BusinessDay 27 Aug 2020

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news you can trust I ** thursDAY 27 AUGUST 2020 I vol. 19, no 638

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With $200m fund for meters, Nigeria set to end estimated billing NERC outline terms for new service reflective tariff Nigeria to order 5m electricity meters Gas pricing in dollars for review to cut cost of gas DisCos get reprieve as monthly remittances cut to 63% ISAAC ANYAOGU

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igeria is to tap a $200-million financing from the Wo r l d B a n k t o acquire up to 5 million electricity meters as President Muhammadu Buhari orders an end to the controversial estimated billing, which has caused uproar across the country.

To fast track the plan, BusinessDay gathers that the President has called on the Central Continues on page 31

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To beat dollar crunch, Nigeria’s central bank eyes special OMO for foreigners LOLADE AKINMURELE

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entral Bank of Nigeria (CBN) is weighing the option of creating a special Open Market Operation (OMO) auction for foreign investors with the hope that it lures in badlyneeded foreign exchange, according to two sources familiar Continues on page 31

Inside

El-Rufai to CAN: Sectionalising, religionising or ethnicising security P. 30 challenges won’t help us

President Muhammadu Buhari (r), with Goodluck Jonathan, former president of Nigeria/ECOWAS Special Envoy on the crisis in Mali, after a meeting at the Presidential Villa, Abuja, yesterday.

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Trust, mutuality to drive impactful partnership for SDGs attainment - experts P. A2

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he Federal Government of Nigeria (FGN) has applied for loan from the African Development Bank (AfDB) towards implementation of the proposed Nigeria Transmission Expansion Project (NTEP1) in the sum of USD 210 million to expand the transmission capacity within the North-western, North-eastern, South-eastern and Southsouth regions of Nigeria. The Transmission Company of Nigeria (TCN) as the Executing Agency of NTEP intends to engage an Individual Consultant under a Time-based Contract to strengthen her Project Implementation Unit (PIU).

The services under this Consultancy will include: I. Provide technical assistance in the process of procurement of works and contract supervision consultancy services and ensure that there is proper scheduling, methodology and documentation in the execution of all activities necessary to produce work plans, standard bid documents and other deliverables; II. Support the project’s procurement officers in interpreting and implementing all procurement matters as contained in the Project Appraisal Report (PAR), Financing Agreement, Project Agreement and other project documents; III. Provide technical assistance to the PIU in all procurement activities according to the Project’s approved Annual Procurement Plan and in line with African Development Bank (AfDB) procurement procedures.

IV. Actively participate and provide technical support in meetings that are aimed at reviewing the status of the project as regards procurement; IV. Develop finalization of solicitation documents including evaluation factors consistent with individual project requirements, including working with user departments to develop appropriate specifications; V. Develop a succession plan strategy and build the capacity of the project’s procurement officers to be able to take charge of procurement function at the end of the consultants’ contract; VI. Advise and support the Procurement staff in ensuring the efficient running of the Projects Procurement Unit and in the achievement of their assigned tasks.

VIII. Provide quality control in the development of procurement plans and support the effective and efficient implementation of approved procurement plans and provide timely progress reports in accordance with the contract agreement; IX. Work closely with the Project Procurement staff in ensuring that adequate records are kept on all procurement activities; X. Work closely with the Project Procurement staff in the preparation of progress reports for inclusion in the Financial Monitoring Report to be submitted to the AfDB www.businessday.ng

The desired consultant shall possess a minimum of First degree in Engineering, Economics / Statistics / Finance, / Business Administration /Management / Procurement / Law or any other relevant field. Post Graduate degree in the above areas will be an added advantage.

Professional degree in Procurement from any internationally recognized institution will be an added advantage. Minimum Fifteen (15) years general work experience including ten (10) years of experience in the field of procurement in a public/Private/international organization where the responsibility substantially covers the procurement of goods, works and services. FIDIC contracting experience shall also be an added advantage.

The Transmission Company of Nigeria (TCN) now invites Individual Consultants to indicate their interest in providing the above-described services. Interested Consultants should provide information on their qualifications and experience demonstrating their ability to undertake this Assignment (certificates, documents, references to similar assignments, letters of reference, etc...)

Eligibility criteria, establishment of the short-list and the selection procedure shall be in accordance with the African Development Bank’s “Rules and Procedures for the use of Consultants” July 2012, which is available on the Bank’s website at http://www.afdb.org.

Please note that interest expressed by a Consultant does not imply any obligation on the part of TCN to include him/her in the shortlist.

The estimated duration of services is 12 months effective from the date of Commencement.

Interested consultants may obtain the Terms of Reference at the address below during office hours (09:00 to 17:00) local time.

Expressions of interest in English Language must be delivered to the address below not later than 27th September, 2020 at 12:00 noon local time and mention “Individual Procurement Consultant”.

Expressions of interest may be sent by e-mail.

Address 1 Project Manager (African Development Bank funded Project) Transmission Company of NigeriaProject Implementation Unit (TCN-PIU) Attention: Engr. H. M. Runka Plot 1285, Wikki Spring, Maitama Extension Maitama, Abuja 900271, NIGERIA Tel: +2348155444002, 8155444035 E-mail: afdb.isdb@gmail.com Website: www.tcn.org.ng Address 2 Programme Coordination Transmission Company of NigeriaCorporate Headquarters Attention: Engr. Ciroma A. J. E-mail: Ciroma.Joseph@tcn.org.ng

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ABIA @ 29

Govnor Okezie Ikpeazu

Ikpeazu’s plan to deepen State’s economy GODFREY OFURUM

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bia State is one of the five states in the south-East region of Nigeria and one of the thirty-six (36) States of Nigeria with seventeen (17) Local government areas (LGAs).

Abia was carved out of the former Imo State on August 27, 1991 and covers an area of 6, 320 km.

The name “Abia” is an abbreviation of four of Abia State’s densely populated regions Aba, Bende, Isuikwuato, and Afikpo.

The capital is Umuahia, and the major commercial city is Aba, which was formerly a British colonial government outpost in the region, and is also one of the most populated areas in Nigeria.

It is also the 5th most industrialized State in the country, and has the 4th highest index of human development in the country, with numerous economic activities and fast-growing populations, as recorded by the United Nations in 2018.

Abia State is bounded on the north and north-east, by the states of Anambra, Enugu, and Ebonyi. To the west of Abia is Imo State, to the east and South-east are Cross River and the Akwa Ibom States. And to the south is Rivers State.

The southern part of the State lies within the riverine part of

Nigeria, it is a low-lying tropical rain forest with an oil-palm brush. The southern portion gets heavy rainfall of about 2,400 millimeters (94 in) per year and is especially intense between the months of April through October.

The rest of the State is moderately high plain and wooded savanna. The most important rivers in Abia State are the Imo and Aba Rivers, which flow into the Atlantic Ocean through Akwa Ibom State.

Abia is endowed with Crude oil and gas, which contributes over 39 percent of the State’s gross domestic product (GDP).

The industrial centre of the State is in Aba, with steel fabrication, garment making, pharmaceuticals, soap and cosmetics, and footwear.

With its adequate seasonal rainfall, Abia has much arable land that produces yams, maize, potatoes, rice, cashews, plantains, and cassava. Oil palm is the most important cash crop in the State.

Agriculture employs 70 percent of the state workforce.

Ikpeazu’s dream for a better Abia Trade and commerce come naturally to the people of the South-East and particularly Abians and that is why it is featuring prominently in Governor Okezie Ikpeazu’s economic blueprint, the “Five Pillars” of economic development. www.businessday.ng

The other four pillars are micro, small, and medium enterprises (MSME), education, agriculture, and oil and gas.

In drafting the “five pillars”, Governor Okezie Ikpeazu (PhD) in conjunction with his economic team, considered those economic activities that the people of the State do better than others in Nigeria, those things that the State has both comparative and competitive advantages over other States and trade and commerce is one of those activities.

Aba, the commercial hub of Abia State, has the largest population of any city in the SouthEast/South regions of Nigeria and the commercial hub of the regions. Its industrial prowess could be seen in the production of finished leather goods-shoes, belts, and bags, garments, steelworks, plastics, paints, cosmetics, and pharmaceuticals.

The city’s Ariaria International Market is one of the biggest markets in Nigeria and West African sub-region and attracts patrons from the West Coast and Central Africa.

It is however the Governor’s belief that trade and commerce cannot thrive in the absence of infrastructure, including good road network and security, which serves as enablers to economic development.

Consequently, the State Government is investing in infrastructure, especially roads and

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security, is to open up the State and make it safe for investment.

And in doing roads, the Ikpeazu-led administration, also elected for itself to build roads that can outlive his administration.

And not only has it done so many roads, the present administration in Abia State, but has also so far commissioned more than 35 roads, predominantly in Aba. And if you add up road construction in other parts of the State, the present administration in Abia has done and completed close to 149 roads, while it is currently active on about 75 road sites.

This is about the first time in many years that 3 first-class contractors are working simultaneously in the State. And there is no State within the economic bracket of Abia that has kept 3 world-class contractors, working simultaneously for two years.

These construction firms, include Setraco and Arab Contractors.

As the commercial hub of the State, it is assumed that if you get Aba right, you will get the entire Abia right, because the revenue generated from Aba, would be used to develop other parts of the State.

And that is why all the roads under construction in the city leads to an economic site, either it is leading to Ariaria International Market or to Ahia Ohuru @Businessdayng

or it is helping patrons to exit the city.

To avert flooding and increase the lifespan of roads in Aba, which is in the rain belt region of Nigeria, the State Government introduced cement pavement technology in road construction in the State.

The State Government is also embarking on a massive reclamation at Ife-Obara pond, which is supposed to take stormwater from the low lying areas of Aba, which Ariaria is within that geographical altitude.

It is remarkable that Abia State, under Ikpeazu, pioneered cement pavement technology in this part of the country, where it is casting 9-inch concrete, before asphalting. In addition, also, it is now a policy in the State that all roads in the State must come with drainages, from end to end, and street lights to extend business hours.

According to Governor Ikpeazu, It has worked, because somebody can stay under the street light and sell fruits and other items.

In the words of the Governor, “I think that with the vision that we have set for ourselves and the speed with which we are going and the promise from God that He will bless every genuine effort, we are confident that things will begin to work for us”.

It is the wish of Ikpeazu to see highly mobilized and optimistic Abia citizenry, confident in what they can do, all of them and half of Nigeria wearing made-in-Aba shoes and garments.

It is also his wish to see young people actively engaged in providing goods and services for the rest of Nigeria.

According to him, “I will like to see people that are not only educated but are capable of producing things with their hands and employing other people.

“I will like to see beautiful cities, not only in Aba and Umuahia. I will like to see a world-class 18-hole golf course at Ohafia that will bring attention to the world about the beautiful undulating hills of the Ohafia area with an event centre that can host the world.

“I will like to see a children’s hospital, where every child under the age of five and the mother, will be safe and healthy.

“I will like to see a situation where if any baby dies before his or her first birthday, the Governor will get a report.

“I will like to see our Abia emergency health service from 2 ultramodern ambulances today, to get 8 to 10 ultramodern ambulances, capable of rescuing people with a heart-attack by 2.00am.

“I will like to see the groundbreaking of Enyimba Industrial Zone, where hundreds of companies, would be manufacturing simultaneously and they are shipped either through the Obaku seaport or Onne seaport.

“I will like to see an Abia rail line covering the 13 railway stations in Abia, getting to Enugu, conveying happy people and goods”.

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Sales Coaching-the peaks and valleys mentality (1) Positive Growth with Babs

Babs OlugbemI

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ales’ coaching is a useful tool for unleashing the potential of your team. While reflecting on one of my clients’ comments, I, without doubt, believe we all need the right push at one point or the other.

No one without the need for motivation; be it intrinsic or extrinsic. Whether your team member is on top of his or her budget or below the exit line, there is power with your staff to be at their best all the time if they are led and inspired appropriately by the sales leaders.

My reflection on our client’s comment that her team and company’s sales figures are always on the way to the ‘north’ whenever my team engages her team brought about an insight into why our sales coaching at Mentoras Leadership Unlimited will in most instances be useful. When you reflect, you breed insight. Reflection and the consequent insight are like questioning the ‘why’ for your actions. One of the techniques I use to move my coaching client in sales to a higher level of performance is ‘focused conditioning’.

In mental health and wellbeing parlance, conditioning patients or service users are unprofessional because they might lack the required mental capacity to decide. However, I have found conditioning in my coaching insight as a useful tool for my team because of our personalities and the passion with which we coach our clients. Condition-

ing as defined in the Relational Security manual issued by the United Kingdom’s Quality Network for Forensic Mental Health Services is defined as ‘when someone uses the power of his or her personality repeatedly and overtime to persuade another person to act or think differently’.

One of the conditioning tools we have adopted in sales coaching is to imbibe the peaks and valleys mentality in our clients. Peaks and Valleys became a famous slogan in 2009 when Spencer Johnson released the book. In the book, Spencer used a story (like an allegorical fable) to teach the principle of making both good and bad times work for people at work and in life. I have never seen a career path that is relevant to the lessons in the book than the sales profession.

Now to focused conditioning as a useful sales coaching tool. As a coach, I put my personality into the coaching process without losing sight of the various professional boundaries and limits.

I know when my clients are trying to test my boundaries and when to be flexible or not. Using conditioning as a form of sales coaching strategy is professional because an average salesperson is with mental capacity even when at the valley of performance. What I imbibed in people is the mentality of highs and lows, hills and valleys to their current situation.

In my terms, peaks in sales are when the figures are in the “north”. When you are above 75 percent of your budget and things are looking good. Emotionally, at the peak, you are at your best, and you received commendations for your current performance at the meetings. To your colleagues, you are the happening salesman or saleswoman. The valley, on the other hand, is when your performance figures are at the “south”. You are operating below 50 percent of your budget, and for a top-notch salesperson, south is running at below 60 percent of

target. At the “south,” your emotional state is awkward. You are afraid when going to meetings. At this stage, you are the easy target of the sales leaders’ unprofessional and abusive words.

Whenever you say, or any promises you made to change the performance will be taken as lies. You will be told to keep quiet as ‘figures don’t lie, and liars don’t figure out things. The valley is a terrible place to be as it affects your other life quickly- relationship with spouse, friends, and family. A worrying emotion is ruining you, and all you can do is to either hope for the best or do something as fast as possible to save your job. You will be at the valley starting to think of how to survive-pay the bills, the school fees, and to cope with maintaining your established standard of living and ego in the society.

Before you overthink on the valleys, let me inform you that all the salespeople will experience peaks and valleys in their career. No one stays permanently at the valleys or the peaks. The question is how long you will want to stay at your peak or the valley? What will you do when you find yourself at the peak or when at the valley of poor performance? We do not just get to the peak or find ourselves at the valley. We took the journey deliberately or unintentionally to the north or the south of performance. The performance baseline is crossed through our conscious and unconscious efforts as the results of how we view and accept our reality.

My job as a sales and leadership coach and consultant is simple. I love dealing more with people termed as “finished” “useless” and “non-performing” staff. My mantra is to help individuals and organisations to be at their most creative best and turn-around their performance within 90 days of engagement. In achieving that self-developed and imposed commitment, the use of

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Before you overthink on the valleys, let me inform you that all the salespeople will experience peaks and valleys in their career.

No one stays permanently at the valleys or the peaks. The question is how long you will want to stay at your peak or the valley?

Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

The Companies and Allied Matters Act 2020 – matters arising (1)

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n 7 August 2020, President Mohammadu Buhari signed the Companies and Allied Matters Act, 2020 (“CAMA 2020”, “the Act”) into Law. The President’s assent capped almost a decade of executive and legislative efforts to berth a new Companies legislation and introduced an exciting dimension to the body of legislations governing the operation of business enterprises in Nigeria.

Indeed, Nigerians and the investing public had long craved for the amendment and, indeed, an outright repeal of the Companies and Allied Matters Act 2014 (“the Repealed Act”) which had its roots in the Companies Act 1968 and was viewed as one of the outstanding vestiges of colonialism being a wholesale importation of the English Companies Act 1900 and had basically modelled itself in line with the then prevailing realities. Surprisingly, whilst the UK Act had been amended severally in response to emerging realities, the Nigerian Act had remained largely untouched and gradually tilted towards obsolesce as its provisions continuously proved to be inadequate to tackle emerging economic issues.

The new Act scored many firsts and deserves the accolades that trailed its passage and assent as it provides the needed incentive for driving businesses in Nigeria and particularly seeks to advance government’s efforts to remove the bottlenecks that have continuously beleaguered the smooth conduct of commercial activities alongside promoting the ease of doing business in Nigeria. The Act also takes cognizance of the prevailing global economic and governance realities and practices that enhance smooth conduct of businesses by adapting provisions

that would ensure overwhelming inclusion and participation of Nigerians and foreign Investors in the Nigerian economy. The Act amongst others made the process for the grant of exemption from incorporation easier for foreign companies.

Notable innovations introduced by the Act include single shareholder and director companies. Indeed, company legislation the world over had long recognised sole shareholder companies as a key driver of economic inclusion particularly for micro, small and medium enterprises. By extending the protection of limitation of liability and enabling upcoming entrepreneurs exercise exclusive rights in the management of their companies, the Act has eliminated a key bottleneck that often had impeded economic inclusion.

The Act also recognises the concept of independent directors as a key initiative in promoting transparency and accountability.

The various Codes of Corporate Governance had long recognised the importance of having independent views on the Board and it is commendable that there is now legislative backing to this key governance initiative. The threshold set for Independent Directors is however a cause for significant concern and an area one expects a quick amendment as it completely negates the concept.

The Act further makes elaborate provisions for the administration, compromise, voluntary arrangements, netting and schemes of contract to ensure the sustainability of businesses and a formal cessation process. Furthermore, the Act abrogates the need for statements of compliance, replacing the concept of “authorised share capital” with “minimum share capital” to reduce costs of incorporation. The CAMA

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2020 also allows for electronic filing of forms and resolutions, electronic share transfers, as well as virtual conduct of general meetings by private companies.

The Act also exempts small companies and companies that have not yet carried out any business since incorporation (save for banks, insurance companies and others to be prescribed by the Commission) from external audit requirements, whilst mandating public companies to display their audited accounts on their websites.

Also commendable is the whittling down of the Attorney General’s (“AG”) powers with respect to the grant of approval for the registration of a Company Limited by Guarantee.

Obtaining the AG’s “No Objection” for the registration of Guarantee Companies had hitherto been a drawback in the registration process and thus the new requirement of publishing the registration of such companies in three (3) national newspapers in the event the AGs consent is delayed is a welcome development. The Act also removes the mandatory requirement for every company to procure a common seal and validates documents and certificates issued and signed by authorised Directors even if such documents are not sealed.

Commendable and bold as the provisions of the Act are, it is important to point out that it is not entirely perfect, indeed there is no such thing as a perfect law. The Act, in trying to make up for decades of ignoring advancement in business, seemed to have overstepped some boundaries and introduced not a few controversial provisions. A very contentious provision is the power vested in the Commission by Section 839 to suspend the trustees

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focused and positive conditioning has proved to be a reliable tool in my kitty.

Here is a true-life experience that lay credence to the peaks and valleys mentality from one of my sales clients and protégés.

Johnson was managing a significant branch of a bank. A month to the end of the bank’s financial year, his branch performance was on the red line in all the parameters. He was afraid of becoming a subject of ridicule and the impact of closing the year low for appraisal reasons.

After the conditioning that enabled him to see the sales roles and life in general as a game of peaks and valleys, Johnson was in his office on a Sunday to reflect. I told him to SEE, THINK and ACT. He printed his balance sheet and stared at it for 20miniutes. He realised that an inflow of one billion naira that stays for the next 28days would change his fortunes and performance rating on the deposit line and affect other tracks like the profitability, solvency, and the bank’s liquidity. His conscious level of awareness rose from the animal level where he blames the bank, his supervisors, and others except himself to an aspirational level with the hindsight of the possibility of a massive turn-around. It was as Johnson was at the stadium when Liverpool turned around the trailing AC Milan by 3-0 to win the Champions League trophy on May 25, 2005. The spirit of Steven Gerald and his teammates reinvigorated in Johnson. He wrote down five existing customers from whom he can source for the needed one billion naira before leaving his office around 7 pm.

Chinedu Ozor of an association and appoint an interim manager or managers to manage the affairs of the association where it reasonably believes that there is or has been any misconduct or mismanagement in the administration of the association or it is necessary or desirable for the purpose of protecting the property of the association.

It is widely thought that this power is unreasonably wide and constitutes a veiled indirect attempt to regulate religious organisations most of whom are registered as Incorporated Trustees. It is also doubtful that the Commission thought through the implications of a single shareholder and Director Company within the context of corporate governance, accountability and transparency.

The access to finance by such companies is also debatable as they would be deemed to lack key corporate governance structures considered by many lenders in evaluating credit.

Another controversial provision is the power of the Commission to request a Company to change its name where it is found to be identical to an already registered name.

It can be argued that this power seems to be overreaching as the CAC is deemed to be functus officio (as regards similarity of registered names) once the registration process is concluded. The power to direct the change of name in this circumstance should be reserved for the courts after determining the extent of similarity of the registered names.

Chinedu Ozor is a Partner at DCSL Law. Kindly, forward comments and reactions to cozor@dcsl.com.ng.

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Sundry coro developments and a summer holiday at Igbo-Ukwu

ik MUO

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wish to start by apologising for my unexplained absence last week. As the above title informs, I decided to have my summer at Igbo-Ukwu, where network quality is probably among the worst in Nigeria. As you will soon see, rather than resting during this summer, I was so busy doing ‘this and that’ to the extent that I forgot several of my responsibilities. I hope you accepted my sincere mea culpa.

Sometimes in July, the Lagos State Commissioner for Health, Akin Abayomi, (whom I have commended in recent times for his exemplary and professional commitment to this Coro War(C-war)), projected that Coro would peak in Lagos this August and that the confirmed cases could go as high as 120,000! It was an alarming projection, but mercifully, like most modelling situations, it did not come to become. Confirmed cases in Lagos as at 24/8/20 were 17,894 out of 52,540 nationwide, barely 15 percent of the projection.

My joy has however been cut short by the fact that Prof Abayomi himself has unfortunately become afflicted by the mean virus. You see why our people ask the native doctor who cures diarrhoea how sure he is of his immunity.

I am sending my message of solidarity to him through this medium and pray that the good Lord, whom he serves by serving humanity, should show mercy.

And on top of this he has assured that he remained committed to the C-War! I am glad that Geoffrey Onyeama, who caught the virus despite his “three layers of protection,” has recovered and that Omotola Jolade-Ekehinde is making commendable improvement.

However it is saddening that the family of Senator Kasamu had to contend with his death as well as the queer, uncharitable condolence message from Obasanjo. Even then, his statement that ‘no legal, political, cultural, social or

even medical manoeuvre could stop the cold hand of death when the Creator of all of us decides that the time is up’. Surely, it shall come to pass for all of us at a time, place and circumstance that are beyond our knowledge and control. Across the world, Usian Bolt is down with Coro days after celebrating his 34th birthday party, where all safety protocols were disdainfully ignored.

And then 100 nudists at the Cap d’Agde, one of the most popular naturist resorts in Europe, have tested positive as they holidayed. There have also been a lot of hush-hush developments in the area of vaccine and treatment protocols.

About 2 weeks ago, Russia announced the development of the world’s first Coro vaccine, which offers a twoyear immunity. Before then, WHO and partners had launched the Access to COVID-19 Tools (ACT) Accelerator to speed up the development, production and equitable access to COVID-19 diagnostics, therapeutics and vaccines. It has continuously emphasised the equitable angle to the vaccine access. However, how can we discuss equitable access when Britain, with a population of 68m and 374k cases as at 24/8/20 has ordered 90 million doses of potential COVID-19 vaccines (still under development) from pharmaceutical companies Novavax, (US) and Jansen (Belgium)?

So, the scramble has already started for vaccines that are still in the pipeline! Meanwhile China has approved an emergency usage of the vaccines developed by a select number of domestic developers while the US has also granted emergency authorisation for the application of plasma to treat “coronised” people (70,000 treated so far). In Madagascar, the health minister has been sacked for seeking external medical help without consultation and authorisation. The background to the study is that the country that promoted an herbal mixture suddenly became overwhelmed with Coro and the health minister, out of frustration or desperation, sought foreign assistance.

And as we are caucusing and even demonstrating for the reopening of schools, bandits had abducted students who were writing their WAEC papers in Kaduna (Prince Academy DambaKasaya in Kunai ward of Chikun LGA, Southern Kaduna). While students of Government Girls’ College, Doma, and Government Science Secondary School Gombe, Gombe state, have tested positive for COVID-19. There

was also another in Akwa-Ibom State.

They still wrote their exams but these evidence the challenges that we face in this C-War. In South Korea, all schools around Seoul have again been closed in deference to Oga-Coro!

It is also noteworthy that people are celebrating their victories over Coro and the associated luck-up, lock-down and lock-in, in diverse ways. A crowded body-to-body party was hosted in Wuhan, the author of this coro, as they celebrated 3 months without any fresh case. A 103-year-old Michigan woman, Dorothy Pollack has celebrated an end to coronavirus quarantine in grand style by getting a tattoo (of a frog of all things!) and also going on a bike ride after she had been in Coro-induced prison for about 100 days! And as we are shouting of economic meltdown and distress, a Chinese fellow resident in the US had contracted an Israeli Company, Yvel (Globalisation at work) to produce a custom-made Gold and diamond facemask worth $1.5m for him (Yes. $1.5m for JUST a face mask).

The 18-karat white gold mask will be decorated with 3,600 white and black diamonds and fitted with toprated N99 filters. And here is the son of man, adorning my own hand-made serviette-based face masks!

Now, to my summer holidays. I had planned my annual summer vacation, an exclusive privilege of those most of who do not produce anything and yet they spend as if money were running out of fashion. You want me to mention them? You are on your own.

Unfortunately, this same coro scattered all my plans. The Nigerian government closed our land borders in August 2019 and then, there was international lockdown, with all the airports, planes and pilots quarantined! While working on how to retrieve all the hard-currency paid to all the flight agents and tour consultants, I decided to head to IgboUkwu, my hometown and the unarguably the origin of Igbo, and probably, black civilisation.

