistance and capacity building to develop expertise in local talents. The UK also assisted with drafting the National Quality Policy and stood ready to support its implementation. Both countries have agreed to sustain this valuable dialogue twice a year, and committed to host quarterly business meetings with selected leaders of top British and Nigerian companies to identify and respond to challenges and opportunities in doing business with each other.

Scene of fire incident at Muna Albadawy Internally Displaced Persons (IDPs) camp in Borno State, late Saturday, with one dying, destroying shelters, property and the two sources of water serving the about 9,678 IDPs and 1,613 households. NAN

FG to intervene in Pantami, Dabiri-Erewa fight over office space Innocent Odoh, Abuja

ederal Government is said to be making efforts to resolve the dispute between the minister of communications and digital economy, Isa Pantami, and chairman/CEO of the Nigerians in the Diaspora Commission (NIDCOM), Abike Dabiri-Erewa, over alleged use of gunmen by Pantami to throw out NIDCOM staff from the office facility of the NigerianCommunicationsCommission (NCC). A source within the NIDCOM told BusinessDay in Abuja on Monday that the matter was being handled at the highest level of government, and expressed hope that the issues would be sorted out after the public holidays. He said the new Chief of

Staff to President Muhammadu Buhari, Ibrahim Gambari, has shown interest in resolving the matter. The NIDCOM boss, DabiriErewa, had taken to twitter on Sunday to accuse Pantami of using violence against her and her staff allegedly because she was a woman. Dabiri-Erewa, according to sources in the NIDCOM, had taken her feud with the minister to the public after she was said to have exhausted all options for an amicable resolution. On May 23, 2020, the former member of the House of Representatives recounted how she and members of her staff were locked and thrown out of their office space by Pantami. “In one year, we don’t have an office. The office we got, given to us by NCC (Nigeria Commu-

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nications Commission)... but we were actually driven away by the Honourable Minister of Communications and Digital Economy, Mr Isa Pantami. “Within two days, they drove us out with guns and what happened? The place was given to us by NCC…. “You know we all help each other, NCC as an agency of government said there is a place you can use to settle in, and just as we settled in, I was in Ethiopia when I got a call. I thought that it was a joke. “I came back from Ethiopia on Thursday, this happened on Tuesday. By Friday, when I went to the office, guns, armed men had taken over the place. I thought it was a joke. But here is the thing; I’m a government employee, so is he. It’s government business,” Dabiri-Erewa tweeted. @Businessdayng

In his reaction Pantami also took to Twitter where he called Dabiri-Erewa a liar. “This is a fat lie from her. The owner of the building @NgComCommission has faulted her lies on their social media platforms. The minister has never given that directives (sic) to any gunman. We need to be very objective in reporting. I have never sent any gunmen there, and I have no one,” he said. But not done yet, Abike responded by calling the minister a misogynist. She tweeted: “An Islamic scholar should not lie, Hon Minister (Phd). You did that to me because I am a woman. Your disrespect for women is legendary. Left the ugly incident behind me since February. But please release all our office equipment. Public office is transient.”

Tuesday 26 May 2020

BUSINESS DAY

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Tuesday 26 May 2020

BUSINESS DAY

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Tuesday 26 May 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Friday 22 May, 2020

Top Gainers/Losers as at Friday 22 May 2020 LOSERS

GAINERS Company

Company

Opening

Closing

Change

N194.5

N213.9

19.4

MTNN

N111

N115

CAVERTON

BUACEMENT

N35.6

N39

3.4

GUARANTY

N37.5

N39.5

CONOIL

N19.1

N21

1.9

MOBIL

STANBIC

FBNH MAYBAKER

ASI (Points)

Opening

Closing

Change

N32.85

N32.55

-0.3

N2.9

N2.61

-0.29

N24

N23.75

-0.25

VOLUME (Numbers)

N5.35

N5.2

-0.15

VALUE (N billion)

N3.15

N3.06

-0.09

25,204.75

DEALS (Numbers)

5,605.00 259,575,556.00

MARKET CAP (N Trn)

