BusinessDay 27 May 2020 by BusinessDay

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Nigeria Kaduna’s IGR revolution is fast- How can exit COVIDpaced and it’s bearing results 19-induced economic crash ANALYSIS

By OUR REPORTER

here is a fast-paced push to revolutionise internally generated revenues in Kaduna State, northwest Nigeria, and the bold move is beginning to deliver handsome results, according to government data. The state governor, Nasir el-

Rufai, set out three years ago to grow the state’s meagre IGR by four times by 2023 when his second term will end and data just released by the National Bureau of Statistics (NBS) show that he is well on his way to attaining the heights he set for his administration. Kaduna had an IGR of just N11.53bn when the governor

was elected in 2015 and the state occupied the 13th position on the national chart. Between 2018 and 2019, Kaduna, with an estimated population of 12 million, grew its internally generated revenues from N29.44bn to N45bn, a 53 percent increase in a single year. Between 2016 and 2017, Kaduna grew its IGR by 55 percent,

delivering N26bn in IGR in 2017. All this means citizens of Kaduna can realistically expect the government to better fund social and infrastructure programmes leading to a better standard of life for the people, according to one economist. This allowed Kaduna to jump

Continues on page 27

LOLADE AKINMURELE

he path to Nigeria’s recovery from the massive fiscal and social crises thrown up by the collapse in oil price and the health pandemic cannot be found in the domain of government, according to several economists surveyed by BusinessDay. Nigeria faces the crisis of collapsed revenues as a result of the fall in oil prices. There is also the massive healthcare crisis as well as a security challenge that is also exacerbating a humanitarian crisis given that as many as 40 percent of the population is already trapped in poverty. Government figures acknowlContinues on page 27

Inside

Why Nigeria’s Voluntary Offshore Assets Regularisation P. 26 Scheme matters

L-R: Moses Chikwe, auxiliary bishop of Owerri Archdiocese; Solomon Amatu, Okigwe Diocese; Anthony Obinna, Owerri Archdiocese; Hope Uzodimma, Imo State governor; Lucius Ugorji, Umuahia and Ahiara Dioceses; Augustine Ukwuoma, Orlu Diocese, and Augustine Ndubueze Echema, Bishop of Aba Diocese, when the Catholic Bishops paid a solidarity visit to Governor Uzodimma at the Government House, Owerri.

Those fighting Obaseki should sheathe their swords, put Edo State first – Ojezua P. 31

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TAJBank announces issuance of N150bn FGN Sukuk

AJBank, Nigeria’s noninterest financial institution, has announced a N150 billion Sukuk Bond as appointed by the Federal Government of Nigeria, making it the first time the bank will be acting in the capacity of a Receiving Agent since its opening for operations on December 2, 2019. Hamid Joda, founder/chief operating officer, TAJBank, affirmed, “We are delighted to be appointed as a Receiving Bank for FGN Sukuk by the Federal Government. This investment platform is a safe and risk-free form of investment and offers a stable, tax free, rental income stream. There are enormous benefits derived from regular Sukuk issuance programmes like these to the economy, as it will secure much-needed capital to boost infrastructural development spanning several sectors such as health, transportation and much more.” Sherif Idi, chief marketing officer, TAJBank, also stated, “It is important to understand the principles which guide Sukuk. These principles are what make this platform so attractive to investors. One of such attractive features is that the holder has an undivided ownership right in a particular asset and as such is entitled to the return generated by that asset. As such, this provides an opportunity for all to invest safely and enjoy the attractive benefits of a triple A rated ethical instrument.”

The FGN Sukuk 2020 is open to all categories of investors, which include retail investors, high networth individuals, institutional investors such as commercial banks, insurance /takaful companies, pension fund administrators, asset managers, ethically inclined investors, cooperative societies, religious bodies as well as state investment companies. Sukuk is also commonly referred to as Sharia compliant bonds and is developed as an alternative to conventional bonds. Sukuk provides an alternative long-term financing for key sectors such as infrastructure. Considering the state of the economy and infrastructural challenges, and as several countries grapple with the economic impact of COVID-19, Sukuk is a veritable tool to help countries and businesses develop sources of long-term, stable financing. However, the book building commenced May 21, while funding will be on June 2, 2020. TAJBank is Nigeria’s second non-interest financial institution, with head office in Abuja and branches at the National Assembly Complex and Kano State. The bank received its licence from the Central Bank of Nigeria on July 12, 2019, offering an exciting array of products and services that span private banking, retail banking, business banking, development finance and the public sector.

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Coven Works launches online AI School, Access Bank begins disbursement of targets 200,000 beneficiaries in 6 months loans to grow Nigeria’s health sector Jumoke Akiyode-Lawanson

spartofeffortstodemocratise and encourage both young people and job seekers to embrace life-long learning and the nitty-gritty of their career pathway in Data Science and Artificial Intelligence, Coven Works Inc. has launched into the market its AI school online learning academy. This aims at on-boarding 200,000 young people/job seekers from around the world within the first six monthsofitsgoliveintothemarket. As an organisation hinged on a Japanese business philosophy of continuous improvement, the company says its key element is the ability to create solutions that give an exponential effect on outcomes. The intensity in the demand for Data Science and Artificial Intelligence skillsets, and the demand for this knowledge keeps growing. As a result, Data Science enthusiasts are looking for more cutting edge means to crush time and space to gain the knowledge they need. Coven Works - An American firm that focuses on raising the workforce for tomorrow is one of the organisations that has been known for right-skilling and upskilling young people across the globe on Data Science and Artificial Intelligence skillsets. Since its establishment in 2018, the company has attracted international affiliation from the

likes of Amazon, Google, and Microsoft,Governmentalsupport from Edo State, Ondo State, and the German Government. With more than 100 Technical Fellows and 2500+ Alumni Network, the organization is set to scale its mandate through this online academy that will give more data enthusiasts access to its content. According to Coven Works, the initial plan is to admit 200,000 peoplewithin6monthsandguide them into a new career pathway in Data Science and Artificial Intelligence. Disregarding individuals’ backgrounds - new to technology or not. With the hand holding training within the platform, learners can take the Self-Paced Learning Modules or the Virtual Instructor Lead Path. “While both come with high real-time support from their technical fellows with a lot of accountabilitystructurewiredintotheOnline Learning School, we believe that this platform can fast track the learning rates of participants. “As a way of demonstrating the mantra: ‘Everyone can learn AI’ - Coven Works will be giving a two-weekwindowforparticipants toaccesstheplatformforfree.This is for enthusiasts to download free data science resources from the members’ area. While they can upgrade into any of the learning pathways they choose to take,” the company said.

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HOPE MOSES-ASHIKE

ccess Bank is set to release loans through the Central Bank of Nigeria (CBN) credit support scheme to ramp up the capacity of Nigeria’s pharmaceutical and healthcare industries. This has become necessary as the country continues to tackle the evolving crisis of the Coronavirus pandemic. The bank is reaffirming a long-held and proven stance on fostering sustainable development across the country. The loan scheme is part of a six-point palliative by the Central Bank of Nigeria (CBN), of which Access Bank is a participating financial institute (PFI). It was developed to provide funding to indigenous pharmaceutical companies and other organisations in the healthcare value chain, enabling them to increase capacity to meet the increasing demand for healthcare arising from the pandemic. Earlier in the month, Access Bank’s group managing director, Herbert Wigwe, had reassured the public of the bank’s commitment to do everything in its power to address the needs of the Nation in these uncertain times. “It has become clear to all and sundry that Nigeria’s

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healthcare sector is in dire need of revitalization and Access Bank, under the auspices of the Central Bank of Nigeria, will be investing heavily in this sector in the coming months. We would be looking to grow Nigeria’s capacity to not only manufacture drugs and other medical supplies locally but also encourage entrepreneurs to take advantage of the opportunities that lie within the sector,” Wigwe said. Nigeria’s healthcare product manufacturers, including pharmaceutical drugs and medical equipment; healthcare service providers/medical facilities – hospitals/clinics, diagnostic centres, laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres, blood banks, et cetera, are eligible to access loans to enhance local drug manufacturing, increased bed count in hospitals across the country, funding of intensive care units as well as training, laboratory testing, equipment, and Research & Development. The loan’s Interest rate is set at a maximum of 5.0% per annum (all-inclusive) up to 28th February 2021, making it more accessible to a larger percentage of the sector. Thereafter (from 1st March 2021), interest on the facility shall revert to 9% per annum (all-inclusive).

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DBN sets up credit guarantee firm to boost lending to MSMEs Onyinye Nwachukwu, Abuja

evelopment Bank of Nigeria (DBN) has set up a Credit Guarantee Subsidiary in order to push more lending to the Micro, Small and Medium Enterprises (MSMEs) sub-sector, which now battles for survival on the back of coronavirus pandemic. Impact Credit Guarantee Company Limited (ICGL) was created with the aim of de-risking the MSME sector by sharing risks with the Participating Financial Institutions (PFIs) to give them some comfort to lend to this critical sector of the economy. Already, the DBN - Nigeria’s wholesale development finance institution - has disbursed over N100 billion to over 100,000 MSMEs cumulatively resulting in an additional job creation of 3,192 in the financial year ended December 2019, managing director, Tony Okpanachi, said. In an address at the DBN’s first virtual third annual general meeting (AGM), which held in Abuja, Okpanachi said the bank had also delivered capacity building programmes for MSMEs across the six geopolitical zones of the Federation. Giving a scorecard on the

bank’s activities and contribution to the Nigerian economy, he said the bank working through its PFIs has facilitated increase in MSME revenue, as well as assets. He stated that DBN has focused on engendering gender equality in its loan distribution and empowered youths with 52% of the total loan disbursed to these segments in 2019. “Through our 27 Participating Financial Institutions, over N100BN was disbursed last year, impacting cumulatively over 100,000 MSMEs. So far, 3,192 jobs have been created leading to an increase of 10% in MSMEs revenue and 6.8% increase in value of their land assets. “Also, 52% of loans disbursed in 2019 were to youths and women owned businesses. This is in our bid to promote economic empowerment and gender equality,” he said. DBN was established by the Federal Government of Nigeria in collaboration with global development partners, including the World Bank, African Development Bank (AfDB), Kfw of Germany, French Agency for Development (AFD) and European Investment Bank (EIB) to address the major financing challenges facing Nigeria’s MSMEs. The bank carries out this

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function by providing financial institutions, predominantly Deposit-Money and Microfinance Banks with on-lending facilities designed to meet the needs of this segment. Although Okpanachi did not disclose lending targets with the new credit guarantee scheme, he assured shareholders that the bank was on the right trajectory with a focus on driving sustainable economic growth. He informed that the bank was currently expanding its distribution network to include other non-banking financial institutions and working on some concessions to PFIs as well as de-risking of SME lending through the subsidiary, ICGL to increase participation. He said the strategy would also cover delivery of technical assistance to PFIs and capacity building programs for MSMEs all geared towards encouraging uptake of the DBN funds by PFIs for on lending. In his remark, chairman of the bank, Shehu Yahaya corroborated the MD’s assertions and commended the Federal Government for its commitment and efforts as well as the selfless health workers for their dedication towards tackling the deadly COVID 19 pandemic.

Dangote, MTN emerge most admired African brands GBEMI FAMINU

or the third time in a row, Dangote Group has emerged as the most admired African brand, of African continent origin, by consumers, paired with the telecommunication giant, MTN, in a survey of 100 Africa best brands announced in a novel global virtual event that incorporated the market openings of Kenya, South Africa and Nigeria. GTBank returns to the top spot in financial services and the United Kingdom’s BBC retains its media category ranking as the most admired media brand in separate category subsurveys of the most admired financial services and media brands in Africa. African brands only occupy 13 of the 100 entries, seven less from last year.Anthony Chiejina, group chief corporate communication officer, Dangote Group, said the ranking was not surprising to the management because the company has a longstanding reputation for quality, relevance compliance and social stewardship. “Our mission and vision engage and inspire us and, by extension, connect us with both our internal and external stakeholders,” Chiejina said. Established 10 years ago, to coincide with the 2010 FIFA World Cup, the world’s biggest single sporting event, the Brand Africa 100: Africa’s Best Brands

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survey and rankings have established themselves as the most authoritative survey, analysis, and metric of brands in Africa. “African brands have an important role in helping to build the image, competitiveness and transforming the continent’s promise into a real change,” Thebe Ikalafeng, founder and chairman of Brand Africa and Brand Leadership, said during an online interactive session via Zoom. “It’s concerning that in the 10 years since the triumphant FIFA World Cup in South Africa which globally highlighted the promise and capability of Africa, and despite the vibrant entrepreneurial environment, Africa is not creating more competitive brands to meet the needs of its growing consumer market.” Caitlin van Niekerk, global client development manager, GeoPoll, said, “The reach and accessibility of mobile across the continent enabled us to survey respondents across a representative sample of countries quickly and effectively, giving us vital and timeous results at a critical time. Kantar has been the insight lead for Brand Africa since inception in 2010.” It is a consumer-led survey which seeks to establish brand preferences across Africa. The survey is conducted among a representative sample of respondents 18 years and older, in 27 countries which collectively represent 50 percent of the continent, covering all eco-

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nomic regions and accounting for an estimated 80 percent of the population and the GDP of Africa. The 2020 survey was conducted between February and April 2020 and yielded over 15,000 brand mentions and over 2,000 unique brands. Out of the top 100 brands in 2010/11, only half still appear in this year’s list due to mergers, acquisitions and the obsolescence of many brands. The most prominent changes are in the technology category with the demise of Blackberry (#32 in 2010/11), the consolidation of Vodafone (#54 in 2010/11 and now #13 in 2020) which acquired Vodacom in 2008 and rebranded in 2011, Etisalat (#40 in 2010/11) rebranding to 9Mobile in 2017, and Motorola (#39) being acquired by Lenovo in 2014. A Chinese brand, Tecno, has raced up the ranking from #33 to #5 – a dominant performance for one of China’s premier global brands that are not even sold in China. “We fervently believe that only Africans can develop Africa, and this gives us stronger sense of relevance in all the countries where we have our operations. We are touching lives by providing their basic needs and empowering Africans more than ever before, creating jobs, reducing capital flight, helping government conserve foreign exchange drain by supporting different industrial infrastructural projects of African governments,” Chiejina said.

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Promoting right leadership, programs around agriculture can limit potential recession in Nigeria

KABIR IBRAHIM

t is obvious that the COVID-19 pandemic has taken its toll on the global economy due to the measures taken to mitigate it through complete lockdown of everything instead of properly appraising the situation and allowing some latitude before adopting the complete lockdown strategy. Of course, the World had not witnessed such a pandemic in a Century and so whatever strategy adopted could be said to be appropriate at the time because there was no existing model to adopt. However, with the benefit of hindsight it is pretty obvious that the economy would have fared better if it was only partially locked down. Nigeria has had the misfortune of relying on a single resource, specifically oil, to run its economic activities

and this happens to be the hardest hit by the complete lockdown as every activity relying on its use was abandoned in the wake of the pandemic. Now that we are here, Nigeria needs to look at other areas to support its economy and consider the contributions of oil as a bonus to mitigate the effects of the imminent recession. Before the discovery of oil Nigeria’s chief resource was Agriculture for all its economic activities and therefore should harness it before anything else to mitigate the envisaged hardship. The means of production in preoil days was in the hands of the Smallholder farmers who are the major stakeholders in the All Farmers Association of Nigeria (AFAN) and can therefore be galvanized to work assiduously to avert any form crises. This group can also be engaged by other investors to upscale their Agricultural activities to earn the direly needed foreign exchange for national development. The Federal Ministry of Agriculture and Rural Development (FMARD) should encourage and support these Smallholder farmers appropriately to meet the aspirations of this administration in the attainment of food security and getting out of the envisaged recession. Of course, Nigeria’s current population, some might say, was more manageable in the 60s and early 70s

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Now that we are here, Nigeria needs to look at other areas to support its economy and consider the contributions of oil as a bonus to mitigate the effects of the imminent recession

but the oil revenue it enjoyed for a long period should have been used to harness its Agriculture contiguously. Today it is obvious that the only choice left to Nigeria is to restore the dignity and economic potential of Agriculture to be able to prosper sustainably. This calls for higher investment, focus and sustainable policies as well as purposeful leadership. The current administration of Muhammadu Buhari has made Agriculture its focus and should therefore double its efforts now that it is challenged by the COVID-19 pandemic. Nigeria’s large population needs large quantities of food to survive and be productive both during and after the pandemic. To effectively ensure food for all we need to upscale its production, storage, processing, as well as marketing. To do this requires uncommon investment and management of the food system. The most important consideration now is to be able to bring about food sufficiency followed by value addition to be able to attract foreign direct investment in the Agriculture space. It is prudent to appreciate that the following need to be done urgently to give the Agricultural sector the optimum push to drive the National economy: We should create a separate and well funded advisory for the attainment of food security with the

National Food Reserve Agency, Presidential Fertiliser Initiative, Cooperatives, Livestock and the Seed Council in one-stop shop. Redefine Cash Crops and manage them for efficiency and profitability under the Ministry of Trade and Investment. We should make credit readily available for Agricultural production, value addition and processing through a well recapitalized Bank of Agriculture owned by the FARMERS! We should take direct charge of Agricultural Mechanisation and heavily invest in it alongside Science and Technology to provide the impetus to locally fabricate spare parts and if possible complete units. The smallholder farmers in Nigeria should be further incentivised to produce more and be happy doing so by making them enjoy tax holidays or exemptions as being promoted by Governor Ayade of Cross River State who deserves commendation and should be modelled by other Nigerian Governors. A new leadership in the Agricultural sector in Nigeria is today absolutely necessary and must be evolved through competence, hard work and integrity as well as be directly and more closely supervised by the Presidency. Ibrahim is the National President, All Farmers Association of Nigeria (AFAN).

