BusinessDay 28 Apr 2020 by BusinessDay

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news you can trust I ** tuesDAY 28 april 2020 I vol. 19, no 551

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… as NNPC faces new dilemma of which fields to cut output

FG to relax lockdown in Lagos, Ogun, FCT May 4

ISAAC ANYAOGU & DIPO OLADEHINDE

segun adams

How CBN intervention may be make or break for indigenous oil firms

irect intervention by the Central Bank of Nigeria (CBN) may be a make-orbreak deal in securing the future of Nigeria’s indigenous oil firms who are dealing with slumping prices, spiralling finance costs, and huge debt overhang that threatens the soundness of the nation’s banking industry and jobs in the oil sector. The global oil market is currently in turmoil on the heels of dwindling demand for crude oil brought about by the coronavirus pandemic. In Africa’s biggest oil-producing country, indigenous energy companies’ ability to service debts is extremely vital to Nigeria’s banking industry. “The impact is a complete and utter disaster,” Kola Karim, chief executive officer of Shoreline Group, the third-biggest independent, said in an interview. “We’re underwater, without adding the cost of finance. If you add the cost of financing, we’re drowning.” BusinessDay estimates that banks’ exposure to the oil and

he Federal Government has approved for a phased and gradual easing of the COVID-19 lockdown measures in FCT, Lagos and Ogun States effective from Monday, May 4. President Muhammadu Bu-

Unveils new nationwide measures to fight COVID-19 Excludes Kano in new guidelines, pledges aid to state

hari announced this in a nationwide broadcast on Monday, where he also rolled out new nationwide measures in the

government’s continued effort to contain the spread of the deadly coronavirus which has infected 1, 273 persons in the country,

with 40 deaths. The highlights of the new Continues on page 29

Continues on page 29

Inside

Private sector urges FG to save economy by removing obstacles to investment P. 2

L-R: Timipre Sylva, minister of state for petroleum resources; Babagana Zulum, governor, Borno State, and Mele Kyari, group managing director, NNPC, during the presentation of Oil & Gas COVID-19 intervention to Borno State as part of efforts to contain the COVID-19 pandemic. NAN

Nigerian hospitals in peril over surging cost of masks, protective gowns ODINAKA ANUDU & TEMITAYO AYETOTO

ising prices of medical masks and other personal protective equipment (PPEs) are undoing a lot of Nigerian hospitals as doctors and nurses run out of PPEs amid surging cases of coronavirus in Africa’s most populous nation. Doctors and nurses are worried about their safety as the

rate of patient-to-health worker transmission continues to rise. Many hospitals cannot afford to kit their doctors and nurses as it takes N25,000 or more to kit a doctor or nurse properly each day with PPE. A hospital with 50 doctors will need a budget of N1.250 million daily to kit them. A pack of 50 surgical disposable face masks sold for less than N4,000 in January now goes as high as N17,000. Also, a kit of

medical protective clothing sold for N1,500 in January on Jumia is now N14,000, BusinessDay finds. A lot of hospitals cannot afford the humongous cost, with some already threatening to shut down temporarily if they can’t procure PPEs, and doctors and nurses are avoiding patients without being fully kitted. The surging prices of PPEs is a demand-supply dynamic, but it is also proving to be one too many.

Francis Faduyile, president, Nigeria Medical Association (NMA), confirmed that many hospitals are in dire need of PPEs. “The government had thought that the PPEs were exclusively for those in isolation and treatment centres,” he said. “But it is becoming clear that those in normal, regular hospitals, where you don’t know if patients have COVID-19, need to protect themselves,” he further said.