The tourist attractions include the Anozie compound of Umunwadim, from which the historic ancient bronze works were excavated, the Federal and state museums, the Centre for Black and African Arts and Civilisation, the Yam House, which hosts the National New Yam Festival, the Shaw Institute for Cultural Arts (SICA) the mmonwu (masquerade) festivals and the famed Nkwo-Igbo Market. Igbo-Ukwu is it and

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It is also noteworthy that people are celebrating their victories over Coro and the associated luckup, lock-down and lock-in, in diverse ways. A crowded bodyto-body party was hosted in Wuhan, the author of this coro, as they celebrated 3 months without any fresh case

if in doubt, just consult Google and you will find the truth and the truth shall set you free.

Anyway, I travelled on 5/8/20, the same police toll-gates, the same bumper-to bumper hold up, got home safely, rested that day and went down to business. It all started with the CoroCompliant Igbo-Ukwu new yam festival on 7/8/20. It was low-keyed due to the coro-season but all the essential ingredients were there. This took a greater part of the day. On the 8th, all the kindred had their own new yam festival and as the Ichie, I presided over the celebrations of Umumennofor kindred. Some individuals also celebrated their own family new yam festivals, including Chief Jude Osude, who is from my kindred. We convoked the First Igbo-Ukwu Political Summit to shape our collective political future. And then, a deluge of funerals!

My community was shaken to the marrows by the accumulated heavyweight funerals within this period.

Sir Just GodOkonkwo of Knights of St Johns International and a community leader of no compare; Lady Theresa Ogbonnia, a 92 year old, whom we were planning to celebrate her 70th marriage anniversary; Joe Umeh, an erudite banker, lawyer and edu-preneure; Nze Ezeakpunwa Ezeokana, an accomplished banker, who was unanimously nominated by his kindred as the Idu3 of IgboUkwu…There are also many more on the queue, including Sir Basil Onwuegbuokwu Osude, a brother and a friend, Ichie Ezechimelueze Igwilo, a member of the Idu- Cabinet and Ello Obinwa, a good man who just died last week and whose death sent shivers down our spines. He was too good to die but God knows the best On 22/8/20, the cultural worth of Igbo-Ukwu was raised a notch higher as the Odenigbo Gallery of Arts was inaugurated. The proprietor is Uchenna Nwosu, (Odenigbo-IgboIkwu) a worldclass and multi-talented Professor of O&G, who happens to be a painter, musicologist, photographer and a writer.

That was how the first phase of my summer went; it ended on 23/8/20, when I returned to the hustle, bustle and madness of Lagos. If you think I had just gone home for mournful burial ceremonies, it is up to you. But for me, that was summer. I am still planning the second phase, all things being equal.

Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Special economic zones and Nigeria’s industrial ambition (2)

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econd, make SEZs an integral part of a long-term national development strategy in the sense that they should complement and support the country’s comparative advantages and be integrated into broader macroeconomic, growth and industrialisation policies and agendas. SEZs should have a detailed strategic planning, feasibility and master-planning process which should take into account the commercial sustainability, target markets and businesses, growth trajectory, technology innovation capability, infrastructure availability, the supply chain, the business environment, and land and labour supplies.

The zones at best should be based on business demand and not a political tool. Furthermore, there must be a predictable and transparent legal and regulatory framework in place for the zones that should be insulated from political setbacks or interferences, and that ensures the clarity of roles and responsibilities of various parties, in order to provide protection and certainty to developers and investors. Additionally, strong and long-term government commitment

is required as it provides supplementary support for the zone’s success by ensuring policy continuity and adequate provision of various public inputs.

Fourth, the zones need to be focused on both exports and domestic markets and should be connected with the local economy through SME and forward/backward linkages, in order to maximise the spillover effects. Following this, a proper monitoring and evaluation (M&E) system must be established to ensure the zone programme is on track, and correct deficiencies once detected. This M&E system should specify targets around investments, exports, revenues, forex earnings, employment, local firms-productivity enhancement, diversification, skills upgrading, technology transfer etc.

An effective investment promotion strategy for attracting investors in the zones is also important and could be done through partnerships with emerging economies or newly industrialised economies. Furthermore, the government must subsidise labour training externalities for firms in the SEZs to ensure

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training is constantly updated to keep pace with changing business and industrial development needs. This means that when certain skills are not available locally for new industries, policies should be implemented to attract such skills from other parts of the county or overseas.

Moreso, it is important that the government ensures continuous technological and industrial learning, innovation, and upgrading so that zones can enhance productivity and sustain long-term competitiveness. This means facilitating industrial upgrading through the promotion of technology innovation/transfer and high-productivity sectors targeted toward different developmental stages. These efforts include expanding applicable R&D expenditures; strengthening university-industry linkages; and supporting targeted business incubators.

Finally, ensure zones have good off-site infrastructure (such as ports, railways, airports and highways), with good trade logistics and customs services. This entails being strategic with locating SEZs to maximise location advantages: coastal locations for export processing

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Chambers Umezulike and logistics; areas where clusters have been formed naturally; proximity to raw materials etc.

SEZs remain the surest means through which Nigeria could facilitate industrial development, attract investments, encourage industrial clustering, and diversify sources of government revenues. Post-Oil Nigeria requires that SEZs and industrial estates are carefully developed and function optimally for economic development.

The author, Chambers Umezulike is an international development professional and Development Economics Researcher. He can be reached through chambers.umezulike@gmail.com and on Twitter via @Prof_Umezulike

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Thursday 27 August 2020

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The coming bedlam in Lekki

CHRISTOPHER AKOR

O

ne constant criticism of leadership in most of Africa is that leadership is not visionary but reactive. Rarely does one find leaders who are capable of envisioning and working for a better future for their societies.

Most of them are preoccupied with gaining and maintaining power, usually through cronyism, political loyalty and corruption. Invariably therefore, the main preoccupation of leadership becomes the maintenance of the status. What we call governance here is at best troubleshooting.

This is what comes to mind when I think about the fate of Lekki, the supposed ‘new Lagos’. The Lekki corridor is arguably the fastest growing settlement in Nigeria if not Africa.

It is being touted as the new mainstreet of Africa, offering vast investment opportunities. The corridor has attracted investments such as the Lekki Free Trade Zone (LFTZ), the ambitious Dangote Refinery originally billed to come on stream by 2019 but now delayed to 2021, the Lekki deep seaport, chemical and fertilizer plants, among others.

About 70 companies cutting across diverse sectors are said to have signalled interest to do business within the LFTZ with many of

them promising billions of dollars of investment in the corridor, which also boasts of West Africa’s biggest shopping mall. Even at that, the Lagos State government says this is just a scratch of the surface as the zone presents limitless opportunities still to be tapped by local and foreign investors.

However, with all these investments and potentials to grow into a city with its own soul, there is no known and concrete plan at public or private sector level to provide the critical infrastructure that will drive and give those investments any meaning. The most agonising is the road network.

The Lekki-Epe Expressway, built in the 1980s during the administration of Lateef Jakande and when the axis was just a rural settlement, became one of the busiest and congested roads at the turn of the 21st century. Then, workers and school children had to begin their journey as early as 4am to have any hope of getting to their workplaces or schools in Victoria Island or Marina by 8 or 8.30 am.

Commuters and motorists along the route groaned in pains for many years until the Lagos state government, in 2006, heeded their call and concessioned the reconstruction and enlargement of the 49.4 kilometre road (and the building of a 20 km coastal road) to the Lekki Concession Company Ltd. (LCC) on a build, operate and transfer basis.

The government justified the Public Private Partnership deal as a strategic partnership with the private sector to ease the discomfort of Lagosians and boost the economic prosperity of the Lekki-Epe vicinity especially as the road will serve as the gateway to the proposed Lekki Free Trade Zone, new model cities and residential accommodations,

business centres and financial and tourism hubs. Guarantee was provided and work began in 2008. Sections 1 and 2 (0-15 kilometre) of the road were constructed but Sections 3 and 4 (15 -49 kilometre) and the coastal road remain unconstructed.

However, like all things Nigerian, the concession has since gone awry. Several delays and agitations over the payment of tolls at three designated gates in less than 25 kilometres led to the stoppage of work. The entire concession agreement has since collapsed with the Lagos state government revoking the concession and paying off the concessionaires.

Meanwhile, buoyed by the expansion of the road, many housing estates, private houses, universities and businesses have sprung up along the axis. It can be said that many people and businesses are escaping the busy and congested Victory Island and Ikoyi and even Lagos mainland to the Lekki peninsular axis. Consequently the road has got very busy that the traffic gridlock of past years has returned with a vengeance.

But perhaps, the elephant in the room is the Dangote refinery and petrochemical complex. Dangote has no intention of constructing pipelines to bring and evacuate fuel from the 650, 000 barrel-per-day refinery. Fuel, according to the Group Executive Director of the company, Devakumar Edwin, would go via “shuttle” boats to Nigerian cities of Warri and Calabar, and other deliveries would go in trucks.

Currently, Kilometre section of the road from Sangotedo to Ibeju Lekki (built since 1980) has virtually collapsed and is almost impassable and no work is being done to repair the narrow road not to talk of constructing the remaining section of

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This is, in many ways, the Nigerian story.

Governments are incapable of planning for future developments and even if they claim to plan, the plan remains only on paper and bears no connection with reality

the road to Epe. Pray, how can trucks evacuate fuel from one of the world’s largest refineries through a single, narrow and virtually collapsed road to all parts of the country?

This is, in many ways, the Nigerian story. Governments are incapable of planning for future developments and even if they claim to plan, the plan remains only on paper and bears no connection with reality.

In 2006, the Lagos state government developed an Integrated Rail Transport System to link the major population and activity centres in Lagos state. Seven lines including the 26 kilometre Green line that will run from Marina to the Proposed Lekki Airport was planned.

Due to lack of funds, the government decided to start with the 27 kilometre Blue Line from Okokomaiko to Marina via Iddo. The contract was awarded, and work started in 2008 and was supposed to have been completed in 2011 and other lines begun. But till date, the Blue Line is yet to be completed and the other lines remain only plans on paper.

Even as the refinery is about being completed, neither the company nor the Lagos state government is concerned about the road network until Lekki becomes like Apapa, although Lekki’s case will be worse than Apapa’s. There are multiple access roads to and from Apapa, but there is only one road to and from Lekki. One can only imagine the bedlam on that axis when the refinery is completed.

The Lagos state government’s solution to the problem is to launch with fanfare the beginning of construction of an 8.7 kilometre long road that will connect the Lekki-Epe expressway at Victoria Garden City (VGC) junction to the Freedom Way in Lekki Phase 1 estate. So much for the ‘new Lagos’.

Enforceability of netting provisions and the intervention of the CAMA 2020

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he President of the Federal Republic of Nigeria signed the Companies and Allied Matters Act, 2020 (the “Act”) into law on the 7th of August 2020. The Act repeals and replaces the Companies and Allied Matters Act, 1990. The effective date of the Act is yet to be confirmed as the Act will only become effective after it has been gazetted.

The Act is a welcome development and has been unanimously described as Nigeria’s most revolutionary piece of business legislation in decades. One of the innovations of the Act is the inclusion of provisions on Netting.

The concept of netting “Netting” is a reconciliation and payment mechanism under which amounts owed between contracting parties are consolidated into a single, smaller payment from one party to another. Netting is used to denote contractual arrangements by which claims of different parties against each other are reduced to a single balance. Bilateral netting enables two counterparties in a financial contract to offset claims against each other to determine a single net payment obligation that is due from one counterparty to the other, meaning that the payables and receivables are netted off. On the other hand, multilateral netting typically involves netting among more than two parties, using a clearing-house or central exchange.

Netting is very common in advanced economies where settlement is based on net

positions in bilateral or multilateral financial arrangements rather than by gross positions.

A strong netting system generally gives rise to a thriving derivatives market, as it provides the most accurate picture of a company’s financial position, solvency and liquidity risk.

Generally, the benefits of netting are: (a) Reduction of credit risk; (b) Reduction of settlement risk; (c) Reduction of liquidity risk; and (d) Reduction of systemic risk.

The introduction of a netting regime under the Act is, therefore, welcome and required to build a thriving derivatives market. This Article examines the provisions of the Act as it relates to netting and examines the scope of its application.

Netting in Nigeria prior to the Act Prior to the Act, Nigerian law did not make any specific provision for netting and there were no Nigerian judicial authorities on the netting concept in the context of structured finance transactions. However, as a general principle, outside of an insolvency, parties were free and are still free to agree to almost any kind of netting arrangement they choose — insofar as it is neither illegal nor contrary to public policy.

The challenges with respect to enforcement of close-out netting provisions prior to the Act arose in the context of insolvency of a Nigerian party. The close-out netting provisions in that instance would be subject to the mandatory provisions under the Bankruptcy

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Act, the rules on fraudulent preference, the rules on “cherry picking” and pari passu distribution.

However, when opining on the enforceability of such close-out netting provisions in structured finance transactions, Nigerian lawyers would opine that as a general principle, Nigerian courts would, in adjudicating on the enforceability of such netting provisions, consider the decision of English courts in the absence of Nigerian judicial precedent.

The premise for this advice was that English case law is of persuasive authority before the Nigerian courts. In the absence of a legislative framework for netting, relying on this opinion was not enough comfort for bankers, primary dealers and other financial institutions in the derivatives market and thus stalled the growth of the derivatives market in Nigeria.

The intervention of the Act Netting provisions are now included in Sections 718 to 721 of the Act. Section 721 of the Act is particularly relevant. It provides that “the provisions of a netting agreement is [sic] enforceable in accordance with their terms, including against an insolvent party, and, where applicable, against a guarantor or other person providing security for a party and shall not be stayed, avoided or otherwise limited by; (a) any action of the liquidator; (b) any other provision of law relating to bankruptcy, reorganisation, composition with creditors, receivership or any other in-

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CHUKWUDI OFILI

solvency proceeding an insolvent party may be subject to; or (c) any other provision of law that may be applicable to an insolvent party, subject to the conditions contained in the applicable netting agreement.”

The netting provisions in the Act, therefore, eliminate the limitations imposed by the mandatory provisions under the Bankruptcy Act on insolvency set-off, the rules on fraudulent preference, the rules on “cherry picking” and pari passu distribution. As highlighted earlier, the provisions will have the effect of reducing credit risk. Besides reducing credit risk and regulatory capital burden for banks, the legislation would free up capital, reduce hedging costs and liquidity needs for banks, primary dealers and other market makers.

There is no doubt that the netting provisions are a welcome development and a step in the right direction.

Ofili is an associate partner with DETAIL Commercial Solicitors chukwudi@detailsolicitors.com

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BUSINESS DAY

Thursday 27 August 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

Fixing agriculture critical to economic rebound Vibrant agribusiness protects lives and livelihoods

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

Bashir Ibrahim Hassan

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

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hocks from the COVID-19 pandemic have hit Nigeria in a time when its absorbers are best defined as weak.

It has worsened the precarious state of the economy, costing Nigerians their jobs, weakening economic growth and increasing the number of poor masses.

To help save lives, prevent increase in poverty rate and protect livelihood of the poor and vulnerable, the federal government must reprioritise public spending, focus more on expenditures aimed at stimulating and developing the economy. One way will be to lessen the COVID-19 induced pressures on the Nigeria agricultural sector.

It has gotten to a point where all hands must be on deck to rebuild a more vibrant and sustainable economy. The federal government’s “I am self sufficient and well able” thinking and policies will not work, hence, the private sector must be carried along.

In every economic crisis, households bear the brunt eventually through increased cost of living, job losses, health complications etc. Households account for more than 70 percent of GDP.

Hence, it only makes sense that policy options that can help mitigate the effects of the crisis on this group must be focused on. This will help lay the foundations for a strong economic recovery, generating more jobs and improving employment.

The Nigeria agricultural sector has remained a major contributor to the economy compared to other sectors. In 2019, the sector contributed 22.12 percent to Nigeria’s nominal GDP coupled with the fact that the sector employs about 70 percent of Nigeria’s working population. The sector is also the largest economic activity in the rural area where almost 50 percent of the population lives.

However, the outbreak of the COVID-19 pandemic has caused the sector to contract. It has brought to the fore many of the existing structural challenges in the sector.

Farmers and dealers of agricultural goods struggled through the lockdown, as security agents routinely declined to grant ease of passage.

With farmers unable to access their farms, some that should have harvested during the months coinciding with the lockdown were unable to, while those that should have been preparing their land for the planting season were equally

restricted.

According to the International Food Policy Research Institute (IFPRI), the agriculture sector contracted by minus 14 percent in April/May 2020. Export crops such as sugarcane, beverage crops, export crops declined 47 percent, 45 percent and 58 percent respectively due to falling export demand and input supply disruptions. These crops account for less than 1 percent of agriculture GDP. Also, decline in investment spending and construction activities reduced demand for timber and wood products. This led to a minus 25 percent plunge in the forestry sub sector which accounts for 1.1 percent agriculture. Root crops which are the largest food group and agriculture subsector in Nigeria accounting for 43.3 percent of the sector’s GDP contracted by 5 percent.

In terms of value of activities, this is huge. Other subsectors moved in a similar direction.

Moreover, the shut down of Indorama, a leading fertiliser producer, was termed the major challenge for farmers in this difficult time.

Fertilisers are needed to supplement required elements found naturally in the soil for improved output.

Farmers now have to find a way

of multiplying their farm harvest else food shortage awaits Nigeria in 2021.

Projections by some agricultural commodity producers shows that productivity this year could reduce by an average of up to 47.5 percent.

Nigerians face a harsher reality of food shortage, job losses; if reforms and policies are not initiated. Food shortage means higher prices amid excess demand. With higher prices adding to inflationary pressures, Nigerians are worse off with no corresponding increase in income due to high job losses.

With such reforms targeted at increasing the productivity of farmers as well as the storing and processing capacity of agricultural produce, Nigeria would be able to mitigate the negative effects of the pandemic, while generating more jobs.

Without bold reforms, strong fiscal and monetary policy actions, the World Bank warns that the macroeconomic implications of COVID-19 in 2020 and 2021 will be severe – including the loss of life, and the possibility of five million more Nigerians being pushed into poverty – even if Nigeria manages to contain the spread of the virus.

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

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Thursday 27 August 2020

BUSINESS DAY

Research&INSIGHT A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

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08098710024

Diseases in Nigeria according to Nigeria Living Standard Survey ADEMOLA ASUNLOYE

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ealth issues (self-reported), whether illness or injuries, are reportedly high in Nigeria, with greater incidence in females than males. The predominant health problems according to the Nigeria Living Standard Survey are malaria, body pains, headaches, ulcer/ stomach pain and catarrh.

While there exist health facilities that can be accessed by patients, a number of other factors like travel time, price and quality of care among others are the reasons why these facilities are underutilised.

It is clear from the demographic data pertaining to health, that when the entire male and female populations are appraised separately, 34.9 per cent and 37.4 per cent respectively suffer from one illness or the other, ranging from mild to critical level. The incidence of health-related issues is generally higher in rural areas than urban areas with larger percentage of the female population having more health problems than their male counterparts—36.8 versus 31.3 percent for men and 39.7 versus 33.3 percent for women.

These health issues vary across different age groups, where its incidence in percentage formed a “U-Shape”. Although 40 per cent of infants within the ages of 0 and 4 years were recorded to have at least one health issue, we saw a decline of same to about 28 per cent for those between the ages of 10 and 14 years, while about 65 per cent of the elderly from the age of 65 years are sick.

Malaria is a dominant health issue that people suffer from in Nigeria. More than half (51.7 per cent) of those who reported to have at least one health issue mention malaria as top health

concern. In comparison to the number of sick people in the rural areas, malaria illness is common (higher by 1.6 percentage points) among those of the urban areas—52.8 per cent of the sick people therein attest it.

In comparison to other health issues within and across the states, out of the total number of sick people in Zamfara State, majority which represents 65.4 per cent are “malaria-sick”. This means that, out of every 100 persons that have any health issues, about 65 of them are either sick of malaria or have malaria fever as an underlining sickness.

The inhabitants of Bauchi among other states have the least worry on malaria as either the sole reason why someone is sick or as an underlining sickness because about 30.8 per cent of the sick people there suffer from malaria.

Unlike the past centuries where malaria fever was one of the biggest diseases, insecticides and mosquito bed-nets now do the magic. It was seen that about half of the population use insecticide treated mosquito bed-nets.

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Jigawa, unlike Lagos State, has about 98 per cent of its entire population reportedly sleeping under an insecticide treated mosquito bed-nets.

Although the health facilities that people have accessed when searching for medical treatment in this survey are hospitals, pharmacy stores, chemists, patent medicine vendors, clinics, maternity and home consultants; the report revealed that out of the total sick people in Nigeria, about 36 per cent of them visited a chemist in search of medical treatment. This is the most frequent health facility visited by sick people even in rural and urban areas; others are hospitals.

While these health facilities can be accessed, about 7.3 per cent of people with health problems chose to self-medicate as they did not seek for any medical consultation from any of the aforementioned options for some of the following reasons: First, the average consultation time is long. The average consultation time including travel time to any health facility in Nigeria and across the states is estimated at 1 hour and 10

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minutes. This threshold is about double the time (about 2 hours and 9 minutes) spent in hospitals and also higher in clinics (1 hour 25 minutes) to reach and receive consultations. However, the time taken to access a pharmacy, chemist, and patent medicine vendor only takes 50 minutes.

Another reason is the severity of the illness and medical cost. While 80 per cent of those who decided not to seek medical treatment for their health problems reported to have had minor illness, around 14 per cent mentioned that the cost of receiving the medical treatment is way too expensive.

Others representing 4.5 per cent and 1.1 per cent complained that distance to the health facilities and the quality of care respectively are other barriers which precluded them from seeking medical help.

Within the last 12 months, 5.75 per cent of the total population were hospitalised/admitted where about 4.9 per cent of men and 6.6 per cent of women reported to have been admitted in hospitals.

While hospitalisation was

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highest in Delta State, where 25.75 per cent of its population were hospitalised at one time or the other, it was lowest in Zamfara where about 1 per cent of its total population admitted to the hospital within the last 12 months.

Another major health-related issue in Nigeria is disability; this could be accidental, consequential or innate. As reported by households, about 1 in every 100 Nigerians (1.42 per cent of the total population) suffers disability: with more disabled females (1.46 per cent) than males (1.42 per cent), even in urban areas.

Data shows that among other states, the highest number of disabled persons can be seen in Yobe State where more than 5 in every hundred people are disabled (5.2 per cent), which predominantly are females.

Whereas, it was least in Kebbi State as it was almost very difficult to find a disabled person there.

Healthy living and access to good healthcare systems are the rights of every Nigerian. The outbreak of the coronavirus in February 2020 showed the state of the already under-developed and underserved healthcare systems we have in Nigeria.

Little wonder we have the elites seek medical cares in foreign land, while the poor masses suffer greatly.

For lack of funds, some are left helpless. Some hospitals are overburdened by the inflow of patients, quality and professional care are amiss, bed spaces and equipment are almost constantly lacking, ramshackle or old.

As widespread as the coronavirus is, it often feeds on the underlining health conditions, a reason there are more asymptomatic carriers than symptomatic. A good health and good hygiene save the day from this evil. As rightly said, health is wealth!

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Wednesday 27 August 2020

BUSINESS DAY

COMPANIES&MARKETS The Companies and Allied Matters Act Guinea Insurance looking the way of merger to meet recapitalisation requirement 2020 - what you need to know MODESTUS ANAESORONYE

Part 3 – Registration of charges

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UDO UDOMA & BELO-OSAGIE

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

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

Negative pledge now registrable Section 197 of the CAMA 1990 specifies a list of security interests which must be registered with the Corporate Affairs Commission (“CAC”) within 90 days of creation. Failure to do so would make the security void against the liquidator and other creditors of the company.

The CAMA 2020 retains the above requirements of section 197 with two significant amendments: •negative pledges are now required to be registered; and •registration of a charge at the CAC will constitute constructive notice of the matters specified in the particulars of the charge.

A negative pledge is a restriction that prevents a borrower or security provider from creating a subsequent security interest over any or specified assets, which would have the effect of jeopardising the security in respect of which the negative pledge is given.

There is no requirement under the CAMA 1990 for negative pledges to be registered at the CAC, although in practice many lenders register it to no-

tify interested parties of the existence of the negative pledge. The change made by the CAMA 2020 will help subsequent debt providers and investors better assess the company’s ability to deal with its assets. It is expected that going forward, the CAC will take steps to amend the prescribed form to make allowance for the registration of any relevant negative pledges.

Significant reduction of fees for registration The cost associated with registering security in Nigeria is prohibitive, with many borrowers and lenders agreeing not to perfect security, or to perfect for only a portion of the debt provided (which creates a significant risk for lenders). The CAC registration fees are a significant portion of these costs - private companies pay 1% of the amount secured while public companies pay 2%.

As a result, a portion of debt raised by a Nigerian company has to set aside towards the cost of registering security, rather than being applied towards helping the borrower enhance its business.

Jurisdictions like England have long since reduced registration cost to a minimal flat fee. The CAMA 2020 does not quite achieve this but takes a significant stride in reducing the cost of perfection of security to a level that will provide much needed relief to lenders and borrowers alike.

The CAMA 2020 specifies that the total fees payable to the CAC in connection with the filing, registration or release of a charge shall not exceed 0.35% of the value of the charge or such other amount as the Minister may specify in the Gazette. This represents a 65% reduction for private companies and an 82.5% reduction for public comwww.businessday.ng

panies.

While the CAMA 2020 still provides an avenue for the Minister to increase the relevant fees, we are optimistic that the benefits of easing the process by which Nigerian borrowers, particularly small and medium scale enterprises, can access debt financing, will make this unlikely.

Intro du ction of ke y definitions The CAMA 2020 introduces new definitions to clarify problematic concepts under the CAMA .

The term “Book debt” has been defined in the CAMA 2020 to exclude negotiable instruments or marketable security (such as treasury bills and bonds). The CAMA 2020 now clarifies that a charge over treasury bills and bonds are not registrable as a charge over book debts.

The term “security financial collateral arrangements” has also been defined. The CAMA 2020 exempts security financial collateral arrangements from the requirement for registration. What this means is that if security is created over the relevant financial collateral arrangement such as bank deposits and securities, such security will be exempt from registration. The proposed amendment will be of benefit to organisations that trade in financial instruments such as derivatives.

This series was produced

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

nderwriting firm, G u i n e a I n s u rance Plc says it’s looking the way of merger to consummate the ongoing recapitalisation in the industry as discussions with core investors and partners are ongoing.

G odson Ugochukwu, chairman, Board of Directors who disclosed this at the Company’s 62nd Annual General Meeting (virtual) said steps were being taken to meet the recapitalisation directive of NAICOM and to beat the 31 December 2020 and 30 September 2021 deadlines respectively.