COVID-19 and uncertainties: Growing your business through e-commerce

ollowing the rapid outbreak of the novel coronavirus (COVID-19) across the globe, there had been concerns surrounding the business impact it presents and the alarming longterm effect the world will have to grapple with if no vaccine is discovered soon. In addition to the business impact, there are also significant economic, health and commercial impact being felt globally. Nonetheless, we have witnessed some other businesses thriving well despite the geographical limitations and constraint in physical interaction caused by the lockdown. Hence, the need to consider e-commerce as a means to grow their business, not only for a period like this, but also prospectively. E-commerce has increasingly surpassed expectation in the Sub-Saharan Africa SME industry. The United Nations Conference on Trade and Development (UNCTAD) reported that the number of online shoppers in Africa increased annually by 18 percent since 2014. The rapid Internet penetration through smartphones over the past years largely contributed to the growth of Africa’s e-commerce. Also, the International Telecommunication Union statistics revealed that the share of the population using the Internet increased from 2.1 percent in 2005 to 24.4 percent in 2018. Furthermore, Africa’s payments services architecture is evolving in response to changing customer expectations and technology, offering a range of disrup-

tive payment models enabling more people, even without a bank account, to take part in online shopping. As of April 2020, Nigeria has a population of 206.13 million people according to Worldometers Stats (unofficial), of which approximately 160 million are Internet users, placing the penetration rate at 80 percent, according to Internet Live Stats. Also, with the intention of expanding internet penetration rates in the country, Google launched “Google Station” in 2018, a service that provides free public WiFi in several locations across Nigeria. Despite all these opportunities present, e-commerce (online-retail) is still in its infancy amidst SMEs in Nigeria. According to Tempest, CEO of E-commerce Forum of Africa during a discussion with Stat Trade Times at Air Cargo Africa 2019, he highlighted several factors that are still constraining the e-commerce market from reaching its full potential in Africa and these include: low levels of Internet penetration, high cost of broadband for Internet access, lack of a national street address system, general distrust on online transaction, low bank card penetration and limited e-commerce payment options. Surprisingly, many of these factors have presented themselves as a leverage for businesses to thrive on, considering the long run benefit an online presence will generate to local businesses. Let’s take for example, a farmer who sells yam. The lockdown automatically constrains

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him from showcasing his product at the market, hence loss of sale and maybe, spoilage of the produce. However, this same person could have leverage e-commerce, display his product, get clients who are interested in buying and alas, find a way (through delivery agents) to pass the items across to the final buyer. This is simply how e-commerce works, connecting sellers to buyer irrespective of geographical limitations. In a bid to grow your business, you may need to consider the following strategies; Create admirable content. Achieving results in e-commerce requires that you deploy crowd-sourced content to make a site “sticky” for potential buyers. Amazon attracted millions of consumers by encouraging them to share their opinions of items like books and CDs. What is your strategy to help potential customers for your products or services find you via Google? Use keywords and meta tags to raise your ranking in search results. Target your existing customers: When many businesses have trouble growing, they immediately think it’s because they don’t have enough customers. Meanwhile, this is a common misconception, so don’t jump to conclusions. Instead of focusing all your effort on customer acquisition, you should improve your customer retention strategy. Use video demonstrations: There is a common saying that, seeing is believing, in fact, marketing experts across the globe say that video has the top return on investment com-

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Richard Okunola

pared to other marketing tactics. Websites that have videos can get the average user to spend 88 percent more time on their pages. Use photo reactions and testimonials: Take advantage of user reviews and testimonials as a great way to show proof your products. Get your clients or customer to send in reviews about their experience on the service you render. Take your testimonials one step further. Add a photo and include the person’s full name and title (if relevant to your product). These are ways to grow your online credibility. Offer discounts: Check Jumia and Konga websites, you would observe that about 80 percent of the products displayed are on discount. It is a strategy to attract buyer. Display the discounted price and also showcase the original price beside it. That’s a sure way to attract buyers. okunolarichard@gmail.com

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Banking and the prudential burden of a pandemic Small Business handbook

Emeka Osuji

OVID-19 has come and is going. Let no one depress you. Humanity may yet survive this particular calamity as it did the Spanish Flu and the likes of it. The world is bracing up for the challenge of going ahead to “take back their lives”. That is the way a lot of people now think it should be. As for those who conspired to unleash this evil on humanity, assuming the conspiracy theories are valid, they have surely lost the gamble. Evidently, people are determined neither to take the vaccine that became “available before a cure was found”, nor is there any evidence that the people of this world are going to leave their destiny in the hands of a few commercial interests. They are most likely going to guard it jealously, no matter how many they take from among us. Clearly, we must face the challenge, and own the responsibility of reopening our lives by going back to work in no distant time. Graciously, we have been armed with new survival skills, from all kinds of sources, in mask-design and adornment, social distancing and hand sanitising and lots more. I think it will be both economically and socially very intelligible to reopen and restore

socio-economic life; albeit in a measured fashion – constantly enforcing the safety guidelines and reopening in measured sequences. Each passing week will provide a guide to the extent of unlocking that the following week should be granted. This, of course, is assuming that the security agencies do not continues to act in ways that make them the target of accusing fingers. Having been accused of partnering with enemies of the nation to circumvent the lockdown and endanger citizens in addition to aiding those moving able-bodied men at night to certain parts of the country, they must step up their image defence by acting right. Having said that, I would like to comment on the state of the banking sector, and indeed, the financial system in general, post-COVID-19. The motivation for it comes from my enduring interest in the informal sector, which houses the Micro, Small and Medium Enterprises (MSMEs), and by implication, more than half of our population. In particular, I would like to note that given our experience with Ebola, the informal sector is most likely going to be hardest hit as it was during that crisis. We need to focus a bit more on MSMEs to help the sector to brace up for the impending hard times in the months ahead. The brunt of the impact of Ebola epidemic was borne by the poor and their micro- and small enterprises. Therefore, we must set out before dawn in our efforts to grapple with the incalculable harm that the pandemic has done to companies, jobs and supply chains across the world. One of the big amplifiers of the impact of COVID-19 is that it came when the world economy was significantly soft. The economies of many countries in the Global South (Africa, Asia and

Latin America) were already down and contracting, due especially to the fall in commodities prices. The price of oil, for instance, had taken a beating, dipping well over 50 percent on several grounds, including the market share battle between Russia and Saudi Arabia. China had also cut production and reduced its demand for fossil fuel. The Purchasing Manager’s Index (PMI) – a major indicator of confidence and optimism - had receded in many countries and dropping rapidly in others. In Nigeria, the PMI reached 37.1 percent in April, sinking from a high of 50.3 in March. Moreover, there is evidence that the world is still struggling with the aftermath of the Global Financial Crisis of 2008, as the effects remain strong in some jurisdictions. The pandemic therefore simply exacerbated an already a bad situation. The place of banking in the economy makes it one of the major victims of global catastrophes like the current pandemic. As the world recoiled from mounting deaths, several nations shut down economic and social life, and businesses took an unexpected bashing. As supply chains broke and consumer demand vaporised, cash flows dried up, leaving banks carrying the can. As if that was not enough, collateral securities backing the loans also failed from loss of value. The combined effects of vanishing cash flows and diminished collateral values was a “Double Whamming”. The result is an unusually high level of loan delinquency now in the pipeline. Truth is that the equilibrium of the global economy has been disturbed and needs to be re-established. As the Keynesians, in their battle with Classical economists contended, macroeconomic disequilibrium is not always automatically restored. The events of

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Truth is that the equilibrium of the global economy has been disturbed and needs to be reestablished. As the Keynesians, in their battle with Classical economists contended, macroeconomic disequilibrium is not always automatically restored

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

Sorry, sorry, sorry

remember a time in early childhood when I was playing with one of my brothers. I use the word “play” very loosely because I can’t quite fathom how we could have devised such a silly “game”. Or what to do call it when children foolishly throw stone projectiles at each other? “Game” is not the first word that would usually come to mind. Anyway, on this early evening, that was what we found ourselves doing. I remember so vividly watching one of those projectiles flying through the air at a speed and trajectory I was profoundly impressed with. I was tempted to burst into clapping until I realised where it was dangerously heading to. Or should I say what it was heading towards. Ah! Daddy’s car! The back windscreen to be precise. Before either of us could exclaim, the screen shattered. Like a flash, we ran inside and headed straight for bed. No dinner. No good nights. Just straight to bed. That had to be our best bet. Be fast asleep before daddy gets back from his trip out of town. Surely, he wouldn’t wake us up just to give us a caning? Or would he? At that very moment, we couldn’t think of a better plan. It wasn’t as if we had too much time to debate it anyway. The next day, we were eager to know what daddy’s initial reaction had been. Apparently, when he arrived that evening, he was surprised to hear we had gone to bed. Already? It was strange not to have the children excitedly welcome him home, having been away for a few days. Something was up. It wasn’t long before he discovered what. Little did daddy know that when he popped his head round the door of our bedroom that fateful evening, to see if we were asleep, we couldn’t have been more awake, even if our lives depended on it. And take my word for it, that night, it felt like it

did. How we eventually fell asleep that night, only God knows. The interesting thing is that contrary to our expectations, the old man’s general demeanour the next day betrayed no signs of the barely controllable rage we had expected. No sign he was struggling to suppress a “volcano” which could erupt at any moment. We couldn’t understand it. All we got was a brief talking to about the risks of hurling stones; especially at each other. As if we didn’t know that already. Still, we were extremely grateful for this most unexpected let off. We later heard that when daddy was informed of what happened that evening, instead of blowing his top, as anyone would have thought he would, his countenance suddenly took on one of sadness. The reason was soon revealed. He felt deep empathy for his children who quite uncharacteristically missed the opportunity of welcoming him back home because of fear. It was something he always looked forward to, just as we did. As far as he was concerned, coupled with the fear we had inadvertently subjected ourselves to, we had served enough punishment already. That was a lesson that stayed with me from that age of seven or so, till I became a parent myself. Especially when I compare it to my own reaction to a hurt, I suffered shortly before that. I felt bad. It can’t have been more than a week or two before that, when my younger brother, Segun, decided to find out how much pain a stick he held in his hand could inflict. And for some reason, he found me to be just the Guinea pig he was looking for. All of a sudden, “Wham”!! A sudden pain surged through my whole body. You know the type. The type of pain that intensifies with each passing second. But where did it come from? As I turned, I saw Segun scampering away shouting, “sorry, sorry,

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sorry”. I was having none of it. “Sorry” after you’ve done the deed? Lai lai. As he panicked, he made one fatal mistake. He dropped the stick as he ran for safety and that was my cue. It didn’t take me long to catch up with him and despite the cacophony of protestations and urgent pleadings on his behalf by our mum and our egbons present, I landed a perfect stroke across his body. It was masterful. And just as quickly, it was all over. He instantly burst into tears, screaming like I had never heard him do before. Did I now feel satisfied? Maybe not as much as I had thought I would. But still, he needed to be taught a lesson. Or so I thought. I like to believe I’m doing a little better on the forgiveness front now but I guess family and friends will be in a better position to confirm or refute that claim. Till this day, one of my older brothers who was present that day only needs to say, “sorry, sorry, sorry” and we both burst into hysterics as the events of that day come flooding back. Fear of an authority figure can often deter one from taking certain actions, which, don’t get me wrong, can be a good thing, many a time. But it just doesn’t compare to when you have the utmost respect for them instead. A leader or a parent should aim to be respected rather than feared. Where fear is the only motivating factor to do the right thing, there will inevitably come a day when that myth will burst and as it does, fear will automatically dissipate and almost as swiftly disappear. But a humble, compassionate and yet principled leader will continue to inspire respect in spite of his or her frailties. Or as the popular term goes, even with “warts and all”. Truth is, no reasonable person will expect you to be perfect. Think about it, the greatest heroes in life are not the infallible ones, but the ones who

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the 1930s, and the subsequent failure of the economy to self-correct, has shown that there will be some monetary and fiscal policy actions to be taken if we are to return to economic prosperity. At the moment, the Nigerian Central Bank has been taken lot of action, some of them precipitate but others largely in line with the need of economic revival. More fiscal action should be contemplated. Clearly, two key issues come out with regard to stabilisation and recovery in the banking sector: regulators and supervisors must focus on the prudential condition of financial institutions and work towards business continuity for their customers. In that regard, prudence anchored on benevolent firmness will be necessary to ride the coming waves. In other words, supervisors must be ready to show flexibility in the application of rules and regulations but must hold operators accountable, especially in the use of any financial support they may get. There is no question of whether banks will give accommodation to their customers. It is a question of how much and to whom. Regulatory forbearance will also be a fundamental part of the unfolding scenario. Therefore, supervisors and regulators may well begin to adapt to the idea of a modified body of guidelines, tax laws and prudential ratios, which the present pandemic has drawn up. Things have been made worse by social distancing. The fact that supervisors may no longer enjoy the privilege of docking operators for person-to-person interrogation is big. Welcome to off-site examination 2.0 and other aftermaths of the pandemic.

Character Matters with Daps

Dapo Akande

in spite of their past or visible shortcomings, remain undeterred and soldier on. They are the ones who have always inspired us and they are the ones who will continue to give us hope. The compassion daddy demonstrated after that incident taught me a valuable lesson. We went scot free as we were forgiven for something, we deserved severe punishment for, and yet we were never tempted to do such a thing again. A beating couldn’t have been more efficacious. Why? Because the new level of respect we developed for daddy meant the last thing we would ever want to do, would be to disappoint him. We were not simply told about this incident and neither were we just shown it. It was our very real and tangible experience; therefore, we know precisely how it made us feel. Nothing can be more poignant. Changing the nation...one child at a time. Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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COVID-19 and stock market volatility in Nigeria: Would equity derivatives have made any difference?

UCHE UWALEKE

cross the world, the coronavirus pandemic has continued to wreak havoc not only on lives but also on livelihoods. Stock markets, useful barometer for economic health, have been roiled not least because of the uncertainty associated with COVID-19. As of May 22, 2020 (the day of penning this article), major stock markets were already gasping for breath. Market-Watch reports that apart from the techheavy NASDAQ composite index which was up 3.92 percent, Year-To-Date, for understandable reasons (the crisis is setting new normal that tends to benefit the technology sector), other global stock market performance indicators were in the negative territory. These include the Dow Jones Industrial Average, an index of 30 blue-chip United States stocks, which was down by -13.88 percent and the S&P 500 index that has plummeted by -8.52 percent since the beginning of 2020. In Europe, according to Trading Economics, the UK FTSE 100 index, which tracks the performance of one hundred most capitalized companies traded on the London Stock Exchange, is down -20.65; Germany DAX 30 stock market index has tanked by -7.35, while France CAC 40 stock market Index is -15.84 percent in the red. In Asia, Japan Nikkei 225 index has plunged by -13.82 percent while China Shanghai composite market index has lost -7.75 percent of its value since January this year according to Bloomberg. In response, many stock exchanges are altering trading rules to deal with intense volatility occasioned by uncertainties associated with COVID-19. For instance, short-selling was suspended by market regulators for a period of time in Greece, Italy, Spain, France, Turkey, India and South Korea, while Thailand, South Africa and Indonesia witnessed the activation of circuit-breaker rules. Indeed, COVID-19 is having an unprecedented adverse impact on global stock markets and Nigeria is no exception. As of May 22, the YTD of the Nigerian Stock Exchange All Share Index was -6.10 percent down from 7.46 percent on 31 Jan 2020. What is more worrisome is the attendant volatility due to growing uncertainty regarding the duration of the pandemic and the scale of its devastation on the economy. The intensity of the volatility can be seen from the V-shaped nature of the Nigerian Stock Exchange weekly stock market returns between the 27th February when the index case was announced in Nigeria and 22nd May 2020. While the second week of

March which ended on the 13th witnessed the deepest plunge of -13.49 percent the second week of April that closed on the 17th recorded the highest weekly returns of 7.19 percent. As always, the elevated volatility in the Nigerian stock market is a major disincentive for institutional investors, such as pension funds and mutual funds that are relatively less active in the equities market with asset allocation concentrated in government bonds and Treasury bills generally considered less volatile. Empirical studies confirm that equity derivative is crucial in tackling market volatility and deepening the stock market. As a matter of fact, while COVID-19 is taking a toll on developed and emerging markets, its impact on countries like South Korea and China is limited by the presence of robust equity derivative markets that are helping investors mitigate losses. In Nigeria, trading in equity derivatives is still on the drawing Board. Would it have made any difference in the stock market performance if it were in place? To be sure, a derivative is a contract that derives its value from the performance of an underlying asset, such as equities, bonds, currency and commodities. Exchange-traded derivatives are derivatives with standardised contracts such as futures and options, while OTC derivatives are products other than exchange-traded ones, such as forwards and swaps. Indeed, like other family of derivatives, equity derivatives can offer certain important benefits including risk reduction, liquidity enhancement of the underlying asset, aiding price discovery and facilitating portfolio management as a cocktail of products fosters

investment diversification. According to The Futures Industry Association (FIA), since the beginning of this year, ‘global derivatives markets have absorbed increasingly large waves of trading volume and volatility. Panic about the economic impact of the coronavirus outbreak and a huge drop in oil prices have sparked extreme market volatility, encouraging investors to find ways of hedging risk with products such as stock index futures and equity options’. In China for example, the importance of equity derivatives as a hedging tool has been growing in the wake of COVID-19. In recognition of the vital role of equity derivatives in mitigating investors’ losses, the China Securities Regulatory Commission broadened the derivatives market by approving the launch of five commodities options and three financial options in a bid to attract more global investors to China with an eye on Hedge funds. And the move is paying off. According to Reuters, ‘’Trading in China’s equity derivatives has hit a five-year high with some products seeing record volume in a sudden comeback for a market considered essential in other major economies. Trading in stock index futures has hit its highest since the end of 2015 with nearly $70 billion worth of contracts changing hands each day while stock option trading has set records with the number of open contracts exceeding 5 million on the Shanghai Stock Exchange’’. So, it goes without saying that in China, equity derivatives has helped to mitigate stock market volatility in a country that first came under the attack of the dreaded SARS-COV2. This is evi-

Uche Uwaleke is a Professor of Capital Market and the Head of Banking & Finance department at the Nasarawa State University Keffi

Motherhood and the society

n the just concluded Mother’s Day celebration, it was all glitz and glamour as usual. Mothers receiving all the love and appreciation from their loved ones. It is no doubt that women are being celebrated differently in every part of the world. While some traditions demand a festival with women dressed a certain way, others will enjoy a stay home to give mothers a treat. However, history tells us mother’s day began in the early 1900s as a way to honor the sacrifices mothers made for their children, another precursor to Mother’s day came from the abolitionist and suffragette Julia Ward Howe, who in 1870 wrote the “Mother’s day Proclamation” a call to action that asked mothers to unite in promoting world peace. Statistics tell us that more phone calls are made on Mother’s Day

dent in the relatively flat shape of the Shanghai composite weekly returns when compared to the V-shaped weekly returns on the Nigerian Stock Exchange between February 28 and May 22 2020. By the same token, the use of equity derivatives in South Korea has assisted firms and financial institutions to hedge the risk of losses from volatility of stock prices due to COVID-19. Statista reports that as of May 22, 2020, South Korea had confirmed 11,142 cases of infection including 264 deaths after the first case of coronavirus in the country on January 20, 2020. According to the Futures Industry Association, listed futures and options contracts tied to the KRX KOSPI 200, which is the South Korea Exchange’s main benchmark stock index, have remained the world’s most-traded derivatives contracts. Several positive factors are contributing to the growth of the derivatives market in Korea according to the country’s Financial Supervisory Service. These include information sharing between the spot and derivatives market and the ability of regulators to take swift and reliable emergency measures to cope with sudden market fluctuations employing market stabilisation schemes, such as circuit breakers, trading halts and daily price fluctuation limits. For instance, On March 12, 2020, The Korea Exchange activated a “sidecar trading curb,” temporarily halting the trading of shares, for five minutes, after KOSPI 200 index futures fluctuated 5 percent from the previous close. This is in addition to strong governing laws and regulations in respect of market price manipulation which cover entry regulations, prudential regulations, investor protection and market surveillance. On investor protection for instance, there is a regulation that provides that ordinary/retail investors, in addition to minimum margin requirements, are also required to comply with education and mock trading requirements. All said, while the full impact of COVID-19 on stock markets may not be known, what seems not in doubt is that equity derivatives have been useful as hedging tools in mitigating investors’ losses from market volatility. It is against this backdrop that the progress made by the Securities and Exchange Commission and the Nigerian Stock Exchange in the area of increasing the menu of available asset classes for investors in the Nigerian capital market via equity derivatives deserves commendation. It bears repeating that the expansion of offerings in the Nigerian stock market will improve risk management tools and enhance the allure of the market for meeting hedging needs especially to global investors who, not a few believe, are still underweighted on Nigerian stocks. Without a doubt, in an era of volatile stock markets occasioned by COVID-19 pandemic, options and futures can provide investors more strategies. Hence, equity derivatives would surely have made a positive difference in the Nigerian Stock market.

than any other day in the year. This goes a long way to show the appreciation and vital roles of mothers in the society and world at large. A lot of people attribute their success and achievement to their parents, especially mothers, simply put, “I would never have made it this far without her.” In this light, I will tell a short story of a young mother with two sons that we encountered recently, whom after the demise of the husband, had to raise them all by herself. To do this, she encountered so many challenges, worked several jobs and literally gave all of herself to that course. Today, she is proud mother of a renowned Artist and an Engineer. Her tenacity was to give her all to her children towards a better life than she had paid off eventually. Little wonder she is fulfilled today.