He said government has promised to send PPEs to hospitals, but pointed out that it is early in the week to ascertain if the assurances have been met. Total coronavirus cases in Nigeria hit 1,273 on April 27 with rising daily deaths. The number of infected healthcare workers has risen lately to over 40, according to Osagie Ehanire, Continues on page 2

Tuesday 28 April 2020

BUSINESS DAY

news Ibeju Lekki youths protest against FG’s lockdown, restrictions ... set trucks, vehicles ablaze Joshua Bassey

here were serious protests in Ibeju-Lekki axis of Lagos State on Monday as irate youths and other residents of the area trooped out to protest the continuous lockdown, ordered by the Federal Government in the state. While some of the youths carried placards pleading that the lockdown be stopped, others shouted at the top of their voices that the lockdown was a harbinger of hunger, as they are very hungry with their families. Yusuf Olakunle, one of the youths with the placards said, the situation was already getting out of hand, as he relied on whatever sales he makes from his shop to feed his family. He said since the beginning of the lockdown, it has become very difficult to feed his family, noting that his wife is now 7 months pregnant. Another protester, who said he works with one of the contractors in Dangote refinery, said since the refinery stopped all contractors from working as a result of the federal government ordered lockdown, eating and feeding his family and siblings has been a very big issue. He said: “I am the breadwinner of my family and I am a welder who works with one of the contractors in Dangote refinery. But, since this lockdown began, I don’t have any work to do; hence there is no money to buy food for my family. I will rather be killed

by the virus than die of hunger; the federal government should stop the lockdown.” The irate youths, who burnt used tires on the road, also set ablaze trucks and some company vehicles which ran into their procession. Meanwhile the Onilekki of Lekki, HRM, Olumuyiwa Liasimm Ogunbekun appealed to the youths to be calm and law abiding as country is going through tough times as a result of COVID-19 pandemic; adding that the Dangote Refinery still remains their major source of daily earnings as more jobs are continuously created” It would be recalled that the Federal Government of Nigeria four weeks ago imposed lockdown on the Federal Capital Territory, Lagos and Ogun states due to the coronavirus pandemic. Meanwhile the Nigerian Medical Association (NMA) has advised the Federal Government to again extend the lockdown, which ends on Monday. This, the association said, would help to contain the rapid spread of the coronavirus disease. It added that with the “exponential” rise in the number of cases recorded across the country daily, people should not see the lockdown as a punishment but a necessary measure to contain the spread of the deadly virus. It, however, stressed the need for fair distribution of the palliatives to cushion the hardship the restriction had caused Nigerians.

Nigerian hospitals in peril over... Continued from page 1

Nigeria’s health minister.

It was gathered that groups andcountriesorderingPPEsnow employ armed guards to follow consignmentstoavoidlosingthe equipmenttodesperatecustomers offering higher prices. Duringthepeakofearlyanxietyoverthespreadofthecoronavirus, the second half of March, the price of a pack of low-quality face masks shot up to N12,000, three times the pre-COVID-19 price of N4,000. Before the novel coronavirus, it had been easy for hospitals to buy multiple cartons forworkers’use.Butthesituation has now changed. More private hospitals are likely going to be under lock and key soon with PPE expenditure eating deep into their pocket of running cost, said Joshua Ante, a medical doctor at a private hospital in Lagos. “Those in the isolation centres are fully protected whenever they want to see patients, making it less likely for them to get the virus. But doctors in other hospitals use just gloves and face masks and might not treat patients as COVID-19 case

until they find out that they are positive,” Ante explained in a phone chat with BusinessDay. The National Association of Nigerian Nurses and Midwives (NANNM) had raised the alarm that healthcare workers in non-coronavirus-designated facilities could be more at risk than those in isolation centres, urging hospitals to consider all patients as potential cases and practice universal precautions. Considering all patients as potential cases of coronavirus means sufficiently shielding workers with PPE, which has become a scarce commodity in many parts of the country. Many are looking to the United States, India and China for PPEs, but these countries are racing against time to save their own health workers. A major player in the health sector explained that there is a global shortage of PPEs, stressing that what is happening in Nigeria is not strange. The experienced health markets player, who pleaded anonymity, said Nigeria has an opportunity to encourage local manufacturers to explore the production of PPEs. www.businessday.ng

Health workers checking the temperature of workers at the entrance of Oyo State Government Secretariat in Ibadan, as workers on Grade Level 13 and above were ordered to resume work on Monday. NAN