Ugochukwu said “We are sure not to be left behind, as discussions are ongoing and our preparedness has reached an advanced stage but could not be discussed prematurely. We are also looking the way of merger and the Company is in dis-

cussion with core investors.

P re s e nt i ng t h e 2 0 1 9 financial said the dip experienced in the general economy was the root cause of declined revenue pool of Nigerian insurance companies, stating that premium payments for the year decreased significantly as in most cases, policies were not renewed for want of disposable income, amongst other economic challenges.

He noted that premium written stood at N1.29 billion in 2019, as against N1.24 billion in 2018, representing an increase of 4.02 percent, while the gross premium income decreased by 2.05 percent from N1.20 billion in 2018 to N1.17 billion in 2019.

Ugochukwu said due to operational efficiency in terms of people, processes and technology, investment income for the period under review increased considerably by 50.5 percent, from N139 million in 2018 to N210

million in 2019, while operational expense of N868.6 million was efficiently managed as it resulted in a savings of about 3 percent when compared to N904 million reported in 2018.

Ademola Abidogun, managing director/CEO of Guinea Insurance in his remark said “it is the intention of our board and management to identify opportunities amidst the Covid-19 pandemic, as we will continually leverage information communication technology to create veritable and easily accessible platforms that will not only deliver services real-time and in a seamless manner but also, will deliver on the numbers.

“Our longevity as a brand has stood the test of time and the values created over the years are embedded in the loyalty and commitment that we have enjoyed from all stakeholders, the CEO said.

Primera Microfinance Bank records impressive half-year performance

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rimera Microfinance Bank, a subsidiary of the Primera Africa Finance Group, a welldiversified and proudly Nigerian group of companies, has reported highly impressive business performance for the half-year (H1) ended June 30, 2020.

Despite the challenging operating environment, Primera MFBank, adopted operational excellence and business efficiency strategies among others, to deliver significant improvements in key business and growth indicators.

For instance, gross earnings rose from N881.3 million by H1 2019 to N1.119 billion by H1 2020, indicating a growth of 27.1%. The Bank further recorded a 34.1 per cent increase in customer deposits over the period to N5.974 billion in June 2020, up from N4.456 billion from the corresponding period in 2019.

Over the period, the number of customers grew by 30.5 per cent from 35,507 to 46,345, indicating the strong positive response to the bank and its product and service propositions.

The bank ’s deter mination to contribute to the growth of the nation’s economy in these tough

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times was also reflected as the bank increased the volume of new loans disbursed by 16.3 per cent from N1.969 billion between January to June 2019 to N2.291 billion over the same period in 2020.

C o m m e nt i n g o n t h e performance, the Manag i ng D i re c t o r / C E O o f Primera Microfinance Bank,Unwana Efiong Esang, said, “Our half-year results are an eloquent validation of the transformative steps we have taken as a management team in recent times. Our digital transformation is in full flow, driven by the strategic re-engineering and repositioning of our o p e rat i o na l p ro c e s s e s, business architecture and market focus.

We have adopted four ca rd i na l mu s t- w i n o bjectives of significantly improving customer and stakeholder satisfaction, optimising our topline revenues, raising employee productivity and delivering operational and cost efficiencies. We are firmly on track across all four objectives.”

The bank has embarked on its transformation into a digitally-driven bank starting with the upgrade of its core banking application. @Businessdayng

It has also commenced business process re-engineering and the expansion of its value proposition in the personal banking and payments space.

Primera MFBank has also deepened its product and service offerings for Small & Medium Enterprises and salaried workers in the public and private sectors. Furthermore, it is significantly contributing to the achievement of gender-balance in financial and economic inclusion via its product and service platforms for women.

Primera MFBank is equally building and sustaining strong and positively focused engagements with the community through cause-specific Corporate Social Responsibility (CSR) initiatives, in collaboration with relevant partners.

T h e b a n k ’s p r o d u c t suite includes; Personal Banking, (savings, microcredit and payroll lending), SME Banking compr ising Local Purchase Order (LPO) finance, invoice discounting facilities, working capital financing and asset financing. The bank also offers fixed deposit investment products at very attractive rates to individuals and corporate entities.

Thursday 27 August 2020

Innovation

Apps

BUSINESS DAY

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

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TECHTALK

Broadband Infrastructure

Bank IT Security

Agritech firm, Hello Tractor joins Mastercard’s accelerator program FRANK ELEANYA

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ello Tractor, an agritech startup with operations in Niger ia and Kenya is one of the eleven firms selected into the Start Path accelerator program by Mastercard.

Start Path evaluates more than 1,500 applications each year and selects approximately 40 startups that offer the most promising technologies and demonstrate a readiness to scale. Startups in the program have gone on to raise $2.7 billion postprogram capital and collaborate with Mastercard, major banks, merchants, and other high-profile organisations.

In a statement BusinessDay received, Mastercard said the six months program which was est ab l i s h e d i n 2 0 1 4 ha s been expanded to include more entrepreneurs and technology partners to its Engage network which provides access to expert engineers and specialists

that can help customers deploy new services quickly and efficiently.

Mastercard said over 230 later-stage startups worldwide to participate in the six-month virtual pro gram, providing

technical guidance, operational support, and commercial engagements w ithin the Mastercard ecosystem.

“We are particularly excited to partner with regional innovative fin-

BlackBerry set to return with 5G smartphones FRANK ELEANYA

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lackBerry, the once-dominant smartphone manufacturer in Nigeria, has secured a partnership with OnwardMobility and FIH Mobile Limited to commence the production of a new 5G BlackBerry Android smartphone.

The new smartphone which is expected to be delivered in the first half of 2021 in the US and the UK markets, will feature the iconic physical keyboard.

BlackBerry last released a smartphone in 2018 - the BlackBery Key 2. The company had decided to stop making its own devices in 2016 and signed a production deal with Chinese electronics giant TCL. That relationship only lasted 2 years. In February 2020, TCL said it will not release any more BlackBerry-branded phones and has commenced plans to end its relationship with BlackBerry by 31 August 2020.

“Enterprise professionals are eager to secure 5G devices that enable productivity,

without sacrificing the user experience,” Peter Franklin, CEO of OnwardMobility said in a statement. “BlackBerry smartphones are known for protecting communications, pricy, and data. This is an incredible opportunity for OnwardMobility to bring next-generation 5G devices to market with the backing of BlackBerry and FIH Mobile.”

There are little details about the specifications of the new smartphone BlackBerry except that it would come with a redesigned ‘clean-sheet keyboard.’

As part of the partnership, OnwardMobility will conduct product planning and market development for BlackBerry smartphones in North America, and FIH Mobile will design and manufacture the BlackBerry devices under strict guidelines to ensure component, device, and supply chain integrity.

techs, such as Hello Tractor, through our Start Path program,” Raghav Prasad, Division President for sub-Saharan Africa, Mastercard said. “These partnerships are crucial as we continue to build the

digital economy through ongoing innovations and harness Africa’s potential.”

Founded in 2014, Hello Tractor connects tractor owners to farmers through a n Int e r n e t o f Th i ng s

Nigerian businesses to get N500m of Facebook’s $100m grant FRANK ELEANYA

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acebook said it plans to support 781 small businesses in Nigeria with a grant of N500 million ($1.3 million) as part of its $100 million Global Grants Programme it announced in March.

The $100 million grant which is planned for 30,000 small and medium scale businesses (SMBs) in over 30 countries where Facebook operates includes both ad credits and cash grants that can be spent on operational costs like paying workers and paying rent.

“We know small businesses are the engine of the Nigerian economy, the COVID-19 pandemic has extended beyond a public health crisis to an economic emergency, with these small businesses most affected,” Nunu Ntshingila, Regional Director, Facebook Africa, said. “We’re listening to the challenges these small

business owners are facing right now and want to provide useful resources for them during this difficult and uncertain year.”

Facebook has engaged Deloitte in partnership with FATE Foundation and Afrigrants to administer the N500 million grant in Nigeria. In a statement BusinessDay received, the grant will be available to qualifying SMBs in Nigeria, applications will be open from 24 August 2020 for the North East, North West, and Southeast regions and 26 August for the

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

(IoT)-enabled digital solution that bridges the gap between manual and mechanised farming. The firm enables farmers to request affordable tractor services while providing enhanced security to tractor owners through remote asset tracking and virtual monitoring.

“By partnering with Mastercard through the Start Path program, we have the opportunity to unlock additional value for our farmers by expanding their access to banking and payments infrastructure,” Jehiel Oliver, founder Hello Tractor said. “This combination of innovations holds unlimited promise for this continent and the global south.”

Several fintech firms in Africa have benefited from the Start Path program in the past. This include Ukheshe, MAX, NFrnds, Flutterwave; Kasha; mfarmPay; Netplus; Lidya; and Lipa Later. Most of these firms have achieved accelerated growth from the program over the past few years.

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@Businessdayng

South West, South-South, and North Central regions.

Recognising that SMBs need training, digitalisation assistance, and improved social connection infrastructure as consumer behaviour shifts online, Facebook has also rolled out virtual versions of its in-person training - Boost with Facebook across Nigeria. These free webinars and online resources cover a range of topics from how to take the business online, build resilience, stay connected with customers, and adapt in real-time.

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Thursday 27 August 2020

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

interview

I am glad that the president-elect has committed to electoral reform to ensure a better system - Augustine Alegeh, SAN In this exclusive interview with BD Legal Business Associate, Chuba Agbu, AUGUSTINE ALEGEH SAN, shares his thoughts on the recently concluded NBA elections, his role in establishing the universal suffrage system, the current challenges facing the e-voting system, the ongoing practice of adoption of candidates by regional groups and his hopes for the incoming administration.

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INSIDE

become our constant tools for interactions, it will make the process seamless.

Some members sit and wait until the next election to do a simple verification of their membership. This is part of the problem we have. If the executive after me had taken up where we had stopped to ensure the platform was more interactive and continuously used for payment of bar practicing fees; payment of branch dues; for conference registration, etc., we would have perfected using the use of the system.

If you want to trip today, and you are registered on the frequent flyer club, you go to the frequent flyer club or to the Hilton portal to check your history and offers. So, these are all the issues that need to be addressed.

Augustine Alegeh, SAN, Former President, Nigerian Bar Association.

agreed by the branch, because each of these delegates votes in a secret ballot. That for me, was a monumental challenge.

No matter how well you represent the bar; no matter how well you contribute to your local branch, you may never get chosen as a delegate to vote.

The other aspect which a lot of people forget is that our elections are in July, July is vacation and that is summertime for a lot of us who take our families on summer vacations. I had friends who would say, “I landed this morning from London. I’m going to vote and I’m going to take a plane back to join my family tomorrow. How many people can afford that? Not everyone can leave their family. Some people who have the right to vote when their kids are on summer vacation, will lose their chance to vote.

After universal suffrage came into place, I have heard colleagues say, “I came to Dubai for a meeting and you can imagine my joy when simply voted online without having to come back.

You don’t know what you have saved me through this electronic voting system. I would have had to drive through that bad road in Abuja, 4hrs or 5 hours to vote

All set for GEP x GEPLAW Consults 2nd Webinar Series on RE Projects in Nigeria, 17 Post Covid-19 Opportunities and Outlook

and drive back.. So the gains are monumental and the practicality of it is very understated.

Post Election, we have heard quite a bit of criticism of the E-voting system. Do you trust the process as it is today? What can be done to increase voter/ candidate confidence?

All I keep saying we have to do, is fine-tune the process and make it more user-friendly, and our database, more interactive.

If our database and our portals

‘

The Complaints against the NBA elections sis coming from those who believe in the delegate system

‘

uring your tenure as NBA President, you fundamentally changed the voting system from a delegate-based system to one based on the tenets of Universal Suffrage? Following the adoption of this system what are your personal thoughts so far?

It would be giving me too much credit to say I changed it. The bar voted for universal suffrage, it is one of the electoral policies I had given when I contested and if the generality of the bar did not accept it they would have voted against it. As president I had only one vote. I always want that point to be known, that it was a collective effort. I believe that it is difficult to have universal suffrage without having electronic voting. We have 60-80,000 lawyers who pay their bar practicing fees every year. In my time, the number was only about 30 so you can have universal suffrage without having e-voting.

The point, I always believe is that when you are called to the bar you automatically start paying fees to that association and it would be unfair to be a financial, member and unable to participate in the election, an association is formed principally for the wealth of its members I our case even though your welfare is there we have other goals the rule of law, the defense of human rights, but centrally in all of that, is the welfare of our members so you cannot disenfranchise the members. And this is why I think the system we now have, is better for the bar.

When I did the elections in 2015 I got calls from people just to say “Thank you, I’m 25 years at the bar and I have never voted for an NBA election.” I am 30 years at the bar and I am a senior advocate. For those who are not senior advocates, if you are not chosen as a delegate you never get your vote. Only about 10 delegates would actually determine who your branch is voting for. They may get to the voting ground and decide to vote for someone else other than that

Communiqué issued following the 14th Annual Business Law e-Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) held on the 16th and 17th of July 2020 on the Hopin.to e-conferencing platform

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There have been aggrieved individuals calling for the cancellation of the election, citing rigging on the voting platforms, what are your thoughts on this?

Everything has become digital, so when I hear people saying let’s go back to analogue. It is like telling us let us throw away our cellphone and bring back the old radial dial, it can’t work. When you accept technology that has come and you realise it can only get better, then everyone gets forward thinking.

I remember as young lawyers with Mercedes Benz, we had the straight engine then there was the flat engine. If you go to the average mechanic and say I want to buy a car they would say to you: “buy the straight engine because it was easier to repair”.

However, what they won’t say to you, is that the flat engine was an improvement of the straight version. Now, this straight engine is totally phased out, we have moved from the flat engine to sealed engines. The progression continues. So, can you imagine what happens to anyone who wants to remain with these old products or an old system? Electronic voting is here, and people have issues with it.

In 2004 when Bayo Ojo won the election I was a member of

Leading experts in arbitration gather at Tolu Aderemi’s book launch

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J.B. Daudu SAN and we complained that the election was rigged by the manner in which the voters list was prepared because people had a right to vote more than once. At Aba, after Bayo Ojo left, Aba met to determine who would take over from Bayo Ojo. My recollection was that the decision was taken that did not determine who they wanted to replace him with. We were at the airport when we heard that those remaining on the floor met and appointed and sworn in Lanke Odogiyon, a fine gentleman we accepted and we moved on.

In the election that brought Joseph Bodurin (JB) Daudu in as President of the bar in 2010,Gadzama was on the other side and he complained that the election was rigged. That notwithstanding, he still congratulated JB Daudu, and this is on record.

In the same vein, in the election, which brought Okey wali, SAN in as president of the association, Emeka Ngige, SAN who ran against him also protested, saying that “dead people voted in that election.” Dele Adesina also complained that the election we ran was rigged but nobody went to court at that time. However, we noted that the complaints were fewer each time we put the interest of the bar first.

In the 2016 election, after JK Gadzama complained that the was rigged, I invited himself and Abubakar Balarabe (AB) Mahmoud to the secretariat evaluate and analyze the process, because the system we used for voting had the capacity to read like a ballot paper. I gave them access to the voters’ list, to print it and match them with every name. Through an existing code, the system we had was could match each vote to an identifiable voter.

People complain during elections and a lot of lawyers make a living out of those election petitions. Does it mean those elections are bad? Not necessarily.

Do I say elections are perfect?

Continues on page 17 Waiver of Sovereign Immunity and 20 Controversies Surrounding Nigeria’s Agreements with International Investors

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Thursday 27 August 2020

BUSINESS DAY

INDUSTRYFILE

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All set for GEP x GEPLAW Consults 2nd Webinar Series on RE Projects in Nigeria, Post Covid-19 Opportunities and Outlook

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ll is now set for the 2nd Edition of the GEPLAW x Geplaw Consult Webinar.

At this edition, panelists will analyze the current state of the Nigerian Electricity Supply Industry in relation to COVID-19, the direct impact of the pandemic on sector participants and stakeholders, existing or proposed legal, regulatory and policy developments, financing and investment climate for projects postCOVID and next steps towards the transition to clean energy and energy security.

Scheduled to hold on Monday, 31st August, 2020 at 3pm, the discourse will comprise of prestigious speakers including market participants and representatives of government/regulatory authorities who have vast experience and knowledge regarding the topic.

These include by Professor Engineer Eli Jidere Bala, DG/CEO, Energy Commission of Nigeria (ECN) and Engr. Ahmad Salihijo, MD/CEO, Rural Electrification Agency (REA); highlighting the state of affairs of their respective organisations regarding Renew-

able Energy policies, reliefs and implementation activities during the pandemic and postCOVID. Other seasoned Panelists include, Dr. Musiliu Oseni, Com-

missioner, Planning, Research and Strategy- Renewable Energy & Research Division, Nigerian Electricity Regulatory Commission; Sele Inegbedion, Hub Manager, All On; Dr. Afolabi

Otitoju, Senior Sustainable Energy Expert- ECOWAS Centre for Renewable Energy and Energy Efficiency, Technical AssistantFederal Ministry of Power; Segun Adaju, President, Renewable

Energy Association of Nigeria (REAN), CEO, Consistent Energy Limited; and Ujunwa Ojemeni, Energy and Development Finance Executive, Senior Technical Adviser, Office of the Honourable Commissioner for Energy & Mineral Resources, Lagos State; Femi Adeyemo, Chief Executive Officer, Arnergy; Bankole Oloruntoba, Chief Executive Officer, Nigeria Climate Innovation Center (NCIC); Alex Obiechina, Chief Executive Officer, ACOB Lighting Technology Limited The Webinar will be moderated by Rolake Rosiji, Country Manager, M-KOPA Solar Limited and Ivie Ehanmo, Partner (Energy and Infrastructure Projects), George Etomi & Partners.

As experts have predicted that renewables would provide 57% of global power generation by 2030, up from 25% in 2017 and an expected 30% in 2020, it is hoped that the RE webinar will provide valuable insight from key players with industry expertise (in an advisory capacity) on the procedures for setting the ball rolling in the growth and development of the fledgling Nigerian Renewable Energy sector amidst the global pandemic.

I am glad that the president-elect has committed to electoral reform to ensure a better system Continued from page 16 Definitely Not. What I keep preaching, is for all of us to understand that the system we have today is good for us. However, the goal must be to make it better. No election is perfect. I can’t even claim that the election I ran was perfect, but I believe that it ticked all the boxes to constitute a fair election. As for AB Mahmoud’s election, I will not comment on that, but I believe also that despite the challenges he faced, that the will of the majority prevailed.

In this current election the man who won is the man who cried and complained the most about the flaws in the system but again, the will of majority prevailed. So, this is where we find ourselves. Let all of us try to adjust to it now that we are in the digital age. Things will only get better. We must understand this.

If all of us understand and agree that e-voting is here to stay, it will all fall in place. Right now, the complaints are coming from those who believe we should all go back to the delegate system and I do not think we should.

No election is perfect. A classic example is that of George Bush and Algore, which I believe, was far from perfect.

I am happy that the incoming president has committed to electoral reform to make the

pre- existing system better I have given you suggestions on how the system can be made better. Again, I must reiterate the importance of a portal system.

If a voters list is published early enough, all we have to do is go to the portal and click vote and we’re good.

If you were to set an agenda for the incoming administration what sort of strides would you like to see the NBA achieve in the next two years?

I want to appeal to the incoming administration to let our portal be interactive. Things should not be left until the elections before verifications are made. Everything on that platform should be live and should stay live. No one needs to ask or complain about the receipt or non-receipt of emails on an election day. We must move past this era and quickly too.

Why is the adoption of a candidate by regional groups still relevant in the face of universal suffrage?

Do you think it is responsible for the ongoing controversy were some candidates become entitled after the have been adopted by a region?

There are two schools of thought in every issue. My personal view www.businessday.ng

is that to have universal suffrage there should be no adoption of candidates. What we have in the NBA constitution gives every region a sense of belonging, as we rotate the positions of president, general secretary, first vice, second vice and third vice and I agree with that.

However, if the intention of the constitution was for it to be zoned to a particular region and for that region to decide for the entire bar who its leader should be, then the constitution would not only have said so, but it would have made it clear enough.

My view is that if the presidency is zoned to the east and the east has 10 candidates interested in that office, let them run because when you win you are a president from the east and the same applies, if it is zoned to the west or the north. Now the West has the Egbe Amofin (an association of lawyers of Yoruba extract), and we have laboured to reach an agreement with them, but all efforts have not yielded any positive results, whenever there’s an election.

In 2014, Egbe Amofin had three candidates and the Midwest region had one. In the just concluded election Egbe had two and the Midwest had one candidate and we won. So, in the Midwest we have never adopted between two of our candidates, when one candidate comes,

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everyone works with him.

When the Midwest bar had two people running for the office of second vice president, some years ago, we asked them both to run and both of them lost to someone from Egbe Amofin. I believe that all the ethnic fora must respect universal suffrage and move away from the process of adoption. You do know that, notwithstanding the fact that Egbe Amofin adopted Dele Adesina, SAN, Babajide Ajibade, SAN who was not adopted was the runner up to Olu Akpata.

There is also a bloodline, which begs the question, are these regional or are they ethnic?

If they are regional, it means that an Igbo man who is chairman of Lagos, badagry , Abeokuta can attend the Egbe Amofin meeting, but if it is ethnic, it means only people of Yoruba extract can attend this meeting.

So, even if you are the Lagos branch chairman, or the Ikeja branch chairman, so long as you are of Yoruba decent, you cannot attend this meeting.

The lines get blurred sometimes. They want to operate as regional, other times they want to operate as ethnic. They only want to operate as regional for electoral purposes. If anyone wants to run, they should run irrespective of ethnicity; and if they win then they should represent the region. @Businessdayng

The only challenge is, if a man for the west wants to run while he is zoned to the east I would say no to this. But you know what? In life, you resolve issues as you go along. One solution is good at a particular point in time and then a few years down the line, that solution may no longer be good.

So zoning was brought in and kept as an unwritten rule. Let us not have this unwritten rule that binds or impacts us negatively. It is either we discard it, or we put it in our constitution. But let me say that life is so dynamic. In a few years down the line, people will say what do we mean by zoning, we want the best at all times if the east produces the best very year then let us give it to an easterner, if the west same and so o .

It may get to a time when we get rid of zoning. For us who are over 50 years of age, we believe in zoning, but something tells me that by the time those who are over twenty today get to 40 -50 they may say “to hell with zoning”.

I recognise that because of the challenges the association faced in 1992, we feel the need to zone the leadership, so everyone gets a fair chance, but moving on, nothing prevents the younger generation of lawyers from saying: we don’t want zoning, let the best man win!

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Thursday 27 August 2020

BUSINESS DAY

THE BUSINESSOF LAW Communiqué issued following the 14th Annual Business Law e-Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) held on the 16th and 17th of July 2020 on the Hopin.to e-conferencing platform

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INTRODUCTION he Nigerian Bar Association Section on Business Law (NBA-SBL) has, since its inception in 2004, held thirteen annual law conferences to deliberate on issues and topics pertinent to improving the practice of business law in Nigeria. Despite the odds and upheavals posed by the COVID-19 pandemic, the NBA-SBL was determined to fulfill its mandate of providing an annual platform for legal practitioners, business leaders, regulators, and other stakeholders to discuss and proffer economic and other various policy reforms and solutions. This was achieved by holding the 14th Annual Business Law Conference on the Hopin.to virtual platform as the first e-Conference of NBA-SBL. The e-Conference was themed “Business Unusual: Digital Acceleration for Growth in a New World”.

The opening ceremony was held on 16th July 2020 and the Conference was declared open by the Chief Justice of Nigeria, Hon. Justice Ibrahim Tanko Muhammad, CFR (CJN). Opening remarks were given by Ozofu Ogiemudia, Chair of the Conference Planning Committee, Seni Adio, SAN, Chairman of the NBA-SBL, and Paul Usoro, SAN, President of the NBA. Goodwill messages were given by His Excellency, Babajide Sanwo-Olu, the Governor of Lagos State and His Excellency, Seyi Makinde, Governor of Oyo State. The keynote address was given by U.S. Senator William “Mo” Cowan, President, Global Government Affairs and Policy (GAP) and Developed Markets for General Electric (GE).

Comprising 13 stimulating and solutions-centric sessions including a fireside chat, SBL showcase (smart regulation presentation), a well-being session, and a debate session, the main objective of the 2020 e-Conference was to facilitate discussions around how business lawyers, key players in the various sectors of the economy, as well as the Government can successfully navigate the evolving new world occasioned by the pandemic by leveraging technology to galvanize sustainable growth and success post COVID-19. The Conference topics were as follows: Plenary Sessions • Plenary Session 1 - Disrupting the Status Quo: Charting the Path for an Alliance.

• Plenary Session 2 - Business Unusual: Continuity in times of Crisis.

• Plenary Session 3 - Zooming Ahead: The Legal Industry post COVID-19.

Breakout Sessions • Breakout 1 - Banking through the Crisis.

• Breakout 2 - Fossilised: End of the Oil and Gas Industry as we know it?

• Breakout 3 - AFCFTA: Dead or Alive?

Breakout 4 - Sunk Costs: COVID-19 and the Maritime Industry.

Breakout 5 - Grounded: The Future of Travel and Tourism.

Breakout 6 - The Price of a Cure: Patent Mechanics in a Crisis.

Breakout 7 - e-Medicine: The Future of Technology in Healthcare.

Fireside Chat • Changes on the Horizon: The Future of Company Law in Nigeria.

SBL Showcase • Level Up: Initiatives of the NBA-SBL Business Unusual: Continuity in times of Crisis.

Wellbeing Session • Every Mind Matters: Emotional Wellbeing during a Crisis.

RECOMMENDATIONS 1. The NBA-SBL was charged to maintain its collaboration with the private and the public sectors and, in particular, the deployment of technology to enhance competitiveness and develop a pandemic-resilient economy.

2. The ‘Ease of doing business’ mandate needs to focus on infrastructural deficits and insecurity.

3. Nigeria needs to become less reliant on fossil fuels and embrace renewable/ clean energy solutions. The country also needs to accelerate the diversification of the economy, particularly with respect to Agriculture and Agro-allied products, as well as healthcare and technology.

4. Federal and State Governments should develop deliberative policies to attract investments in the healthcare and pharmaceutical sectors, and equally important, attract Nigerians in the diaspora who have the required expertise and resources including physicians, scientists, and entrepreneurs to take advantage of the gaps in the healthcare space.

5. To successfully survive this pandemic, there is a need to focus on emotional, psychological and social well-being. Organizations should develop programmes to enable employees communicate their mental health issues. There is a need for a mental health policy for lawyers, and legislation on mental health in Nigeria in order to address the stigma that is associated with it.