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Generally, mothers and motherhood are very important to nation and societal development, considering the position of a mother in a family. They are the ones that nurtures, cares, empathises and ensures development of the children to become responsible individuals in the society. In Nigeria today, we see a subtle display of jealousy from men saying “every Sunday has officially become a mothering Sunday” communicated via banters and skits. Regardless of these sayings of men, we are more concerned with what affects the lives of women and reaching to help them achieve even more by supporting them in every way we can. Pre-historic women accomplished great feats, defeated giants they were faced with, and were a force to reckon with. Hence, the need

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Naomi Momodu to continue to support the women, because the support and empowerment of the woman is enablement for the family and the society at large. At WODDI, we believe women have a lot of role to play in societal development, and we have been supporting them for over 15 years. WODDI has provided 205 (2-bedroom) fully furnished bungalows to indigent widows and empowered 2,750 women and girl child in skill acquisition empowerment initiatives across 3 states in Nigeria and still doing more. Naomi Momodu & Deborah Nuhu contributed this piece from WODDI office in Abuja.

Wednesday 27 May 2020

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Editorial Publisher/Editor-in-chief

Frank Aigbogun

Nigerian scientists’ COVID-19 advances promising for Africa Locally produced reagents fixes shortage, increases tests

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

Bashir Ibrahim Hassan

igeria, often derided as the big for nothing giant of Africa has made two major scientific breakthroughs since the outbreak of the novel coronavirus. Though both feats are firsts in Africa, they are important for two reasons: tracking the infectious disease and massively scaling the number of tests conducted on the continent which has been difficult because of the scarcity of test kits. In three days, Nigerian epidemiologists and virologists from agencies within federal and Lagos state ministries of health and Redeemers University were the first to decode the genome of SARS-CoV-2, the virus which causes COVID-19, in Africa. Last week, these public health scientists together with immunologists successfully completed the first phase of a process known as viral Ribonucleic Acid (RNA) extraction. Armed with the genetic code of a virus scientists can track the speed of its spread in real

time, detect changes (mutations) and more importantly its origin i.e. whether it is being transmitted locally or was imported. Information about where a virus came from, where and how its spreading is, however, as useful as the capacity to test those likely infected with it. Which is why the second breakthrough is important. One month ago, Chikwe Ihekweazu, the dauntless head of the Nigeria Centre for Disease Control (NCDC) tweeted an urgent appeal for RNA extraction kits. Last week, scientists at NCDC, Nigeria Institute of Medical Research, the National Biotechnology Development Agency and the National Veterinary Research, Ethiopia and from the University of Sheffield, UK inched close to producing test kits for Nigeria and Africa. Reagents, an essential chemical for extracting, amplifying and detecting the coronavirus, have been in short supply since the pandemic; there is a high demand globally. Every country in the world wants it but there isn’t enough. Few companies in the world make the

recommended reagent specified by the World Health Organisation, hence the supply shortage. China, the largest supplier of reagents in the world, does not have enough to conduct the millions of tests it plans to curtail the contagion. Rather than rely on a single supplier, Japan, for example, directed its laboratories to look for other reagent makers. South Korea which initially had enough reagents to conduct large scale tests is struggling to meet local demand. Until a cure or vaccine is discovered, testing, testing, testing is the only way to keep the virus in check. The NCDC is confident that the quantity and quality of RNA extracted is comparable with the imported versions. Finding a solution to the shortage reagents takes away a major distraction. With the massive production of test kits in Nigeria and Africa public health professionals can focus on rolling out more laboratories and scaling the number tests conducted daily. With these two achievements science in Nigeria has made significant strides – the result of dogged work despite stubborn challenges.

Challenges that may constrain local production of reagents. These include scare foreign exchange to import other inputs, say equipment or vials, necessary for making the chemicals and storing the virus; logistics bottlenecks at the ports; unstable electricity supply to power the factories as well as the lack of skilled manpower to oversee the process. These usual suspects can’t be ignored nor can they be wished away. They are being mentioned not to discourage investors or give reasons why these scientific achievements won’t succeed. Investors in biotechnology and Nigerian drug companies will no doubt seize the opportunities these advances signal. But it has taken the coronavirus pandemic for these potentials to come to light, we can’t wait for another outbreak to discover what else Nigerian scientists can do. Fixing the stubborn challenges coupled with more investment in research and development could see Nigeria emerge as a hub for genomic research and drug making on the continent.

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

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Galloping exchange rate pushes major oil marketers to the brink HARRISON EDEH, Abuja

igeria’s galloping exchange rate concern is already eliciting worry among major oil marketers in the country, as they express fear they might not compete optimally in the market, which has the Nigerian National Petroleum Corporation (NNPC), unless a full deregulation of the downstream is effected. The Federal Government says it has deregulated petroleum downstream sector since March to allow oil marketers resume importation and sale of petrol. However, marketers have expressed fears that concerns of galloping foreign exchange rate and access still remain a major concern for them. The forex concern is further worsened by the lingering delays in the discussion between the Petroleum Product Pricing Regulatory Agency and the Central Bank of Nigeria, which is expected to create a forex window for major oil marketers with several of their members licenced for fuel importation.

Analysts also note that NNPC’s persistent role on importation could still see it go back to subsidy payment despite dwindling resources should there be upsurge in the global oil price with lack of effective competition in the sector, which could have been effected with full deregulation of the downstream sector. “There are two major dilemmas we are facing now: the rate at which you find the dollars to buy and finding the dollar at all. When you eventually find it, how much is it? The challenge is where to get the dollar and at what rate?” Adetunji Oyebanji, chairman, Major Oil Marketers Association of Nigeria, told BusinessDay. According to Adetunji, “Even though we can import today as may have procured licence, if there is no dollar, you notice the NNPC would still be the one to import. This is not healthy for the market as it does not make it attractive for investors to play fully into the market.” Speaking further on the impact to the market, he said, “It means that we have to refine our

crudes more locally and make the market attractive for investors to embrace the market. But there is a caveat: if there is no full deregulation of the downstream, the investors may not come.” Analysts insist that without a proper template that shows the landing costs and FX rate for the importers, the Federal Government may create more chaos in the market problem with a galloping exchange rate. “The lead questions for the go, is what is the landing cost for petrol, kerosene, if truly deregulate. The deregulation should ensure marketers get their forex from the market. Is it N360 per dollar in the template or N425,” Henry Ademola Adigun, an oil sector governance expert, told BusinessDay. Some sector analysts believe these problems could be solved if the government and the private sector show capacity in refining petroleum products locally. However, the concerns of local refinery leave sour taste in the mouth with Nigerian refineries persistent loss posting.

Improved travel time expected as design for Agege-Berger road ready Q4 JOSHUA BASSEY

esign for the proposed expansion of the AgegeBerger road would be ready by the fourth quarter of this year, the Lagos State government said on Tuesday. The proposed expansion is targeted at freeing the heavily congested part of the Lagos metropolis of its perennial traffic jams, improve travel time, raise standard of living and create conducive environment for business within that axis. Special adviser to the government on works and infrastructure, Aramide Adeyoye, dropped the hint while speaking during a virtual conversation, ‘CovInspiration,’ organised by the special representative of the United Nations (UN) and British Council Global Change maker, Dayo Israel, in connection with the first anniversary of the Governor Babajide Sanwo-Olu’s administration.

Sanwo-Olu, who took oath of office on May 29, 2019, will turn one year in office on May 29, 2020. Residents had long clamoured for the improvement of the Agege-Berger road which links several parts the inner Agege to the Berger axis towards the Lagos-Ibadan expressway. According to Adeyoye, the desire of the government is to see motorists and commuters enjoy a significant reduction in travel time, adding that new projects would also be introduced while not abandoning those inherited from the previous administrations. She noted that one of the major projects inherited by the administration and would be completed was the Agege PenCinema flyover bridge, which was designed to reduce travel time for residents of Ifako-Ijaiye, Agege and Alimosho local government areas. She said: “We realised that

after completing the bridge, there is a gap that would be created and that is why we have decided that the Agege-Berger road should be expanded to reduce traffic within the axis.” Adeyoye noted that one of the major facilities to accompany the road expansion would be the provision of a dedicated Bus Rapid Transit (BRT) lane to move hundreds of Lagos residents possibly coming from other states that might have alighted at Berger bus stop to link their community with ease “This will afford the people the opportunity to connect Agege and Abule-Egba from Berger axis of the state. That is what we have slated for next year. We have started working on the design as I speak and I am sure that by the end of the fourth quarter, we will be done with all the designs and cost of the road ahead of next year’s budget,” Adeyoye said.

NESCAFÉ powers youth entrepreneurial training by NECA

ESCAFÉ, a coffee brand in Nigeria, is collaborating with the Nigeria Employers’ Consultative Association (NECA) and Redwood Consulting Limited to offer entrepreneurship courses to youths for free under the NECApreneur platform. In line with Nestlé’s commitment to build thriving communities by equipping youths to be future ready; the NESCAFÉ brand has a long history of supporting credible initiatives targeted at developing young Nigerians. Speaking on the collaboration, Mr. Olugbenga Alabi, Category Manager – Coffee, at Nestle Nigeria said, “We are glad to be part of this laudable NECAPreneur initiative which ties in with NESCAFÉ’s ‘START STRONG, FINISH STRONG’ campaign. I urge every young entrepreneur or aspiring entrepreneur to take advantage of this free

opportunity to prepare themselves for the times ahead.” As a way to give back to the society, the brand decided to support and contribute to the economic and capacity development of Nigerians, especially the youths, by supporting the FREE access to NECA’s entrepreneurship online education. Speaking on the initiative, Timothy Olawale, DG, NECA, said, “In view of the need to re-energise the economy post COVID-19 shutdowns, we want to provide an opportunity for everyone who wants to venture into enterprise to get the right information and training required to succeed. We have also made the NECAPreneurcourses free in order to reach as many Nigerians as possible at this critical time.” Launched as part of the organization’s mission to influence economic and socio-labour policies in order to create a fawww.businessday.ng

vourable business environment, NECAPreneuris an e-solution targeted at providing an easy-toaccess opportunity for the teeming public to upscale their entrepreneurial skills and ultimately add to national development. The online courses are suitable for different stages of the entrepreneurial journey. Topics include - How Anyone Can Start a Business; Market Knowledge; Logistics & Operations and many more, making the training highly relevant for all entrepreneurs. The courses are easy to access for free, at https://necapreneur. ng/until the end of June 2020. With a current membership of over 3,500 members, NECA is a Business Membership Organisation (BMO) that provides a platform for private sector employers to interact with other stakeholders to promote a harmonious business environment resulting in productivity and prosperity for everyone’s benefit. https://www.facebook.com/businessdayng

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Soaring debt risks fuelling pressures on eurozone, ECB warns Governments forecast to run 8% budget deficits as they tackle coronavirus hit to economy MARTIN ARNOLD

oaring government debt levels threaten to make investors reassess European sovereign risk and could “reignite pressures” on more vulnerable countries in the region, the European Central Bank has warned. Eurozone governments’ budget deficits will rise to 8 per cent of gross domestic product on average this year, far above the levels reached after the 2008 financial crisis, the central bank forecast in its annual financial stability review, published on Tuesday. Aggregate government debt is set to rise from 86 per cent of GDP to above 100 per cent across the 19-country bloc as member states seek to tackle the economic impact of the coronavirus crisis, the ECB said. “The pandemic represents a medium-term challenge to the sustainability of public finances,” the financial stability review warned. Public debt is set to approach 200 per cent of GDP in Greece and 160 per cent in Italy, and will hit 130 per cent in Portugal and just below 120 per cent in France and Spain, the ECB said, adding: “The associated increase in public debt levels could also trigger a reassessment of sovereign risk by market participants and reignite pressures on more vulnerable sovereigns.” Italy must refinance more than 15 per cent of its debt in the next year, while that figure is more than 10 per cent for France, Spain, Belgium, Finland and Portugal, the ECB said, calling some countries’ repayments in the coming two years

The ECB has forecast that the eurozone will this year suffer its deepest postwar recession © AFP via Getty Images

“substantial”. A decade ago, fashionable economic thinking suggested that beyond 90 per cent of GDP, government debt levels became unsustainable. Although most economists do not now believe there is such a clear limit, many still think that allowing public debt to build up ever higher would threaten to undermine private-sector spending, creating a drag on growth. Debt levels are rising across the world as countries turn to the capital markets to finance public-sector responses to the economic impact of coronavirus. The OECD club of rich countries forecasts that its members will take on at least $17tn of extra public debt as a result of the crisis, increasing average financial liabili-

ties from 109 to 137 per cent of GDP. The ECB, which is due to update its economic forecasts and review its monetary policy next week, has predicted that the eurozone will suffer its deepest postwar recession this year, with GDP set to contract by between 5 and 12 per cent. It warned on Tuesday that a more severe downturn than expected risked putting public finances “on an unsustainable path in already highly indebted countries”, if combined with higher government borrowing costs and borrowers’ defaults resulted in loan guarantees being called in by lenders. Eurozone governments are set to issue an expected €1.2tn of extra debt this year, although the ECB has positioned itself to soak up a

large proportion of that through the €750bn bond-buying plan it launched in March. Last week’s Franco-German proposal to create a €500bn European recovery fund could provide grants to support countries hit hardest by the pandemic, offering additional financial help. The ECB said on Tuesday that although countries’ “large fiscal policy response” helps to mitigate the economic cost of the coronavirus crisis and “provid[es] a first line of defence against fiscal debt sustainability concerns”, a more severe and protracted economic downturn “could give rise to debt sustainability risks in the medium term”. The pandemic risked adding further stress to the eurozone’s existing

financial vulnerabilities, it added, citing “overvalued asset prices, low bank profitability, high sovereign indebtedness and increased liquidity and credit risks in the non-bank sector”. Raising the alarm about the so-called doom loop between governments and banks that hold high levels of their domestic public debt, the ECB said this created “risks of negative feedback loops arising from sovereign or bank rating downgrades”. “Such a development could reactivate the negative feedback loops of the sovereign-bank nexus, especially for Italy and Portugal, as well as for Spain, where bank ratings are closest to non-investment grade,” it said.

Macy’s pledges stores as collateral in $1.1bn bond deal Latest sign that companies are turning to assets to raise much-needed cash ALISTAIR GRAY AND JOE RENNISON

acy’s is turning to its real estate portfolio to raise cash in the coronavirus crisis, pledging several of its department stores and other properties as collateral in a $1.1bn bond deal. Stores in downtown Brooklyn, San Francisco’s Union Square and near Millennium Park in Chicago, as well 35 stores in some shopping malls and 10 distribution centres, are being put up as guarantees as the retailer taps capital markets for cash. In a filing with the US Securities and Exchange Commission, Macy’s estimated the properties in question had a value of $2.2bn — more than its market capitalisation of $1.6bn. The bond deal is the latest example of companies pledging their assets to help raise cash to outlast the downturn. Aircraft, cruise ships and even a Caribbean island have been put up in secured debt deals by other companies in

Macy’s intends to use the proceeds of the bond deal to help repay a $1.5bn credit facility drawn down in March © AFP/Getty Images

an attempt to persuade investors to lend them money. Department stores have been particularly hard hit by the pandemic and the chains JCPenney and Neiman Marcus have both filed for bankruptcy this month. Macy’s, which owns Bloomingwww.businessday.ng

dale’s as well as its eponymous stores, forecast last week that it would post a $1bn quarterly operating loss. The company’s flagship store on New York’s Herald Square is not included in the debt deal. In pledging some of its real estate

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as collateral, Macy’s will be able to borrow at a lower interest rate than it would in an unsecured bond offering. The company is set to pay interest of more than 8 per cent on the five-year debt, according to people familiar with the pricing, but such @Businessdayng

a rate would be a significant saving for Macy’s, whose existing debt largely trades with a yield of more than 10 per cent. Macy’s said it intended to use the proceeds to help repay a $1.5bn credit facility drawn down in March, when the company turned to its banks for emergency financing. Macy’s balance sheet has been stronger than its more distressed rivals but the crisis is taking its toll on the company, whose total debt has swelled from $4.7bn to an estimated $5.7bn over the past year. “The global crisis resulting from the Covid-19 pandemic has had and continues to have a substantial impact on the company’s business,” Macy’s noted in a regulatory filing for the bond deal. Jeff Gennette, chief executive of Macy’s, said last week that he expected business to recover only “gradually” as its stores begin to reopen. All its approximately 775 stores were closed in March. Terms of the bond sale were expected to be finalised on Wednesday.

Wednesday 27 May 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Global stocks push higher on easing virus nerves

Loosening of restrictions helps investors shrug off US-China tensions as NYSE gets back to work HUDSON LOCKETT AND HARRY DEMPSEY

lobal stocks climbed on Tuesday, building on a rally that has been defying pessimists for two months. The US S&P 500 rose above 3,000 for the first time since March, adding as much as 2.1 per cent in morning trading, as the easing of coronavirus lockdown measures across the world gave cautious grounds for optimism that the worst of the economic impact may have passed. A switch into riskier assets was evident in Europe, where travel and leisure stocks led the gains after Germany and Spain moved to lift their travel restrictions. Asian markets also climbed, with speculation of new stimulus measures from China lifting the CSI 300 index of Shanghai- and Shenzhenlisted stocks by 1.1 per cent. “The recession has likely ended,” said Exane BNP Paribas strategists in a research note. “Lockdowns are being gradually reversed across most countries. And high frequency measures of activity suggest that economic growth has bottomed.” Investors are taking the view that reopening is almost equivalent to rebounding. Not so fast Max Kettner, HSBC strategist Global markets were hit hard when coronavirus lockdowns started in late February and early March, but a wave of support from central banks and governments kindled a rally from March 23. The S&P 500

A trader gives a thumbs-up as he arrives at the New York Stock Exchange as the trading floor opens up for the first time since late March © Mark Lennihan/AP

is up by 30 per cent in that time, while Germany’s Dax has reached its highest level since March 6, up by 40 per cent from its lows. Fiscal stimulus “eventually flows back to corporate profits”, Exane said. “What also supports a sharper than usual recovery in earnings is that financial conditions have never been this easy during any of the recent recessions.” Positive market sentiment comes as the daily death rate in the US from Covid-19 hovers at its lowest level in about two months, following declines in death rates in many other countries. Ian Tomb, an analyst at Goldman Sachs, said it was encouraging that countries that were early to

lift their lockdowns such as New Zealand had not seen a resurgence in cases so far. “With coronavirus concerns moderating, limited evidence so far that opening up has triggered fresh medical concerns, and the potential negative effects of lockdowns continuing to accrue, markets have tentatively started to take a more positive view of reopening,” he said. Investors are showing a greater willingness to move away from haven asset classes and into riskier territory, denting the US dollar in the process. The dollar weakened against most of its peers on Tuesday, with the Australian dollar gaining 1.4 per cent to its strongest point since March 6.

“The [US] dollar has become such a bellwether for risk sentiment in this crisis and with even the [Hong Kong stock market] bouncing, long positions in the dollar have capitulated,” said Kit Juckes, a macro strategist at Société Générale. However, some economists warn that lower consumption in the US and a slowing recovery in China give reason to doubt that rallies in riskier assets can be sustained. “It seems that investors are taking the view that reopening is almost equivalent to rebounding. Not so fast,” said Max Kettner, strategist at HSBC. “That leaves us with the possibility of markets continuing

to trade in a rather volatile sideways range.” Boris Johnson, the UK prime minister, indicated on Monday that the country’s economy will open further — if the spread of the virus is contained — with all non-essential retailers able to trade on June 15. That helped sterling strengthen against the US dollar, rising more than 1 per cent to $1.2311 — its highest level in almost two weeks. Economic activity in the UK for the week starting May 11 returned to almost 80 per cent of normality, driven by higher retail sales both online and offline, according to analysts at Barclays. Frankfurt’s Xetra Dax pushed 0.8 per cent higher after a slight recovery in the GfK German consumer confidence indicator for June and signs of recovering business confidence in data released on Monday. The continent-wide Stoxx Europe 600 gained 0.9 per cent. Travel companies led gains in Europe with Tui, easyJet, InterContinental Hotels Group and British Airways owner IAG all jumping more than 10 per cent. Germany will vote this week on whether to relax travel restrictions by mid June while Spain said on Saturday it would be open for foreign holidaymakers from July. Japan’s Topix index added 2.2 per cent after Asia’s second-largest economy lifted a nationwide state of emergency aimed at curbing the spread of Covid-19. Last week’s oil rally continued, with Brent crude, the international benchmark, up 1.8 per cent at about $36 a barrel. West Texas Intermediate, the US marker, climbed 2.7 per cent to just above $34 a barrel.