Moody’s changes outlook on Nigerian banking sector to negative ... Capital ratios to reduce but remain adequate, profitability to deteriorate ... Lenders should develop structures to harness opportunities in crisis – Analyst Hope Moses-Ashike

oody’s Investors Service, a leading provider of credit ratings, research and risk analysis, on Monday changed its outlook for Nigeria’s banking system to negative from stable. The change reflects the firm’s view that banks will face weakening loan quality and foreign-currency liquidity challenges as depressed oil prices and the coronavirus pandemic weigh on Nigeria’s economy. These new difficulties add to existing headwinds from weak economic growth and rising regulatory costs. Nigeria’s largest banks, however,

will continue to benefit from a high probability of government support. Ayodele Akinwunmi, relationship manager, investment banking at FSDH Merchant Bank Limited, said the current challenges are real, but “what we should concentrate on is how we should develop structures to harness the opportunities in the crisis. And banks will facilitate this development”. Banks’ exposure to the oil and gas industry is substantial, at around 27 percent of total loans at the end of 2019, making the system susceptible to the oil price slump. The banking system is also highly dollarised, putting pressure on both assets and liabilities

in the event of a naira devaluation. Nigeria’s largest banks, however, will continue to benefit from high government support, Moody’s said. The quality of banks’ oil and gas loan portfolios will further deteriorate as a majority of these loans were extended to the upstream and service segments, where borrowers are more sensitive to oil price movements than downstream. However, a substantial amount of upstream and midstream loans were restructured to match borrowers’ cash flows during the 2015-16 oil price slump, and some banks have hedged against a low oil price. Lower oil revenue for the government could also hurt down-

stream oil and gas borrowers that receive federal subsidies, as these payments may be delayed. “We expect problem loans to rise to between 8 percent and 10 percent of total loans from 6 percent in December 2019, with risk tilted to the downside should the depressed oil price persist for more than a year. Loan restructuring and forbearance will lessen the impact of loan quality deterioration,” Moody’s said. Despite the measures taken by the Nigerian central bank to support the economy, the firm expects the creditworthiness of most Nigerian

Continues on page 29

Private sector urges FG to save economy by removing obstacles to investment ... as COVID-19 continues to expose frail economy LOLADE AKINMURELE

emoving the obstacles to doing business in Nigeria in order to attract the investment capital needed to soothe an ailing economy was the recurring theme as private sector participants brainstormed at the “Realities of COVID-19” webinar organised by BusinessDay. Faced with the double whammy of the rampaging COVID-19 pandemic and an oil price downturn, Africa’s largest economy is exposed,

with decades of poor economic choices returning to deepen a potentially ugly crisis. Both the International Monetary Fund and McKinsey Consulting are tipping the economy to contract by more than 3 percent this year, the biggest decline since 1987. Slower economic growth means companies would cut back on output and there’ll be staff layoffs. “The question is no longer whether the economy will enter a recession or not, it’s certain; the worry now is whether the economy can avoid a

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depression,” said Andrew S. Nevin, chief economist at consulting firm, PricewaterhouseCoopers (PwC). A depression is a severe and prolonged downturn in economic activity. In economics, a depression is commonly defined as an extreme recession that lasts three or more years or which leads to a decline in real gross domestic product (GDP) of at least 10 percent in a given year. Depressions are relatively less frequent than milder recessions, and tend to be accompanied by high unem@Businessdayng

ployment and low inflation. “This is when the government needs to answer critical questions around why Nigeria gets way less investment capital than it requires and find a way to solve that to help the economy,” Nevin said. “We need to make progress in diversifying the economy and improving the ease of doing business.” Nigeria’s investment stock as a percentage of GDP is a paltry 10 percent, according to World Bank data. That’s less than half of the African average of 25 percent.