COMMITMENTS OF THE NBA-SBL

Debate Session • The ‘Next Normal’: Practice in a borderless legal profession.

1, Is digital technology an aid or inhibitor of legal practice?

2, Are 9-5 work patterns still relevant?

3. Are Nigerian-trained lawyers well-equipped for practice in the Digital Age? 4. Pay cuts in a COVID-era: a necessary sacrifice by all, or an unfair burden on already under-paid lawyers?

The engaging debates and discussions throughout the Conference focused not only on identifying issues but also recommending solutions to foster the leveraging of technology to accelerate growth across all sectors of the Nigerian economy. Against this background, the NBA-SBL is pleased to set forth the following recommendations and commitments.

OBSERVATIONS The panelists and delegates identified a number of key issues which include: 1. Businesses need to review their corporate governance policies, rules, and regulations in the context of COVID-19 and other potential disruptions.

2. The “new norm” requires the enthusiastic embrace of technology to promptly and efficiently deliver qualitative services and solutions for clients and other stakeholders.

3. There has been a significant decline in Foreign Direct Investment and Foreign Portfolio Investment into Nigeria since the pandemic. Therefore, enhancing the www.businessday.ng

ease of doing business is a sine qua non to competing favorably with certain favoured destinations in Africa, and other emerging economies.

4. There is an urgent need to resolve congestions at Nigerian ports, and harmonize the relationship between concessionaires and regulators to encourage investments and optimize profitability.

5. Mobile applications should be broadly deployed to enhance access to local and international telemedicine, and reduce incidences of self-medication.

6. Nigeria urgently needs to address issues of insecurity and an anemic power supply to achieve transformational, sustainable, and inclusive growth.

7. The oil and gas sector needs to urgently innovate. The demand for fossil fuels is on the decline, however, fossil fuels remain for now an important source of foreign exchange earnings for Nigeria and many developing economies. Nigeria needs to urgently implement reforms before the sector becomes a dinosaur.

8. On July 8th 2019, Nigeria signed the Africa Continental Free Trade Agreement (AfCFTA), which created the largest trading bloc since the advent of the World Trade Organization (WTO). However, many countries have recently been exhibiting protectionist tendencies including the closure of borders, which has been justified, in part, as being due to the Covid-19 pandemic. The resulting postponement of the implementation of the Treaty from July 1st, 2020 to January 2021 has caused many to become skeptical about the success of the Treaty in the short term.

9. Regarding the healthcare and pharmaceutical sectors, Nigeria needs to find a way to participate in the ongoing global activities relating to the development of vaccines and participation in clinical trials.

10. Mental health significantly impacts productivity and it is important to invest in it. There is a lack of a deliberative and cohesive policy on mental health in Nigeria, and we need a policy that supports employees and abhors stigmatization.

The NBA-SBL commits to: 1. Reviewing the legal framework and regulations of key sectors of the economy including healthcare, technology, and agriculture to foster transformational investments, employment, sustainable, and inclusive growth.

2. Championing the development of workplace policies and practices that foster both physical and mental wellness in the private and public sectors.

3. Ensuring that future Annual Business Law Conferences and other knowledge sharing programs continue to optimize the use of technology to deliver content to stakeholders.

4. Engaging all levels of government and private stakeholders to push for smarter regulations and, in doing so, strengthening the alliance between the public and private sectors towards maintaining the path for sustainable and inclusive growth of the Nigerian economy in our “new world’’.

Submitted by: Seni Adio, SAN Ozofu Ogiemudia Chairman Chairman NBA-SBL 14th Annual Business Law NBA-SBL e-Conference Planning Committee

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Thursday 27 August 2020

BUSINESS DAY

INDUSTRYFILE

BD

19

LegalBusiness

Leading experts in arbitration gather at Tolu Aderemi’s book launch

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he Nigerian and Diasporean arbitration community came together (physically and virtually) at the public presentation of the book titled The International Arbitration Law & Practice: The Practitioner’s Perspectice edited by Tolu Aderemi, Partner, Perchstone & Graeys LP. The public presentation was was chaired by Chief Bayo Ojo SAN and Co- chaired by Mrs Funke Adekoya SAN had dignitaries such as the Honourable Attorney General and Minister of Justice Abubakar Malami, the Ooni of Ife, Oba Enitan Adeyeye Ogunwusi, Nigerian High Commisioner to the UK, His Excellency, Hon Justice George Oguntade CON, NBA President-Elect, Olumide Akpata, President, Chartered Institute of Arbitrators, Francis

Xavier, Director, Confederation of Indian Industries, Indrayani Mulay, Supo Shasore SAN, Osaro Eghobamien SAN, Chief Adeniyi Akintola SAN, Dr. Wale Babalakin SAN, Segun Odubela SAN, Yele Delano SAN, Seeni Adio SAN, Bode Olanipekun SAN. Others include the Chairman, Lagos Bar, Yemi Akangbe and the newly elected Chairman, Ibadan Bar, Yinka Esan and a host of others.

According to Tolu Aderemi, the book represents a compendium of scholarly chapters which cannot be found in one single text. Similarly, the book reviewer, Prof Amokaiye recommended the book to every practicing arbitrator, lawyer, Judge and learning student.

The book was presented to the public on August 20, 2020 at the Metropolitan Club, Victoria Island, Lagos.

Oluyele Delano SAN, Tolu Aderemi, President-Elect, Olumide Akpata and Bode Olanipekun, SAN

Tolu Aderemi (L) and Chief Niyi Akintola, SAN

Tolu Aderemi (R) with his wife Tinuade.

L-R, MKunle Aderemi, Mrs Tinu Aderemi, Tolu Aderemi, Magistrate Sumbo Adetuyibi, Olaide Odega and Ladi Aderemi

L-R, Tolu Aderemi, Representative of the Ooni of Ife, Oba Odaye, Chief Launcher, Tunji Owoeye (MD, Elephant Group), and Co-Chairman, Funke Adekoya, SAN

Has the national industrial court declared open season on termination of employment with reason?

Continued from last week

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n 2016, the NIC in Duru v. Skye Bank Plc [2015] 59 N.N.L.R (Pt.207) 680 held that the law has now gone beyond termination without reason under the common law concept of hire and fire without reason as it is no longer fashionable. To support its decision, the Court referred to Article 4 of the Convention and the Recommendation. Although Nigeria was yet to ratify the Convention (as to make it automatically applicable in virtue of section 254C (2) of the Third Alteration Act), the NIC proceeded to apply same in furtherance of its powers to apply international best practice and international labour standards. As recently as 2019, the NIC reiterated its position on termination with reason in Bello Ibrahim v. Ecobank

Plc (Unreported Suit No. NICN/ ABJ/144/2018, the judgement of which was delivered on December 19, 2019). The consensus among industry practitioners is that the position of the NIC promotes fairness in industrial relations in accordance with global labour standards.

What Then Did the NIC Decide in Ifeadi v Zenith Bank Plc.?

However, on January 13, 2020, the NIC, in a surprising turn of events in Ifeadi v. Zenith Bank Plc., held it to be the law: “…that an employer is not bound to give any reason for terminating the appointment of its employee but where the employer gives a reason, the law imposes on him a duty to establish the reason to the satisfaction of the court.

See Olatubosin v. NISER Council www.businessday.ng

(1988) 1 NSCC 1025… The Defendant in its letter dismissing the Claimant dated March 11, 2016 did not give any reason for her summary dismissal.” (Emphasis mine) At a first glance, this decision is inconsistent with the previous decisions of the NIC in which the Court upheld international best practice on termination of employment with reason. At this point, it is worth stating that, by Section 7(6) of the NIC Act, what amounts to international best practice in labour or industrial relations is a question of fact. What this means is that where a convention has not been ratified by Nigeria (such as the Convention), a litigant seeking to rely on the convention as proof of international best practice on labour must plead same to justify reliance by the NIC on such convention.

Now, upon a careful review of

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the judgement of the NIC in Ifeadi v. Zenith Bank Plc., it does not appear that the claimant pleaded the Convention and the Recommendation as international best practice (by making a case in that regard in terms of her reliefs before the court). It is the view of the writer that this omission on the part of the claimant was fatal to her case. The claimant having failed to prove the rules of equity on the subject, the Court was left with no choice but to apply the strict common law position of employment at will.

Conclusion The decision in Ifeadi v. Zenith Bank Plc might have been different if the claimant had pleaded the Convention and the Recommendation. The question as to whether the NIC will apply the Convention and the Recommendation in any @Businessdayng

given case by virtue of Section 15 of the NIC Act or not is dependent upon the approach adopted by the claimant in seeking to rely on relevant international labour standards. Where the claimant fails to plead and prove the international labour standards, the court will apply the common law position that the employer need not adduce reason for terminating the employment.

For this reason, it is suggested that employers should adduce valid reason(s) for termination in the letter of termination in line with the Convention and the Recommendation. Further, employers must be prepared to justify such reasons if challenged.

Mayowa Arokodare, ACITN is Senior Counsel at a leading commercial law firm in Lagos, Nigeria.

He is a Finance, Corporate & Commercial Law specialist.

20

Thursday 27 August 2020

BUSINESS DAY

POWERPERSPECTIVE with AYODELE ONI Waiver of Sovereign Immunity and Controversies Surrounding Nigeria’s Agreements with International Investors

O Proem:

ver the past few weeks, the Senate and the House of Representatives, the two houses of Nigeria’s bicameral national legislature, have raised concerns about certain clauses perceived to be unfavourable to national interest in agreements between the Federal Government of Nigeria (“FG”) and international investors, for the development of key infrastructure projects in Nigeria.

In June 2020, several Nigerian newspapers reported that the House of Representatives had discovered clauses in a commercial loan agreement between Nigeria and the Export-Import Bank of China, which allegedly conceded Nigeria’s sovereignty to China. According to an online article published by Thisday Newspapers, the clause in issue was contained in the Four Hundred Million Dollar loan agreement signed in 2018 between Nigeria and the Export-Import Bank of China for the phase 2 project of the Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone Phase (the “Agreement”) {/’Udora Orizu (2020) ‘House Uncovers Clauses Conceding Nigeria’s Sovereignty to China’ Thisday Newspaper, 29 July. Available at https:// www.thisdaylive.com/index. php/2020/07/29/loan-agreements-house-uncovers-clausesconceding-nigerias-sovereigntyto-china/ (Accessed: August 13 2020) }. The “offending” Article 8 (1) of the Agreement reportedly provides that: “The Borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.”

In a similar vein, in July 2020, the Senate called for a review of the power purchase agreement and the put call option arrangement between the FG and the shareholders of the Azura-Edo Independent Power Project (“Azura-Edo IPP”), claiming the agreement was a drain on the nation’s resources and the FG should never have signed such agreements (https://businessday.ng/energy/power/article/ senate-calls-for-review-of power-purchase-agreement-withazura-power-plant/ :Senate calls for review of power purchase agreement with Azura Power Plant by James Kwen On Jul 22, 2020- BusinessDay). Some of the purportedly problematic terms which have been flagged include the take or pay (electricity) provisions, put call option

structure and the buy out terms in the event of termination of the agreements, under certain circumstances.

This article will address the flagged terms in agreements between the FG and international investors, using the Azura-Edo IPP as a point of reference for infrastructure projects in the power sector, showing that there is nothing untoward about the terms, especially within the context of the realities of investing in Nigeria.

Background to the Azura IPP Negotiations for the Azura IPP can be traced as far back as 2010 before binding agreements were signed between 2013 and 2014.

At the time, the power sector in Nigeria was still in the transition period between the establishment of the Power Holding Company of Nigeria and the full unbundling and privatisation of the power sector. The Goodluck Ebele Jonathan administration had released the Roadmap for Power Sector Reform (the “Roadmap”) detailing the plans to reach a targeted 40,000MW generating capacity by 2020 and the significant financial investment required to attain that goal, funding which Nigeria did not have and would be unable to raise on its own.

Following the unbundling and privatisation of the power sector, due to the inadequacy in revenue collection by the distribution companies (“DisCos”), Nigeria still faced a significant bottlenecks associated with generating much needed investment in the generation sector.In the power sector, revenue flows upwards from the customers to the generation companies (“GenCos”); where DisCos are unable to obtain enough revenue from customers to cover their cost of operations, the DisCos are, in turn, unable to pay the Nigerian Bulk Electricity www.businessday.ng

Trading Company (“NBET”) for power purchased and NBET is hampered in their ability to pay GenCos. This condundrum was further affected by the NERC Rules for the Interm Period between Completion of Privatisation and the start of the Transactional Electricity Market 2013 (the “Interim Rules”) which was in effect at the time of subsisting negotiations between the proponents of Azura IPP and the FGN. The Interim Rules provided a minimum baseline remittance of invoices which should be paid by the Discos to the Market Operator and NBET for power supplied by the GenCos. In essence, the Interim Rules implied that GenCos would not receive the full value of their invoices being that the Market Operator and NBET were not being paid in full. Undoubtedly, this situation would have occasioned significant concern for for any 3rd party investor interested in getting the full value in returns for investments provided to the various components of the power sector value chain.

A cocktail of the myriad of peculiar issues which confront the power sector combined with the revenue generation difficulties faced by the FG, foreign exchange volatility, possibility of changes in government policies would expectedly evoke a need to provide foreign investors with extra security to dually guarantee their investment and as an incentive investment.

Having provided a contextual background, this article will now proceed to analyse the flagged clauses.

The Take or Pay Tariff Structure The take or pay payment structure simply means that the Azura-Edo IPP, as the seller under the Power Purchase Agreement (“PPA”), is required to supply or make available a specified quan-

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tity of electricity to the FG as the buyer in exchange for a fixed tariff. Once the seller makes the specified quantity of electricity available, the buyer is required to pay the fixed tariff regardless of whether it actually takes up the full quantity of electricity provided. Tariffs under a take or pay structure are often comprised of two elements, a capacity charge, which is a fixed amount based on the minimum quantity of electricity made available; and, an output charge (also known as energy charge) which is a variable amount payable based on the actual quantity of electricity delivered to the buyer.

In practical terms, where the Azura-Edo IPP generates the contracted quantity of electricity but the FG is unable to take up that quantity due to inadequacies in the transmission infrastructure or otherwise, the FG would still be required to pay, at a minimum, the capacity charge based on the quantity of electricity made available.

Take or Pay tariff structures are commonplace in PPAs for thermal power plants as well as for Gas Sale Agreements and are often sought as an essential requirement for such agreements to be bankable not just for the parties but also for potential lenders and therefore form the basis for financing for such infrastructure projects. This is completely understandable from a commercial viewpoint.

Where an investor, as with the Azura-Edo IPP, has invested significant funds in developing a power plant with a certain available capacity and is required to bear the operations and maintenance costs to guarantee the available capacity, it makes commercial sense that the payment structure under the PPA is sufficient to cover the plant’s operating costs and enable the investor to gain a return on its investment. In project financing transactions where the source of repayment is the revenue from the project asset, the take or pay structure will almost always be a sine qua non. This becomes even more essential considering the challenges with Nigeria’s transmission infrastructure which increases the chances of the FG being unable to take up the available capacity.

Put and Call Options A put option gives a shareholder the right to offer its shares for sale to other shareholders, who are obligated to purchase the shares at a price either stipulated in the contract or determined in accordance with the stipulated procedure in the contract. A call option, on the other hand, gives shareholder(s) the right to offer to purchase the shares of another shareholder, who is obligated to sell its shares on the terms stipulated in the contract. Put and call @Businessdayng

options are usually specified in either a shareholder’s agreement (“SHA”) or a put and call option agreement (“PCOA”). The PCOA was adopted in the Azura-Edo IPP transaction and provides for the circumstances which trigger the investors’ right to exercise their put and call options. Concerning infrastructure projects such as the Azura-Edo IPP, the put option often becomes exercisable upon a material breach by the FG of its obligations under the PPA, early termination of the PPA or expiry of the PPA. It is particularly important to iterate that the situations which would usually trigger the exercise of this put option would arise from a default or a breach by the counterparty which would thereby allow the non-defaulting party the right to “put” their shares to the defaulting party for an agreed price and each party can thereafter part ways.

Thus, having this background in perspective, the investors in the Azura IPP would only trigger this option when there has been a default by the FGN and the FGN has not remedied such default within the required cure period.

As with take or pay tariff structures, put and call options are necessary elements for projects to be bankable enough to attract project financing. Firstly, because it guarantees that where the FG fails to perform its obligations under the agreements, the investor can recoup both its capital investment and the return it would have been entitled to if the FG had complied with its obligations; and, secondly as it guarantees the investors right to recoup its investment at the end of the project lifespan.

Credit Enhancements and Guarantees provided by the Federal Government of Nigeria Due to the significant funding provided for the Azura-Edo IPP, which was estimated at Nine Hundred Million United States Dollars, the project was structured with several layers of credit enhancements and guarantees including the partial risk guarantee provided by the World Bank.

However, to obtain the partial risk guarantee, the FG was also required to provide corresponding guarantees of its own, in form of an indemnity agreement between the FG and the International Bank for Reconstruction and Development (“IBRD”) to align with the guarantee provided by the World Bank.

To be ontinued next week Dr. Ayodele Oni (ayodele.oni@ bloomfield-law.com) specializes in international energy (oil, gas & power) investment law.

Thursday 27 August 2020

BUSINESS DAY

21

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

32 million Africans gained access to energy through World Bank’s support olusola Bello

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frica is engaged in an exciting energy transformation, country by country, across the continent. Through the Lighting Africa program initiated by the World Bank 32 million Africans have gained access to energy, often through off-grid products that charge with batteries at home.

Lighting up Africa through solar energy is a pillar of the World Bank’s Africa Climate Business Plan (ACBP), with ambitious programs across the continent scaling up every year.

Since the ‘Scaling Up Clean Electricity for a Low Carbon Future’ project began in Ghana, World Bank-supported solar projects and programs have been launched in West Africa and the Sahel Region.

These include Benin, Burkina Faso, Cape Verde, Cameroon, Central Afri-

can Republic, Chad, Cote d’Ivoire, The Gambia, Guinea, Guinea-Bissau, Liberia Mali, Mauritania, Niger, Nigeria, Senegal Sierra Leone and Togo, among other countries.

The Lighting Africa program, which includes GEDAP, contributes to the World Bank Group’s Sustainable Energy for All, which has

a mandate to bring energy to the planet by 2030.

The Bank’s initiatives began with solar mapping atlas projects to assess general energy needs and has continued with projects that increased electricity access to households, businesses, schools and clinics through stand-alone, off-

grid solar systems.

According to the bank, there is a monumental mission ahead—more than half a billion Africans in SubSaharan Africa live without any electricity at all. The World Bank and partners are responding to a need both great and urgent.

Between 2014 and 2018,

How new Eterna plc CEO plans to strategically implement company’s five-year corporate plan olusola Bello

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or Nnamdi Obiagwu, Eterna Plc’s new CEO effective from 1st September 2020, how to key into the company’s fiveyear plan and scaling up in the company’s presence in the downstream sector are major priorities he is hoping to achieve before he leaves the stage at any point in time.

As typical of emerging giants in the sector, the Company is primarily focused in the downstream sector with major operations in Petrol, lubricants, bitumen, dualpurpose and diesel space; however under the leadership of Obiagwu the company will be having braver ideas, thanks to a five year strategic plan.

Obiagwu joined Eterna Plc in July 2017 as General Manager, Head Lubricants

responsible for all lubricant’s activities and was appointed to the Board of Eterna Plc in January 2020 as CEO. Before his appointment, Obiagwu have several years of experience that span across IT, Sales, Business Development, Financial & Business Reporting, Data Analytics, Distributor Network Development, Fuels Supply Chain Management, Logistics, Oil & Gas Consulting, Financial Advisory, and Marine Vessel Management.

He has also served on the Boards of several private companies have the requisite experience and the professional but calm personality that would steer Eterna despite the prevailing challenges currently facing the industry.

With Obiagwu’s experience, Eterna Plc will be aiming to be a leader in Nigeria’s downstream sector with ex-

T

h e Ce ntra l Ba n k of Nigeria (CBN) has asked all Deposit Money Banks (DMB), also called commercial banks, to take full responsibility of collections and remittance on behalf of Electricity Distribution Company (Discos), a move Olusola Bello, Team lead,

expected to solve the liquidity challenge facing Nigeria’s electricity sector.

According to a circular signed by CBN’s director of banking supervision, Bello Hassan, commercial banks providing banks guarantees to Nigeria Bulk Electricity Trading (NBET) plc and Transmission Company of Nigeria (TCN) would take full responsibility of collections and remittances on behalf of Discos.

Graphics: Joel Samson.

tensive distribution networks across the country and a wide range of top-quality energy products and services.

Although the outgoing CEO Mahmud Tukur contributed his quota and guard the company’s fortunes with the expansion of its retail stations from 10 to 60 retail outlets, including mega stations across the country, however the change of baton was necessary after the expiration of his 10 years maximum tenure as CEO. At the company’s last Annual General Meeting, the company’s chairman Lamis Dikko admitted the board subjected the CEO recruitment process through a rigorous structured procedure before appointing Nnamdi Obiagwu as the new CEO. “The Board strongly believes in the competencies of the incoming CEO which

“No DMB is permitted to open or continue to maintain a collection of account for a Disco without the express no-objection of the DMB that guaranteed its exposure to NBET or TCN,” CBN said in the circular addressed to all banks dated August 24.

CBN noted that all energy and non-energy collections of Discos, whether cash or cashless, shall only be performed by commercial banks.

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renewable energy are at the heart of the climate agenda,” said World Bank Senior Energy Specialist David Vilar, who leads the infrastructure programs in Ghana, Liberia, and Sierra Leone.

He stated further that : “Solar energy is renewable and carbon-free; it has unquantifiable potential to decrease greenhouse gas emissions. Mini grids have the potential to play a significant role in efforts to achieve universal energy access.”

Poor households were able to afford mini grids because the project included subsidies to help make energy more affordable and supported access to financing with local financiers, including rural banks.

The International Development Association (IDA) is providing technical assistance to help make more mini grids financially sustainable for homes and communities with the support in regulation from the various governments

‘Dangote Refinery Vocational Training is helping to reduce unemployment’ makes him an exceptional choice for the role of CEO,” Dikko told shareholders.

Eternal Plc‘s annual halfyear financial result showed the company’s profit after tax plunged to N104 million in the first half of 2020 from N245 million.

The company’s revenue fell sharply by 81 percent to N28.4 billion as of June 2020 while the cost of sales also declined by 82 percent to N26.1 percent in June 2020 from N153 billion recorded in the first half of 2019.

Finance income fell to N10.8 million in the first half of this year from N197 million recorded in June 2019.

Finance income comprises interest received on outstanding monies and upward adjustments to the fair value, gain on derivatives, net foreign exchange gain and interest income on lease receivables.

CBN tasks commercial banks to take full responsibility of remittance on behalf of DisCos Olusola Bello and Oladehinde Oladipo

the Bank provided more than $11.5 billion in financing for renewable energy and energy efficiency. A comprehensive approach to scaling up access to electricity is critical.

Mini-grid systems, where several homes are connected (often with pay as you go systems) are emerging as a key player for cost-effective and reliable electrification of rural areas. The Bank is currently one of the largest financiers in this sector, supporting about 25per cent of mini grid investments in the developing world.

As the Ghana pilot program demonstrates, access to technology, systems, and products is key. From the outset, GEDAP considered different technologies that were sustainable and affordable, including hydroelectric and wind technologies, but identified solar as the best option. Solar energy panels are relatively simple, making the transformation both affordable and resilient.

“Solar technology and

Also, the CBN explained that commercial banks are expected to work with relevant stakeholders to ensure all energy collection are categorised as Feeder Collection Account (FCA) in the sole name of the Discos.

“DMBs shall ensure that bulk purchasers and resellers of energy maintain a dedicated and segregated account per Discos for customer energy collection,” CBN said.

olusola Bello

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any indigent youths in IbejuLekki area of Lagos State are now counting their fortunes and reaping the benefits from the first batch of the vocational training programme organised by Dangote Oil Refinery.

So far, some of the youths who took part in the first batch of the programme which started in 2019, have secured jobs with Dangote Oil Refinery Company, while the others are doing well in their various trades.

“Now I can feed myself, pick my bills”, Balogun Jeleel Owolabi, who is from Epe Local Government Area, boasted as he spoke about the impact of the training on him and family members.

Speaking on his experience so far, Owolabi said that the training he acquired in refrigerator and air conditioner repair from the Dangote Refinery Vocational Training Programme has transformed his life and that of his family members.

According to him, Dangote Refinery offered him employment few months after graduating from the vocational training.

“Few months after graduating from the training programme, I was called upon by the company to take up an employment at the project site.”

Owolabi described being offered an employment as

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the best thing that has ever happened to him. “I am very excited about the job and opportunity to learn more things from the company. My salary has been regular and I can now help my family members from whatever I am earning from the company.”

He encouraged other youths in the community who are feeling reluctant to participate in the training programme to make themselves available as they stand to benefit so much from the programme.

“My message to other youths is that they should be serious and have focus. Although, the training may look challenging from the beginning, but at the end of it, they will be glad they did,” he added.

Also, Lamidi Oladehinde described himself as one of the lucky beneficiaries of the vocational training programme as he has been able to secure a job with the Dangote Refinery. He described the opportunity as ‘life-changing’.

Speaking on the rationale behind the training, Dangote Group Executive Director, Strategy, Capital Projects and Portfolio Development, Devakumar Edwin, said that the programme is aimed at curbing unemployment among the youths.

According to him, the programme cuts across a wide range of vocational skills including welding, electrical technician, plumbing, auto mechanic, radio and television repairs.

22

Thursday 27 August 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Market capitalisation

NSE Premium Index

The NSE-Main Board

N13.146 trillion

2,203.61

N13.158 trillion

25,221.87

NSE All Share Index

Week open (14 -08–20)

25,199.84

Week close (21- 08–20)

25,221.87

Percentage change (WoW)

0.09

Percentage change (YTD)

-6.04

0.06 4.19

NSE ASeM Index

NSE 30 Index

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

1,056.41

740.58

123.37

414.47

189.10

1,834.18

1,116.82

963.71

1,063.17

1,067.29 1,069.73

292.28

740.58

128.80

422.28

187.36

1,832.03

1,112.21

973.23

0.64 -7.69

0.00 0.00

0.23 -9.18

294.64

0.81 -17.43

4.40

1.88

-0.92

2.37

-28.77

-28.64

NSE Lotus II

-0.12 -0.15

NSE Ind. Goods Index

-0.41 3.40

NSE Pension Index

0.99 -7.67

Here are analysts’ views on Nigeria’s stock market this week Storeis by Iheanyi Nwachukwu

U

nless there is major positive news capable of accelerating Nigeria equities market rally, its direction this week will largely depend on investors positioning in Tier-1 banks ahead of their half-year (H1) 2020 results and interim-dividends declaration, according to majority of analysts whose views were collated here by INVESTOR. Nigeria’s economy contracted by 6.1percent in the second quarter of 2020 from a year earlier, National Bureau of Statistics (NBS) said on Monday, with lockdowns in the nation’s two main cities and low oil prices taking their toll.