Market ‘distress’ over virus sparked emergency Wall St measures Banks needed two weekend meetings to clear backlogs of failed trades LAURA NOONAN AND PHILIP STAFFORD

ore than 270 of Wall Street’s key trading staff were summoned for emergency weekend duty to clear a massive backlog of failed trades in March and April, highlighting the stress that built up in the financial system when the coronavirus crisis tore into markets. The clean-up took place on March 28 and April 25, co-ordinated by Sifma, a US trade body that represents Wall Street brokers, banks and asset managers, using protocols that had never been tested out of a training environment before. More than 50 institutions were involved. The pile-up of paperwork was created by frenzied trading while banks dealt with several multiples of their typical daily trading volumes in some asset classes and investors rapidly retooled portfolios to take account of the pandemic’s economic fallout. “There were times when you could see the indicators of distress,” said a senior executive at a top US

Many traders were working from home, often with poorer communication tools and technology, leading to a logjam of paperwork for deals © FT Montage, AFP, Getty Images

investment bank, adding that his bank was left hanging when “other banks could not deliver” on trades they had committed to. Stock markets in New York were repeatedly halted in an effort to calm outsized declines in March that kicked in when leading economies were locked down to control the virus and the threat of a global recession first emerged. The dollar rocketed and bond markets showed signs of malfunctioning while stocks dropped www.businessday.ng

heavily. At the direst point, even an emergency Sunday-night interest rate cut from the US Federal Reserve was insufficient to restore confidence. At the time, Bank of England governor Andrew Bailey said market conditions were “bordering on disorderly”. The situation put pressure on banks’ already-stretched liquidity, a senior executive at another large bank said, as resources were tied up in failed trades at a time when corporate clients were also drawing

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down record amounts of funding from revolving credit facilities. The largest banks had access to central bank facilities — which were also extended to non bank primary broker dealers in the US — but smaller broker dealers were more exposed. Had the backlog not been cleared, banks would have been left with risks they had not accounted for, making it even harder for them to complete clients’ trade instructions and potentially worsening already chaotic trading conditions. Large market moves were just one side of the problem for banks and investors. Complicating matters further, many traders were working from disaster recovery sites or from home, often with poorer communication tools and technology. Taken together, that led to a logjam of paperwork for deals. “We were hearing from members about a substantial amount of backlog of trades. It was driven by the excess of trading volumes. At the peak there was three times the daily volume,” said Tom Price, managing director of technology and operations at Sifma. Sifma used the blueprint of an exercise for Wall Street to cope @Businessdayng

with potential flu pandemic that it had co-ordinated in late 2007. The online sessions in March and April marked the first time the operation had been conducted outside of a training exercise. Over several hours, operational staff agreed on what each bank owed to each other, negotiating privately on payments and trade cancellations. The senior executive at the first US bank said the system coped “pretty well” given the high levels of activity and volatility. A senior operations executive at one of the largest US banks said the financial system had not been “close to collapse”. The “big housekeeping exercise” was “pretty successful”, he added. While these emergency exercises were targeted at the US, Europe also experienced problems. The number of trades in the EU that failed to settle in March rose sharply, according to data from Esma, the markets regulator. Failures in equities and government bonds doubled to 12 per cent and 6 per cent respectively, caused by operational rather than liquidity issues, the watchdog said. Most failures were resolved within a couple of days, it added.

Wednesday 27 May 2020

BUSINESS DAY

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Wednesday 27 May 2020

BUSINESS DAY

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Tomato prices rise on Tuta Absoluta outbreak, coronavirus supply chain disruption Josephine Okojie

rices of fresh tomatoes in the country have increased by 100 percent owing to the recent outbreak of Tuta Absoluta in some farmlands in Kaduna, Kano, and Katsina states, BusinessDay findings show. The disruption in the food supply chain since the outbreak of the novel coronavirus has also caused prices of fresh tomatoes to make rapid climbs in recent weeks. BusinessDay survey of Mile 12 market revealed that a big basket of tomato now sells for N13, 000 as against N6,500 sold two weeks ago, indicating a 100 percent price increase. While the price of a small basket of tomatoes sold between N2, 500 and N3,500 two weeks ago is now selling between N7,000 and N8,500. “We have received reports from our farmers in Kaduna, Kastina and Kano about the

outbreak of Tuta Absoluta in some farmlands,” said Abdullahi Ringim, national president, Tomato Growers, and Processors Association in a telephone. “ The situation of the outbreak is not that serious,” Ringim said. He added that the continuous disruption on

Nigeria’s agric sector growth slows to 2.2% in Q1 2020

he Nigeria agricultural sector has seen its 2020 firstquarter growth rate slowed to 2.2%, an indication that the coronavirus pandemic has affected activities in the sector, data from the country’s GDP report states. On a year-on-year basis, growth in the sector declined by 0.97 percentage points from 3.17 percent in the first quarter of 2019 to 2.2 percent in the same quarter in 2020. On a quarter-on-quarter basis, the sector also declined by 0.11percentage points from 2.31percent in the preceding quarter in the fourth quarter of 2019 to 2.2 in the first quarter of 2020. T h e s e c t o r ’s ov e r a l l contribution to the country’s GDP in real terms for the period stood at 21.9percent in the first quarter of 2020, slightly higher than its contribution of 21.8percent in the first quarter of 2019. Quarterly, it declined from 26.09percent recorded in the fourth quarter of 2019. The agr ic sector has

Lagos,” he said. Similarly, he stated that the country has just entered the raining season which the crop does not do well, as tomatoes do not require plenty of water to grow well. Prices of major staple foods and vegetables have surged across the country, making it more difficult

above 48 hours – prompting far mers to nickname it Tomato Ebola. It can breed between 10-12 generations in a year with the female capable of laying between 250 – 300 eggs within its lifetime. The National Horticultural Research Institute (NIHORT) says it is not aware of any outbreak of Tuta Absoluta in the country, adding that it has already trained farmers across the country on the use of a technology developed by the institute. “We have a technology that tomato farmers are already using to control the pest. It involves using traps to prevent the pest from multiplying,” said Victor Chikaleke, plant breeder, NIHORT. “The technology has been very effective in curbing the pest,” he said. He urged farmers to adopt the technology by placing a bowl of water with a drop of insecticides and lamps on their farmlands in the night hours to help prevent a severe outbreak of the pest.

‘Re-introduce commodity board system to revive Nigeria’s agriculture post-COVID-19’

…as coronavirus disrupt food supply systems Josephine Okojie

the food supply chain across borders within states has also affected negatively prices of the fresh produce. “It takes a day or two to transport tomatoes from Kano or Kaduna to Lagos, but since the numerous checks at the interstate borders across the country it now takes three to four days to arrive at

for poor Nigerians as the government also fails to provide social safety net to protect them from the economic fallout of the pandemic. The country’s inflation for April accelerated to 12.34percent, its highest in two years. Nigeria is the 13th largest producer of tomato in the world and the second after Egypt in Africa, yet the country is still unable to meet local demand because about 50 percent of tomato produce is wasted due to lack storage facility, poor handling practice, and poor t ra n sp o r t at i o n n e t w o rk across the country. Nigeria’s post-harvest losses have further increased owing to the current disruption in the food supply chains, as it takes longer periods to get the foodsespecially fresh produces to the market where they are needed. Tuta Absoluta, has a reputation for swiftly ravaging tomato cultivation in a little

been largely affected by the disruptions in the food supply systems as Nigeria introduces lockdown and restriction of movement measures to contain the spread of the novel coronavirus in the country. Key stakeholders across the agricultural value chains have been badly affected from crop production to livestock, and fish. Farmers have recorded high volumes of post-harvest losses as trucks conveying agric produce from farms to the markets are being delayed at numerous checkpoints a s w e l l a s e x t o r t e d by security operatives at these checkpoints. “There is currently low demand for eggs and birds due to the lockdown and restriction of movement policy across the country,” said Ezekiel Ibrahim, national president, Poultry Association of Nigeria (PAN) in a telephone response to questions. “The lockdown has affected businesses such as hotels, restaurants, and eateries that are major buyers of eggs and birds to shut-down or operate skeletal services,” Ibrahim said. www.businessday.ng

Osifo Agharese, Associate Professor of Agricultural Economics, Ambrose Ali University (AAU), Ekpoma, Edo State. He is also a consultant-agricultural finance and marketing practitioner to Bank of Agriculture and Central Bank of Nigeria. In this interview with Churchill Okoro, call for the reintroduction of commodity boards system to revive Nigeria’s agriculture post COVID-19. Will the continuous obstruction in the food supply chain impact agric productivity? he immediate effect of COVID-19 on the agricultural sector in Nigeria is a significant reduction in the food supply chain system across arable crops and the livestock enterprises. As a practitioner i n c ro p s a n d l i v e s t o c k production, I can see the resemblance of the realisation of the Robert Malthus theory of population growth in geometric progression while foods production is at arithmetic progression. There is a palpable fear that the pandemic has dealt a devastating impact on the agricultural sector of the Nigerian Economy. Amid drop in oil demand and dwindling prices, do you think the government can take advantage of this opportunity to diversify the economy through agriculture? Nigeria is a mono-product economy relying on crude oil

Osifo Agharese

to fund its annual budgets. With the drop in oil prices, the time is right to diversify to agriculture. Our country has a comparative advantage in the production of several crops and livestock. We are the largest producer of Yam and Cassava in the world. The country has a favourable climate and adequate manpower to excel in the export of various agricultural products. There was a time when Nigeria was a leading exporter of oil palm, cocoa, groundnut, rubber, coffee, castor, animal hides and skins

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to other countries in the world. How can Nigeria revive its agricultural sector? We can regain the lost glory by recognising the fact that agriculture is a business not just a way of life. The Federal Government should revisit the commodity board system. The commodity board was established by the government to encourage the development of cash crops such as rubber with headquarters in Benin City, cocoa with headquarters in Ibadan, groundnut with headquarters in Kano. The boards were able to guarantee minimum pr ice for the commodities. The result was that the farmers were encouraged to produce high quality farm produce which met international quality specifications. Also, the boards went into agro-industrial processing thereby adding value to the commodity. For example, the rubber boots were produced from the latex which the farmers tapped out of the rubber trees and later processed into lumps, crepes and subsequently rubber @Businessdayng

products such as rain boots and elastic band. Eventually when government scrapped the boards, agricultural processing started moving in reverse order just like the conversion of warehouses to worship places. The board system is an avenue for Nigeria to earn more foreign exchange as it was in those days and there was actually no reason for scrapping it. Reintroducing these boards will help to revive the agricultural sector; it will make Nigerians to consume what they produce rather than consuming imported items because these boards will ensure standard quality. In addition, there will be excess for export. The commodity boards I am suggesting will be a hybrid between government, commercial sector, farmers a n d s t a k e h o l d e r s. T h e presidential directive for the implementation of the Oronsaye Committee Report White Paper is a window of opportunity to provide a panacea to the post COVID-19 economy.

Wednesday 27 May 2020

BUSINESS DAY

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Nigeria dithers as Uganda rolls out Covid-19 EVs

...For export to other African markets MIKE OCHONMA Transport Editor

MIKE OCHONMA

ith Nigeria still battling to streamline the national automotive poli c y f ra m e w o rk that will give original equipment manufacturers (OEMs) and their local assemblers some measure of confidence in the polity, reports say Uganda’s Kiira Motors Corporation limited, has rolled out its brand new Kayoola Electric Buses (EVS) with amenities that are capable of containing the spread of the ravaging global coronavirus pandemic. This is to not only to showcase the indigenous company’s home grown green mobility technologies, but also to prove that, the vehicles are complainant with all health and safety guidelines issued by President Yoweri Museveni and the Ministry of Health to contain the spread of the deadly Coronavirus. The Kayoola EVS buses are equipped with automated coronavirus disinfectant sprinkle systems designed to eliminate the spread of Covid-19 as the country awaits President Museveni’s announcement on a partial lifting of a two month long nationwide-lockdown and curfew as some of the measures instituted to fight the deadly pandemic. Other special features on the 12- meter long Kayoola EVS buses include on-board Wi-fi to ensure travelers stay connected to the internet, USB charging ports for mobile devices, display boards for timely, accurate information dissemination and a ticketing system that allows seamless fare transactions. According to Allan Muhumuza, the KMC business development manager, the new Kiira Motors electric buses can cover a distance of 300 kilometers under a single charge. They have a speed governor that allows a maximum speed of 80 kilometers per hour but can pick up to a speed of 140 Kilometers

F1 teams agree to cost-cutting measures

per hour. The 12 meter long Kayoola EVS buses have a capacity of 90 passengers (49 sitting and 41 standing) while the diesel engine ones will seat 65 passengers . Checks reveal that, the company is now ready to produce and supply both electric and diesel combustion engine buses to transport operators in Kampala city and the rest of the country. The company is also targeting the car markets in the East African region and the rest of the African continent. The new electrified buses according to the assemblers have many advantages as to why transporters should include the brand into their fleets. The buses are said to have far much lower operating costs in comparison to the diesel combustion engine buses with an operating cost per km of Ug.shs. 320 while a diesel bus equivalent costs Ug.shs.1,670 for the same distance . This also means that the electric buses are more energy efficient and environmentally friendly. “It should be noted that the battery life of the Kayoola EVS electric bus is up to 3,000 charge cycles (900,000kms) compared to 200,000Kms of a typical diesel engine,” a statement issued by the company reads in part.

The floor of the buses is made out of bamboo while the interior is mainly made out of plastics and aluminum and body panels supported by a steel superstructure. All these locally available materials provide an unprecedented opportunity for participation of a wide range of local manufacturers making components to feed the production line at the Kiira Vehicles Plant which will address key aspects of the local content supply

‘‘ The Electric buses

are equipped with automated disinfectant sprinkle systems designed to eliminate the spread of Covid-19 chain , create jobs and ensure import substitution. Paul Isaac Musasizi, chief executive officer of Kiira Motors said that with the current capacity to produce eight buses per month,

the company was ready to take orders to produce buses at the UPDF’s Luwero industries Ltd in Nakasongola before they shift to the Kiira Vehicles Plant when it is completed at the Jinja Industrial and Business park mid next year. Recall that while addressing the Private Sector Foundation Uganda (PSFU) E-Conference recently , President Yoweri Museveni emphasized the need for government to prioritize the post Covid-19 interventions to boost the economy by supporting key nine key sectors including transport with local manufacturers like Kiira Motors Corporation Ltd, taking the lead. Kiira Motors is operated under the Ministry of Science Technology and Innovation led by Elioda Tumwesigye, who together with the KMC executive chairman; Sandy Stevens Tickodri-Togboa. They both called upon both government and the private sector to purchase locally made vehicles to promote the country’s nascent automotive industry. Both Ministry and KMC leadership expressed gratitude to President Museveni for his continued support to the Science, Technology and Innovation sector as a leading driver for economic growth and national development.

ormula One’s 10 teams have agreed to various cost-cutting measures including a budget cap of $145 million. Although, reports say the measures have yet to be approved officially by the governing FIA’s World Motor Sport Council, by an e-vote due to the Covid-19 pandemic, but that is seen as a formality and is likely to take place next week. Ross Brawn, Formula One’s managing director for motorsport said this month that, the $145 million figure had been agreed and the sport would look for further reductions in future seasons. The BBC and motorsport.

com, citing multiple sources, said teams had agreed to reduce the cap to $140 million in 2022 and $135 million for the period between 2023 and 2025. Formula One’s season has yet to start, with the first 10 races postponed or cancelled due to the Covid-19 pandemic. A major rewrite of the technical regulations has been delayed to 2022, with teams carrying over this year’s cars to 2021. The budget cap, which does not include driver salaries, had been set initially at $175 million but some teams had wanted a more drastic limit closer to $100 million to ensure the sport survives the crisis.

JLR SVOs’ reports retail sales growth for 2019/20 Velar SVAutobiography Dynamic – which both saw deliveries starting in 2019 made significant contributions to the overall numbers. Reacting to the development, Michael van der Sande, managing director, JLR Special Vehicle Operations, said: “Despite a challenging

MIKE OCHONMA

espite mounting challenges, latest results indicates that Jaguar Land Rover’s Special Vehicle Operations (JLR SVOs) division retailed more than 9,500 highperformance and luxury SV products in the 2019/20 fiscal year, representing a 64 percent increase when compared to the 2018/19 fiscal year. Extremely strong demand for all seven SV vehicles has driven this growth, including the long-wheelbase Range Rover SVAutobiography, which offers airline-style executive class seating, and the driver-focused 416kW Range Rover SVAutobiography Dynamic.

The 423kW Range Rover Sport SVR remains the best-selling SV model, with demand continuing to grow through its fifth year of production, while launches of the 405kW Jaguar F-pace SVR and Range Rover www.businessday.ng

sales environment for the automotive industry as a whole, we’re delighted that the demand for Jaguar and Land Rover SV products continues to grow strongly, just five years after the division was first launched. We currently have our broadest-ever

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range of models offering enhanced performance and luxury, each with its own distinctive personality that resonates with our customers.” This increase in retail sales has been supported by the roll-out of SV Specialist Centres in key markets and the establishment of dedicated SV areas at retailers including the new Jaguar Land Rover Statement Site in Munich, Germany. These retailers are trained to meet the exacting needs of SV’s customer base and deliver the premium service expected from SV, including personalisation requests. SV Specialist Centres have already launched at 100 retailer sites globally, with more to follow. On his part, Richard Gouverneur, managing director, Jaguar Land Rover @Businessdayng

South Africa and sub-Sahara Africa, said: “While focusing on satisfying demand for existing SV vehicles, we’ve also simultaneously expanded the portfolio with new models such as the Jaguar F-Pace SVR and Range Rover Velar SVAutobiography Dynamic which have both proven extremely popular throughout Africa”. Special Vehicle Operations’ SV bespoke department which handles the tailoring paint colour and finish, interior and exterior trim choices along the value-production chain to create truly individual vehicles for customers has also seen 20 per cent growth in bespoke commissions and premium palette paint finishes for a selection of Jaguar and Land Rover vehicles.