2.881

... non-core revenue grew by 162.5% year-on-year

entral Securities Clearing System (CSCS) Plc on Friday May 22 held its 26th Annual General Meeting (AGM), where shareholders approved 86kobo dividend per share payout to shareholders. The AGM was held by proxy at the Nigerian Stock Exchange Event Centre, Lagos while observing relevant social distancing protocols and hygiene, aimed at curtailing the spread of Covid-19. Following the approval of shareholders on the 86kobo dividend per share proposed by the Board, CSCS would be paying a total of N4.3billion to its shareholders, some 22.8percent year-on-year growth in return to shareholders, when compared to N3.5 billion dividend (that is 70kobo dividend per share) paid in the previous year. CSCS has a diversified

shareholder base, including the Nigerian Stock Exchange, some of the largest Nigerian banks, private equity firms, other institutional investors and thousands of retail investors. Speaking on the performance of the company, the Chairman of the Board of Directors, Oscar N. Onyema noted the resilience of CSCS’ performance amidst market volatility and waning transaction volumes in 2019: “This set of results and impressive returns to shareholders are commendable, particularly when put in the perspective of the relatively

weak liquidity in the market in 2019. This feat reflects the tenacity of the management in diversifying the business and commitment to cost efficiency. Whilst transaction fees waned, it is satisfying that CSCS sustained both top and bottom-line growths, with revenue and profit before tax of N9.1billion and N6.3 billion respectively”, the Chairman noted. Also commenting on the results, the Managing Director/Chief Executive Officer, Haruna Jalo-Waziri said; “my colleagues and I remain committed to our

earnings growth and cost efficiency philosophies , as we driven by the ultimate objective of creating superior value for shareholders and enhancing market efficiencies. I am pleased with the 165percent growth in non-core earnings, reflecting our tenacity towards diversifying the business. More importantly, the overall performance reflects the pay-off of our painstaking investment in people and new technologies, as we strengthen our capacity to serve our participants better and meet anticipatory need of the market.” “Notwithstanding the inflationary environment, we closed 2019 financial year with 31.5percent cost-to-income ratio, demonstrating continuous improvement in cost efficiency. As we deliver on our strategic initiatives aimed at enhancing the post-trade segment of the Nigerian capital market, we are upbeat on the earnings outlook of the Company, with expectations of delivering superior returns to shareholder over the long term”, Jalo-Waziri added.

Shareholders laud Sterling Bank’s 2019 financial performance

hareholders of Sterling Bank Plc have commended its financial performance and dividend payout for the financial year ended December 31, 2019. They gave the commendation at the 58th Annual General Meeting (AGM) of the bank held virtually by proxy and streamed live from the MUSON Centre in Lagos. Speaking at the meeting, Boniface Okezie, President, Progressive Shareholders Association noted that “Our b a n k ’s A n n u a l G e n e r a l Meeting is always a day of celebration; a day to give kudos to the board, management and entire workforce for their hard

work. But we are constrained by COVID-19 and cannot roll out the drums to celebrate the achievement of our bank today. All the same, we thank the board and management for the impressive outing in 2019 and the dividend recommendation. “Looking at performance highlights, the bank has done a lot to grow our assets to N1.182 trillion. Loans and advances have also grown, operating income has grown, and our deposit base should hit N1 trillion by next year. We commend the board for retaining earnings, protecting shareholders’ funds, and ensuring there is no insider abuse as it relates to loans. We are happy that our bank www.businessday.ng

is at the forefront of the fight against COVID-19 and keeping the environment clean through its support for LAWMA. Also speaking, Sunny Nwosu, National Coordinator Emeritus of the Independent Shareholders Association of Nigeria (ISAN) appreciated the increase in the bank’s demand deposit which went up by 47 percent and described it as “quite good.” As a shareholder who is also a customer of the bank, Nwosu was full of appreciation for the way employees of the bank attend to customers and expressed the hope that this excellent service delivery would continue to differentiate Sterling Bank post-Covid-19. Nonah Awoh, a shareholder,

commended the bank for its level of financial disclosure. He said, “I don’t think it is out of place to have payments of external assessors stated. I want other companies to learn from Sterling Bank and do the same.” Als o, Gbenga Idowu, National Coordinator of Shareholders United Front (SU F ), c ommende d th e bank’s strategic focus on the HEART sectors, affirming the importance of these critical sectors to national growth and development in the wake of COVID-19 pandemic. Mr. Idowu urged the bank to remain committed to these critical sectors, most especially agriculture, which he described as the future of the country.