Africa’s largest economy and the continent’s top oil producer - reported its first Covid-19 case in late February, leading to lockdowns which were imposed in the commercial capital Lagos, the Federal Capital Territory Abuja, and Ogun State.

Despite the negative economic news, the country’s stock market opened new trading week in green, not thanks to banking counters but thanks to consumer goods stocks.

“We expect investors to continue to cherry picks on stock with strong fundamental amid market volatilities. This as they continue to await the publications of audited Tier-1 banks financial results for H12020”, said United Capital research analysts.

“The macroeconomic environment remains largely weak, evidenced by the newly released second quarter (Q2) 2020 GDP which shows a contraction in output growth by 6.10percent. This, coupled

with the continued rise in headline inflation to 12.82percent year-onyear (YoY) in July, does not inspire positive investor sentiment.

“While we expect the continued hunt for dividend paying stocks to drive some activities in the market, the possibility of profit taking following a five-week gaining streak is expected to negatively impact market performance this week.

Ultimately, we expect a reversal in the market performance, as we expect the NSEASI to shed this week”, Meristem research analysts said in their August 24 note.

“We expect the level of bargain hunting activities to continue in the Banking sector next week, as investors continue to take position ahead of H1 results and interimdividends declaration. Also, with the gradual easing of lockdowns in the country, we expect shares in

the Consumer goods sector to be positively patronized” said Vetiva Capital research analysts in their August 24 note.

“Our view continues to favour cautious trading as 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 seek trading opportunities in only fundamentally justified stocks”, said Cordros research analysts.

“This week, we expect a bearish performance as we anticipate profittaking on bellwethers”, Afrinvest Research analysts said.

“We expect further bargainhunting from investing public in the new week, as investors continue to await the release of H1’20 result of the remaining tier-I banks (UBA, Guaranty, Zenith Bank and Access),”

according to GTI Securities.

Market in review Last week, trading activities on the Nigeria bourse closed on a positive note as investors booked N12.22 billion gain amid price appreciation recorded by some market bellwether.

The Nigerian Stock Exchange (NSE) All-Share Index appreciated by 0.09percent to close last week at 25,221.87 points while the value of listed stocks increased to N13.158 trillion respectively.

In the trading week ended August 21, all other sectoral indices finished higher with the exception of NSE Oil/ Gas, NSE Lotus and NSE Industrial Goods Indices which depreciated by 0.92percent, 0.12percent and 0.41percent while the NSE ASeM Closed flat.

The market was largely dominated by the bulls because more investors

chose to take advantage of cheap valuations banking, insurance and consumer goods counters.

Thirty-one (31) equities appreciated in price during the review week, higher than twentynine (29) equities in the preceding week. Twenty-seven (27) equities depreciated in price, lower than thirty-three (33) equities in the preceding week, while one hundred and five (105) equities remained unchanged, higher than one hundred and one (101) equities recorded in the preceding trading week.

The total turnover of 950.414 million shares worth N10.123 billion in 16,647 deals were traded in last week by investors on the floor of the Exchange, in contrast to a total of 1.327 billion shares valued at N13.934 billion that exchanged hands last week in 19,392 deals.

The Financial Services industry (measured by volume) led the activity chart with 624.278 million shares valued at N6.181 billion traded in 8,313 deals; thus contributing 65.68percent and 61.06percent to the total equity turnover volume and value respectively.

The Consumer Goods industry followed with 96.320 million shares worth N2.199 billion in 3,148 deals and the Conglomerates industry, with a turnover of 89.376 million shares worth N145.612 million in 757 deals.

Trading in the top three equities namely Zenith Bank Plc, Guaranty Trust Bank Plc and Transnational Corp oration of Nig er ia Plc. (measured by volume) accounted for 298.901 million shares worth N4.761 billion in 3,056 deals, contributing 31.45percent and 47.03percent to the total equity turnover volume and value respectively.

Notore gets shareholders nod to raise N30bn additional capital …increase authorized share capital to N2bn

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he Members of Notore Chemical Industries Plc at its 6th Annual General Meeting held by proxy in Lagos proposed and unanimously adopted among others that the company raises whether by way of a public offering, special placement, rights issue or any other method(s) or combination of methods as the Board may deem fit, additional capital of up to N30billion.

This additional capital is to be

raised through the issuance of shares, convertible or non-convertible securities, loan notes, bonds and/or any other instruments, whether as a standalone transaction or under a programme, and in such tranches and on such terms and conditions, including a book building or other process, as may be determined by the Board of Directors.

The Directors of the Company are authorised to apply any outstanding convertible loan, shareholder loan or www.businessday.ng

loan facility due to any person from the Company towards the payment for any shares subscribed for by such person under the capital raise.

The shareholders also approved that where the Directors deem fit, the public offer, special placement, rights issue or any other capital raise may be underwritten on such terms and conditions as the Directors may approve.

In the event that the Company raises the additional capital by

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way of a rights issue, any shares not taken up by the existing shareholders within the stipulated period, will be determined and offered to interested shareholders of the Company and where the rights issue is underwritten.

The shareholders also authorised that the company increases its authorized share capital from N1billion to N2 billion.

Notore is to achieve this by the creation and addition thereto @Businessdayng

of 2billion Ordinary Shares of 50kobo each, such shares to rank pari pasu in all respects with the existing shares in the capital of the Company.

The shareholders of Notore also approved the amendment of Clause 6 of the Company’s Memorandum of Association to reflect the new Authorised Share Capital of N2billion divided into 4billion Ordinary Shares of 50kobo each.

Thursday 27 August 2020

Harvard Business Review

BUSINESS DAY

23

ManagementDigest

The Big Idea: Microsoft analyzed data on its newly remote workforce Natalie Singer-Velush, Kevin Sherman and Erik Anderson

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s part of a group of data scientists, management consultants and engineers at Microsoft Corp., we help companies harness behavioral data to measure and solve the kinds of challenges that firms feel but usually cannot see. In March we realized that our company, like so many others, was undergoing an immediate shift to remote work. We all scrambled to set up home offices, situate newly home-schooled kids, juggle customer calls and cat antics and, in many ways, rethink how to do our jobs.

At the same time, we knew this was an opportunity to learn something about work itself. So we launched an experiment to measure how the work patterns across our group were changing, using Workplace Analytics, which measures everyday work in Microsoft 365, and anonymous sentiment surveys. We had many burning questions, such as: How will employees integrate — and separate — work and home life under the same roof? Will we be able to maintain our relationships and networks without our typical face-to-face connections? Will we collaborate differently to get our work done? How will managers support and engage fully remote teams?

For this research, we measured collaboration patterns across our 350-person Modern Workplace Transformation team, based largely in the United States, as well as other groups within Microsoft. Our most fascinating findings can be grouped into a handful of big themes: — WHEN DRIVEN BY EMPLOYEES, ENTRENCHED NORMS CAN CHANGE QUICKLY. While weekly meeting time increased by 10% overall — we could no longer catch up in hallways or by the coffee machine, so we were scheduling more connections — individual meetings shrank in duration. We had 22% more meetings of 30 minutes or less and 11% fewer meetings of more than one hour.

This was surprising. In recent decades meetings have generally gotten longer, and research shows it has had a negative effect on employee productivity and happiness. Our flip to shorter meetings had come about organically, not from any management mandate. And according to our sentiment survey, the change was appreciated.

— MANAGERS GET SOAKED, BUT THEY ALSO CARRY THE LIFE PRESERVERS. We learned managers are bearing the brunt of the shift to remote work. Senior managers are collaborating eight-plus more hours per week.

In China, where offices closed weeks earlier than in other countries, our manager colleagues saw Microsoft Teams calls double, from seven hours a week to 14 hours a week. Working to support employees, nurture connections and manage dispersed teams from home, managers sent 115% more instant messages in March, compared with 50% more for individual contributors.

At the same time, managers are enabling employee resilience through this disruption.

Employees across our team saw their work hours spike after the shift. But we found that the employees who averaged the most weekly one-on-one time with their managers experienced the smallest increase in working hours. In short, managers were buffering employees against the negative aspects of the change by helping them prioritize and protect their time.

— IT DOESN’T TAKE MUCH FOR WORKPLACE CULTURE TO START TO SHIFT. Most of our team shifted meetings away from the 8 a.m. to 11 a.m. window and toward the 3 p.m. to 6 p.m. window. As our days became fragmented, with more meetings and personal responsibilities to www.businessday.ng

juggle, we leaned on flexibility.

Working in pockets helped, but sometimes we found that job demands rushed in to fill spaces previously reserved for personal downtime.

— HUMAN CONNECTION MATTERS A LOT, AND PEOPLE FIND A WAY TO GET IT. We know that belonging is a core human need and that feeling a sense of connection is an intrinsic motivator. On our team, around Microsoft and throughout many of our customers’ companies, virtual social meetings quickly became common. Responding to the lack of natural touch points — grabbing lunch in the cafeteria, popping by someone’s desk — employees found new ones. Overall, social meetings went up 10% in a month. At the same time, scheduled one-onones among employees went up 18%, showing that people would sooner add meetings to their schedules than lose connections.

We also measured networks across more than 90,000 Microsoft employees in the U.S. We discovered that most employees maintained their existing connections, and that most people’s network size increased. We saw network growth not only within existing work groups but also across different groups, indicating that to adapt and thrive teams sought to build bridges.

In our experience, organizations and leaders who success-

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fully seed change are those who choose to tackle a small number of challenges — problematic norms that pose the most risk to employee well-being, business continuity and customer focus.

Within Microsoft and among our customers and partners, we’ve seen groups respond to recent behavioral shifts by normalizing manager one-on-ones to help employees gain clarity and connection, increasing small-group meetings to combat the isolation of remote work and reducing late-night instant messaging to address burnout.

Our organization and others within Microsoft are also trying creative tactics to support engagement and productivity and to better integrate work and life.

One product engineering team has committed to “Recharge Fridays” — days free of meetings so that employees can focus. As an antidote to the “always on” triage mode of remote work, some teams encourage employees to use their vacation time to unplug and relax.

As our company and many others plan for what comes next, we’re adjusting the focus of our research to the changes that will be needed to continue supporting organizational health and business continuity. These changes include new processes and policies, tooling and workspaces, collaboration norms and employee wellness resources.

We know the future will be in@Businessdayng

creasingly digital, flexible and remote-friendly, or even remotefirst. And as organizations across the globe shift back to the office, measuring patterns of work against a baseline and keeping an eye on how people adapt will be essential — especially if new waves of disruption bring new unknowns. For example, our colleagues in China, who have already moved large parts of their workforces back to the office, are seeing that some of the habits that emerged during remote work, such as more reliance on instant messaging and longer workweeks, have continued even after the return.

Is work today permanently different from what it was before COVID-19? We don’t know yet, but the data can give us ongoing, real-time information that we can use to influence what happens next. We believe that what we learn about these changes will be key to organizational resilience in the months and years to come.

Natalie Singer-Velush is a marketing communications manager and the editor of Microsoft Workplace Insights. Kevin Sherman is a director on the workplace analytics team at Microsoft. Erik Anderson is a director on Microsoft’s workplace intelligence team.

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Thursday 27 August 2020

BUSINESS DAY

Garden City Business Digest Princess Medical Centre in Garden City to boost medical tourism – Wike’s aide •Emeka Woke says centre would curtail medical trips abroad due to top equipment Ignatius Chukwu

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he huge traffic to foreign lands in search of medical attention may reduce as fast as wellequipped medical centres spring up in Nigeria. Emeka Woke, the chief of staff to Gov Nyesom Wike of Rives State, who made this known in Port Harcourt, said the successful establishment of ‘The Signature’, a top medical centre in the Trans-Amadi area of Port Harcourt by the Princess Medical Centre, would bridge that gap.

Describing The Signature as a world class medical centre with 5-star status, the chief of staff said it would help bridge the gap and fill the needs of patients seeking to travel abroad for medical treatments, expressing confidence with its modern, state-of-the-art equipment, and serene ambiance of the hospital.

He made this assertion

R-L: Matthew Ossai, PMC Admin; Emi Membere-Otaji, Chairman; Emeka Woke, chief of staff, R/S Govt House); Olajide Adepoju, chief operating officer of PMC, among others during the visit.

when he visited Princess Medical Centre, stressing: “I am extremely impressed with the modern facilities available in Princess Medical Centre. The hospital parades equipment that can compete healthily with the ones abroad. As you can see, I have already signed up with the hospital and will do my routine full check-up. I wish

to enjoin other executives in the public and private sectors to follow suit.”

He said, with the upsurge of COVID-19 pandemic which has made traveling a huge challenge; the hospital has the capacity to bridge the gap.

The chairman and chief executive of the hospital, Emi Membere-Otaji, a former Commissioner for Health in

Rivers State and past President of Port Harcourt Chamber of Commerce (PHCCIMA) appreciated the chief of staff for his kind words, and assured him that Princess Medical Centre will continue to provide top medical services to the populace. The hospital is dedicated to his mother, a top nurse who influenced his path a lot in life.

As Niger Delta Basin prepares to flood the region with Songhai foods, police ready to offer maximum security Ignatius Chukwu

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he Niger Delta Basin Development Authority says it is ready to flood the region with foods produced in the Songhai Integrated Farm in Kpon, Khana local council area of Rivers State. It has thus reached an agreement with the Nigeria Police to protect the large farm.

Speaking during a courtesy call on the divisional police officer (DPO), Bori, by top management staff of NDBDA, the managing director, an engineer, Tonye David West, said partnering with the police was necessary to provide security to the over 84 hectares of farmland.

This multi-million naira federal government sponsored project, he said, is so dear to the Minister of Water Resources, Suleiman Adamu, because it has the propensity to create jobs and provide food sufficiency for Nigerians.

He talked about the need to partner with the police the needed security to the facilities in the farms. “As you know, we are just about to go into full operations after successfully completing the construction of different infrastructural projects at the farm.

“Our cardinal objective is hinged on the promise of President Mohammadu Buhari of providing food security to all Nigerians. We have also set machinery in motion to train the youths of the Niger Delta region on skill acquisition for self-reliance and improve their individual economic base”.

Tonye admitted that security was a challenge in the farm but said the constant presence of police patrol team within the farm settlement would help. “It will also interest you to know that the farm settlement is capable of providing sufficient foods for the Niger Delta region. Our eggs, chickens, plantain, banana, fish and different cash crops will soon be on sale. There is also an opportunity to employ thousands of youths through direct and indirect labor”, he said.

One of the core objectives of the federal government is food security, adding that the Board has about 25,000 birds, eggs”.

In his response, the Bori DPO, a superintendent, Bako Angbashim, called on the management of NDBDA to integrate cow grazing and rice farming to create more jobs for the youths of the community as a way of diverting their minds from crimes.

A convoy for Simeon Nwakaudu • And the Reporter now being reported Port Harcourt

by Boat

IGNATIUS CHUKWU

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oth the press bus and the Hilux that always usually carried Simeon Nwakaudu left the Govt House PH without him. Where was Chibiko (as Makurdi people called him)? A little drive few minutes later brought everybody to where Nwakaudu waited, right inside the cold morgue. At about 7.30am that Thursday, August 20, 2020, the long convoy proceeded from the mortuary, snaking through streets and roads until out of PH, out of Rivers State, and into the Abia plains.

At a hill, the journalists in one long bus looked ahead and saw the length of the convoy.

These are journalists who were used to riding in convoys with governors, ministers and even presidents. They knew the meaning and value of a convoy. Nwakaudu used to ride in such convoys, too. Every convoy bears one personality, everyone else is a passenger.

This day, this solemn convoy bore one very important passenger (VIP), Simeon Chibiko Nwakaudu. The face caps on heads of all other passengers screamed it louder with his gap-toothed face inscribed with; ‘Adieu, Son of Nwakaudu’. Misty eyes reported the state of the hearts of men and women. Once in a while, tears welled up in some eyes but courage pushed it back.

Nwakaudu was until his death on May 17,

2020, the Special Assistant (SA) to Gov Nyesom Wike. He was the Guardian Correspondent in Benue State before he joined Wike, then minister of state for education, as press secretary.

The journey continued. At a point, as the security vans with amber lights twinkled and beastly jeeps overtook each other to buy space ahead, one journalist shook others to the reality on ground: So, this convoy is for Simeon Nwakaudu? Another echoed: The Reporter is being reported. Yet another said: Truly, everyday for journalism, one day for the journalist. Others swallowed hard to fight back the woman in them so the man in them would stand out.

Soon, the convoy stopped and turned into a cortege (funeral procession) at Umuanya village in Ogbodikwu community in Umuahia South local council area of Abia State and the hearse (long vehicle bearing the coffin) handed over to pall-bearers, those young men who handle coffins and corpses like mere toy.

Who can challenge the truism that women are the biggest mourners; children the cheerleaders? Don’t joke with women in your family or kindred, for they shall cry the dirge on your day of days. The men of Umuanya grunted their grief, but the women cried theirs out. One particular woman looked a visitor in the face and cried: See his gap-tooth with which he greets us oh.

The head of the family who received his hero at the upper gate lamented over absence of any government official hailing from his homestead.

“This one, this only one, they just took him?”

Inside the newly cleared compound newly acquired and built up by the 47-year-old journalist who did all his schooling and working in Benue and later Rivers, the local people huddled around the scanty cheers (low gathering rule) while his wife sat in a heap inside the inner compound with his toddler children around her.

Monica Iveren was a Benue-born girl (Tiv) before Simeon made her an Igbo woman.

The ceremony was deliberately brief because all Covid-19 protocol was observed. Simeon was

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on top of managing Covid media messaging for the state before he died. Close sources said he worked normally for about two days trying to package the Governor’s May 29 (first year in second tenure) booklet. He was very okay and no covid was near him. He was said to have complained of sudden pains and was rushed to the state university’s teaching hospital where the best of attention was made available. As the wife said in her brief talk, both of them talked that Friday (May 15), but his line failed to go through on Saturday. (Simeon was in a coma and she would not be told so yet in her Abuja home). By Sunday, he gave up and she was told.

The officiating pastor, Innocent Aleke of City of Fate, in his ‘Prepare To Die’ message, sermoned on three types of death: Death by Appointment, by Covenant, and by Sin-Call. He said death by appointment cannot be changed but that by covenant can be changed through intercession while sin-call can be changed by repentance. He asked the audience to take action, now.

It was amazing that when Monica (chief mourner) was allowed to greet the audience, she showed strength and revealed what must have attracted Simeon to her. Her wiry strength looked

Late Simeon Nwakaudu

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the crowd in the face and sternly admonished all to seek repentance and chase after nothing but God. Wao! The first son, Benedict, read the oration. The second son, Simeon jr, looked keenly and only daughter, Daniela and last son, Daniel watched.

Their maternal uncles kitted in black and white striped Tiv anger dress could only be full of anger.

Martins Kajo, leading the Benue NUJ delegation, spoke eloquently, offering scholarships to all the kids in the NUJ primary and secondary schools – applause.

The bombshell came when the engineer, Chukwuemeka Woke, who is chief of staff to Gov Wike, announced N50m education fund for the kids and family upkeep. The inner message from Gov Wike was: Gov and his SA had a personal relationship and the governor would pay personal attention to Simeon’s family. That seemed more important.

The assurance got bigger boost when the chief of staff from Abia State, Anthony Chidi Brains Agbazuere, arrived later and strongly warned against any attempt to maltreat the wife and children, saying the wife is the chief mourner. It was a parable over the education fund. He promised that the state government would keep an eye too, and urged the wife to report any negative movements. He conveyed the governor’s grave respects to Rivers State and Gov Wike for finding an Abia son worthy and trusted and also for the fund.

The funeral brochure brought from Govt House in PH demonstrated a big sense of solidarity from most departments and units of Govt, except one sensitive office that was conspicuously missing. Probably, in the heat of tears, in-laws are usually forgotten.

As is with burials, the mourners left one after the other; convoys departed without sirens, everybody left, living only Simeon among the lilies near the green fields of Umuanya.

But, Simeon Nwakaudu rode in his own convoy!

@Businessdayng

Thursday 27 August 2020

BUSINESS DAY

25

BUSINESS TRAVEL How new health checklist to help airlines implement ICAO COVID-19 guidance Stories by IFEOMA OKEKE

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he International Air Transport Association (IATA) released an airline self-assessment health checklist to support the International Civil Aviation Organization’s (ICAO) Take-off: Guidance for Air Travel through the COVID-19 Public Health Crisis.

The Take-off guidance is the global standard framework of risk-based temporary measures for governments and the air transport value chain for safe operations during the COVID-19 crisis.

“Safety is always the number one priority for air transport. And the challenges of COVID-19 have added a new dimension to our efforts.

Developed with input from industry, public health authorities and governments, ICAO’s Take-off guidance is the global standard for safe operations. IATA’s self-assessment checklist is a practical implementation guide to help airlines comply,” IATA’s Director General and CEO, Alexandre de Juniac said.

“A harmonized approach to health is key not only to the recovery of civil aviation but also to ‘building back better,’ which is crucially important to ensuring the future resilience of the

aviation network.

“IATA’s health checklist for airlines will be of importance in terms of providing momentum for the implementation of the ICAO Council Aviation Recovery Task Force (CART) recommendations, of which harmonization and resilience are the guiding principles,’’ Salvatore Sciacchitano, ICAO’s Council President, said.

The IATA Health Safety Checklist for Airline Operators provides the standards and recommended practices (IHSARPs), associated guidance material and other supporting information necessary for an operator to self-assess. Sections covered include pre-arrival notification; check in;

embarkation and disembarkation; aircraft cleaning; on-board air quality; in-flight operations; flight and cabin crew –general; crew layover and airport facilities.

The checklist is available here and can be used free of charge by interested airlines.

For Nigeria, passengers arriving or returning to Nigeria must have tested negative for COVID-19(pre-boarding PCR test in country of departure).

The PCR test must be within two weeks before departure and preferably no less than five days to boarding.

Tests done more than two weeks before departure are not valid and persons will not be allowed to board;

but for the five days minimum, this is advisory and will not preclude boarding.

Onboard, passengers are required to fill in the Health Declaration/SelfReporting Form and the Sample Collection Time Allocation Form.

Passengers will ensure that the information/contact details provided on the form are correct and are verifiable and they can be reached on the phone number and at the address provided. Upon arrival in Nigeria, passengers shall queue in an orderly manner and disembarkation will be done systematically and in batches to avoid overcrowding.

Passengers will proceed for health screening at the Point of Entry.

The Health Declaration Form will be assessed and collected along with the Sample Collection Form.

Passengers are requested to keep their face masks on, perform hand hygiene, ensure respiratory/cough etiquette; cough into tissue, sleeve/ bent elbow and discard used tissue safely into a bin and always observe and maintain physical distancing measures.

Persons who have arrived in Nigeria are advised to self-isolate for 14days and to remain in the City/State where the Point of Entry is located (i.e.Lagos or Abuja) throughout the duration of self-quarantine.

Dana Air increases frequency to Abuja, re-introduces Owerri, Port Harcourt to Abuja August 28

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ne of Nigeria’s leading airlines Dana Air has announced that it will introduce additional flights between Abuja and Lagos and commence Lagos to Owerri, Port Harcourt to Abuja from 28th August.

Commenting on the airline’s increase in frequency, Obi Mbanuzuo, the accountable manager of Dana Air said, “We introduced these additional flights based on the feedback from our guests and popular demand for flights at specific times and we are also delighted that our guests have embraced the safety measures we have in place for them’’ According to him, “The additional Lagos to Abuja flight will depart at 8am, 11.50am, 3.40pm and 5.30pm, while the Abuja to Lagos flight will depart at 9.55am, 1.50pm, 5.30pm and 7.25pm.

“Lagos to Owerri will depart at 7.10am, while Owerri to Lagos will depart at 8.45am. Lagos to Port Harcourt will now be at 10.30am while Port Harcourt to Lagos will depart at 3.35pm. Port Harcourt to Abuja daily flights will be at 12.05pm, and Abuja to Port Harcourt will depart at 1.45pm.’’ ‘’For safe and ease of booking and reservation, our guests are advised to visit our website www.flydanaair.com, download the DANA Air Mobile App on playstore or get social with us by sending us a chat on WhatsApp for booking,’’ he added.

AIB, NCAA partner to increase air safety in aviation industry

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he Accident Investigation Bureau (AIB) and the Nigerian Civil Aviation Authority (NCAA) have formed a partnership to further increase air safety in the country’s aviation industry.

The two agencies in Abuja on Wednesday jointly inaugurated an 11-man committee that would review the NCAA’s response to safety recommendations issued by AIB on accidents, serious incidents and continuous operation of the State Safety Programmes (SSP) and ensured that the agency’s recommendations are implemented.

A statement by Tunji Oketunbi, the General Manager, Public Affairs, AIB, quoted Akin Olateru, the Commis-

sioner of the bureau as saying that the committee would also consider any other areas of cooperation that would improve safety of aircraft operations in Nigeria.

Oketunbi emphasised that the committee would also coordinate activities with regards to aviation occurrences, respect for the mandate and responsibilities of each organisation, effective and efficient exchange of information and data amongst others.

He explained that both government agencies nominated five representatives each to the committee, while one representative was nominated by the Federal Ministry of Aviation.

The AIB helmsman stated that the

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two agencies had worked together to ensure effective discharge of their duties in establishing and promoting higher levels of safety.

He said: “These 11 Joint Committee members will collaborate in the review of NCAA’s responses to safety recommendations issued by AIB on accidents and serious incidents.

“The committee will see to the implementation and continuous operation of the State Safety Programmes in Nigeria and any other areas of cooperation that will enhance safety of aircraft operations in Nigeria.”

He emphasised that NCAA was in charge of regulating the industry, while AIB focused on investigating serious incidents and accidents to

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promote safety of the sector.

Olateru reiterated the readiness of AIB to cooperate and collaborate with other agencies and organisations, both in Nigeria and abroad, in ways that would ensure continuous safe skies in Nigeria, West Africa and the world.