Wednesday 27 May 2020

BUSINESS DAY

TRANSPORTATION Motoring

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Rolls Royce: Making best better 116 years after ...Despite Spanish flu, great depression

Covid-19: Do’s and dont’s of car disinfection (2)

MIKE OCHONMA

olls-Royce Motor Cars recorded yet another chapter in its long story recently, and it was exactly this month in 1904 that Charles Rolls first met Henry Royce at the Midland Hotel, Manchester an encounter after which the motor car, and the world of luxury, was never the same again. It is with a fitting sense of historical symmetry that production resumed at the home of RollsRoyce on May 4, 1904, on the anniversary of Rolls first declaring of Royce; “I have met the greatest engineer in the World”. Together, Rolls and Royce shared a vision to make the future of motoring extraordinary. Henry Royce, an engineer, had a desire for perfection and an innate work ethic that later became the pillar of Rolls-Royce philosophy; “Take the best that exists and make it better.” Charles Rolls, an aristocrat, was an accomplished motorist, experienced in selling imported foreign motor cars. His business partner, Claude Johnson, stepped into the role of managing director of Rolls and Royce’s venture and expanded the fledgling company’s reputation. The company they founded has faced extraordinary challenges and difficulties throughout its 116 year history. Though still in its infancy, Rolls-Royce endured in 1918 when the Spanish Flu, described as the greatest pandemic of the 20thCentury, swept the world. A decade later, it again stood firm when the Great Depression laid waste to the global economy. Over the years that followed, Rolls Royce has withstood the shocks of economic and political crises at home and overseas, embodying calm and constancy in a tumultuous, uncertain world. In its more recent history, the

company weathered the financial crash of 2008 and came out the other side more resilient and determined than ever. The marque has always risen to every challenge with ingenuity, commitment, courage and solidarity, so while Covid-19 is possibly the biggest test Rolls-Royce has ever faced, it’s certainly not the first. For the current generation of the Rolls-Royce family, working from home has been a new experience. For Henry Royce, however, it was entirely normal. Indeed, some of his most influential designs were produced in the private studio he maintained at his home in Elmstead located at West Wittering, just eight miles (12.8 kilometers) from the present-day manufacturing plant and global Head Office. Royce clearly found inspiration and creative energy in the peace, quiet and solitude that working away from the bustle of the office and factory provided. Famously, while walking on the nearby beach

one day, he sketched the initial design for the R-series aero engine in the sand with his walking-stick. A later development of that design, the Merlin, would earn everlasting acclaim as the engine which powered the legendary Supermarine Spitfire. Royce’s home studio was also the birthplace of another, perhaps less storied engine that nevertheless occupies an important place in the annals of aviation achievement. In 1919, his Eagle VIII provided the power for the first-ever transatlantic flight, from St John’s, Newfoundland to County Galway in Ireland, by British adventurers Captain John Alcock and Lieutenant Arthur Brown. Rolls-Royce Motor Cars commemorated the centenary of their astonishing feat, and the engine that made it possible, in the spectacular Wraith Eagle VIII Collection Car, limited to just 50 examples, released in 2019. Torsten Müller-Ötvös, chief executive officer, Rolls-Royce Motor Cars; “We are living through

historic times. Our primary focus is, of course, on safely resuming production at The Home of RollsRoyce in Goodwood, West Sussex; but in marking this amazing anniversary, we are taking a moment to reflect on what 116 years have taught us.”. He added, “As a company, we can draw strength from the knowledge that although Rolls-Royce has faced uncertainty many times over the years, it has emerged more resilient and confident, with its fundamental principles unaltered. Our present challenges may be unprecedented, but as we look to the future, I am confident that, there is no company in the world better prepared to overcome them”. In Nigeria, Rolls-Royce Motor Cars Lagos is owned by Coscharis Motors plc as the exclusive franchise owner for Rolls-Royce vehicles sales and services in Nigeria. It currently has showrooms and workshops located both in Lagos and Abuja, the country’s economic and political hub respectively.

and washing and face masks are the most common preventative measures in the battle against Covid-19, and that is why it is important that disinfecting of surfaces is another important habit to develop, and that includes your car and as a result, it is recommended that wearing disposable gloves for cleaning and then disinfecting surfaces is essential. If a surface looks dirty, it should be wiped down with soap and water prior to disinfection. For instance, Nissan recommends using a soft or microfiber cloth dampened with soap and water to wipe down hard surfaces. Cleaning liquids to avoid. The carmaker also warns that while most common household disinfectants are effective, some are not ideal for use on a vehicle, including bleach, hydrogen peroxide, benzene, thinners or other harsh and abrasive cleaners. These chemical products could damage your vehicle’s upholstery and/or interior surfaces. Instead, alcohol-based wipes or sprays containing at least 70% alcohol are effective against the coronavirus according to the CDC, and can be safely used in your vehicle. How to clean the touchscreen. Your infotainment touchscreen is tricky because it’s a high-touch area that should not come in contact with aggressive cleaners. Rather use screen wipes or a soft cloth dampened with soap and water to clean the screen surface, then wipe it dry with a clean, soft cloth. Ammonia-based cleaners should not be used on infotainment screens, as they can damage the anti-glare and anti-fingerprint coatings. If your car has a competent voice control system; though an experience that is rather rare, using it might help you to avoid touching the screen altogether.

Revamped S-Class flaunts bolder face in official teaser MIKE OCHONMA

ercedes-Benz is getting ready to pull the covers off of its all-new, seventh-generation S-Class sedan and this first official teaser shows off its new face. Although it doesn’t stray too far from the current design language, generation-seven does get a bigger and bolder grille, while also retaining the traditional design elements like the bonnet emblem. Mercedes has not given an exact reveal date as yet, but in a Facebook post, it said, the new S-Class is planned for the second half of 2020.

That’s about as much as Mercedes is prepared to say about the new S-Class for now, but being the traditional technology innovator in the range, it goes

without saying that, the large saloon will debut some advanced new driver assistance gadgets. So come second half of this year, the global luxury automo-

tive community should expect to see a higher level of autonomous driving capability, perhaps limited only by the legislation in various countries. On the engine front, the SClass is likely to carry over the still-new 2.9-litre straight-six engine with mild hybrid technology, which was introduced with the current model’s midlife facelift, but there’s no word on whether there will be V8 versions. There will, of course, be a number of plug-in hybrid versions to choose from. Talking electrification, Mercedes will be offering a separate car called the EQS for those that want a full electric saloon. Although the EQS will be built

on a different platform to the SClass, that being the company’s new purpose-built architecture for electric cars, the EV is likely to share many of its features with the S-Class. Checks reveal that, MercedesBenz is likely to discontinue the standard-wheelbase S-Class as the E-Class has grown big enough to render it pointless, thus S-Class buyers will only be able to opt for a long-wheelbase package. Inside the cabin, the forthcoming S-Class will get an even more advanced version of the MBUX infotainment system, part of which now works through a large vertical screen as seen in various spy shots of the car’s interior.

Wednesday 27 May, 2020

BUSINESS DAY

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How covid-19 is affecting insurance services

Wapic records N15.2bn GWP for 2019 …holds teleconference call for investors, analysts tomorrow Modestus Anaesoronye

apic Insurance Plc, a multi-line insurance company will tomorrow Thursday announce its audited financial results for the period ended 31December 2019, posting a Gross Written Premium (GWP) of N15.2 billion, a 9 percent growth compared to same period in 2018. This will be disclosed at a teleconference call for investors and analysts at 2pm tomorrow, with its senior management, also giving highlights of the unaudited Q1 2020 results. There will also be an opportunity at the end of the call for management to take questions from investors and analysts. The GWP according to the Company was buoyed by attainment of leadership status on some major accounts and enhanced underwriting capabilities. Wapic paid N4.1 billion in gross claims for the year, as gross claims to GWP ratio closed at 27 percent as at Dec’19, a reduction when compared with the 36 percent recorded in 2018. The Group’s underwriting profit also grew to N2.9 billion, a commendable 36 percent year-on-year growth from the N2.1 billion recorded in the preceding period of 2018. The growth in premiums and decrease in net claims expense during the review period had a positive impact on this position.

The Group experienced an 87 percent decline in profit before tax (PBT) to close at N24 million. The drop in investment and other income, and the growth in underwriting and operating expenses for the period negatively affected the bottomline position. The group subsidiary, Wapic Life Assurance Ltd recorded a 52 percent yearon-year increase in GWP to N3 billion from N1.97 billion in the prior year. Gross claims paid by the life arm increased slightly by 2 percent to N1.27 billion for the period ended Dec 2019, compared to N1.25 billion in the corresponding period of 2018, while the underwriting profit had an impressive growth of 150 percent from the prior year’s position of N330 million to N825 million in 2018.

Profit before tax recorded for the year was N267 million, a commendable 943 percent growth from the 2018 position of N25 million. Wapic Insurance (Ghana) Ltd, another subsidiary recoded a slight decrease in GWP year on year by 5 percent to N1.41billion in 2019, from N1.48 billion recorded in the prior year. The Ghana Company closed the year with a N13.7 million profit before tax. Commenting on the results today at the Company’s headquarters in Lagos, Yinka Adekoya, managing director WAPIC Insurance Plc., said: “Wapic delivered a commendable performance in the financial year 2019 despite a sluggish macroeconomic and business landscape which didn’t

Yinka Adekoya, managing director WAPIC Insurance Plc www.businessday.ng

pick up until the latter part of the year. With a combination of an intensified underwriting capacity expansion, and the focused execution of our business plans, the Group’s GWP for the period grew by 9 percent year-on-year to close at N15.2 billion surpassing the average Nigerian insurance market growth rate. Adekoya stated that positive improvements were recorded in the Group’s underwriting profit position for the period, which grew to N2.9 billion, a commendable 37 percent year-on-year growth from the N2.1 billion recorded in the preceding period of 2018. “The Group also recorded a Profit Before Tax of N23.4 million from N187 million and a Profit After Tax of N214 million from N315 million recorded in the previous year. Our Total assets grew by 1.3 percent to N30.7 billion from N30.4 billion in 2018. “O u r Sh a re h o l d e r s’ Funds stood at 18.5 billion for the period from N17.1billion in 2018, she said. “The year 2019 was a challenging year for the company as we were only able to achieve marginal growth in our Gross Written Premium. However, we expect that the disciplined execution of our transformation projects and other growth strategies will begin to yield the desired results from 2020. We will continue to deliver best-in-class customer experience offerings and the creation of sustainable value to all our stakeholders”.

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ean Hanlon, executive director, Sales and Distribution at BrightRock looks at how Covid-19 is changing service delivery at the broker’s table. The realities of the COVID-19 lockdown have meant that the world has been forced to do all their business virtually. Face-to-face meetings have been replaced by Zoom calls, travel has been banned, and processes have had to become paperless. Some have said that, in just a few weeks, this global crisis has catapulted us a good five years ahead in the way that we harness technology. Necessity is indeed the mother of invention. This sudden change has been a bit jarring for the insurance industry, as we are a sector that generally lags behind the times when it comes to technology. However, companies like BrightRock have risen to the challenge and have devised ways of ensuring you can still get cover for your clients, especially at a time when many people are feeling vulnerable and more acutely aware of their own mortality. For example, our clients can now sign counter offer letters on WhatsApp, and are able to submit previous blood test results from the past year in order to apply for cover. As financial advisers, your business has always been heavily reliant on personal relationships and your ability to establish and maintain them. Our COVID-19 world is now demanding you do this differently. Ironically, technology that might have previously been seen as alienating and being a barrier for personal connection has now become the sole tool that can facilitate it. In addition, our current state of affairs has made peo-

ple crave more personal contact (in this case a voice on the phone or a face on the screen), especially in situations where they may not have wanted it before. Taking out a life policy is always a big deal, and has become an even more emotional undertaking, I think, in these trying times. More so than ever before, people need reassurance and advice that speaks to their personal needs and worries – an aggregator or online insurance application cannot do this. In BrightRock’s opinion, the independent financial adviser remains the best aggregator and the most sophisticated technology available to clients. Financial advisers are uniquely qualified and experienced to find the perfect fit for their clients’ risk cover needs. In their ability to relate to their clients, like no online aggregator can, brokers are not only able to understand their clients’ concerns and their aspirations, but are able to relate those concerns and aspirations back to clients’ underlying financial needs. And in turn, are then able to relate those financial needs back to a life insurance solution that can adequately cater for them. So what’s needed from you, as a financial adviser, to assist people in this new reality? I think you owe it to yourself and your clients to start using, or get better at, the platforms that they want to see you on. Get familiar with video conferencing tools such as Skype, Zoom, and Microsoft Teams so that you can chat to your clients ‘face to face’. These tools will continue to be popular post lockdown, I believe, now that people have seen how simple they are to use.

Unitrust Insurance pays N269.2 million claims in Q1 Modestus Anaesoronye

nitrust Insurance Company Limited has paid its customers the sum of N269.16 million within the first quarter of 2020. In a statement obtained from the company, the claims were paid while the country was on Covid 19 lockdown in fulfillment of its avowed commitment to prompt claims settlements. The statements read further, “we have been actively running business operations by working remotely despite the COVID-19 disruption and has remained reachable to our customers via our CRM @Businessdayng

solutions and business continuity plans”. According to the organization, some of the major businesses whose claims were settled Includes ; Mouka Form Limited ( Fire & burglary Policy) PzCusson Nigerian limited & Subsidiary (Marine & Fire policy) Sulma Foods limited (Marine Cargo & Goods-in-Transit) RATCON constructions (Engineering & Cash -in -Transit Insurance) Unitrust is a leading insurance company licensed in 1981 and Authorized by Corporate Affairs Commission RC- 42899 and National Insurance Commission (NAICOM).

Wednesday 27 May 2020

BUSINESS DAY

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Why Nigeria’s Voluntary Offshore Assets Regularisation Scheme matters STEPHEN ONYEKWELU

resident Muhammadu Buhari last week signed an amendment to Executive Order 008 on the Voluntary Offshore Assets Regularisation Scheme (VOARS) to facilitate the enforcement of the order originally signed in October 2018. The order was first signed two years ago to help Nigeria collect taxes on offshore assets by providing an avenue for defaulters to voluntarily declare their foreign assets and pay a one-time levy of 35 percent to avoid penalties for tax evasion. This was similar to the 2017 Voluntary Asset and Income Declaration Scheme (VAIDS) meant to shore up Nigeria’s tax revenue. Under the amended order,

domestic or foreign banks, asset managers or intermediaries that cooperate with defaulters, enabling them to conceal offshore assetsandobligationsaboutthem, shallbeliabletopaytotheFederal Government of Nigeria a penalty on the total of such offshore assets, in addition to other penalties provided for under Nigerian laws or laws of foreign countries from which Nigeria can benefit. What is offshore? The term offshore refers to a location outside of one’s national boundaries, whether or not that location is land or water-based. The term may be used to describe foreign banks, corporations, investments, and deposits. A company may legitimately move offshore for tax avoidance or to enjoy relaxed regulations. Offshore financial institutions can also be used for

illicit purposes such as money laundering and tax evasion. Offshore refers to a variety of foreign-based entities or accounts. To qualify as offshore, the accounts or entity must be based in any country other than the customer’s or investor’s home nation. Many countries, territories and jurisdictions have offshore financial centres (OFCs). These include well-known centres such as Switzerland, Bermuda, or the Cayman Islands, and lesser-known centres such as Mauritius, Dublin, and Belize. The level of regulatory standards and transparency differs widely among OFCs. These are sometimes referred to as tax havens. Nigerian government’s tax drive and offshore assets Tax revenue keeps society and an economy afloat. But not

all taxpayers play by the same set of rules. The global dip in oil prices and the resulting economic recession (2016) in Nigeria resulted in an increased focus on revenue generation through taxation. Following the mandate by the Federal Government, the Federal Inland Revenue Service (FIRS) intensified its drive for tax collection and has so far reported giant strides in its collection efforts. However, the tax-to-Gross Domestic Product (GDP) ratio has continued to hover around an abysmal 6 percent despite the reported tax revenue increase by the FIRS. The tax-to-GDP ratio in SouthAfricais29percent,Ghana 18percent,Egypt15percent,and Kenya 18 percent, according to the Organisation for Economic Corporation and Development.

COVID-19: Commuters at breaking point as transporters burden with ‘toxic’ fares Temitayo Ayetoto

arless Nigerians scampering to recover aspects of their lives abruptly crushed by the COVID-19 outbreak are trudging towards a breaking point from transport operators burdening them with toxic fares. Commuting has both been extra difficult and financially burdensome, particularly for people who rely on the services of commercial transporters, due to COVID-19 restrictions throttling transport. In Lagos, Nigeria’s commercial capital, cash-strapped commuters pay more, wait longer. The fares have been sharply hiked for many whose businesses were shut for over a month, and those already battered by job losses, salary cuts and interim unemployment. Under the guise of complying with the physical distancing rule by the Lagos State government, which mandates 60 percent loading capacity in public buses, transporters are subjecting commuters to a hike as elevated as 400 percent above the pre-coronavirus era. The cost of seats left vacant by the physical distancing measure is being shoved down the throat of commuters. Even with the drop in petrol price, the fares paid by passengers for bus journey within cit-

ies rose 1.89 percent to N206.73 in March from N202.89 in February, according to the National Bureau of Statistics (NBS) Transport Fare Watch Report for March 2020. In 2019, the combined cost of transportation, food consumed outside the home and starchy roots, tubers and plantain led the largest proportion of total household expenditure at 24.16 percent, NBS consumption expenditure pattern data released May 2020 indicate. For residents of urban centres like Lagos, transportation cost singularly accounted for 15. 22 percent of non-food expenditure and 7.38 percent of total expenditure, unlike their counterparts in the rural areas who spent 14.44 percent and 5.59 percent, respectively. Rukayat Badmos, a sales representative at one of the big fabric stores at Balogun Market, Idumota-Lagos, didn’t receive her less-than-N30,000 salary for April since her employer could not operate under the month-long lockdown that required non-essential service providers to shut business. But as the lockdown eased early in May, she was slammed with N500 fare from Mushin to Idumota and N1,000 back to Mushin without a choice. Prior to the novel coronavirus outbreak, the fare ranged between N250 and N300 during peak hours.

Relief for taxpayers as LIRS further extends deadline for filing annual returns to June 30 JOSHUA BASSEY

Hafsat Baba (r), commissioner, Kaduna State Ministry of Human Services and Social Development, receives Nasir el-Rufai, governor, Kaduna State, during his visit to Almajiri children who are kept in interim care at Government College, Kaduna. NAN

COVID-19 seen wiping gains of Nigeria’s $5.854bn investment inflows in Q1 Cynthia Egboboh, Abuja

he total value of capital inflows into Nigeria stood at $5.854 billion in the first quarter of 2020, representing a 53.97 percent increase compared to $3.802 billion recorded in Q4 2019. But there are fears that the impressivenumberscouldseea hugedeclineincomingquarters as the impact of the COVID-19 pandemic begins to be felt. According to the National Bureau of Statistics report released on Tuesday, the largest amount of capital importation by type was received through portfolio investment at $4.309 billion, accounting for 73.61 percent of total capital importation. This was followed by other

investment, which accounted for 22.73 percent at $1.33 billion of total capital, and Foreign Direct Investment (FDI), which accounted for 3.66 percent or $214.25 million of total capital imported in Q1 2020. Johnson Chukwu, CEO, Cowry Asset Management, told BusinessDay that the increase recorded in the quarter is commendable but not good enough as a huge percent of the investment was in portfolio investment which adds little or no effect to economic growth. “It is not so good to see that only 3.66 percent was invested in Foreign Direct Investment, while the huge amount was in portfolio investment; that is liquid money and can leave at any time, which may have left in Q2 due to the COVID-19,” www.businessday.ng

Chukwu said. He further said that there would be a huge decline in the inflows in the next quarters of the year. “We should expect a huge drop in Q2, Q3 because the pandemic with its uncertainties would have caused many of these funds to be withdrawn from the system,” Chukwu said. “The first quarter, as we see, did not really reflect the effect of the COVID-19, but we should brace up for a huge decline in capital inflow in the meantime.” Chijioke Ekechukwu, former director general, Abuja Chamber of Commerce, said the increase was as a result of naira depreciation within the period which aided more capital inflow but really does not lead to a positive eco-

nomic growth considering the direction of the investment. He further said that the next quarters might not yield so much due to the scourge of the COVID-19 pandemic. “As we know, the effect of the COVID-19 pandemic can be seen on all economics of the world, and Nigeria is no exemption. It is time for us to get our policies right, put in our best as a nation to hit our economy running because we may not be receiving capital inflows in the nearest future due to the COVID-19 crisis,” Ekechukwu said. The NBS report showed the United Kingdom emerged as the top source of capital investment in Nigeria in Q1 2020 with $2.90 billion, accounting for 49.68 percent of the total capital inflow in the quarter.