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FTSE 100 Index 5,993.28GBP -21.97-0.37%

Nikkei 225 20,388.16JPY -164.15-0.80%

S&P 500 Index 2,940.35USD -8.16-0.28%

Deutsche Boerse AG German Stock Index DAX 11,073.87EUR +7.94+0.07%

Generic 1st ‘DM’ Future 24,301.00USD -75.00-0.31%

Shanghai Stock Exchange Composite Index 2,813.77CNY -54.16-1.89%

13.135

CSCS shareholders approve N4.3bn dividend Stories by Iheanyi Nwachukwu

Global market indicators

Nigeria stocks to continue upward trend post-holidays ...though risks to sustaining gains in future remain

hen Nigerian equities dealers assemble for trading on Wednesday May 27 after the public holidays to mark the Eid-al Fitr celebration, most of them may continue to take advantage of some cheap counters. On the contrary, the short-term speculative buyers among them may resort to taking profit on some other tickers that have gained substantially in recent times. Over N694billion gain was booked in the trading week ended May 22 as the market maintained its bullish run all through the review week. The All Share Index (ASI) closed the last trading session of the review week higher by 1.80percent to 25,204.75 points, from week-open position of 23,871.33 points. From week-open low of 12.441trillion, the value of listed stocks increased to N13.135trillion. Taking a cue from the improving events in the global space as well as the positive market breadth posted on the last trading session of last week, market watchers at Vetiva Securities expect the market to continue on its upward trend, “though at a slower rate upon resumption from the holiday”. Fifty-five (55) equities had appreciated in price last week, higher than 32 equities in the preceding week. Eight (8) equities depreciated in price, lower than 28 equities in the preceding week, while100 equities remained unchanged, lower than 103 equities recorded in the preceding week. “The question on the mind of investors includes whether the uptrend is sustainable and what exactly is driving this recovery”, said Lagos-based research analysts at United Capital plc in their recent note. In the analysts opinion, the recovery in share prices of listed stocks on the

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Nigerian Stock Exchange “is driven by: Rebalancing in the oil market which has resulted in a 94percent rebound in oil prices from $18/barrel to about $35/ barrel within a month; increasing indications that governments around the world will reopen their economies regardless of the anxiety around Covid-19; cheap market valuation of high quality stocks; sustained dividend declaration by corporates – translating into attractive dividend yield amid poor rates on T-bills; and sizable market liquidity”. Coronavirus (Covid-19) pandemic successfully nullified a decade of global oil demand growth and the recovery remains slow lately. Many foreign and domestic stock investors have continued to price-in this risk amid others considering their near term impact on the Nigerian economy and businesses. In the latest report from the National Bureau of Statistics (NBS), the overall consumer price index - a measure of the average change in prices over time of goods and services purchased by consumers was up 12.34percent year on year (y/y) in April 2020 from 12.26 percent y/y in March 2020. The International Monetary Fund (IMF) predicted a negative Gross Domestic Product (GDP) of -3.4 percent for Nigeria in 2020, due to the ongoing disruptions caused by the Covid-19 pandemic. “In our opinion, risks remain on the horizon due to a combination of the increasing number of Covid-19 cases in Nigeria and weak economic conditions. “Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks”, said equity research analysts at Cordros Capital. Oil prices have plummeted more than 40percent so far in 2020.