Also commenting, Musa Nuhu, Director-General, NCAA said the primary objective of establishing the committee was to ensure the enhancement of thorough coordination, collaboration and cooperation processes and public safety in the aviation industry.

According to him, such coordination had been taking place between the authority and the bu-

@Businessdayng

reau, although inconsistently and informally.

He described the inauguration as a giant stride towards performing the two agencies performing their functions in the areas of safety oversight and investigation of accidents and serious incidents with a view to determining probable causes, implementing safety recommendations in order to prevent re-occurrence.

Nuhu emphasised that it was expected that safety and accident investigation experts would have the opportunity to sit down together to review safety recommendations that have been proposed by the bureau and the responses provided by the authority.

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Thursday 27 August 2020

BUSINESS DAY

FT

ANALYSIS

Wirecard: the frantic final months of a fraudulent operation A plan to buy Deutsche Bank is now seen as part of a desperate effort to disguise fraud at the German payments group Olaf Storbeck

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he codename was “ P ro j e c t Pa n t h e r ”.

Markus Braun, the chief executive of German payments group Wirecard, had hired McKinsey & Co to help prepare his most audacious idea yet, a plan to take over Deutsche Bank.

In a 40-page presentation last November, the consultants insisted the new entity, to be dubbed “Wirebank”, would be “thinking and acting like a fintech, at the scale of a global bank”. By 2025, it could generate €6bn in additional profit, McKinsey claimed.

While Germany’s largest bank sat on €1.4tn in assets, it was worth a mere €14bn on the stock market, roughly the same as Wirecard. The McKinsey report promised that the combined stock market valuation would double to close to €50bn.

A deal to acquire Deutsche Ban k w ou l d have b e en t he crowning achievement for a company which within a few years had become one of the most valuable in the country, winning the label of “Germany’s PayPal”. An upstart financial technology company would be running Germany’s most illustrious bank.

A tie-up with Deutsche Bank had another potential attraction: a deal offered the prospect of a miraculous exit from the massive fraud Wirecard had been operating. Around €1.9bn in cash was missing from its accounts and large parts of its Asian operations were actually an elaborate sham.

By blending Wirecard’s business into Deutsche’s vast balance sheet, it might be possible to somehow hide the missing cash and explain it away later in postmerger impairment charges.

There was one catch. To even start preparing such a deal in earnest, the company needed to get a clean bill of health from KPMG, which was conducting a special audit of Wirecard’s books.

The approval from KPMG never came.

Six months later the curtain fell on Wirecard. On June 25, the group collapsed into insolvency after it was exposed as one of Germany’s biggest postwar accounting frauds. Prosecutors in Munich suspect that €3.2bn in debt raised since 2015 has been “lost”. Around €1bn was handed out in unsecured loans to opaque business partners in Asia.

Mr Braun, who denies allegations of fraud and embezzlement, and three other former top managers are in custody. Jan Marsalek,

Wirecard’s former second-in command, is on the run and the boss of a key Wirecard business partner in the Philippines has been registered dead.

The Financial Times talked to more than a dozen people involved and reviewed hundreds of pages of internal documents to reconstruct the final months before Wirecard’s collapse. They reveal a desperate effort stretching from Munich to Manila to cover up the fraud and to hoodwink the company’s auditors that continued right up to the very end.

“The brazenness of Marsalek [and others], who constantly lied straight through their teeth, is just mind blowing,” says one person who was working closely with them in a senior position at Wirecard’s Aschheim headquarters near Munich.

Audit arguments The crisis in the company began with an FT story published on October 15 2019 — the latest in a string of investigations into the company’s accounts — that explained how Wirecard appeared to fraudulently inflate sales and profits. Wirecard shares plunged but a relaxed Mr Braun brushed away the accusations. Three days later the company announced a €200m share buyback.

Behind closed doors at Wirecard, however, a heated debate broke out. Thomas Eichelmann, Deutsche Börse’s former finance director who had joined the board in June 2019, pushed for an independent audit into the allegations, according to two people familiar with the discussions. The proposal was supported by SoftBank, which had invested €900m into Wirecard a few months earlier.

The company’s longstanding chairman Wulf Matthias was deeply sceptical. Just days before www.businessday.ng

KPMG was hired, he told the FT that the allegations were “an annoyance” and argued a special audit was unnecessary as Wirecard’s accountant EY was “evaluating the matters sufficiently”.

Mr Braun, whose 7 per cent stake in Wirecard was worth more than €1bn at the time, also opposed the audit idea. But a joint effort by SoftBank and the supervisory board swayed him. “We told him that he needed the audit to protect himself and his money,” says a person who was involved in the discussions.

In November, 40 forensic accountants from KPMG started to dig through Wirecard’s books.

They were promised access to any data they needed, and Wirecard had publicly committed to publish the result.

Within a few days, KPMG realised that Wirecard’s core payments processing operations in Europe were not making any money — a fact that Wirecard had never disclosed to investors. All of the profit was generated by the operations overseen by Mr Marsalek: Wirecard’s Asia business, where the processing of transactions was outsourced to third-party business partners.

By January, Wirecard had a new chairman, with Mr Eichelmann succeeding the 75-year-old Mr Matthias, who had been in charge of the board for more than a decade.

Mr Eichelmann was scathing about Wirecard’s haphazard internal structures. “Even if I were running a chippy I would do it differently,” he told a confidant.

However, the new chairman did not believe that Wirecard was involved in fraud, in part because of the group’s strong cash generation. According to a person familiar with his views, he was

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convinced that it was “extremely hard if not impossible to fake cash flows”.

Fantasy accounts With the KPMG investigation in full flow, the Wirecard executives allegedly behind the fraud saw Project Panther and a deal with Deutsche, which was first reported by Bloomberg, as one possible way to fend off discovery, says an adviser to the payments group who was involved in the discussions. But they also worked on a separate plan: a vast cover-up operation in Asia.

They had to fix the weakest link — and quickly. For years, Wirecard had told EY that large sums of company cash were deposited in escrow accounts held by a trustee at Singapore’s second-largest bank, OCBC. The accounts, it turns out, were fantasy. Yet EY, for years, had been content with balance confirmations issued in the name of the trustee, a company named Citadelle whose director R Shanmugaratnam was charged this month over falsification of accounts in Singapore.

Sven-Olaf Leitz and Alexander Geschonneck, the two veteran KPMG partners running the special audit, told Mr Braun and other senior Wirecard executives that the documents on the escrow accounts were not good enough.

They insisted on seeing original documents, ideally directly obtained from OCBC. It took almost two months before Mr Marsalek presented an apparent solution. Wirecard’s second-in-command informed the auditors that the company had moved the bank accounts to a new trustee based in the Philippines.

Citadelle, said Mr Marsalek, had abruptly terminated the business relationship in late 2019 and was @Businessdayng

not responding to inquiries from Wirecard any more.

According to Mr Marsalek, Manila-based lawyer Mark Tolentino had stepped in as a replacement for Citadelle. Wirecard had subsequently transferred €1.9bn in cash in early December from OCBC to escrow accounts in Mr Tolentino’s name at two banks in the Philippines, BDO and BPI. KPMG asked again for the paperwork — and made a surprising discovery. By February — two months after the money was supposedly paid into Mr Tolentino’s accounts — Wirecard still did not have a contractual relationship with the new trustee, nor had it conducted background checks on him. Wirecard’s chief financial officer, Alexander von Knoop, only learned about the transaction in late January.

Yet by mid-February, Wirecard’s outlook seemed to be improving. It had won the support of two of Germany’s biggest asset managers, DWS and Union Investment, and its share price was back to the level it was at before the FT report in October.

The preliminary full-year results, published on February 14, vindicated the optimists. Once again, Wirecard smashed analyst expectations and Mr Braun gave bullish guidance. When coronavirus escalated a few weeks later, Wirecard was one of the few companies globally claiming that its full-year performance would be unaffected.

Manila meetings Some senior executives had started to feel uneasy. “I really hope Jan [Marsalek] will be delivering,” Susanne Steidl, the chief product officer overseeing Wirecard’s business outside Asia, told a confidant, adding that the operations she was responsible for were doing poorly.

Yet Mr Marsalek was otherwise tied up. He had to somehow convince KPMG and EY — the latter was auditing the 2019 results — that Wirecard’s business in Asia was genuine.

Mr Marsalek arranged a series of meetings in Manila on March 4 and 5, introducing senior KPMG and EY staff to the new trustee Mr Tolentino, according to documents seen by the FT. He also accompanied KPMG and EY to branches of BDO and BPI where employees handed over account statements. Mr Tolentino, who is named in several audit documents by KPMG and EY, denies any wrongdoing and says he has been framed. “I am not the trustee of Wirecard,” he told the FT. “I never signed any document with Wirecard. They committed identity theft.”

Thursday 27 August 2020

BUSINESS DAY

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INTERVIEW Nigeria transport industry as a destination hub for investors Festus Okotie, CEO of Bernard Hall Nigeria Limited and a transport specialist, in this interview with David Ibidapo explains the challenges, opportunities and prospects in the Nigerian transport sector. He identifies that Nigeria’s transport sector has not taken its rightful position in the region, considering that it is a key regional player in West Africa. However, he believes that the Nigerian transport sector can be a destination hub for investors and will aid economic diversification. Excerpts:

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ow will you describe Nigeria’s transport industry? Has there been growth over the years?

Nigeria’s transport sector is the gateway to the economy of the nation and the backbone that facilitates trade, supply chain and economic success. The sector has great potential especially because of the nation’s huge population of over 200million people. The nation’s transport sector was not given the necessary attention by past governments and I see this translated in poor management, decayed infrastructure, unavailability of well-tailored policies etc. which created huge gaps in the system then.

Yes, I believe the sector has experienced growth recently because of the efforts of the current administration and that of the Minister of Transportation – Rt. Hon. Rotimi Amaechi. They have done very well in the areas of building infrastructure such as several railway projects across the country, construction of the new deep sea port located at the Lagos free trade zone Lekki, creation of employment opportunities, building and rehabilitation of various roads to connect different parts of the nation to open up the economy. All these were responsible for the sector’s growth which contributed to the nation’s GDP from $642.927 to $720.241 million in 2019.

How will you compare the transport industry with peers in sub-Saharan Africa and the rest of the world?

Nigeria’s transport sector has not taken its rightful position in the region, considering that it is a key regional player in West Africa. Nigeria has the human resources with almost 60 percent of its population between 15 and 65 years, it is the world’s sixth largest oil producer (largest in Africa), with over 300 square kilometres of arable land and significant deposits of largely untapped minerals.

If the sector is rightfully positioned, it could take great advantage of globalisation which many nations in Asia and the world over are already tapping from due to their standardised transport systems.

Also, if the nation had modern multi modal transport infrastructures, the right policies, and other basic elements in place, Its GDP would have been higher

Australia and other developed nations in the area of transportation to develop its economy.

Festus Okotie

than what it is currently.

A lot of foreign investors looking at expanding into Africa and West Africa still prefer Nigeria as a hotspot due to the potentials of the sector and its strategic position as the gateway to the region, however owing to inadequate infrastructures, manpower development, inability to adopt modern policies, sectarian violence, corruption etc. they may be deterred.

Nigeria offers by far the largest transport market in the region and Africa. The sector can achieve far more than its current state, if the government gives it more attention.

About 2 percent contribution to GDP is rather small.

What do you think are the challenges in Nigeria’s transport sector?

Yes, approximately 2 percent contribution to the nation’s GDP is quite small. This is because the government has not given the sector the necessary attention considering the fact that it is a very essential sector as well as time sensitive in nature.

It therefore requires modern infrastructure and strategies to upgrade it.

There are other factors affecting the growth of the sector, such as lack of technically- qualified persons occupying some sensitive positions due to tribalism, politics, nepotism etc. Institutional gridlocks, poor economic and political policies, poor manpower development, safety, security and environmental issues. Additionally, concentrawww.businessday.ng

tion of transport development on intra, inter-city linkages and the relative neglect of rural transport is also responsible for the slow movement of agricultural products from the rural areas.

Another area to look into is fostering more collaboration with nations that have succeeded in the areas where we are not. For example, it would be interesting to see Nigeria partnering with a country like Denmark in the development of strategic investments opportunities in offshore energy activities like the Ocean Wind Farm which made Danish government to generate 407 megawatts (MW) in its energy sector that covered the yearly electricity consumption of around 425,000 Danish homes.

Do we need to emphasise on the role of energy as a driver of the transportation sector and economy at large?

The advantage of improving trade relations and Foreign Direct Investment (FDI) to boost growth in the sector are numerous. For instance, partnering with a nation like Australia that has capitalised on the benefits of building a more sustainable transport sector in boosting the growth of its economy. This was confirmed by the Australian Logistics Council when they reported that logistics accounted for 8.6 percent of its GDP, with 1.2 million jobs for Australians and a $130 billion annual injection to the national economy.

I believe Nigerian government should explore more avenues to collaborate with

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In the quest to diversify the Nigerian economy from oil dependence, do you consider our transport industry as a key sector to achieve this objective and restore growth in GDP? Absolutely, I consider Nigeria’s transportation sector as one of the key drivers we can leverage on in diversifying our economy from oil dependence. This is because the sector is very critical to the growth of the economy, if well managed.

The sector has the ability to create wealth, it will also enable us to maximise our natural resources, distribute and integrate the manufacturing and agriculture sectors. In addition to facilitating the supply of other essential services needed to sustain growth in the economy.

Also, a well-structured transportation sector will help create better access in facilitating timely movement of goods and services across the entire value chain of the nation.

Additionally, Transportation and logistics are very key in facilitating and attracting investments opportunities from MultiNational Companies (MNC’S) to the economy, as well as supporting job creation. The sector would also make products cheaper for internal markets, as well as its ability to open the global market for our local products and services, thereby encouraging innovation and increased productivity.

Diversification of Nigeria’s economy in the area of transport would also facilitate the transformation of the economy to achieve higher levels of productivity, as well as improve trade and competition. It would also make the economy to explore untapped opportunities that can facilitate growth, create new businesses and job opportunities.

Also, the government of Nigeria needs to empower experts in transportation investments to look at innovating investments opportunities within the sector (in and outside Nigeria), as an alternative source of revenue generation to the economy just like the strategy by Shanghai International Port Group (SIPG) and the PSA Corporation at the Ports of Shanghai and Singapore respectively. They all have investments and businesses outside the ports domestically and internationally. @Businessdayng

Additionally, investment in global ports and terminals operation is big business that will also help in the transfer of knowledge and growth. Therefore, we can think outside the box by looking into equity investments in efficient ports globally. An example is the 2009 deal of China’s COSCO Pacific signing of a 35 year lease contract worth US$4.2 billion to take over the management of the port of Piraeus in Greece, another one is the International Container Terminal Services Incorporation (ICTSI) bid for Portek International – Singapore shares in June 2011.

All these are very viable business initiatives Nigeria can explore to reposition its economy, create business and job opportunities.

How can Nigeria make its transport sector a destination hub for investors?

There are several instruments that can be applied to make the sector attractive and I can highlight a few. Improving the nation’s transportation systems such as railway, roads, airports, pipelines, ports and other maritime infrastructures would help open the sector for more investment opportunities and also facilitate the movement of goods and services across the nation. Creating an enabling business environment would help attract more investment opportunities to the nation and make it more competitive - for instance governments provision of incentives and waivers to the exporters of locally produced goods and services would make the sector more attractive . Also, allowing foreign investors to freely repatriate their capital and net profit after tax without any restrictions provided there is evidence of Certificate of Capital Importation (CCI).

Improving trade relations and collaboration with developed nations that have succeeded in using transportation to grow their economy would make the sector more attractive for investors. Also, adopting modern policies to drive the sector, simplifying the process of business registration as well as encouraging the free flow of investments capital and freedom from expropriation of investments.

Lastly but not the least, engaging technocrats in transportation is very crucial as it will facilitate the upgrading of the sector and make it globally competitive, creating platforms that would encourage innovation will also make the sector greatly sought-after.

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Friday 28 August 2020

BUSINESS DAY

NBA 2020 CONFERENCE ‘Judiciary would continue to uphold rule of law under my watch’ ..says the NBA is light of the nation Onyinye Ukegbu

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on. Justice Ibrahim Tanko Mohammed, has said that the Nigerian bar is the light of the nation and is setting the pace for development and entrepreneurship in the nation.

The CJN said this while giving his Special Address at the 60th Nigerian Bar Association Virtual Annual General Conference (AGC).

Applauding the NBA for its leadership and the support it has given to the judiciary during this time when all sectors have been hit by the pandemic, said: “The fact that we are here today (at the virtual conference) exemplifies the doggedness of the bar and the leadership of Paul Usoro, SAN, in remaining firm and resolute in making an indelible mark to reposition our modus

operandi by fully entrenching the digitization of our processes.

The the array of speakers and the theme of the conference shows that it is indeed a step forward.”

J u s t i c e Ta n k o a l s o n o t e d t h at o n 23rd March 2020, he directed all heads of courts, excepting a few, to suspend physical hearings to ensure that courtrooms do not become vectors for the spread of C OV I D - 1 9 . Fu r t h e r to this, a committee led by Justice RhodesVivour was directed to draw up measures that would enable safe processes in the judicial system, and on the basis of this work the guidelines that were issued on 7th April, 2020 and subsequently adopted and published as Practice Directions were adopted by several state high courts.

He added that “the rule of law is a sine qua non for any society. It is not a luxury. The bar plays a major role in this regard.”

“Let no one be in doubt that the judiciary under my watch would continue to uphold the tenets of the Constitution of the Federal republic of Nigeria, 1999 as amended. It is our collective responsibility to uphold the rule of law through commitment to the full enthronement of the rule of law, rejecting disobedience and non-compliance by judicial authority which is a direct invitation to anarchy in the society.

Certainly, under our watch, we will not take it, I will not take it.”

On behalf of the Nigerian Judiciary, he welcomed all panelist, speakers and delegates, as the Judiciary joins the NBA to step forward into a new era of innovation.

Bar leader calls on President Buhari to utilise executive orders more Chuba Agbu

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former Vice Chair of the Nigerian Bar Association (NBA) Abuja Branch, Ozioma Izuora, has called on President Muhammadu Buhari to utilise Executive Orders more.

She said this during the 60th edition of the NBA annual general conference with the theme “stepping forward”. The Session of Executive Order and Democratic Governance was the main discourse of the day and it involved a discourse on the instrumentality of executive orders within the context of democratic governance.

Speaking during this session, Izuora stated that in looking at democracy and what it is trying to achieve, whatever government does it should be public good.

“If by utilising the executive orders, president Buhari does what Is good for the people I say fire on. There is good that comes from executive orders when it addresses issues that are beneficial to the people. In the social contract theory it says that normal freedom comes from the leaders to the laws of the land.”

She further said that the president should use executive orders to speed up the legislative process. “Many useful legislations are lying in the national assembly and are not moving anywhere; for instance we can see how long it took to do the violence against persons (Prohibitions) Act, it took all most 20 years.

When it is a matter that is in the interest of the legislature it will go a bit faster.”

Izuora also stated that Nigeria is at a point where its 250 ethnic tribes, collectively need a little bit more support and if President Buhari

by Executive order is doing the right thing then he should continue to do so and the details an be sorted out later. If the people are benefiting they will not complain.

The former Vice Chair concluded by adding a caveat that executive orders can be abused but the judiciary and Legislature can mitigate this issue. “For me executive orders might be an aberration but the court also goes on about inherent strides, I see it much like the oil that get the wheels turning. Yes it can be abused but that is why we have the legislative and the judiciary and that’s why we have people.”

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L-R: Akin Ajibola, chairman, content and program sub-committee, Technical Committee on Conference Planning (TCCP), Nigerian Bar Association (NBA)-Annual General Conference (AGC) 2020; Paul Usoro SAN, president, Nigerian Bar Association (NBA); George Etomi, vice chairman, conference planning committee, Technical Committee on Conference Planning (TCCP), 2020 Nigerian Bar Association (NBA)-Annual General Conference (AGC) 2020; Mfon Ekong Usoro, chairperson, technical sub-committee, TCCP, NBAAGC 2020; Uche Val Obi, vice chairman, finance and mobilization committee, TCCP, NBA-AGC 2020, and Chukwuka Ikwuazom, member, TCCP, NBA-AGC 2020, during the 60th Nigerian Bar Association annual general conference in Lagos, yesterday.

Paul Usoro SAN, president, Nigerian Bar Association (NBA), giving his welcome address at the conference.

Kayinsola Ajayi, chairman, Technical Committee on Conference Planning (TCCP), 2020 Nigerian Bar Association (NBA)-Annual General Conference (AGC)

Kelechi Obi (l), with Chukwuka Ikwuazom, member, TCCP, NBA-AGC 2020.

Oyinkansola Badejo Okusanya (l), with Ayotola Jagun

NBA Annual General Conference opens in grand style amid El-Rufai saga THEO KIO-LAWSON

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he 60th Annual General Conference (AGC) of the Nigerian Bar Association (NBA), themed “Step Forward” opened today to a rich display of Nigerian cultural danceand music.

In his opening remarks, the president of the NBA, Paul Usoro SAN, stated that the dancing and music that ushered in the event, was indicative of the” celebratory tone” for this year’s conference. He noted that beyond the event marking the Diamond Jubilee of NBA conferences, there was “quite a lot to celebrate”. In particular, he mentioned the need to celebrate “a united bar association”, noting that though the “people that would like to divide us, would not let up”, the NBA would remain united.

It would be recalled that

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the conference was preceded by a lot of controversy, including the threat to boycott the AGC by several state branches of the association.

Dr. Konyinsola Ajayi, SAN, the chairman of the technical committee on conference planning in his own opening remarks referred to “the hues and cries of foul” that had trailed the conference preparation and apologised” to all that were aggrieved on all sides of the divide”.

He however noted that regardless of all the uncertainties surrounding the AGC, “it serendipitously brought us this virtual conference that truly steps forward into the digital age”. He further remarked on the various achievements of the NBA over the last sixty years, and indicated that this Diamond Jubilee presented the opportunity “ to interrogate the steps we need to move forward towards the next sixty years”. @Businessdayng

Lagos State Governor, Babajide Sanwo-Olu, remarked that the theme for this year’s conference was fitting for the current times and concurred with Dr. Ajayi, SAN that it was “apt at this time to consider how to step forward”. He further remarked, that it was interesting to note that whilst Lagos had started the use of “convalescent plasma over 4 to 5 months ago”, in the treatment of severe COVID-19 cases, “America was just getting to understand it”. For him, that “is what step forward is about”. He charged the NBA as a “big brother” to Nigeria in terms of age to “step forward” and “show Nigeria real leadership”. He stated that his government would “continue to give the NBA the enabling environment to do well, and do what they need to do”.

The conference, with over 22,000 attendees - the largest in the NBA’s history- continues till 29 August, 2020.

Thursday 27 August 2020

BUSINESS DAY

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Thursday 27 August 2020

BUSINESS DAY

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Missing 10m labour force means Nigeria’s unemployment rate at 34% DAVID IBIDAPO & GBEMI FAMINU

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igeria’s unemployment rate could be higher than the 27.1 percent earlier reported by the National Bureau of Statistics (NBS) as at the second quarter of 2020.

BusinessDay’s analysis puts number of unemployed Nigerians as a proportion of Nigeria total labour force - the share of people with employment in addition to those without work but actively seeking employment and currently available to start work, at approximately 34 percent.

Nigeria’s unemployment rate in 2018 revealed a labour force of 90.47 million of which 20.9 million Nigerians were identified as unemployed. This placed Nigeria’s unemployment rate then at 23.1 percent.

However, in 2020, Nigeria’s labour force fell by approximately 11 percent to 80.29 million. This represents a difference of almost 10.17 million Nigerians who either lost their jobs or are not incorporated in the methodology of the NBS, etc. Irrespective, they should be considered as part of the labour force.

Consequentially, this

puts number of unemployed Nigerians at 31.07 million when added to 21.76 million unemployed Nigerians in 2020, accounting for 34 percent of Nigeria’s total labour force in 2020.

This raises concern for the government given that number of unemployed Nigerians is about the population of Ghana and about 0.4 percent of the world’s population. The United Nations’ estimated population for Ghana is 31,158,344.

This suggests that unemployed Nigerians can make up a country, which will be among the top 15 most populous countries in Africa.

According to a report titled ‘Through the roof: A legacy of high inflation and Unemployment,’ by SBMorgen, “One of the economic legacies of the Buhari administration will be high inflation. Even though he assumed office in May 2015 with inflation at 9 percent, poor economic decisions meant it peaked at 18.7 percent in January 2017, at the same time the country was in the grip of recession. In his five years as president, headline inflation has averaged 13.2 percent, while food inflation has averaged 15 percent.”

Nigeria’s recovery to be undermined by run-down in consumer spending – Renaissance Capital … maintains growth forecasts of -2.9% for 2020 Endurance Okafor

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hile analysts expect Nigeria’s economy to see a shallower decline in the remaining part of this year due to the reopening of the economy, Renaissance Capital says the recovery of Africa’s largest economy will be prolonged by the run-down in consumer spending.

According to the Moscowbased investment bank, consumption (as indicated by wholesale and retail trade’s decline) was the biggest drag on Nigeria’s first contraction of -6.1 percent, as reported by the National Bureau of Statistics (NBS) in the second quarter of 2020.

“Nigeria’s recovery will be undermined by a consumer who was already in recession,” Renaissance Capital notes in its economic update report released on Tuesday.

According to the report titled: ‘Nigeria: 2Q20 GDP Consumption collapses,’ Renaissance Capital is maintaining its forecast for Nigeria at -2.9 percent and 1.0 percent for 2020 and 2021, respectively.

This is because it believes “a run-down consumer implies a protracted recovery.”

Meanwhile, the July 1 subSaharan Africa: The recovery

note by Renaissance Capital reveals that Nigeria’s wholesale and retail trade – the second-biggest economic sector and the company’s proxy for the consumer – contracted for the four quarters preceding second quarter of 2020, implying the consumer was already in recession before the COVID-19 pandemic hit.

The sector’s decline deepened to -17 percent year-onyear (YoY) in Q2, as against the -0.2 percent YoY in 2Q19. It also corresponded with a sharp fall in Nigeria’s Consumer Confidence Index to -29.2 from 1.2 over the same period. The last time consumer confidence was this low was in the second half of 2016, when the naira was sharply devalued against the dollar to N315/$1, from N199/$1 previously.