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he Lagos State government has further extended the deadline for filing of annual tax returns to June 30, 2020. This is continuation of its effort to provide the muchneeded relief to taxpayers and mitigate the economic impact of the COVID-19 pandemic. Annual returns for individuals (both employees and self-employed persons) that were initially due on May 31, 2020 can now be filed any time on or before June 30, 2020, the Lagos State Internal Revenue Service (LIRS) announced on Tuesday. The deadline for the filing of the tax returns had earlier been extended to May 31, 2020 from its statutory March 31. “As the Lagos State government keeps abreast of global best practices in containing the Covid-19 pandemic and eases the effects of an economic downturn on taxpayers and residents of the state, LIRS had initially extended the deadline for filing annual tax returns for two months, from the statutory March 31 @Businessdayng

of every fiscal year to May 31, 2020,” said Ayodele Subair, executive chairman of LIRS. “We constantly debated what other measures could be taken as an organisation to support individuals and businesses at this time, hence, the additional one-month extension from June 1 to June 30, 2020. It is our sincere hope that taxpayers take advantage of this new extension to duly file their returns,” Subair said. Businesses and incomeearning individuals have been seriously hit by the pandemic, and the latest extension is expected to create some room to readjust, as the economy begins to breathe following the phased reopening of the lockdown in the last three weeks. LIRS has, therefore, encouraged taxpayers to access the LIRS eTax platforms for all tax administration matters, including filing of annual returns, generation of assessment and payment schedule and payment of the liabilities from the comfort of their homes and offices. All that they have to do is to simply log on to the e-Tax platform via https://etax.lirs.net.

Wednesday 27 May 2020

BUSINESS DAY

news Kaduna’s IGR revolution is fast-paced... Continued from page 1

over its large neighbor, Kano state which has a population of nearly 20 million, to become the sixth largest IGR state in the country after Lagos, Rivers, FCT, Ogun and Delta. “The tremendous growth seen in the state’s IGR is not unconnected to the aggressive government’s stand on tax collections,” said Boboye Olaolu, sub-Saharan economist at Lagos-based CSL Stockbrokers Limited. Olaolu, who spoke with BusinessDay on phone, Tuesday, said since the state signed the tax codification and consolidation law in 2016, aimed at restructuring tax collection within the state by centralising and automating tax collection, the state’s revenue from taxes has continued to rise. “Kaduna has also succeeded in harmonising primitive taxes that have been collected at the local government level through the creation of an e-platform that has made payment of taxes easy and effective,” Olaolu said. “Meanwhile, we expect the government to bring in efficiency and optimisation into the state ministries so they can be revenue-generating agencies rather than an em-

bodiment of cost, as this would help complement the gains seen in taxes,” he said. Investigation by BusinessDay showed that the huge jump in Kaduna was well planned and the execution was delivered to safe hands. The key pillars of the raise in the IGR strategy include the professionalisation of the state’s inland revenue service, the infusion of technology and a robust know-yourpeople scheme which involved the enumeration of households in the state. For this to happen, the state’s inland revenue law was amended by the House of Assembly and in the process the state was able to compress the multiple taxation platforms which helped it to plug leakages in revenue collection. Governor el-Rufai brought in vital expertise from the private sector and received valuable help from DFIs to clean up the old process and transform it into a go-to state in Nigeria. According to one senior official who worked on the project, the key goals were “to institutionalise the revenue platform; grow the state’s revenue profile by four to five times by 2023

How Nigeria can exit COVID-19-induced... Continued from page 1

edge that oil revenues will fall by as much as 80 percent this year and the 2020 budget deficit will touch a record N5.6 trillion, with the three tiers of government expected to struggle in paying salaries. Although the NBS recently released a report estimating Nigeria’s poor at 40 percent, the basis of that estimate is data collected two years ago, making economists suggest that the real size of the poor population in Nigeria is closer to 100 million today. The poor population puts more burden on government finances in form of bigger social spending to meet its target of lifting millions out of poverty. Nigeria also needs a prolonged quality spending on healthcare to manage the many faces of the crisis faced by the sector in Africa’s most populous nation with some of the worst health indices in the world.

The country also needs to quickly create a credible national identity scheme which will allow it to map its poor population and quickly offer the urgent cash transfers they need. To do this will require significant spending. The clearest sign yet that the government by itself cannot get Nigeria out of these holes is visible in the paltry size of its COVID-19 fiscal stimulus that is in the region of 3.4 percent of GDP when that of the South African government is in excess of 10 percent of GDP. Even then, there are questions about how Nigeria will fund its small fiscal stimulus. The economists all agree that Nigeria’s hope of a post-COVID-19 recovery lies in quickly and sensibly positioning itself for the private capital required to ameliorate the challenges. “In medical terms, those with pre-existing conditions are said by doctors to be the most vulnerable to COVID-19 and they should also fare www.businessday.ng

Abdullahi Ganduje (2nd r), governor, Kano State, frees one of the 300 inmates on lesser charges that were pardoned with their fines paid up by the state at the Goron Dutse Correctional Facility, in line with the Federal Government’s directive to decongest prisons to avoid the spread of diseases, in Kano. NAN

and to raise the credibility of the revenue generation process”. “Kaduna clearly has a strategy,” said Johnson Chukwu, CEO of Cowry Asset Management Ltd. He explained that since coming into office, Governor el-Rufai’s approach has been on building a tax base and improving the attractiveness of the state as an investment destination. “If you recall, when Abuja airport was closed down, the state governor used that opportunity to attract a lot of investments and economic activities,

even though many of them might not have lasted,” he said. He described El-Rufai’s Kaduna revolution as comparable to Lagos under Tinubu who helped boost the metropolitan state’s IGR, urging other states to emulate Lagos, Edo and Kaduna in adopting a onestop tax administration system, automating title registration process which makes land use charge collection easier, integrating land use charge to tenement rate and having a single body collecting as a single tax, having a

Geographical Information System for documentation and registration of land titles, etc. The NBS data also showed that Lagos and Rivers States together account for above 40 percent of the aggregate internally generated revenues in Nigeria. The two states recorded a total of N539.13bn of the N1.344trn internal revenues generated by all the 36 states and the FCT last year. The two giants in IGR are joined in the chart for the top five by the FCT,

Ogun and Delta and together they account for 56.16 percent of Nigeria’s total states’ IGR or N759.294bn which was generated in 2019. A further analysis shows that the top 12 states (Lagos, Rivers, FCT, Ogun, Delta, Kaduna, Kano, Akwa Ibom, Enugu, Kwara, Ondo and Edo in that order) account for a staggering 73 percent of the total IGR generated by Nigeria’s states. The bulk of the states’ IGR comes from taxation from the personal income of workers.

worse when it comes to fatalities,” according to one economist. “It is the same way that nations like Nigeria that have pre-existing economic conditions will confront more severe economic dislocations while it will take much longer time for the country to recover from the financial, health and social crises which it faces.” That’s why the government must come to grips with the fact that it doesn’t have the financial wherewithal to weather the impending storm and must be thinking of incentivising private domestic and foreign capital, according to Wale Okunrinboye, head of investment research at Lagos-based Sigma Pensions. “This is the time to privatise government stake in unprofitable ventures to allow the private sector bring efficiency and create jobs,” Okunrinboye said. “There is massive private capital waiting on Nigeria to get its head right in terms of implementing reforms before they start pouring in, but there has

been a lack of urgency in pushing those reforms,” he told BusinessDay. Omotola Abimbola, an analyst at investment bank Chapel Hill Denham, was of the view that Nigeria must put its ease of business struggles behind it to attract the needed private capital for life after COVID-19. “Nigeria still ranks poorly on the World Bank ease of doing business metric and that’s one area we need to fix to build investor confidence in the economy,” said Abimbola. Another area of focus for the government postCOVID should be finding a way to leverage its massive dead capital. PricewaterhouseCoopers (PwC) estimates that Nigeria has about $300-$900 billion in dead capital trapped mainly in real estate. That’s roughly the size of Nigeria’s GDP or nearly three times its size depending on which figure you take. Leading economist, Ayo Teriba, has also in the past flagged the need for government to convert

some of its idle real estate assets to earn rental income like is the case in emerging markets. A swift passage of the Petroleum Industry Bill which has held back new investments into the oil and gas sector was also fingered as key to supporting the economy. The delay in ratifying the bill has rendered Nigeria less competitive and seen investors divert money to other African countries. The economists who took part in a BusinessDay survey also listed key sectors that must get maximum attention from government today to include agriculture, insisting that Nigeria cannot afford to miss the current planting season. They also canvassed urgent work by the state governments in strengthening farm-to-market access through grading of roads linking farms around the country in a way that farmers are helped to take inputs to the farms while getting produce from the farm to the market.

“Nigeria is headed towards a troubling time but staying in it does not have to be prolonged by our own failings,” said one of the economists. While the economists surveyed arrived at a consensus that Nigeria needs private capital to resuscitate the economy post COVID-19, the government may not be entirely sold on the idea. The newly revised budget shows little signs of ambition to attract private capital through privatisation. The N5.6 trillion 2020 budget deficit will be financed mainly through debt totalling N4.6 trillion. Bilateral and multilateral draw-downs will provide the second largest source of the deficit with N387 billion, while draw-downs from Special Accounts will total N260 billion. Privatisation proceeds are expected to rake in just N126 billion and no details of the assets to be privatised were provided. It was cut by 50 percent from an earlier estimate of N256 billion.

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Stakeholders laud Obaseki’s agric-based COVID-19 stimulus, as farm settlements get support

mallholder farmers and other stakeholders in the agriculture sector in Edo State have commended the Governor Godwin Obaseki-led administration’s sustained investment in the sector, to ensure food sufficiency, create jobs and improve livelihoods amid the coronavirus (COVID-19) pandemic. The commendation came on the heels of the commencement of planting in government-backed farm settlements across the state. Special adviser to the governor on agriculture, forestry and food security programme, Joe Okojie, said with support from the state government’s agriprenuer programme, the farmers in the farm settlements has been supported with machinery and other materials for tilling, harrowing, ploughing for the 2020 farming season. According to the governor’s aide, “The state government will not relent in

supporting the farmers to achieve a bumper harvest. We are excited that the rice seeds planted in Warrake and Illushi farms have sprouted. We are confident that the yield will be rich as we are focusing on sustaining a robust agriculture-based economy during and in the aftermath of the coronavirus pandemic.” He said the state government’s ongoing investments in the agriculture sector are designed to spur agribusiness, agro-processing and other agro-allied sectors in the state, noting, “We will continue to assist farmers in government’s backed farms across the state in managing the farming activities as we offer agronomic support to the farmers.” A far mer in War rake rice farm, Owan East Local Government Area (LGA), Suleman Momoh, said with the support provided by the state government, farmers are ready to cash in in the agriculture-based post COVID-19 economy.

Nigeria increases oil selling price for June, thanks to renewed market confidence DIPO OLADEHINDE

frica’s biggest oil-producing country has increased its June Official Selling Price (OSP) for major crude grades on perked-up demand, a move that is expected to help raise capital and shore up fallen oil income. The move reflects new confidence in Nigeria, which has been stuck with millions of barrels of unsold crude in recent weeks and also a sign of confidence the market is tightening as demand returned following the easing of lockdown restrictions in some countries, while output cuts have started to chip away at the oversupply. “Nigeria has increased its OSPs for June in a sign of confidence the market is tightening. Flagship crude Qua Iboe June OSP is -$1.05 to Dated Brent, compared to -$3.92 in May,” Javier Blas, an oil market analyst tweeted on Tuesday afternoon. On Tuesday, Brent crude, the benchmark for Nigeria’s oil, rose near $34 a barrel following Russia’s prediction that the market may balance as early as next month as global producers take historic amounts of crude out of the market. Brent crude futures were up 1.55% to $36.11 per barrel. West Texas Intermediate (WTI) crude futures gained 84 cents, or 2.5 percent, to trade at $34.09. There was no WTI settlement on Monday because of the US Memorial Day holiday. Oil has surged more than 80 percent this month as demand returned following the easing of lockdown restrictions in some countries, while output cuts have started to chip away at the oversupply. The market was buoyed by comments from Russia that its oil output had dropped almost to its target of 8.5 million barrels per day (bpd) for May and

June under the supply cut deal agreed by major producers popularly called Organisation of Petroleum Exporting Countries (OPEC)+ alliance. Russia, a key member of the OPEC+ alliance that has pledged to trim supply by almost 10 million barrels a day, expects the market to balance in June or July. Energy Minister Alexander Novak said global output curbs had so far exceeded those agreed by the coalition. OPEC+ countries are set to meet again in early June to discuss maintaining their supply cuts to shore up prices, which are still down about 45percent since the start of the year. “Russia is clearly committed to continued cuts also in H2-20 so the upcoming OPEC+ meeting on the 9th of June is unlikely to be a bearish surprise like the one that fell apart on the 6th of March,” SEB chief commodities strategist Bjarne Schieldrop said. Of note, China’s oil demand has climbed back to about 13 million barrels per day (mbpd), a swift rebound that undergirded improving market sentiment. With China’s demand back to about 90 percent of pre-pandemic levels, oil traders are clearly holding out hopes of a quick rebound elsewhere. The International Energy Agency sees oil consumption eventually rebounding past previrus levels, even as some argue that the coronavirus outbreak will fundamentally shift patterns of consumption. More than any other country, Nigeria needs the oil price to rise and in the worst case, remain steady at any price above the $20 revised benchmark of the 2020 budget. To achieve this, the country needs to avoid disruptions in crude production and also hope that the alliance under OPEC achieves its objective. www.businessday.ng

Ghana, Brazil lead in digital financial policy as Nigeria is stuck with 2012 NFIDS ENDURANCE OKAFOR

hile the outbreak of coronavirus has created a new normal driven by technology, countries like Ghana and Brazil have taken the lead in digitalising their payment systems to accelerate economic development and drive inclusive growth. With almost the same population as Lagos, Nigeria’s busiest city, Ghana on May 18, 2020, launched three policy initiatives designed to deepen financial inclusion and accelerate the shift to digital payments. The country’s National Financial Inclusion and Development Strategy (NFIDS), developed in collaboration with the World Bank, aims at increasing financial inclusion from current 58 percent to 85 percent by 2023, and is targeted at spurring economic opportunities and reducing poverty. “The Digital Financial Ser-

vices Policy, built in partnership with the Consultative Group to Assist the Poor (CGAP), stands on existing technological gains to create a digital ecosystem that contributes to social development, economy and a thriving private sector,” Ghana ministry of finance said in a document seen by BusinessDay. The West African country, where about 19 million adults have 14.5 million active mobile money accounts, plans to use digital financial services (DFS) to shore up its economy. As part of its response to the impact of Covid-19, Ghana allowed beneficiaries of its largest social benefit transfer program (LEAP) to receive their payments through mobile money. Through the consultation and agreement between services providers and the central bank of Ghana, the government of the West Africa nation made knowyour-customer (KYC) transferable from SIM registrations to allow for remote mobile money

account openings, removed fees for low-value remittances, relaxed transaction and wallet size limits for mobile money, and zero-rated all interoperable transactions made through the interbank switch. Having almost the same unbanked population as Nigeria, Brazil recently launched coronavoucher, an emergency aid programme aimed at giving support to 54 million of its population who became financially vulnerable as a result of the coronavirus crisis. Through the country’s central bank- Caixa Econômica Federal (CEF), Brazil said its paying vulnerable population 600 reais ($117) monthly until June through the coronavoucher. This includes millions of previously unbanked citizens, who are being provided with a mobile-based savings account. As of April 8, 2020, 24 hours after the emergency aid registration website and app went live, CEF said it had processed

applications from over 25.1 million Brazilians. Of that total, 39.3 percent were reported to have opened the digital account offered by the bank to receive the monthly payments. The new policies by the aforementioned countries are in line with what is happening in other African countries where a cashless economy is seen as a key tool for surviving COVID-19 and any future pandemics. The National Bank of Rwanda for example made financial service providers to agree to waive merchant fees for digital payments while the Central Bank of Kenya raised mobile money transaction limits. The case is not the same in Nigeria where more than 40 million adult population are unbanked. With one of the highest financial exclusion rates in Africa at 36.8 percent Nigerian government preferred cash instead of electronic transfers in distributing palliative to its economically vulnerable population.

Sadique Abubakar, chief of the air staff (CAS), Air Marshal inspects a quarter guard before a luncheon organised by the Nigerian Air Force (NAF) to celebrate the Eid-el-Fitr with personnel of the Air Task Force (ATF) of Operation Lafiya Dole, where governor Babagana Zulum of Borno State was the special guest of honour, in Maiduguri.

Logistics platform Kobo360 poised for greater impact as founders join Endeavor’s global network ndeavor, a mission-oriented organisation that is leading the global movement for high-impact entrepreneurship, has welcomed two new entrepreneurs into its global network. Obi Ozor and Ife Oyedele II, co-founders of Kobo360, a digital logistics platform that uses big data and agile technology to reduce friction and improve efficiency in the African logistics ecosystem, were selected as Endeavor Entrepreneurs on May 21, 2020. They were successfully selected as part of a cohort of 10 entrepreneurs from five markets. “We’re excited to welcome

Kobo360 into Endeavor’s network which includes some of the world’s most exciting scale-up entrepreneurs and most experienced mentors and investors,” said Eloho Gihan-Mbelu, managing director and CEO of Endeavor in Nigeria. By helping entrepreneurs behind some of the world’s most exciting scale-up companies accelerate their companies’ growth, and by contributing to building strong entrepreneurship ecosystems in underserved markets like Nigeria, Endeavor is driving economic growth through entrepreneurship. Earlier this year, Endeavor also welcomedDaystarPower(arenewableenergycompanybasedinNigeriaandGhana)andMigo(afinancial

CHANGE OF NAME I formerly known and addressed as Miss Ogechi Jecinta Anyaeji now wishes to be address as Mrs Ogechi Jecinta Chijioke. All former documents remain valid. General public take note.

I, formerly known and addressed as Miss Cynthia Nkechi Onyejiaka now wish to be known and addressed as Mrs Cynthia Nkechi Godson. All Former documents remain valid. General public please take note.

BUNMI BAILEY

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technology platform operating in Nigeria and Brazil) into its network. “Fixing Africa’s supply chain is clearly important for commerce on the continent, and Kobo360’s rapid growth over the past three years is evidence that the company’s valuable services are in critical demand. Obi and Ife are inspiring founders and their relentless focus on scaling Kobo360 serves as an inspiration to high-impact entrepreneurs everywhere,” Gihan-Mbelu said. Logistics in Nigeria continues to beachallenge.Formanybusinesses, findingthepropertruckoperatorsfor cargoisdifficultandinefficientasthey spenddaysnegotiatingwithbrokers, searching for trusted truck drivers, and pursuing updates on delivery.

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I formally know and addressed as Sanusi Oluwatobi Muinat and now wish to know and addressed as Kolawole Oluwatobi. All other document remain vialed. General public please take note. @Businessdayng

Kobo360 is solving this challenge for businesses by using its digital platform to match cargo-owners with truck owners, while providing real-time updates throughout the entiredeliveryprocess.Thecompany alsooffersvalue-addedservicessuch astrip-financing,discountsondiesel, and insurance. Since launching in 2017, Kobo360 has surpassed several milestones, including a $30 million Series A in August 2019. “It’s an honour to be joining this global network of high-impact entrepreneurs and to have Endeavor recognise our efforts to transform Africa’s logistics sector using technology,” said Obi Ozor, co-founder & CEO, Kobo360.

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I formally know and addressed as Ollawa Anthony Otutubuike and now wish to know and addressed as Ollawa Anthony Samuel. All other document remain vialed. General public please take note.