Tuesday 26 May, 2020

BUSINESS DAY

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BUSINESS DAY Tuesday 26 May 2020 www.businessday.ng

‘Never waste a crisis’: Inside Saudi Arabia’s shopping spree The $325bn Public Investment Fund has spent billions on overseas deals this year even as the kingdom’s economy struggles Andrew England and Arash Massoudi

“Y

ou don’t want to waste a crisis . . . So for us, definitely we are looking into any opportunities.” That was the message delivered by Yasir al-Rumayyan, governor of Saudi Arabia’s sovereign wealth fund, as more than 2,000 bankers and executives tuned in to a virtual conference in April. And they were not idle words. The $325bn Public Investment Fund has not been shy about its ambitions since it fell under Crown Prince Mohammed bin Salman’s stewardship five years ago — it boasts of becoming the world’s “most impactful investor” and the largest sovereign wealth fund. As the coronavirus pandemic wreaks economic carnage across the globe, PIF has stepped up a gear to become the most publicly active sovereign investment vehicle, unabashedly seeking out bargains amid the panic. Three days after the conference, US regulatory filings revealed the fund had made one of its biggest bets on a company battered by the global crisis. It has snapped up a 5.7 per cent stake worth around $500m in Live Nation, a US-based entertainment company. Three weeks earlier, it had pounced when the shipping industry was sinking to build what is now a 7.3 per cent holding in Carnival, making it the secondlargest shareholder in the world’s biggest cruise line operator. It has also invested in about 20 US and European blue-chip companies, such as BP, Royal Dutch Shell, Total, Boeing, Citigroup, Disney and Facebook, acquiring smaller stakes worth at least $7.7bn in the first three months of the year. And those were just the investments made public. Separately, it led an investor group that agreed to buy Newcastle United, the English football club, for £300m. “They are very engaged with investors. They see lots of opportunities, a lot of capital needs that will give them access to businesses,” says a senior London-based banker. “Hasty or good timing? We won’t know for another three years.” PIF says it is “identifying opportunities to invest in solid companies with strong, longterm outlooks who we expect will be sector leaders when global economic activity begins to approach pre-pandemic levels”. But this flurry of activity has brought increased scrutiny for a neophyte global investor, which is at the forefront of Prince Mohammed’s bold plans to modernise Saudi Arabia and reduce the kingdom’s dependency on oil. PIF has been a source of contention for several years. Its

association with the crown prince meant it was tainted by the murder of journalist Jamal Khashoggi by Saudi agents in 2018. And it entered the crisis with a mixed investment record. Critics fear it has become the personal tool of Prince Mohammed, a state-within-a-state that threatens to crowd out the private sector at home — where it is pursuing multibillion dollar projects that risk becoming white elephants — even as it makes huge bets overseas. Its advocates argue that its role is vital for incubating and developing new industries to spur the diversification of the economy. Now that it is splashing cash in foreign markets, at a time when Riyadh is grappling with its worst economic crisis in decades, there are questions about its activities. Is it being opportunistic or strategic? Why invest in oil companies when its mandate is to diversify the economy? Should it be prioritising support for the struggling domestic economy? “There’s a disconnect between the dire domestic fiscal situation and the fund’s continuous outward investments,” says John Sfakianakis, a Gulf expert at Cambridge university. “And that complicates the economic recovery due to finite sources of funding.” Buffeted by a combination of coronavirus and the collapse in crude oil prices, Riyadh is slashing government spending,

raising debt and imposing painful austerity measures, including tripling VAT to 15 per cent. Although the world’s top oil exporter has foreign reserves of $470bn, it needs to preserve the bulk of those funds to stave off speculation on the riyal’s dollar peg. Other Gulf investment funds, including Abu Dhabi’s Mubadala and the Qatar Investment Authority, are also hunting distressed assets at a cut price, as they did during the 2008-09 financial crisis. But both Abu Dhabi, capital of the United Arab Emirates, and Qatar have smaller populations, longer records of active investing and are wealthier in per capita terms. “The big man [Prince Mohammed] needs to be careful what he spends on . . . Joe Public will be watching,” says a senior Gulf-based banker who adds that Saudi nationals will not appreciate “millionaire footballer salaries being paid for by VAT on groceries”. Yet Mr Rumayyan, one of Prince Mohammed’s closest confidants and head of the PIF since 2015, believes this is the fund’s moment to expand its portfolio as he strives to increase its assets under management to $2tn by 2030. “If you look at different sectors, like airlines, oil and gas, entertainment, they are all put on hold by the stoppage of the