With Nigeria’s first contraction in three years at -6.1 percent in the second quarter of 2020, the largest economy in Africa can now be best described as a stagflated economy, a condition described by slow, declining or contracting economic growth and relatively high unemployment, or economic stagnation, which is at the same time accompanied by rising prices (i.e. inflation).

The NBS recent report on unemployment shows the rate

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L-R: Kayinsola Ajayi, chairman, Technical Committee on Conference Planning (TCCP), 2020 Nigerian Bar Association (NBA)-Annual General Conference (AGC); Paul Usoro, president, Nigerian Bar Association (NBA), and George Etomi, vice chairman, TCCP, 2020 NBA-AGC, during the 60th NBA annual general conference in Lagos, yesterday.

El-Rufai to CAN: Sectionalising, religionising or ethnicising security challenges won’t help us MICHAEL ANI

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aduna State governor, Nasir elRufai, has called on religious and ethnic leaders on the need to unite and build a constituency that will forestall peace in the state.

This is as the state, particularly Southern Kaduna, has been engulfed in decades of communal reprisal attacks that have claimed hundreds of lives and displaced many.

In a recent meeting with delegates of the Christian Association of Nigeria (CAN), El-Rufai said there

should be an equality of concern for all lives, no matter their ethnic origins or religious beliefs.

According to El-Rufai, sectionalising, religionising or ethnicising security challenges won’t help in resolving the situation.

“We must uphold common citizenship, united in respect for the rule of law, equality of opportunity and promotion of the rights and liberties of everyone,” the governor said.

In recent time, the incessant spate of killings in the state have generated protest, unrest and a lot of criticism both locally and internationally, as various

agencies including CAN have urged both the state and Federal Government to swing into action to handle the situation.

There have been lots of false narrations regarding the history of violent conflict in Southern Kaduna, as many tend to lose the use of terms like land-grabbing and genocide, he explained.

“We have requested and encouraged anybody to present evidence of an inch of land within Kaduna State that has been forcibly or illegally occupied,” he said, but noted, “This is a battle that requires a common front of good people from everywhere against the criminals

from anywhere.”

While giving detailed insight on the happening in the state, the governor stressed that the Southern Kaduna crisis was nothing more than “unnecessary frenzy of communal attacks, reprisals and revenge.”

He said the killings in the Southern part of the state was not different from the communal clashes, attacks and killings in parts of Northern and Central Kaduna, as well as in Zamfara, Katsina, Sokoto and Niger.

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ANAP calls for full re-opening as economy shrinks …canvasses improved funding for COVID-19 response Odinaka Anudu

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he Anap Foundation COVID-19 Think Tank says government at all levels in Nigeria must fully re-open the economy in the light of declining economic growth and other emerging realities.

In a statement sent to BusinessDay on Wednesday, the organisation says achieving the next level, which is the third scenario of COVID-19 response, should be the target of government and citizens in the short and medium terms.

Anap notes it is critical to fully re-open the Nigerian economy, given the devastating collapse of the GDP in second quarter (Q2) 2020.

The economic growth of Africa’s most populous nation slumped by 6.10 percent (yearon-year) in real terms in Q2 2020, ending a three-year trend

of low but positive real growth rates since the 2016/17 recession, according to the National Bureau of Statistics’ (NBS) report released on Monday.

“A 6.1 percent year-on-year real GDP drop is worse than we were expecting and has conclusively exposed the fragility of our economy and its inability to cope with disruptive lockdowns and needless curfews,” Anap explains.

The organisation recommends that in re-opening the economy, local channels such as town criers, civil societies, religious and opinion leaders, youth organisations, influencers and volunteer networks must be better engaged by designing social and behaviour change communication (BCC) interventions, with consideration for the need to tailor interventions and age-appropriate messaging to different communities and groups.

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Nigeria’s COVID-19 cases reached 52,800 on August 25, with 1,007 deaths and 39,964 recoveries. The country’s recovery rate is 76 percent while death-to- cases is 1.9 percent.

Globally, cases reached 24.22 million on the same day, with 826,772 deaths and 16.7 million recoveries. Global recovery is 69 percent, less than Nigeria’s recovery rate of 76 percent.

ANAP says that the country must now re-open the economy fully as there is a reasonable basis for believing that sub-Saharan Africa will be spared from the worst possible COVID-19 outcomes.

It urges the government to plan for and be prepared for clusters and outbreaks due to absence of disciplined risk mitigationthroughadherenceto personal hygiene, masking and socialdistancing whenpossible.

It calls for innovative BCC strategies to overcome wide@Businessdayng

spread myths and misconceptions among the citizens.

It stresses the need to strengthen the coordination of the national response units, such as the port health services and immigration at international airports, the COVID-19 test centres, mobile teams and communication arms for better efficiency in order to build better trust among the citizens and secure their buy-in.

“The opinion of most Nigerians now is that the COVID-19 response is as chaotic and inefficient as many other aspects of our national life,” ANAP, which helps Nigeria respond appropriately to the pandemic, further states.

It admonishes government at all levels to improve the current funding of the COVID-19 response in particular and the health system in general as a commitment to ensuring national health security.

Thursday 27 August 2020

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News To beat dollar crunch, Nigeria’s central...

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with the matter.

Dupe Olusola (l), managing director/ CEO, Transcorp Hotels plc, with Adeniyi Adebayo, minister of trade and investment, at a meeting to discuss the challenges being faced by the Nigerian hospitality industry as a result of the COVID-19 pandemic in Abuja.

With $200m fund for meters, Nigeria...

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Bank of Nigeria (CBN) to

provide the $200 million as a short-term credit to finance the ambitious meter acquisition programme, and will then get a refund once the World Bank disburses its loan.

A source in the Federal Government told BusinessDay last night that President Buhari had directed that the issue of estimated billing should be resolved with fresh urgency, and it was on this basis that he gave an approval on Tuesday for a new dispensation, which allows the DisCos after consultation with Nigerian Electricity Regulatory Commission (NERC), to charge a new service reflective tariff for electricity. This thereby ends the regime of government involvement in resolving mere buyer and seller commercial terms between DisCos and consumers. This will now be purely a regulatory play going forward.

Government officials insisted last night that the president intervention was principally to protect the poor

consumers and that any increase in tariff would impact only the top 10 percent of electricity consumers in the country.

The president also ordered an end to arbitrary billing, and this would be achieved through the enforcement of the capping order. In addition, there will now be a review of the gas pricing mechanism that allows gas producers to charge in dollars. This will ensure that cost comes down as only a small part of the cost of gas production, like maintenance, will now be costed in dollars.

Under the new plan, which could begin next month, customers have been divided into various bands. Band A is for customers who get 20 hours of power and above daily; Band B has customers who get power for 16 hours daily, C-band has customers who enjoy power for 12 hours and above a day.

Those that enjoy power for 8 hours and above are in D-band, and E-band has customers who only get 4 hours.

Accordingly, there will be

El-Rufai to CAN: Sectionalising...

Continued from page 30

voice and media hype? What happened to our common humanity?” he asked “There should be an equality of concern for the rights of all persons to live in peace and security everywhere, in strict obedience to the law and civilised norms,” he said The governor also briefed the CAN delegation of the efforts the government had made since 2015 to stop the violent conflict, address its causes and create a path for the diverse communities to live in peace and security.

He said some of the efforts included the setting up of a committee chaired

by retired general Martin Luther Agwai to study and proffer ways to stamp out attacks in Southern Kaduna, which had intensified since the violent aftermath of the 2011 elections.

Others were addressing the problem of Sara-suka gangs, widespread cattle rustling and other acts of rural banditry, establishing military and mobile police outposts in Kafanchan, as well as a peace commission, among others.

“The Federal Government also extended the mandate of Operation Safe Haven, based in neighbouring Plateau State, to Southern Kaduna and appointed a commander www.businessday.ng

no tariff increase for customers in Bands D and E representing more than 70 percent of electricity consumers deemed to be poorest of the poor, who are often referred to as lifeline customers.

Consultations held by the DisCos with their customers in January and February this year showed that while Nigerians were willing to pay more for the power they use, but this willingness was tied to improvement in availability. As part of the new deal, DisCos will be mandated to improve service for all customers under a performance improvement plan over time or be sanctioned.

According to data published by the NERC, “Of the 10,374,597 registered electricity customers in Nigeria, only 3,918,322 (37.77%) have been metered as at the end of the fourth quarter of 2019.

Thus, 62.37% of the registered electricity customers are still on estimated billing, which has contributed to customer apathy towards payment for electricity.”

In 2018, NERC began a Meter Asset Provider programme to allow third-party investors

provide meters for customers at a fee but a controversial 35 percent levy and the foreign exchange challenges blighted the project. Many Nigerians have also wondered why an ordinary electricity metre that is not more than the cheapest made-in-China GSM handset should cost as much as N56,00 apiece.

Relief seems to have come for customers this week as the Federal Government suspended the 35 percent levy on fully built meters, which is expected to bring down the cost of the meters.

In order to streamline payments, the CBN has also directed banks to provide guarantees to DisCos and have a fuller share in collections. This means that the bank account of DisCos will be directly charged for the power they take on behalf of their customers.

Analysts believe this is positive for the sector. “With the involvement of deposit money banks in collection, they will be in a better position to consider proposals for revenue collections that offers best result,” said Chuks Nwani, an energy lawyer based in Lagos.

of the rank of colonel to lead the sector covering parts of the area,” he said He added also that the state also collaborated with other states in the Northwest and Niger State to undertake joint military and police action in the Kamuku-Kuyambana forest, which serves as a hideout to bandits, cattle rustlers and armed robbers in the Birnin-Gwari axis.

He noted that the current round of violence was triggered by a clash over unresolved farmland.

The governor explained that he revisited the reports of 1992 and 1995 ZangonKataf crisis “to address the procrastination of past governments on the disputed land and other key recom-

mendations that required an official White Paper.”

He assured that the government would continue to support security agencies to restore calm in the affected communities.

“Over the last five years, we have invested heavily in the security sector. We have consistently provided vehicles and other logistics support to the security agencies that are deployed in the state.

“We are also addressing the technology side of security, through the procurement of drones, the award of contracts to install CCTVs in phases in Kaduna, Kafanchan and Zaria metropolitan areas, build a command and control centre and establish a forensic laboratory,” he said.

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The plan was discussed during the weekly committee meeting between the CBN governor and senior bankers on Tuesday.

The special one-year OMO, which is essentially a debt instrument issued by the CBN, will yield between 4-5 percent and will be settled in dollars at the delivery date rather than the usual practice of settling in naira through Non-Deliverable forwards, the sources, who do not want to be named, as the discussions have not been made public yet, said.

“It was initially proposed by one of the banks and the CBN is currently weighing the option as a way to attract dollar inflows,” one of the sources said.

Lower oil prices and a global pandemic, which have reduced foreign investment inflows into frontier markets, have sparked dollar shortages -reminiscent of the dark days of 2016 in Africa’s largest oil producing nation.

The CBN has devalued the naira thrice this year alone, more times than it has done in the last three years. The official naira has weakened by 24 percent to N380 per US dollar from N306 per dollar at the beginning of the year.

The devaluation has however not led to increased dollar inflows with investors irked by the slow pace of reform in the foreign exchange market.

The CBN governor, Godwin Emefiele promised to end the country’s multiple exchange rate practice that had drained investor confidence and de-

terred investment inflows.

Emefiele told investors and the International Monetary Fund (IMF) in March of his plans to engineer a convergence of the multiple rates at the I&E window rate, which was quoted at N386/$ Wednesday.

However, while there has been some movement, a full convergence is still elusive.

What is worse is that there are fresh worries that the hitherto market-reflective I&E window rate is now being manipulated by the CBN, which may mean the naira will still be overvalued if a convergence were to happen around that rate today.

“The CBN could find it difficult to convince investors to bring their dollars in to participate in the special OMO auction, given the damage done to investor confidence by its unorthodox FX management,” an investment banker said.

“On the other hand however there might be some yield-hungry investors willing to take the risk but at a huge premium,” the banker said.

As the CBN drags on reforms, Nigeria’s situation is getting worse. The country’s dollar demand backlog is squeezing life out of businesses and further damaging investor confidence.

Several foreign investors are currently trapped in the country and have been on the queue for dollars, alongside Nigerian manufacturers and importers, for months.

Bankers estimated the dollar backlog was between $5 billion and $7 billion last month.

Nigeria’s recovery to be undermined ...

Continued from page 30

rose to 27.1 percent while inflation accelerated to 12.8 percent.

Faced with the double challenge of lower oil prices and COVID-19 pandemic, Nigeria’s second-quarter contraction is the deepest the economy has witnessed since 2004.

On the economic outlook, Renaissance Capital thinks there is potential upside for growth in the second half of 2020 due to the easing of lockdown restrictions. “We also do not expect the stringent lockdown restrictions imposed in April to be reinstated, because the government and the economy cannot afford it,” it notes.

It expects agriculture’s growth to be sustained, in large part because it is the most insulated from the COVID-19 pandemic and its associated restrictions.

“There is some moderate upside for oil production, which is set to pick up to 1.41.5m b/d in 2H20, according to our Frontier oil and gas analyst, Nikolas Stefanou, from 1.4m b/d in May to June (and to 1.6m b/d from January 2021 to April 2022), following @Businessdayng

the OPEC+ initiative,” it says.

Meanwhile, Renaissance Capital’s growth forecast for Nigeria is the highest among all the projections from different industry players.

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

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

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

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NEWS

Trust, mutuality to drive impactful partnership for SDGs attainment - experts Zenith Bank urges expansion of BUNMI BAILEY

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evelopment experts have said that trust and mutuality are needed to drive partnership and impactful assessment to facilitate the achievement of the Sustainable Development Goals (SDGs) by 2030.

Thy stated this, Wednesday, at the part two of a sustainability series organised

by Lafarge Africa, a leading Sub-Saharan Africa building materials company.

The theme of the series was ‘co-creating value through best practices in private-public partnership and impact assessment for the SDGs.’ The webinar was designed to assemble both national and international stakeholders to discuss and

create a national blueprint towards accelerating the achievement of SDGs in Nigeria.

At the webinar, Sanda Ojiambo, executive director, United Nations (UN) Global Compact said, partnerships should start on the premise of mutuality and trust to make it impactful and scalable because the challenges ahead for humanity are quite significant.

“It is not a winner takes all but it is really if we can all win, everybody can have it all. One of the biggest challenges to successful scalability in terms of partnership is whether or not we have a shared and mutual vision,” Ojiambo said.

The SDGs is a 15-year development strategy designed by the UN, as an improvement on the Millen-

nium Development Goals (MDGs) for member nations to affect development in all areas, particularly at the grassroots.

SDGs helps to target development and growth in fighting poverty through empowerment, job creation, provision of clean and safe water, roads, power, as well as provision of social amenities for meaningful development and growth.

Muhammad Sanusi, the immediate past emir of Kano and an advocate of the SDGs, said that it was important to get all stakeholders work together as the achievement of the goals cannot be left for the government alone.

“They don’t even have the balance sheet anyway, as a lot of their revenue is already spent on debt ser-

vice. So, the private sector, NGOs, and various partners will have to come together to address some of these issues, especially around skills, education and healthcare. We have not paid enough attention to certain elements of the SGDs,” He said.

At the first part of the series held last week, experts called for effective collaboration between the private and public sector to improve the country’s poor ranking on the SDGs. According to the 2019 Sustainable Development Report, Nigeria ranked 159 out of the 162 countries on the SDG index.

Muhammed Mahmud, the technical adviser to the minister of education said there was a need to define the problem properly and simplify the result.

L-R: Unoma Grant, chief operating officer, Paelon Memorial Hospital; Modeola Odedeji, pharmacy manager; Ngozi Onyia, medical director; Michael Chen, Nigeria country manager, CHINT West Asia and Africa, and Allen Jia, sales manager, CHINT Nigeria, during the presentation of 10,000 face masks to Paelon Memorial Hospital by CHINT Group in fight against Covid-19 in Ngeria, in Lagos, yesterday.

Pic by Olawale Amoo

non-oil exports post COVID-19 MICHAEL ANI

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roup managing director/CEO of Zenith Bank, Ebenezer Onyeagwu has called for a concerted effort towards diversifying the country’s export base through the promotion of non-oil exports.

He made the call at a webinar themed “prospects of non-oil export during and post Covid-19” organised by the bank on Wednesday.

According to him, the onset of the Covid-19 pandemic which has impacted the demand for oil and, by extension, the price of crude oil in the international commodities market has further exposed Nigeria’s over-dependency on crude oil earnings and its susceptibility to oil-related shocks. He added that the events of the last couple of months have also highlighted the limited range of the country’s value-added products exported to foreign markets.

He noted further that boosting non-oil export is imperative in view of the opportunities that exist in the broader contexts of ECOWAS Trade Liberalisation Scheme and the African Continental Free Trade Area (AfCFTA) which seeks to create a continent-wide market of 1.2 billion people with combined Gross

Domestic Product (GDP) of $2.5 trillion and about $4 trillion in consumer and business spending.

Onyeagwu, who commended the efforts of the government and the Central Bank of Nigeria (CBN) in deepening the non-oil export business in the country, urged players in the non-oil export valuechain including exporters and financial institutions to play their part in the drive towards expanding the nation’s non-oil export base.

Delivering a keynote address, the director of trade and exchange, CBN, Ozoemena Nnaji, who commended Zenith Bank for organising the webinar, noting that the impact of the Covid-19 pandemic, was a wake-up call for the country, as it has once again exposed the over-dependence of the Nigerian economy on one product.

She, therefore, called for a deeper policy look at the non-oil sector to find ways of genuinely improving the quality and quantity of our non-oil export goods.

Also speaking the chief executive/executive director, Nigerian Export Promotion Council (NEPC), Olusegun Awolowo commended the efforts of Zenith bank in promoting non-oil export business in Nigeria, describing the bank as ‘the Export Trade Bank of Nigeria’.

COVID 19 amplifies need for Nigeria, others to invest more in infrastructure Education minister inaugurates 7-man panel on UNILAG crisis CHUKA UROKO

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he Covid-19 global health emergency that has forced world economy on its knees, has amplified need for more investment in infrastructure, improvements in logistics, and the embrace of broader digital technology in Nigeria and other African countries.

In Nigeria, particularly, at no other time than the Covid-19 induced movement restrictions and lockdown era, was the lack of basic infrastructure such as electricity and water more challenging and more pronounced.

Housing was a bigger issue. “This pandemic has exposed the extent of homelessness in Africa’s most populous nation and that is posing a major challenge to the government in its efforts at containing further spread of the deadly virus.

I hope some lessons have been learnt,” noted Festus Adeboyo, President, Housing Development Advocacy

Network (HDAN).

The impact of the pandemic on this sector is such that, despite various governments recovery-related financing support, industrial, retail and office markets continue to be severely challenged by appeals for decreasing of rentals or rental payment holidays, reviewing of occupancy space, closures of small and medium range retailers, high vacancy levels, and diminished product and services sales.

These challenges are reflected in a Covid-19 Africa Report in which Broll Property Intel provides a broad summary of sector-specific market overviews for the retail, office and industrial sectors as at the end of June 2020.

The report which highlights experiences in nine African countries including Nigeria, Ghana, South Africa among others, also reflects individual country’s restrictions and lockdown protocols, government aid packages, and an economic overview.

It presents the nine countries as a collective, repre-

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senting the challenges and opportunities confronted by this resilient continent during the Covid-19 crisis.

At individual level, the countries are responding differently to the pandemic according to their environment, experiences and strength of economies.

While Nigeria is seeing retail market recovery despite approximately only 50 percent of retailers trading, South African companies may begin to review their office space requirement.

Again, while Nigeria is experiencing an uptick in fast moving consumer goods (FMCG) in the warehouse and logistics sector, rental growth in South Africa is expected to slow even further in the industrial sector.

Similarly, while some Ghanaian businesses are operating on a shift basis for staff, with others embracing working from home, Uganda, with no Covid-19-related deaths, as at the end of June, embraced flexible office spaces and looking to increase digital work-flows.

KELECHI EWUZIE

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s part of efforts to resolve the crisis that threatened the academic stability of University of Lagos (UNILAG), minister of education, Adamu Adamu has inaugurated a seven-member presidential panel to dig out all issues and make recommendations that would put the school back on course.

Adamu during the inauguration of the panel, Wednesday, in Abuja, tasked the members to conclude its assignment and submit its report within two weeks.

The minister noted that members of the panel among other tasks were expected to view the report of the governing council subcommittee on review of the University of Lagos since May 2017 and make appropriate recommendations, after affording all those indicted an opportunity to defend themselves.

According to Adamu,

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“they are to examine the steps taken by the council leading to the removal of the vice-chancellor, Oluwatoyin Ogundipe, and ascertain whether due process was followed as stipulated in the universities amendment act 2003, and the principle of fair hearing adhered to.

He stated that the presidential panel would also determine whether the process (if any) leading to the appointment of the acting vicechancellor for the university was consistent with the provisions of the enabling Act. “To make appropriate recommendations, including sanctions for all those found culpable by the special visitation team, on allegations contained in the report, as well as other subsequent actions, arising therefrom. “And make any recommendations that will assist the government to make decisions that will ensure peaceful, stable, and effective administration of the university,” Adamu said. @Businessdayng

The minister called on stakeholders in the university to cooperate with the panel and allow it work unhindered.

Tukur Sahad, chairman of the panel while responding after the inauguration lauded the minister for finding the members of the committee worthy of carrying out the national assignment.

Salad pledged the panel’s commitment to ensure the resolution of the crisis rocking the university while calling on the university’s governing council as well as the senate to give them full cooperation in the course of discharging their duty.

Aside from the chairman, other panel members include Adamu Usman, board chairman, Universal Basic Education Commission; Ikenna Onyedo, former vice-chancellor, Federal University of Agriculture, Umudike; Ekanem Braid, former vice-chancellor, Cross River State University.

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Access Bank, women financiers emerge winners at African Banker Awards HOPE MOSES-ASHIKE

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inners of the 2020 edition of the African Banker Awards were announced on Wednesday at a virtual awards ceremony in London, with Nigerian-based group, Access Bank and women in the banking and finance sector emerging winners.

The awards were pushed back to August to coincide with the African Development Bank (AfDB) annual meetings which are taking place this week, with the election of the new president of the bank expected on Thursday (today).

The awards are consid-

ered the Oscars of the African banking community and given the impartial selection and judging process are the most respected in the field. The winners this year were Nigerian-based group, Access Bank and also women in the banking and finance sector. Following on from what was seen as a lack of inclusion last year, the organisers put an emphasis to reward institutions that ensured that women and financial inclusion at the forefront of their agenda.

Access Bank’s Group CEO, Herbert Wigwe, won this year’s African Banker of the Year. Access ranks as one of Africa’s top-tier banks and Wigwe has been at the helm of the bank’s

growth and expansion, including the oversight of the takeover of Diamond Bank.

Access Bank also won agriculture deal of the year, in their role to help Olam develop their rice operations in Nigeria.

Women were also the big winners at this year’s awards. The Central Bank Governor of the year went to Caroline Abel, from the Seychelles and the Finance Minister of the Year went to Nigeria’s Zainab Ahmed.

The organisers had noted that despite difficult circumstances, Ahmed had managed to push through a set of difficult reforms as well as successfully engaging international partners to help the country navigate an extremely challenging

economic environment.

African Banker Icon was given to Vivien Shobo, who was the CEO of ratings and advisory firm, Agusto & Co up until last December. She was recognised for playing an instrumental role in developing Nigeria’s credit markets and also for helping grow a truly world class organisation that is competing against much better resourced international players.

Tunisian pioneer Ahmed Abdelkefi won the Lifetime Achievement Award. This businessman and financier was the founder of numerous businesses operating in leasing, brokerage and investment banking. He also founded private equity group Tuninvest.

COVID-19: Nigerian academics in UK lift students with N2m IFEOMA OKEKE

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ssociation of Nigerian Academics in the UK (ANAUK) said it has provided financial support to privately sponsored Nigerian students in the UK higher institutions.

At the height of Covid-19

pandemic, many students experienced severe financial hardship due to their inability to work and little or no support from their families and educational institutions.

In response to their plight, the association supported a number of these students through the Olure-

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mi Tinubu Hardship Fund with over N2 million to ameliorate their situation and help them get through the crisis.

The association in a statement stated “however, many Nigerian students still require financial assistance as their circumstances are yet to improve due to

the slow pace of economic recovery and financial uncertainty created by the pandemic.

“In this regard, we are appealing to well-meaning individuals and organisations for donations to enable us to provide support for more students during this difficult period.”

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Sickle cell: Okowa seeks legislation for compulsory test for new-borns FRANCIS SADHERE, Asaba

D L-R: Oluropo Dada, 2nd vice president, Chartered Institute of Stockbrokers (CIS); Casmir Azubuike, managing director/CEO AfriGlobal Insurance Brokers Ltd; Olatunde Amolegbe, president/chairman of council, CIS, and Kasimu Garuba Kurfi, chairman, membership committee, CIS, at signing ceremony of MOU on Group Life Insurance between CIS and AfriGlobal Insurance Brokers Limited in Lagos yesterday.

CBN eyes $12bn non-oil export earnings amid FX crunch GBEMI FAMINU

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he Central Bank of Nigeria (CBN) is planning to grow the non-oil export earnings six times to ensure it provides sufficient foreign exchange for the economy.

The bank has pledged to increase such earnings from about $2 billion to $12 billion annually to fund FX-starved Africa’s biggest economy.

Ozoemena Nnaji, director, trade and exchange department, CBN, in her keynote address during the Zenith Bank’s trade forum held on Wednesday via Zoom, said the CBN has commenced funding of the value chain of identified commodities with positive result already recorded in crops such as cassava, fish cocoa livestock, dairy maize palm oil product, rice, and tomatoes, among others.

“This effort is being bolstered by the establishment of the Non-Oil export Stimu-

…experts urge enhanced non-oil exports lation Facility Fund, which was introduced by the CBN to diversify the revenue base of the economy and foster the growth of the non-oil sector,” Nnaji said while addressing the theme, ‘prospects of non-oil export during and post Covid-19’.

She noted that the outbreak of the pandemic has brought to the fore, the implications of being over-dependent on oil, stressing the need to take a reformed look at other sectors of the country for economic stability.

She further called for policy re-examination and reformation in the export sector as its prospects is being undermined.

“Optimal attention should be given to critical sectors like the micros, small and medium scale enterprises, ICT, agriculture and manufacturing sector which can make significant improvements on the econ-

omy,” she said.

Nigeria’s FX earnings from crude oil and minerals have declined by over 30 percent since COVID-19 started in the first quarter.