Wednesday 27 May 2020

BUSINESS DAY

INTERVIEW Those fighting Obaseki should sheathe their swords, put Edo State first â&#x20AC;&#x201C; Ojezua Countdown to the next governorship primary elections for various political parties in Edo State has begun. In this exclusive interview with BusinessDay, ANSELM OJEZUA state chairman of the All Progressives Congress (APC) invites those in conflict with the governor of the state to pursue peace and development. He spoke to UMAR MOMOH and CHURCHILL OKORO. Excerpts:

he National Working Committee of the All Progressives Congress said it will use direct primary for the conduct of the governorship primary election in Edo State. As a stakeholder and the state chairman of the party, are you satisfied with the proposed mode of the primary election? If the National Working Committee has indeed made that decision, then they are wrong. That decision is not for them to make. The decision as to the mode of the primary election for any elective position is for the state chapter of the party to make. We, the leadership of the party in the state have met, and settled for indirect primary. It is now our duty to communicate our resolution to the national leadership of the party, who will then arrange to conduct the primary election following the wishes of the state chapter. The decision to ratify or approve our resolution for the indirect primary is for the National Executive Committee and not for the National Working Committee. With the crisis still rocking the party in the state, how prepared are you for the forthcoming gubernatorial election? And what can be done to ensure that Governor Godwin Obaseki emerges as the flag bearer of the party? We are fully prepared for the election. We believe all of these crises are artificial. They are not real and after the primary election, I believe the crisis will come to an end and the party will be more united than before. We are very confident that Governor Godwin Obaseki will get the party ticket for the election and re-elected for the second term. It is the tradition of our politics that when someone has two terms and has performed creditably, he will be given the opportunity for the second term to finish the good work he started. Obaseki has so many things in the pipeline which will make Edo State very great even beyond the imagination of most Nigerians. He has introduced reforms and innovations into governance, and it is only a sustained period that we will see it come to fruition. So, it will be unfortunate should anything otherwise happen. I am very confident that he will get the

that it is a healthy development from President Muhammadu Buhari to express support for the APC governor who has done well. So all those who are beating the drums of war, this should give them sufficient notice that their days are numbered.

ticket and win the election. It is no longer news that the APC is factionalised in the state. What are you doing to bring back the aggrieved members and unite the party? Substantially, APC has remained one. The attempt to divide the party has failed woefully, and that is the reason why you see the architect of this destructive effort have now gone outside the party to seek mercenary help. That is why you see those offering waivers that they have no powers to give. But I can tell you, APC remains intact. The people who are going outside to throw stones are the greedy ones who are bleeding the economy dry. I believe that the citizens of this state can tell the reasons why the dissident members are doing what they www.businessday.ng

are doing. It is not in the interest of our state. In fact, that has now made the citizens even more loving of Godwin Obaseki because he has refused to share the patrimony to private pockets and to that extent, I think that will enhance his chances rather than dim it. The immediate past national chairman of the party, John Odigie-Oyegun, had in a recent publication in some national dailies said Buhari endorsed the re-election of Godwin Obaseki for the second term. Do you think this is a signal to ending the lingering crisis in the party? Well, according to the wise saying, a word is enough for the wise. I think

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As the primary election is fast approaching, what is your advice to Governor Godwin Obaseki as well as the would-be delegates for the primary? I would advise the governor to remain steadfast and focused. Though his style of governance may not be liked by a few I can tell you the majority of Edo people love him, they are praying for him and will support him. I will also use this opportunity to appeal to those who are fighting him to reconcile with him, if not for their benefit but at least for the benefit of the state. But for the would-be delegates who are the officers of the party, elected persons who ran on the platform of the party and very senior members who are referred to as statutory delegates to the national convention which is the highest organ of the party, they have the onerous duty of picking a candidate. I just want to remind them that this is the candidate they sponsored about three and a half years ago. He has done so creditably well which justifies their confidence in him, and they should support him this time around to enable him to take the state up even further for the betterment of all. Obaseki may not be sharing money to people but he is creating so many opportunities that will ensure Edo State can operate independently of the monthly allocations from Abuja. The end of your tenure is around the corner, what legacy will you leave behind? I want to be remembered as a party chairman who used the opportunity and organisation of the party to provide support for the government. I supported Oshiomholeâ&#x20AC;&#x2122;s government to success and we are supporting Obasekiâ&#x20AC;&#x2122;s government to succeed. And when that happens, if all the dreams that we have shared with our people come true, then, of course, I would be fulfilled. I also want to thank the Edo people for the support they have given the Obaseki-led administration, and urge them to continue to pray so that peace can return to the state because without peace there can be no progress.

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Wednesday 27 May 2020

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

Higher education needs a long-term plan for virtual learning ity.

JAMES DEVANEY, GIDEON SHIMSHON, MATTHEW RASCOFF AND JEFF MAGGIONCALDA

he impact of COVID-19 on education systems around the world is unlike anything we have seen in the postwar era. More than 1.6 billion students have been affected, representing over 91% of all students in the world. Unsurprisingly, demand for online learning has skyrocketed. In April, there were 10.3 million enrollments in courses on Coursera, up 644% from the same period last year. Universities are (rightly) focused on ensuring academic continuity for students, and in many cases that has meant relying on existing, ready-made, online courseware from other institutions. Colleges can reference the vast set of remote teaching resources that leading universities have made available under Creative Commons, for example. Or consider the example of Duke Kunshan University in China, a partnership between Duke University and Wuhan University: Dealing early with the COVID-19 crisis, the school moved to remote teaching using Coursera for Campus. These measures, though effective, are stopgaps. As the emergency subsides but normal fails to return, higher education institutions need to do more. There’s a good likelihood that virtual learning — in some capacity — will need to be a part of education for the foreseeable future. Higher education institutions need a response framework that looks beyond the immediate actions. They have to prepare for an intermediate period of transition and begin future-proofing their institutions for the long term. BUILDING MATURE DIGITAL LEARNING ECOSYSTEMS Evolution in the higher education ecosystem happens through “punctuated equilibrium”: long periods of relatively slow change interspersed with occasional moments of rapid adaptation. The current pandemic is a punctuation moment. Educators, faced with unprecedented urgency, are working hard to restore teaching and learning using technology, innovation and collaboration.

Universities want — and need — to be providing their own online content from their own faculty. But many faculty members have never designed or delivered a course online. Universities have to work with faculty to make quick decisions: Which courses must be reimagined online and which content can be transferred directly without a significant loss of experience? Faculty will need to reimagine seminars, making improvements to how they teach online. For example, a two-hour lecture may actually consist of multiple activities rather than a continuous, monolithic video. Finally, as universities begin to transition to a more robust digital infrastructure during this period, virtualization, guided projects and gamification will take online learning solutions beyond video conferencing. As universities develop their own digital competencies, what started as a short-term response to a crisis could well become an enduring digital transformation of higher education. Universities are in varying stages of digital transformation. What separates the digital newcomers from the advanced institutions? And what actions do education leaders need to take to move their organization forward? We’ve developed the following framework to help universities identify where digital learning fits into their education ecosystem and, with that knowledge, transform their teaching and learning in response to COVID-19. The guide www.businessday.ng

draws on our collective experiences leading digital strategy at the University of Michigan, Imperial College London, Duke University and Coursera: — DIGITAL NEWCOMERS: Institutions that lack the necessary prerequisites of online learning and remote teaching face a daunting challenge. These institutions are characterized by having less than 3% of their courses available online, no experience in teaching online and not having allocated any team or budget to exploring or expanding online content. But it’s not all about teachers and administration. In these schools, students and faculty have no or limited access to software (collaboration tools, video conferencing) and hardware (laptops, webcams). They have poor or no internet connectivity. They may have mobile and W-Fi connectivity but are inhibited by expensive data costs. The current state of technology and platform choices make it easier for universities in this position to take quick actions. We now have extensive broadband access, reliable communications tools, user-friendly video conferencing and widespread smartphone adoption. Institutions can easily and cost-effectively secure licenses for students, and faculty can immediately start engaging online. Getting the faculty and students comfortable with the medium is the first step — if possible, seek help from peer institutions, consultants and companies to train the group

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on what it means to teach effectively in an online setting. — EMERGING ADOPTERS: These are universities that have successfully experimented with online learning in pockets. They already have basic communication and collaboration tools in place, with a few departments delivering programs online. Faculty and instructors have experienced the benefit and have the conviction to embrace the medium. These institutions now need to accelerate their digital transformation with institutional intent and an onlinestrategy task force. They should use early adopters among departments, faculty and staff as mentors and key architects of their strategy. That means empowering them with authority, resources and decision-making latitude to adopt turnkey solutions. They will also need to accelerate the production of online courses, supplemented wherever required with widely available open content from other institutions. They can minimize human curation by using machine-learning solutions like CourseMatch to map the most relevant courses to their curriculum. Universities can begin to explore virtual and take-home labs for courses that require hands-on problem solving, given the uncertainty around access to physical labs in the months ahead. Finally, they will need to rapidly upgrade software and hardware infrastructure for on and offcampus learning, including alternate plans for students who don’t have reliable connectiv@Businessdayng

— ADVANCED INSTITUTIONS: Advanced institutions are the ones that have the robust technical infrastructure, a large catalog of digital content and a faculty well versed in teaching online. They usually have dedicated centers of academic innovation driving their digital strategy. For such institutions, this moment is about scaling the infrastructure across all programs. That said, advanced institutions should accelerate innovations to serve online communities with varying socio-economic backgrounds and increase the commitment to creating an inclusive environment for learning by championing breakout group discussions, live discussion boards and student presentations. Offline, community engagement can be strengthened through crowdsourced notes, study groups, virtual coffee/happy hours and livestreamed events. Advanced institutions are best positioned to explore immersive technologies like augmented reality and virtual reality in fields like medicine and engineering, as Imperial College London is doing. DIGITAL TRANSFORMATION IS NOW RISK MITIGATION As schools contemplate the possibility that students may not be allowed on campus in traditional ways for extended periods of time, risk mitigation will become an important driver of digital transformation and allow universities to continue enrolling — and serving — students. Universities that build digital capabilities will be equipped to pivot in any crisis, whether an extended COVID-19 outbreak or a future calamity.

James DeVaney is the associate vice provost for academic innovation at the University of Michigan and is the founding executive director of the Center for Academic Innovation. Gideon Shimshon is the director of digital learning and innovation at Imperial College London. Matthew Rascoff is the associate vice provost for digital education and innovation at Duke University. Jeff Maggioncalda is the CEO of Coursera.

Wednesday 27 May 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Nigeria’s financial industry GDP surge by 24% YoY in Q1, highest in 4yrs Endurance Okafor

hile many industries have been disrupted by the outbreak of coronavirus, Nigeria’s financial industry is one of the few that is less hit by the pandemic as the sector reported four-year high GDP growth in Q1 2020. With a GDP expansion of 24 percent in the first three months of 2020, Nigeria’s financial institutions outperformed other sectors to emerge as the topperforming industry in Q1, data by the National Bureau of Statistics (NBS) on Monday shows. A year-on-year comparison of the industry performance shows that the 24 percent GDP growth reported in Q1 2020 was 14.8 percentage points higher than the -9.21 recorded in the corresponding quarter of 2019. The sector expanded by -13.16 percent, 0.60 percent, and 12.58 percent in Q1 2016, Q1 2017 and Q1 2018 respectively. On the factors that supported growth in the finance industry Ayorinde Akinloye, a research analyst at CSL stockbrokers said: “Banks continued to expand their loan books in the first 2 months of the quarter before the pandemic as they tried to meet the CBN LDR requirement.” Meanwhile, in a bid to improve lending to the real sector of the Nigerian economy the Central Bank of Nigeria (CBN) for the second time, last year upwardly reviewed deposit money banks’ por-

tion of minimum loanable deposits to 65 percent. The decision, which is subject to quarterly review, was informed by appreciable growth in the level of the banking sector’s gross credit following the pronouncement of a 60 percent minimum Loan-to-Deposit Ratio (LDR) in July 2019 and the need to sustain the momentum, the apex bank said in a circular on September 30 2019. Analysis of the 2020 firstquarter GDP report by NBS revealed that the Financial and Insurance sector grew by 13.19 percentage points year-on-year in Q1 2020. From a contraction of 7.60 percent in Q1 2019, the sector leveraged on contactless payment, increase in deposits and transactions to post a growth of 20.79 percent in the first three months of 2020, the fastest expanding sector in the review quarter. The Finance and Insurance Sector consists of the

two subsectors, Financial Institutions and Insurance, which accounted for 87.02 percent and 12.98 percnt of the sector respectively in real terms in Q1 2020. The Financial Institution sub-sector alone financial institutions was responsible for most of the sector’s growth as it reported a growth expansion by 33 percentage points. The insurance sector, on the other hand, recorded a marginal growth increase of 0.36 as it expanded from the 2.58 percent reported in Q1 2019 to 2.94 percent at the end of March 2020. “Insurance firms have seen modest improvement in premiums written driven by improved awareness and strategic insurance product marketing by these firms,” Akinloye said. Meanwhile, Nigeria’s big banks received a combined N16.22 trillion from customers through deposits across various account types in the

first quarter of 2020 as business activities almost came to a halt due to the coronavirus pandemic. The total deposit collected by the tier-one lenders in the review quarter was 12.72 percent above the N14.39 trillion recorded in the comparable quarter of 2019. Industry analysts expect Nigeria’s financial industry to leverage the new normal of online shopping and digital financial services to post higher growth in 2020. “With the COVID-19 epidemic posing significant concerns and online shopping becomes an increasingly attractive option for consumers. Ultimately this leads to increased EPayments revenue for the banks,” a Lagos-based analyst said. Among the electronic channels mostly patronised by Nigerians, Mobile payment and PoS recorded some of the highest revenue reported by Nigerian finan-

cial institutions in 2019. According to the data by the Central Bank, the volume of transaction that was done through mobile payment was valued at N5.08 trillion while PoS posted N3.2 trillion in the same year. A recent report by Quantum Metric, a SaaS platform provider shows the number of online shoppers increased 8.8 percent since the outbreak of coronavirus and led to a 52 percent surge in online sales as against the value reported a year ago. The firm analyzed 5.5 billion anonymous and aggregated online and mobile visits to retailer websites from Jan 1 to Feb 29. Ayo Ibaru, COO /Director - real estate advisory, Northcourt is optimistic that Nigeria’s e-commerce industry will benefit from the virus outbreak. “E-commerce is expected to grow due to the virus outbreak,” Ibaru said adding that the growth of the e-commerce industry in Africa’s largest economy will also lead to an increase in the demand for last-mile warehousing. According to consulting and research firm Technomic, 52 percent of consumers globally are avoiding crowds and 32 percent are leaving their house less often because of coronavirus. While Nigeria is preparing to gradually re-open its economy, the social distancing recommendations by the Federal Government and health experts to contain the spread of the virus which has already affected more than 7,000 persons, is expected to fuel the surge in online and

contactless transactions. Meanwhile, before the virus outbreak, Nigeria’s e-commerce industry was described as one on a growth trajectory as McKinsey projected the size of the market to reach $75billion by 2025, N58 billion higher than the current estimate of over $17billion. The expansion of the industry is buoyed by the country’s young population coupled with the mobile phone penetration estimated at 89 percent by Global System for Mobile Communications (GSMA). According to the 2019 data by GSMA, 50 percent of the total 89 percent of mobile phone users in Nigeria have access to the internet. With broadband of 40 percent Nigeria has about 184.4 million mobile phone subscribers as of December 2019, as compiled from data by Nigerian Communications Commission (NCC). Nigeria’s growing cashless economy which began in Lagos in 2012 has since improved with digital payment and electronic banking implemented in phases across 27 states of the federation. This is another catalyst responsible for the growth reported by the country’s ecommerce industry, as compiled from industry sources. Nigeria’s e-commerce industry which has some popular online stores like Jumia, Nigeria’s version of amazon. com, PayPorte, Deal Dey, Gloo.ng have also leveraged social media to onboard informal online owners who use Instagram, Facebook and Twitter their means of selling their products.

measures will use digital finance as a lever to influence social distancing, P2P transactions and financial inclusion in an infectious health crisis. Fintech and Social Enterprises: There is an opportunity for fintech companies to innovate and go beyond payments and transactions. One of the many effects of the pandemic and lockdown measures is an increase in illnesses especially in rural and densely populated households/

communities where social distancing is nothing but a pipe dream. This is the time to collaborate with health management and pension organisations to develop a product that caters to the vulnerable and under-served.

COVID-19 & Financial inclusion in Nigeria (1) …the good, the bad, and the not-so-ugly Onyeka Akpaida The Good (Recommendations) inancial Inclusion Goal: The Digital Nigeria report on financial inclusion as at January 2020 revealed that over 36 million of the 101.4 million adult Nigerians are financially excluded and if you are gender- focused like I am, it will interest you to know that about 20.5 million of the excluded

population are women. There is a huge opportunity for new players in the financial inclusion space irrespective of your business location- Urban centres or rural communities and if you are passionate about under-served communities, there are over 28 million excluded people in this demography. Reduction in barriers to entry by regulators in the financial inclusion space such as high cost of fees will also encourage more play-

Onyeka Akpaida

ers and ultimately bring us closer to Nigeria’s financial inclusion goal of achieving a 20% reduction in the ex-

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cluded population by 2020. Kenya’s largest Telco announced a fee waiver on MPesa, the country’s leading mobile money product for 90 days to reduce the physical exchange of currency in response to the COVID-19 outbreak following a directive from Kenya’s President Uhuru Kenyatta to explore ways of deepening mobilemoney usage to reduce risk of spreading the virus through physical handling of cash. Implementation of such

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Onyeka Akpaida is a financial service professional with 9+ years of experience in financial inclusion, consumer-centric digital banking and public sector engagement

Wednesday 27 May, 2020

BUSINESS DAY

BANKING CBN’s dollar sales resumption to BDCs means huge loss to FX speculators HOPE MOSES-ASHIKE

he naira is facing its greatest risk from the coronavirus pandemic, as currency speculators continue to make spurious demand for dollar with hope to make good returns from the rising gaps between official and parallel market rates. Dollar exchanges at between N450 and N461 on the black market and retail Bureau segment while it remains stable at N361 at the official window. Interestingly, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele and President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe have in recent weeks, analyzed the illicit business of currency speculators and the danger this pose to the economy and naira stability. In the coming months, foreign currency speculators will face over N10 billion losses as the CBN snd the ABCON finalize plans to resume dollar sales to Bureaux De Change (BDCs). With over 5,000 BDCs spread across the country receiving weekly allocations for sale to the retail end of the market, and rising accretion to the foreign reserves to over $37 billion, the naira’s future looks bright. ABCON had warned forex speculators to retreat their steps or get ready to lose their savings and businesses as the CBN has the financial muscles to sustain dollar interventions to businesses, and economy to keep the naira stable in line with its exchange rate stability mandate. Both leaders have also warned the currency speculators about the looming danger for their trade if they refuse to retrace their steps as they will incur losses estimated at over N 10 billion in the next few months as the CBN prepares for BDCs return to the forex market after nearly six weeks of absence due to the Coronavirus pandemic and need to protect operators. The fact remains that currency speculators will lose huge funds, that will likely be the beginning of the ending for their illicit businesses as the apex bank will soon begin dollar sales to over 5,000 BDCs operating across major