‘‘

Some bankers and economists say a case can be made for the investments in Carnival and Live Nation as both fit with Prince Mohammed’s goal of developing entertainment and tourism

economy,” Mr Rumayyan told the April conference. “So we think once the economy is opening up we will see a lot of returns.” Some bankers and economists say a case can be made for the investments in Carnival and Live Nation as both fit with Prince Mohammed’s goal of developing entertainment and tourism. Sovereign funds in the region, notably Mubadala, have previously bought stakes in companies in part to use their financial leverage to lure projects and joint ventures to their domestic markets. A Saudi analyst close to the royal court says PIF previously sought but struggled to attract a cruise ship company to the Red Sea, where the fund plans to develop a high-end tourism project and Neom, a $500bn futuristic city. It later considered setting up its own company, but decided against it after realising the cost. “Then the price of Carnival plunged, so the feeling was they are buying it at a deep discount, they will be able to give Carnival business that will push its prices up, and the market will go up eventually,” the person says. “On the oil companies, there’s a feeling in the system that price isn’t going to stay where it is and that these are undervalued companies, so it’s a tactical short-term investment.” Others see a gamble on an uncertain future. “Carnival is fully booked [for 2021], but if Carnival ships can only take 30 per cent capacity, or we still don’t have a meaningful vaccine over the next 12 months, I can’t see the industry coming back at all,” says an executive close to the Saudi government. Five years ago, few outside of the kingdom were aware of PIF. Set up in 1971 to finance domestic projects and act as “custodian” of government stakes in companies, including Sabic, the petrochemicals group, and Saudi

Telecom, it had about 40 staff and was largely dormant. After becoming PIF’s chair — two months after his father, King Salman, ascended to the throne in January 2015 — Prince Mohammed earmarked the fund as the vehicle to drive his Vision 2030 economic reform plan. The young royal appointed close lieutenants to its board and it is now the dominant force in the economy. It now employs more than 700 people and wants to increase its international exposure to 25 per cent of its assets under management this year. “It’s not Yasir’s decision, it’s the crown prince who is bottom fishing,” says one investor who has worked closely with PIF. “It will end in tears like everything they’ve touched,” alluding to the poor results from some of its earlier investments, such as the $400m it bet on reality start-up Magic Leap. PIF made its first significant splash overseas in the summer of 2016 when it invested $3.5bn in Uber at a $62.5bn valuation, its largest single investment in a private company. A few months later, it agreed to become the main investor in SoftBank’s $100bn Vision Fund, committing $45bn to the biggest private fund of its kind ever created. Uber listed last year, but its shares trade below its initial offer price with a valuation below the level of the Saudi investment. The Vision Fund, which principally invests in tech companies before they go public, reported last week that it had lost $17.7bn in the fiscal year to the end of March. The fund wrote down the value of 47 of its 88 holdings, including WeWork and Uber. PIF also pledged to match up to $20bn in funds raised and managed by Blackstone to invest in infrastructure projects. That fund has reached $14bn in size and as of the end of March had an internal rate of return of -18 per cent, according to Blackstone filings. When asked about those investments in an interview on The David Rubenstein Show in March, Mr Rumayyan said the Uber deal came about after he used the company’s “amazing app”. For the Vision Fund he alluded to the strong relationship between Prince Mohammed and Masayoshi Son, SoftBank’s founder. “I remember sitting down with the crown prince a number of times trying to strategise what exactly we’d like to be invested in, of course it’s the future . . . artificial intelligence, robotics,” Mr Rumayyan said. “When I met with Masa Son for the first time he was talking about the exact same things . . . so the alignment of the thinking is what drove us to have this mega partnership with SoftBank.”

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