Low global crude oil prices have pushed the importdependent economy to the precipice, with importers and manufacturers scrambling for dollars.

The country earned $3bn from non-oil export in 2018, with commodities dominating the country’s exports rather than manufactured goods.

Poor infrastructure, lack of competitiveness and absence of support for many exporters are also key issues. Ebenezer Onyeagwu, GMD/CEO, Zenith Bank, in his address, said when considering the country’s economic advancement, Nigeria must ask what happens when oil dries up.

“The country is endowed with abundant human and raw materials resources and

also solid minerals. However, the country’s heavy reliance on oil price, despite its volatility, has undermined the prospects of the non-oil products and exports,” Onyeagwu said.

He advised that there is a need for the country to concentrate on its non-oil industry, especially agric business, and develop it for export purpose and also economic development.

He stated that beyond that, there is a need to incorporate value-addition in the export process.

“We need to improve our primary production so we can increase and expand the value chain. We are not generating enough income from exports, and we need to explore, research and incorporate value addition in our export in order to effectively utilise it. We also need to change our taste buds,” he explained.

elta State governor, Ifeanyi Okowa on Wednesday called for appropriate legislation for compulsory sickle cell test for every new-born child in Nigeria.

He also noted that his government would do everything to support the screening of children across Delta. Okowa stated this while inaugurating new-born screening equipment for the treatment of sickle cell, donated to the Sickle Cell Referral Centre, Asaba Specialist Hospital, Asaba, by 05 Initiative, project of Edith Okowa, his wife.

Okowa said that with the inauguration of the equipment, Delta has become the first state in Nigeria to have a “new-born and adult screening machine’’ in one system under High-Performance Liquid Chromatography (HPLC).

He thanked his wife for the vision to assist people with sickle cell disorder, thus assisting the hopeless in the society, and commended the 05 Initiative, which he said has had its drive sustained by donations from individuals and agencies.

Government plans N10bn palliative for transport operators MIKE OCHONMA

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he Federal Government has approved a N10 billion survival fund for transport workers and operators in the transport sector.

Gbemisola Saraki, minister of state for transportation, made the disclosure when members of Public Transport Owners of Nigeria Association (PTONA), led by their president, Isaac Uhunwagho visited the minister in Abuja.

In a statement made available to journalists by the director of press in the ministry, Eric Ejiekwe, on Wednesday, Saraki informed the delegation that the fund, which will help cushion the sufferings en-

countered by road transport workers and operators as a result of Covid-19, was domiciled with the federal ministry of trade, industry and investment She said that the ministry of transportation was working on the modalities for its disbursement. The minister stated that the government would also initiate a master plan that will reform the sector and solicited the buy-in of all stakeholders.

Reacting to challenges operators face from state governments and other stakeholders, the minister gave the assurance that she will discuss the issues through the national transport commissioners’ forum.

Stating that 90 percent www.businessday.ng

of Nigerians travel by road, she disclosed that talks are ongoing with the federal ministry of works and housing on the concessioning of some routes which she thinks is the best way to go so as to increase government revenue.

Saraki urged them to avoid duplicity and formalise their structure in an organised manner for better engagements, with the ministry and other relevant agencies.

Responding, Isaac Uhunwagho stated that their visit was in respect of challenges being faced by the body and also to appreciate the minister’s efforts towards the challenges his members have been facing since February 2020.

He further appealed for Covid-19 financial palliatives for members to prevent their businesses from folding up. He lamented that despite PTONA members being the major investors in the transportation sector, their companies were the prime target for state and local government authorities who impose taxes, levies and other ridiculous conditions on their members.

These challenges, among others, necessitated the visit on the minister and hoped their pleas would be looked into.

He lamented the impact of the lockdown, as most of their branded buses could not operate due to the ban on interstate travel.

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@Businessdayng

“Let me congratulate the 05 Initiative for truly impacting on the lives of our people in several ways. I have witnessed them do a whole lot of things for children, women, and the less privileged.

“They have gone further to reach out to our brothers and sisters in the prisons and I believe that beyond what they give, the fact that they carry out evangelism to the prisons will help make those people better citizens when they come out.”

He said that when the issue of establishing sickle cell clinics across the state came up, “I was wondering how they were going to achieve the feat. I am glad that they have succeeded in establishing these clinics in 13 hospitals across the state with donations made by our brothers and sisters without the state government contributing a dime into the project.”

CHANGE OF NAME

I, formerly known and addressed as Mr. MOHAMMED BASHIRU now wish to be known and addressed as Mr. MAMMAN BASHARI. All former documents remain valid.

General Public please take note.

Thursday 27 August 2020

BUSINESS DAY

NEWS FG, stakeholders differ on economic sense in building low-cost houses for Nigerians CHUKA UROKO

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he Federal Government and stakeholders in the housing industry are walking separate ways in their views on the viability of government building lowcost houses for Nigerians.

The government reasons that building low-cost houses for Nigerians is no longer viable, citing high cost of building materials which government does not have total control of.

“If you want low-cost housing, where’s low-cost land, low-cost cement, low-cost doors and lowcost labour to deliver lowcost housing?” queried Babatunde Fashola, minister for works and housing, who spoke at an Arise TV programme recently.

But the stakeholders reason differently, insisting that it is viable for the government to build lowcost houses for Nigerians, especially for those who cannot afford what is on

offer in the market.

“We need bold, radical solutions; not just outside-the-box solutions, but without-a-box solutions. Everywhere in Nigeria, there are innovative solutions taking place on a small scale. We should seek them out and scale up the ideas. The solutions are right here amongst us.

We do not need to travel abroad to find them,” noted Festus Adebayo, president, Housing Development Advocacy Network, in Abuja.

Adebayo cited Centre for Affordable Housing based in South Africa which notes that the lowest cost of a house produced by a private developer in Africa in 2019 at the cost of $8,000 (N2,999,900) is affordable to only 26 percent of the urban population in Nigeria, stressing that this should make the country think of where government interventions should be directed.

He advised that Nigeria

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should build, on a massive scale, low-income residential layouts with minimal infrastructure for the urban poor, adding that the government should immediately get out of the present contractor-procurement system of building houses and focus on public-private partnerships (PPPs) and the provision of an enabling environment.

The minister had contended that what the government could do to make houses affordable was to create the right environment for the industry by working out right policies.

He was of the view that every decision taken in the sector now has to be driven by hard data with adherence to market segmentation, recalling that some houses built by the Shehu Shagari administration in the 80s in the north have been left unoccupied because no survey was carried out as to the taste of those who needed the houses.

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‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Sterling Bank strengthens financial position as asset quality improves amid Covid-19 shocks BALA AUGIE

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Abubakar Suleiman, managing director, Sterling Bank

try’s and gas sector.

“The COVID-19 shock poses serious risks to the financial sector, as mounting pressures in Nigeria’s external sector and the intensifying stress in global financial markets threaten its stability,” said the Bank.

“The economic downturn and the collapse of global oil prices will likely reverse the declining trend in banking sector NPLs, starting with loans to the oil sector, which represent almost 30 percent of private-sector credit, and progressing through the remaining sectors as demand weakens,” summed the Bank.

Further analysis of the financial statement of Sterling Bank shows net income increased by 10.09 percent to N33.48 billion as at June 2020 as against N30.41 billion the previous year.

Sterling Bank has minimized operating expenses while contemporaneously magnifying profit as cost to income ratio reduced to 72.60 percent in the period under review from 79.20 percent the previous year.

Its operating income grew by 9.08 percent to N44.26 billion in the period under review as against

N40.59 billion the previous year.

Analysts and investors have divergence of opinion over the decision of the Central bank of Nigeria (CBN) to hike the Cash Reserve Ratio (CRR).

‘

Beyond the fact that it represents a significant accumulation of liquidity that has not yet been deployed, which means that the banks increasingly have access to liquidity if they ever need it, it would be a squeeze on profitability to the extent that what goes into CRR cannot go into treasury bills or bond

‘

he financial position of Sterling Bank Nigeria Plc has strengthened as asset quality improved (NPLs) even amid the coronavirus pandemic and cratering oil price that threw the economy into a tailspin.

For the first six months through June 2020, Sterling Bank’s NPLs stood at 2.10 percent- lower than the 5 percent regulatory benchmark- which compares with 12 percent in the corresponding period of 2017.

The improvement in asset quality amid harsh regulatory environment belie the prospect of accelerated profit growth in the future.

Also, low NPLs shows the lender isn’t susceptible to default risk, which underpins its credit ratings.

Analysts are of the view that improved provisions and expected recoveries from multiple accounts should help improve investor confidence towards Sterling Bank.

Nigerian banks have more to worry about at the moment as the coronavirus pandemic and collapse of global oil price triggered currency devaluation, thus exposing them to more risk.

The business lull or capital market tailpin revives the dark memory when the sharp drop in oil price of mid-2014 tipped the country into a recession in 2016.

Consequently, customers were unable to pay interest on money borrowed from financial institutions. That balloon NPLs and led to the collapse of Skye Bank Plc and Diamond Bank Plc, which were bought by Access Bank in 2019.

The World Bank disclosed in its latest World Bank Nigeria Development Update that Nigerian banks are now faced with serious risks of destabilisation, no thanks to what was aptly described as “the COVID-19 shock”.

The World Bank stated in the report that the pandemic could erode the generally positive performance recorded by the banks in 2019.

The Bank added that in specific terms, there is the risk of resurgence in banks’ non-performing loans (NPLs), especially as it pertains to loan exposure to the coun-

At the end of the first Monetary Policy Committee (MPC) meeting for the year, which was concluded on 24 January, the committee decided to hike the Cash Reserve Ratio (CRR) by 5% to 27.5% while maintaining status quo on other key policy parameters (MPR ; 13.5%, Liquidity ratio; 30%, Asymmetric corridor; +200/-500 basis points).

Abubakar Suleiman, managing director of Sterling Bank, said that the central bank’s decision to increase the CRR will not negatively impact the profitability of banks.

Cash Reserve Ratio (CRR) is the share of a bank’s total deposit that is mandated by the CBN to be maintained with the latter in the form of liquid cash.

CRR is one of the main components of the central bank monetary policy, which is used to regulate the money supply, level of inflation and liquidity in the country.

The higher the CRR, the lower is the liquidity with the banks and vice-versa.

“The increase in CRR during the pandemic itself is actually marginal, so we were already at 22.5 percent prior to the pandemic.So the real increase between 22.5 and eventually to 27.5 is five percent,” said Suleiman “Beyond the fact that it represents a significant accumulation

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of liquidity that has not yet been deployed, which means that the banks increasingly have access to liquidity if they ever need it, it would be a squeeze on profitability to the extent that what goes into CRR cannot go into treasury bills or bond,” Suleiman added.

However, global rating agency Fitch, has warned that the central bank decision to raise the amount of money in which commercial banks park in its coffer at zero interest, is credit negative for the sector.

Fitch noted the move would restrict commercial banks’ ability to lend and dampen their productivity.

“The Central Bank of Nigeria’s (CBN’s) decision, designed to reduce excess banking sector liquidity in an attempt to curtail high inflation, clashes with its competing objective to stimulate lending,” Fitch said Wednesday.

The move has raised dust across fronts from analysts who said it contradicts the regulator’s July 2019 policy forcing commercial banks to lend at least 65 percent of their deposits to boost economic growth.

So far, unaudited 6-months earnings for 2020 of Fist Bank Holdings and First City Monument Bank points to slow growth in profit, lower growth interest income, and rising impairments of financial asset.

Analysts are of the view that 2020 will test the resilience of the Nigerian banking sector in the mist of uncertainties.

“We note that the capacity of the banks to weather the storm is peculiar for each of the banks, said analysts at United Capital Ltd .

“Banks that have the holding company structure such as Stanbic IBTC, FCMB and FBNH are better positioned due to the multiplicity of their revenue streams,” said the analysts.

“In the same vein, banks that have a net dollar long position such as Zenith Bank and Guaranty Trust Bank are at an advantage, due to the devaluation and possible further devaluation of the naira. In terms of asset quality, we observe the move by banks to restructure loans across affected sectors (especially upstream Oil & Gas and Sub-Nationals) while increasing loan origination in Agro-allied, Telecoms and related sectors,” they summed.

Thursday 27 August 2020

BUSINESS DAY

39

POLITICS & POLICY PDP chides Buhari over alleged empty promises, agenda to foreign envoys James Kwen, Abuja

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he People’s Democratic Party (PDP) has berated President Muhammadu Buhari over alleged attempts by his handlers to cover the failures of his administration by reeling out another round of empty promises and blank agenda to members of the international community.

The party described as tragic that President Buhari, who can no longer face Nigerians due to his unfulfilled promises, now seeks a facesaving measure of presenting yet a fresh list of vacuous agenda to foreign envoys who are already aware of the failures of his government.

PDP in a statement by its National Publicity Secretary, Kola Ologbondiyan on Wednesday said it was embarrassing that after five years in office, President Buhari is still in campaign mood, reeling out empty promises, at a time other world leaders are showcasing their achievements; a development that further confirms that his administration has nothing to show in the last five years.

Ologbondiyan said the world need not be reminded that the President and his party, the All Progressives Congress (APC), packaged a litany of false promises with which they swayed Nigerians in 2015, only to renege on assumption of office.

He noted that President Buhari and the APC had “promised to pay N5,000 monthly allowance to indigent Nigerians, provide massive employment, free houses, monthly allowances to discharged Corps Members, reduction in price of fuel, revamping of our refineries, bringing the US dollar to the same value as the naira and other bogus promises which have today, become streams of mirage.”

According to him, “On assumption of of-

Kola Ologbondiyan

fice, President Buhari reduced the litany of promises to three cardinal undertaking of ending insurgency and insecurity, fighting corruption by having and improving on the economy. It is no longer news that President Buhari has failed in all these three undertakings to Nigerians.

“Five years under Buhari, insecurity has worsened in our country with bandits, insurgents and kidnappers running over towns and communities in various states including President Buhari’s home state of Kastina, while

Olubadan personifies greatness, honour, says Makinde …Felicitates monarch at 92 REMI FEYISIPO, Ibadan

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ov e r n o r, S e y i Ma k i n d e o n Wednesday, described the Olubadan of Ibadanland, Oba Saliu Adetunji, (Aje Ogungunniso I), as a foremost monarch that “personifies greatness and honour.”

While felicitating him as he clocks 92 on earth, Makinde said the tenure of the monarch, who he described as a royal pillar and custodian of Ibadan’s great values, rich history and tradition, has witnessed huge successes, unprecedented growth and development in his domain.

In a statement by his Chief Press Secretary, Taiwo Adisa, the governor was quoted as saying: “On behalf of the government of Oyo State, the sons and daughters of Ibadanland and the good people of Oyo State, I celebrate our revered father and monarch, the Olubadan of Ibadanland, His Imperial Majesty, Oba Saliu Adetunji, Aje Ogungunniso 1, on his 92nd birthday.

“Kabiyesi has been our royal pillar and custodian of the great values, rich history and tradition of our people. His tenure has coincided with huge successes, unprecedented growth and development of his domain.

“Oba Adetunji has continued to personify greatness, honour and candour and he has continued to be an exemplar as a royal father and elder.

“Kabiyesi, as you add another year, may the Almighty God uphold you and imbue you with good health and agility to continue to lead your people,” he said.

Tolulope Akande-Sadipe, who represents Oluyole Federal constituency, extolled the royal father for serving as a pillar to many within and outside Ibadanland Akande-Sadipe, while felicitating with the Olubadan of Ibadanland, Oba Saliu Adetunji (Aje Ogungunniso 1), wishing him continued good health and Almighty’s blessings as he clocks 92 today.

In a statement by her Special Assistant on Media, Olamilekan Olusada thanked God for giving Kabiyesi longevity of life.

“I join well-meaning Nigerians, Oyo State Government, the people of Oluyole Federal Constituency and Ibadan indigenes home and abroad to salute our royal father.

Akande-Sadipe who is the Chairman, House of Representatives Committee on Diaspora Affairs, prayed saying, “Kabiyesi, as you begin the journey into another year, I wish you long life in sound health and the strength to lead.”

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Mr. President, who promised to lead from the front is receding in the safety and comfort of the Aso Presidential Villa.”

The opposition party further faulted that “Instead of any improvement, the Buhari administration had only wrecked our economy and turned our once prosperous nation into the poverty capital of the world with so much hardship, hunger and starvation, escalated unemployment, high cost of food, reduced life expectancy, high morbidity rate and collapsed infrastructure to the extent that

Nigerians now resort to suicide and slavery abroad as options.

“Contrary to its promise, the Buhari administration has increased the price of fuel from N87 in 2015 to the current N148 per liter; the naira now exchange as high as N500 to a dollar against N160 margin in 2015; our refineries have still not received attention.

“Under President Buhari, no sector of our national life has witnessed any improvement.

Imposition of suppressive tariffs and taxes, including an increased Value Added Tax (VAT) from 5percent to 7.5percent; huge foreign borrowings that are siphoned by APC leaders and other anti-people policies have become the order of the day.”

The PDP further alleged that under President Buhari, corruption has worsened as even detailed in the reports by various reputable international organisations such as the Transparency International (TI), with government providing cover for corrupt officials and their agents.

“The stench of corruption oozing out from the various investigations in the National Assembly and the indicting of the head of the nation’s anti-corruption agency under Buhari expose the decadence in the Buhari administration.

“It is therefore, scandalous that the Buhari Presidency could attempt to grandstand before foreign envoys and pull out another merry-go-round box of fake promises when Nigerians already know that it has no intentions of fulfilling such, nearly two years into Mr. President’s second and final term of four years,” he said.

According to Ologbondiyan, “In case he is not aware, President Buhari should be made to understand that Nigerians have moved ahead and are not ready to listen to new sugar coated fake promises of an incompetent government.”

Edo 2020: We are still in the governorship race - ADC Churchill Okoro, Benin

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he leadership of the African Democratic Congress (ADC) on Wednesday said nothing would distract the party from fielding its governorship candidate, Mabel Oboh, for the Edo State gubernatorial election slated for September 19.

The Spokesperson of the National Campaign Council of the party, Friday Musa made the disclosure while speaking with newsmen in Benin City.

Musa, who dissociated the party from the purported collapse of its structure into another party, noted that the party is not shifting ground for any political party.

While insisting that ADC, as a political

party, is formidable and strong as ever before, he said that Mabel Oboh remains the party’s gubernatorial candidate for the election.

“In a family there are hitches but ADC as a party in Edo State did not collapse its structure for another. We remain ADC and we are ready to go into the contest.

“We are ready for the election come September 19. Our candidate, Mabel Oboh remains and for that we are not shifting ground for anybody,” he said.

The candidate of the party, Mabel Oboh, said the party remains intact, adding that the party is strongly behind her candidacy.

She further urged citizens of the state to come out en masse to vote for her in the election.

Nasarawa Deputy Governor, others to appear before State Assembly over Covid-19 funds Solomon Attah, Lafia

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he leadership of the Nasarawa State House of Assembly has threatened to sanction members of the State Taskforce on Covid-19 should they fail to appear before the House Ad-hoc committee on Covid-19 tomorrow.

According to the house, if the state deputy Governor, Emmanuel Akabe-led Taskforce on Covid-19 refuses to appear before it, they would invoke relevant laws/sections of the Constitution to compel them account for all the palliatives and funds received during the pandemic period.

The Ad-hoc committee had extended invitations to the state Taskforce Committee on

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Covid-19 for interface, which they declined honouring.

Chairman of the committee and member representing Lafia Central, Dahiru Abdullahi Angibi stated this Tuesday in a briefing to newsmen in Lafia.

Angibi said, the House through the Ad-hoc committee has sent invitation to the members of the state Task Force on Covid-19 severally, but instead of honouring their invitation, they sent the secretariat to them.

“The House is interested in meeting with the state Task Force Committee on Covid-19, and not the members of the secretariat, and because they are not the ones we wanted to meet, we asked them to go back.

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BUSINESS DAY Thursday 27 August 2020 www.businessday.ng

The gains, pains of Nigeria-Benin border closure ODINAKA ANUDU

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n August 2019, the Federal Government shut the Nigeria-Benin border in order to check smuggling of petrol and other commodities by local and foreign traders. The move angered several neighbouring countries as many of them saw the action as unilateral. Few months after, several African countries impacted by the closure pleaded with Nigeria’s President Muhammadu Buhari to re-open the borders to save their economies from slump.

Earlier in the year, Nana Akufo-Addo, president of Ghana, was reported to have begged Buhari to re-open the land borders to boost the Ghanaian economy.

This, according to reports, happened on the sidelines of the UK-Africa Investment Summit 2020 in London.

A statement released by Nigeria’s presidency in January 2020 had said that the Ghanaian president showed understanding of the fact that Nigeria needed to protect its citizens, but pleaded for an expedited process as the Nigerian market was significant for certain categories of business people in the West African country.

In 2019, John Mahama, former president of Ghana, had appealed to Buhari to reconsider opening Nigeria’s land borders as the shut-down was hurting many small and medium businesses, especially in Togo, Ghana and Cote D’Ivoire, which rely on regional trade for survival.

The land borders have been on the shut-down for the past 12 months. Proponents and supporters of the closure of the land borders argue that local rice production has risen in the last one year. They see evidence in the 1.58 percent growth recorded by the agriculture sector in the second quarter of 2020.

Another piece of evidence for the proponents is data from the United States Department of Agriculture (USDA) which put Nigeria’s milled rice production in 2018/2019 at 4.78 million metric tons (MMT), up over 2.5 percent from 2017/18 figure of 4.66 million MT. Data from the Thai Rice Exporters Association show that Nigeria imported a total of 2,796 metric tons in the half-year 2019 and 1,192 metric tons in the corresponding period of 2020, indicating a 57.36 percent decline over the period.

“Since the border closure, lots of farmers, who had abandoned growing rice, have returned.

Other farmers are shifting to rice cultivation because the market is there now and it is profitable,” Muhammed Augie, former chairman, Rice Farmers Association, Kebbi State chapter, recently said.

“Nigerians are now changing their preference to local brands and consuming it more,” Augie further said.

Protectionists have always argued that border closure is the best measure to promote the local production or manufacturing. They argue that by shutting borders, imports are restricted and local manufacturers have the space to scale and make sales/profits. For them, border closure reduces the level of unfair competition local producers faces and increases their competitiveness. They further contend that border closure helps to protect infant industries, especially in Nigeria where firms’ survival rate is low.

Border closure, for the proponents, can also curb smuggling, especially of arms and ammunition, and is a vital policy for a country like Nigeria which is facing insecurity crisis.

However, as logical as the points are, opponents of border closure and proponents of open borders do not see many positives in protectionism.

They say that it creates monopolies and enriches a few at the expense of many others.

This point is evident in the price of rice today. Before the border closure in August 2019, a 50kg of rice cost N16,000 to N18,000.

One year after the closure, the price has risen to N24,000 to N6,000, thereby out-pricing the

majority poor and enriching rice farmers who are also getting government incentives. In the agriculture sector, the noise about gains of border closure has often been heard on rice.

Nobody is talking about cash crops which provide the muchneeded foreign exchange when exported. Cash crops such as cocoa, palm oil and rubber, among many others, are sometimes exported through the Nigeria-Benin borders. The business has been crumbled and the FX, eroded. Several exporters have shut down operations along the corridor, with attendant job losses. Nigeria does not mostly base its policies on data and the recent NBS figures should tell anyone how much the country is losing from this singular policy.

Nigeria earned $823.06 million (N296.3 billion) from export to ECOWAS countries and $2.72 billion (N978.21 billion) from shipping out products to Africa in the first quarter of 2020. This is no longer possible, and it is bad news for an economy reeling under acute FX crisis.

Surprisingly, as was demonstrated, rice price has not decreased, which, for economists, means that the country is still not producing enough for the citizens. This reinforces many economists’ viewpoint that border closure forecloses competition which should be

‘‘

This demonstrates that border closure is not a fix-it-all, especially when the fundamental issues of competitiveness have not been addressed

crucial for Nigerian farmers as the African Continental Free Trade (AfCFTA) nears.

This demonstrates that border closure is not a fix-it-all, especially when the fundamental issues of competitiveness have not been addressed. As of today, power supply issues have not been addressed in local production, and many farmers cannot access several markets due to poor road network. Flood is still a major issue for rice farmers, which naturally affects their output and cast doubt on their capacity to pay back government loans. More so, many farmers are still using crude tools because they are not farming commercially or cannot afford sophisticated machinery such as tractors. Also, quality of seeds is still a critical issue yet to be addressed, while input prices are sometimes very high.

These fundamental issues are still with Africa’s largest economy and cannot guarantee improved productivity even if the borders are shut for 10 years.

While the border closure favours some manufacturers, it disfavours many others who cannot import inputs or set up offices in other West African countries.

Toki Mabogunje, president, Lagos Chamber of Commerce and Industry (LCCI), said at a dialogue session with Vice President Yemi Osinbajo recently that the closure of the land borders has enormous implications for cross-border economic activities around the country.

“The indications are now that the closure is indefinite. While we share the concern of government on issues of security and smuggling, we believe that the indefinite closure of land borders is not the solution to the problem,” she said.

The biggest problem with border closure is that it could

make or mar the AfCFTA starting in January 2021. Nigeria is a very significant country, being the continent’s largest economy and most populous. It needs to trade with the rest of Africa to boost its own growth. Critical issues are already fuelling under-performance in the economy. For example, inflation rate is 12.82 percent and poverty among the consumers reached 44 percent in 2018, according to World Poverty Clock. Unemployment rate has hit 27 percent in the second quarter of 2020, from 23 percent in the third quarter of 2018. The GDP contracted 6.1 percent in the second quarter of 2020, according to the NBS. The country is facing a worsening foreign exchange crisis, including low Foreign Direct Investment and Diaspora dollar inflows.

This is why trade is important to create opportunities for businesses, which, in turn, will create jobs and grow the economy.

Trade among West African countries is about 12 percent, which is relatively low when compared with other regions. On continental basis, trade among African countries is 16 percent, which is poor when compared with Europe’s 59 percent, Asia’s 51 percent, North America’s 37 percent, and Latin America’s 20 percent, data show.

At the moment, it is looking like Nigeria is not preparing for the trade treaty as it continues to shut land borders through which goods and services will come in and leave when the AfCFTA starts. Apart from the shutdown of the border, the FX restriction on several items is another antitrade policy that will impact how things pan out when the AfCFTA begins in January 2021.

Nigeria must be ready to open borders as it is simply a one-sided policy that disfavours all the consumers and many sectors, while enriching a few people.

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