Aminu Gwadabe

cities nationwide. Emefiele even went a step further to appeal to industrialists patronizing the parallel market to stop such practices in the interest of the economy and for the sustainability of their businesses, failure which they will equally record same huge losses like the currency speculators. Both Emefiele and Gwadabe have huge experiences in the market to predict what follows after every major crisis. Like in 2016 currency crisis, the market got a major relief after the BDCs’ began getting dollar allocations from the CBN. That same scenario will soon play out as the CBN team and ABCON management begin to count days for the BDCs return to the market. The CBN has come to realize that BDC operators can be the difference between naira recovery and depreciation during volatile and uncertain times. That’s especially true now that the local currency has come under intense pressure that is purely driven by speculative demand for the dollar. The BDCs are essentially operators that help get dollars to the end users no matter where they are and have for decades proven time and time again their relevance in stabilizing the naira. Gwadabe said the CBNlicenced BDCs will soon start full operations as the apex bank will soon reopen dollar sales to operators. According to him, with the CBN’s planned lifting of moratorium on dollar sales to BDCs, www.businessday.ng

reopening of the airports for air travels, global ease on restriction of movement are positive indications that dollar flows to the economy will soon improve. He said the naira has been exchanging at N461 to dollar at the parallel market but will be upbeat once dollar sales to BDCs commence. “The return of over 5,000 BDCs to the forex market will add great strength to the Naira and lead to major capital losses for forex speculators. It happened in 2016 and will happen again in 2020. The return of the BDCs will immediately boost Naira recovery and put the enemies of the economy to shame. We are committed to the CBN’s exchange rate stability and will take all necessary steps within set rules and regulations to keep the naira stable,” he assured,” Gwadabe said. He said the return of BDCs to the forex market will help chase away speculators, curb rising inflation, boost productivity and employment, enhance price discovery, enhance market transparency and competitiveness. Positive Indicators for Naira Recovery Aside positive developments in the global economy, the CBN has taken action to address the risks facing the naira, which will lead to rapid recovery for the local currency. For instance, the recovery in the Chinese manufacturing sector and opening of the Asian tiger’s economy after months of closure due to the

coronavirus pandemic have raised the country’s crude oil demand, many of which will be bought from Nigeria. Such purchases will boost Nigeria’s dollar earnings. Besides, Nigeria is one of the few lucky countries that have secured emergency $3.4 billion loan from the International Monetary Fund (IMF) under the Rapid Financing Instrument (RFI). This fund will not only support Nigeria’s financial sector and address balance of payment hitches, but has boosted foreign reserves and financing to the budget for targeted and temporary spending increases. Nigeria’s foreign reserves have reached over $37 billion, which represents enough buffers for the CBN to deal with any act of illegal economic behaviour like hoarding, speculation, conversion of local assets among other illicit financial activities. Gwadabe also added that the OPEC measures on sustainable price stability are commendable as many governments across the world have agreed to oil production adjustment targets and continued collaboration with all their partners, a move that will benefit Nigeria. He said the CBN has also officially reviewed the naira exchange rate to N380 to a dollar. Aside devaluing the naira, the apex bank also adopted a unified exchange rate, and pushed the official rate of the naira to N376 to dollar for International Money Transfer Operators rate to banks; N377 to dollar for banks’ dollar sale to CBN and pegged CBN’s dollar sales to banks at N378, all aimed at attracting Foreign Portfolio Investment and strengthening the local currency. The BDC operators are expected to buy dollar from the CBN at N378 per dollar. Gwadabe said the naira rate review and assurances by the CBN Governor, Godwin Emefiele to foreign investors that want to repatriate their funds from the country are positive for the naira continued recovery. Reopening Guidelines for BDCs Gwadabe said ABCON is issuing their reopening guidelines to all its members nation wide to include on-boarding on the queuing crowd ticketing management application by all members known as ABCON 360°QSM portal with over 80 per cent members registered nation wide so far. “We are also updating all

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regulatory obligations during the lockdown, fumigation of members offices/markets, distribution of second phase of face mask nation wide to our members. There is also the provision of wash hand basins, sanitizers at our distributions centres while members are to explore school fees, mortgage, subscription payments as one of their allowable scopes during post COVID-19,” he said. ABCON’s Take on African Currencies’s Performances ABCON boss Gwadabe said the impact of the coronavirus pandemic on the naira was not as bad as seen in other African countries’ currencies. Amid huge capital flow reversal driven by risk-off sentiment, currency rates of African countries shows that the South African rand is the worst hit, down 20.6 per cent year-to-date . This is followed by the Angolan Kwanza which has depreciated by 16.1 per cent, Mauritius Rupee (-8.8 per cent), Nigerian Naira (-6.6 per cent) and Kenyan Shilling (-5.3 per cent) followed in that order. Others include the Tunisian Dinar (-3.8 per cent), Morocco’s Dirham (-2.7 per cent) and the W7est African Monetary Union’s CFA franc (-2.3 per cent ). Notably, the Egyptian Pound, up 1.3 per cent year-to-date, remains the best performer across the region. Gwadabe explained that while an adjustment of the Nigerian naira from N360/$ to N385/$ broadly reflects the 6.6 per cent weakness observed in the official market, it must be noted that currency depreciation at the unofficial market is much deeper, currently at N461/$. But looking ahead, the outlook for the naira is expected to remain relatively strong on the back of growing foreign reserves at over $37 billion, increasing global demand for crude oil, rising commodity prices and rising global trade. CBN’s Message to Parallel Market Patronizers Emefiele has warned domestic and foreign investors against patronising the unofficial market, saying it was helping to overheat that market. Dollar sales have since resumed following a phased easing of the lockdown but foreign investor currency demand is yet to be met, analysts say. Emefiele, has warned firms and individuals against @Businessdayng

patronizing the parallel market, popularly called the black market. He warned them to stop using black markets for foreign currency exchange, adding that patronizing the parallel market is helping to overheat the foreign exchange market. “I know some of you are involved, stop now. By going to the parallel market, you are helping to overheat that market. Not only that, you will lose money because you would have bought it at a price that is not realistic. I can tell you that you are going to lose money. But we have seen your account already. We are appealing to you, please stop and let’s do what is right, what is legal, so that Nigeria can continue to be a good place for you and to live in,” Emefiele appealed to businesses patronizing parallel market. Going further, he said, “We are taking note of some of you and I can tell you, go ahead and do your business, nothing will stop your forward, your forward will be at a committed price, we are going to provide more liquidity in the market so that people can stop going to the parallel market. Don’t go there because it is not good for you. But be patient, it’s going to be orderly’’. ABCON’s Commitment to Exchange Rate Stability Gwadabe disclosed that ABCON executive council under his leadership will continue to promote transparency and efficient market dealings while commending the CBN management for its progressive policies and achieving stable exchange rate that aligns with its price stability. He said the CBN has been able to create a people-focused Central Bank promoting macro-economic objectives such as low inflation and a stable exchange rate, along with a focus on promoting inclusive growth and reducing unemployment in the country. Gwadabe said the BDCs remain at the centre of economic development and have the capacity to attract needed capital for the development of the Nigerian economy. He said that Nigerian BDCs, like their counterparts in other emerging or developing economies, have what it takes to deepen the forex market through the deployment of technology and adhering to global best practices.

Wednesday 27 May 2020

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Expert worry as Nigeria neglects opportunities to earn FX from agro - export …Says Nigeria produces close to 60% of world’s shea nut AMAKA ANAGOR-EWUZIE

griculture was formerly resp on sib l e fo r 93.3 percent of Nigeria’s total foreign exchange earnings, but sadly the nation abandoned agriculture to face crude oil, which brought down the volume of nonoil and agricultural export earnings down to less than 20 percent, Obiora Madu, director general of Multimix Academy, has said. According to him, Nigeria was once the highest producer of cocoa before crude oil pushed the country away from agriculture, and today, Cote d’Ivoire and Ghana are doing more than Nigeria in cocoa production. Madu, who spoke recently in Lagos on the theme, ‘Agro Export: Policy, Practice and Issues,’ as a guest on Maritime TV’s Live Conver-

sations, said there are about seven agricultural produce which Nigerians can tap into to earn foreign exchange especially in the face of dwindling oil revenue. He listed cocoa, cocoyam, yam, sesame and others as products for an intending agro-exporter in Nigeria, adding that the country produces about 300,000 tons of sesame seed yearly and

240,000 tons of cocoa. “With an annual production volume of close to 60 percent to 300,000 tons, Nigeria is the largest producer of shea nut in the world today. Shea nut is an agroexport product that is mostly produced in West African region,” he said. Comparatively, statistics shows that Nigeria produces 54.1 percent of global shea

NIMASA gives dockworkers, seafarers movement permit as essential workers AMAKA ANAGOR-EWUZIE

he Nigerian Maritime Administrat i o n a n d Sa f e t y Agency (NIMASA) has finally received the Federal Government approval, and has issued a new guideline categorising Nigerian seafarers and dockworkers as essential duty workers. By implication, both can now receive passage permit to and from their residence to the seaport or jetties to perform their official duties of ensuring the movement of international trade. Also, ship owners can now effect crew change t hat w ou l d e nab l e o n board workers to able to come ashore to reunite with their families and for those ashore to be able to join ships when necessary. This development is coming months after industry stakeholders raised alarm that many seafarers were stuck onboard vessels and oil platforms, unable

to come ashore while those ashore were unable to go home to their families due to the interstate lockdown, shut down of airports and land borders to contain the spread of the COVID-19 pandemic. According to a marine notice recently published in national dailies by NIMASA, the agency tasked employers of dockworkers to take responsibility of ensuring that all measures of preventing the spread of coronavirus (COVID-19) as stipulated by the World Health Organisation (WHO) and the Nigerian Centre for Disease Control (NCDC) are observed to minimise occupational risks. “Employers are responsible for providing, where necessary and so far, as is reasonably practicable, adequate protective clothing and equipment at no cost to the dockworkers,” the notice stated, It is also directed that employers must ensure that workers who absent from work as a result of www.businessday.ng

COVID-19 are compensated for the suspension of earnings they suffer as a consequence. “Mandatory use of nose masks shall be enforced within all terminals and jetties, mandatory temperature checks shall be conducted on all staff before accessing the terminals and anyone who presents temperature above 38 degrees shall not be allowed entry,” the notice further stated. It further directed all docklabour employers to ensure that all bus deployed dur ing the CO VID-19 pandemic has 50 percent maximum capacity, ensure that passengers wear nose masks, provide sanitisers for all passengers and drivers to use and have all buses frequently disinfected. “All employers shall ensure social distancing of two meters maintained between people in the workplace and other public spaces within and around port terminals,” the agency added in the notice.

nut while Mali 25.5 percent, Burkina Faso 6.8 percent, Ghana 5.0 percent and Ivory Coast 4.6 percent. According to him, the government is doing a lot to encourage investment in agriculture, which would likely result to increase in the volume of agricultural produce in the future if Nigerians would harness the inherent opportunities in the

business. On the issuing limiting the growth of export business in Nigeria, Madu, who stated that Nigeria has comparative advantage, worried that the country lacks competitive advantage. “For example, it is cheaper for a shipper to bring a container from China to Tin-Can Island Port in Lagos, than to move that same container from Tin-Can to Ogba in Ikeja due to the clog in the wheel of the nation’s logistics supply chain. We are not talking about taking the container to the Northern part of the country. If you have your produce coming from the North to Lagos, you would pay through your nose,” he said. He said the logistics challenge increases cost for most export produces that leave Nigeria to the international market, which at end, limits the nation’s competitiveness.

“Assuming the rail system in Nigeria is efficient and two people buy ginger in the North for export via Lagos seaports. If one person sends his goods via the rail and the other utilised the road, the person who used rail has the competitive advantage because it would cost more to use the roads than using rail,” he explained. While noting that Nigeria’s national integrity is also very low globally, he said that this fact puts off potential buyers from doing business with Nigerian farmers. “When you call someone to discuss an export transaction, as soon as you mention that you’re calling from Nigeria, the person would want to check that you’re not fraudulent. This is a big challenge and is why some Nigerians are shipping their goods from Ghana, which in most cases attract higher prices,” he added.

CMA CGM introduces overweight surcharges on Nigerian, W/African bound containers …Reviews surcharges

AMAKA ANAGOR-EWUZIE

MA CGM has announced the implementation of an overweight surcharge applicable from 1 June 2020 on containers from India (East & West Coasts) to West African ports including Nigeria. According to CMA CGM, 20-foot containers with gross weight exceeding 12.7 tons (tare included) would be expected to pay quantum US$200 per 20 foot as per freight. The company listed the ports concerned to include Cabinda, Luanda, Lobito,

Namibe and Soyo Ports in Angola; Cotonou Port in Benin Republic; Douala and Kribi Ports in Cameroon. Others include Pointe Noire Port in Congo; Banana, Boma, and Matadi Ports in Democratic Republic of Congo; Libreville Port in Gabon; Tema Port in Ghana; Walvis Bay Port in Namibia; and Apapa, as well as TinCan Port in Nigeria. Meanwhile, CMA CGM has also announced the end of several surcharges across the globe, as the operational situation in Manila and Subic ports, has improved. The liner company has cancelled its port congestion surcharge applicable to reefer

imports into the Filipino ports as from 20 May 2020. In addition, CMA CGM has stated that its emergency space surcharge applicable since 15 March 2020 from Russia & Baltic is to be cancelled as from 15 June 2020. Furthermore, the line has informed customers that the peak season surcharge of US$300 per dry container from all North European ports (including the United Kingdom and Scandinavia) to North West India, South East India, Pakistan & Sri Lanka ports and inland points, applicable since 1 April 2020, is to be cancelled from 1 June 2020.

We’ll tackle road congestion, underutilisation of eastern ports – NPA Board AMAKA ANAGOR-EWUZIE

kin Ricketts, chairman, board of the Nigerian Ports Authority (NPA), has assured that under his watch, issues around congestion on the roads leading to seaports as well as underutilisation of ports in Eastern part of the country, would be dealt with.

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Speaking at the inauguration of the new board members of NPA in Abuja last week, Ricketts said the major issues confronting ports today are capacity utilisation and evacuation corridors. “While the ports in the East are being grossly underutilised due to many factors, the efficiency of the ports in Lagos is hampered by inadequate evacuation corridors @Businessdayng

that lead to congestion on the road, which ultimately affects prompt service delivery,” he stated. According to him, the new board intends to confront the challenges head-on in conjunction with other stakeholders, with a view to ameliorating the sufferings of port users and ease business in the port, as envisaged by the Federal Government.

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BUSINESS DAY Wednesday 27 May 2020 www.businessday.ng

Uka Eje: Linking thousands of farmers to finance, market opportunities

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CALEB OJEWALE

hen Uka Eje, CEO, Thrive Agric graduated from Covenant University with a Biochemistry degree in 2012, he had another path set for himself, not in the laboratory titrating chemical samples, but on farmlands across Nigeria. From working with 150 farmers in the beginning, Eje, through Thrive Agric as at last year had reached 35,000 farmers within three years, and in fact, told BusinessDay in an exclusive interview of an ambitious plan to reach 250,000 farmers this year. The company has developed what it calls an Agriculture Operating System (AOS), a technology driven platform that is hosting a database on farmers; their individual, financial, and agricultural profiles, which aids decision making when trying to identify legitimate farmers, and their records of accomplishment. Currently, Eje says 121,000 farmers in 6 states; Kano, Kaduna, Bauchi, Jigawa, Kebbi, and Plateau State have been captured in the system. The company has also been able to raise about N2.5 billion since 2017, which has been used to support production by the 35,000 farmers reached so far. These farmers have been supported with a combination of access to input, access to markets, and of course, credit. This investment in smallholder farmers has in turn translated into about 150,000 tons of maize, rice, soyabeans and sorghum, which are the major crops the company facilitates. Apart from crops, working with poultry farmers has yielded 3.7 million birds as at last year. Growing up in Benue state, described as Nigeria’s Food Basket, Eje noticed that even in the midst of enormous agricultural activity, farmers were not getting the best value after toiling for months to produce crops. There was an incident during the ‘Tomato-Ebola’ (Tuta Absoluta) crisis where Tomato was sold for as low as N500 (per basket) in Benue State, but going to Lagos, Eje noticed that tomato was sold at about N20,000 per basket. “It was really a shocker for me,” he said. He could not reconcile N500 naira per basket in Benue to N20,000 for the same commodity in Lagos, a 3000 percent price difference. While this could be explained with principles of

Growing up in Benue state, described as Nigeria’s Food Basket, Eje noticed that even in the midst of enormous agricultural activity, farmers were not getting the best value after toiling for months to produce crops

Eje

scarcity, demand and supply, and other factors that influence prices to skyrocket, for Eje, it simply did not make sense. “I couldn’t logically reconcile how that made sense, especially when you notice that these farmers have the potential of scaling more and of doing more,” he said. He noticed a broken farmmarket linkage, where primary producers had little or no knowledge of who was going to off take whatever commodities had been produced. In many cases, they only interacted with middlemen who determined the price of commodities for the farmers. “I felt it was unfair. I felt there was a lot going on that needed to be corrected,” said Eje. Initially, Eje and his then cofounder decided to put these farmers in a cluster, and become the ‘middleman’, on what he described as “an empathetic level”. They moved farm produce for the farmers and gave them a percentage of whatever profit

was made. This, he said made many of the farmers want to do business. Expectedly, it attracted a lot of interest from farmers, and got to a point where they could not buy all of the commodities. “It was because our price was better than anywhere they could get it,” he said. At that point of being overwhelmed, it was then decided to also go into production. Teaming up with some of his former university friends, the production aspect started, but it was not in the mould of what is today known as crowdfunding. It was first from the empathy of the problems of the farmer in accessing market, and then it became an expansion into direct production by supporting farmers. The group (yet to become a company at the time), started with about 150 farmers, expanding to 500 within that year and continued growing till date. In 2017, Thrive Agric was formally launched, both as a legal entity registered with the Corporate

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From 150 to 35,000 farmers and a new target of 250,000 farmers, Uka Eje is connecting farmers to finance, market, and knowledge that help them improve their productivity, even beyond their own imagination

Affairs Commission (CAC), and as an online facilitator of crowdfunding for agriculture. Operating, even within just about three years, has not been without challenges, but according to Eje, the company draws strength from its resolve to ensure that it gives value to the farmers, especially in trying periods such as this. Ambitions beyond crowdfunding For Eje, while it appears Thrive Agric is known more as a crowdfunding company, with the smallholder farmers, the company is considered more than that. “With the farmers we work with, it is their stories and experiences of impact from working with us that is the real story of Thrive Agric,” he said. As he illustrates, the company’s story is not for instance, entirely based on someone who gave one million naira and got X or Y percent after some months. While for the average investor, it is about putting money down for a fixed period and getting returns, but for farmers, the experience is different. That experience as he says, is for a farmer cultivating as little as 0.2 hectares of land, but because of Thrive Agric, is now able to farm on one hectare and able to make three times the previous yield because of technology based advisory the company is providing. For him, that experience is much more than returns on investments, as it is also about

access to market, education and the financial literacy that happens for thousands of farmers. Even as the crowdfunding and finance aspect of the company no doubt excites many people, one of the things that the company has been doing intentionally is moving away from crowdfunding to other alternative investments that would be a lot more beneficial for the smallholder farmers. According to him, “Millions of farmers do not know that access to Capital from the government is possible and we depend on them for food. Why it is so strong for me, especially at this point is if we are talking a lot about solving food scarcity and farmers at this period don’t have access to easy Capital to finance their operations, then the reality is we are going to experience food scarcity.” Thrive Agric, according to Eje, is in the process of positioning itself to get support from all major stakeholders support, to achieve the company’s goal of working with 250,000 Farmers this year. The reason for this according to him is because the cost of goods will increase (in view of current economic challenges), and before we think of exporting outside the country, we need to be able to satisfy internal consumption to a good extent. Through its Agriculture Operating System (AOS), Thrive Agric is creating a new experience in agricultural finance, where whoever is the financier has visibility of the operation. This starts by ensuring the onboarding process is intact and covering information regarding farmer location, mapping their land, and all the little details that helps to even know who is the legitimate farmer. According to him, there is often no one watching after loans are given to farmers to determine if it actually gets to the farmers, and there is no one watching what the farmers are doing. This, he says is important not just for financial records, but also that when disbursements actually occur, the same system can be used to monitor performance and progress of farmers. When there are disease outbreaks, those can be easily controlled as early alerts would have been raised. From 150 to 35,000 farmers and a new target of 250,000 farmers, Uka Eje is connecting farmers to finance, market, and knowledge that help them improve their productivity, even beyond their own imagination.

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