Tuesday 28 April 2020

BUSINESS DAY

news

Biggest gainers, losers from Covid-19 induced economic lockdown MICHAEL ANI

t is nearly a month since fear of an abrupt spread of coronavirus (Covid-19) forced Nigeria to toll the line of several other countries in enacting an almost total lockdown of economic activities. The major effect has been that many companies have been badly hit economically, some others slightly impacted while the businesses of a few have not been negatively affected. President Muhammadu Buhari had in mid-April, directed the extension of a stay-at-home order for another two weeks for virtually all businesses, particularly those in three of the country’s most bruised states, Lagos, Abuja and Ogun, in order to buy some time for the Nigerian Centre of Disease Control (NCDC) to ramp up testing and self-isolate those known to be carriers of the virus. Whatever has been the outcome, while we expect economic activities to return gradually with hope of a lifting in the lockdown, the past one month has categorised companies into gainers and losers charts. GAINERS Telecommunication: Telecoms companies have seen a surge in the voice calls and data usage, as businesses adopt digital technology in line with calls for the adherence of social distancing in order to curtail the spread as well as not to contract the virus, prompting analysts to bet on a limited exposure of the sector to the economic impact of the virus. There has been an increase in virtual meetings online on Zoom, Google hangouts and Go-tomeetings. As the outbreak of the virus forces businesses to shift to remote work, it would drive demand for networking infrastructure and connectivity that would add to telcos revenue, leading data and analytics company, Global Data said in a report, after it evaluated the impact of COVID-19 on 600 companies across 17 sectors in technology, media and telecoms (TMT). Similarly, Agusto & Co, a Lagos-based consulting firm, in a recent publication tipped telecoms as one of the three sectors that would post strong growth on the back of the lockdown as the bottom line of most businesses in the country is expected to head South. Pharmaceutical/Healthcare: This sector has got the urgent attention of both the private and public sectors since the coronavirus pandemic began, and was exempted to continue production irrespective of the economic lockdown. To show the extent of how critical the sector is to the fight against the virus, a total of 10 pharmaceutical firms were provided with both naira and FX funding facilities to the tune of N1.1 trillion, to enable them boost production of drugs after supplies from China and India, two of the world’s exporters of pharmaceutical products, were distorted due to the pandemic. The funding facility, comprising a N100 billion intervention in healthcare loans to pharmaceutical companies, health practitioners intending to expand/build capacity, and a N1 trillion loan to boost local manufacturing and production across critical sectors, was given to the following pharmaceutical firms: Emzor, Fidson, Swiss Pharma, Neimeth, Orange Drugs, Dana Pharma, Sagar, Unique Pharma, May &

Baker, and GSK. Analysts say with focus on local drug makers to bridge the supply gap and the exception to the lockdown, it is expected that domestic pharmaceutical firms would see a boost in revenue. Agriculture: As imports of agricultural produce decreases due to restrictions and factory closures in major countries hit by the virus, domestic demand is expected to increase, which would be positive for the books of agricultural producing companies. Analysts say they expect the increased demand for agricultural produce to drive up earnings, particularly for export commodities, especially with the downward adjustment seen in the exchange rate. Financial services: Although there is a reduced transaction volume as a result of the slowdown of businesses, yet, financial service firms particularly banks and other Fintech companies, saw an increase in e-business income as companies, households and individuals shift to online transactions more. Also, unlike in 2016 when banks suffered a high Non-Performing Loans (NPLs) due to a high exposure to the oil and gas sector in the wake of the economic recession, this time most lenders, particularly those in the Tier-1 space, have hedges to their oil clients, thus making them have material exposure to any impending shocks. Media & Communication: As a result of the lockdowns, there have been unprecedented levels in the consumption of media, as people seek various means to get entertained while staying safe indoors. A research by Global Web Index on the impact of the lockdowns on the media, using the US and UK, shows that over 80 percent of consumers say they consume more content since the outbreak, with broadcast TV and online videos (YouTube, TikTok) being the primary mediums across all generations and genders. Similarly, the mass media have long been recognised as powerful forces shaping how we experience the world and ourselves. This recognition is accompanied by a growing volume of research that closely follows the footsteps of technological transformations (e.g. radio, movies, television, the internet, mobiles). Online money agents: Online platment businesses saw a surge in operation more than ever before, as more Nigerians resorted to their usage due to the lack of proximity or means of transport to use the services of the traditional banking system. E-commerce & Food vendors: Panic buying, especially for food and personal care items, was witnessed across Nigerian states immediately after the lockdown was announced. Those who are tech savvy and saw it as stressful to face the influx of people in the traditional markets, made use of various ecommerce platforms to get their stock. LOSERS Airlines: The aviation sector has been hit most since the outbreak of the virus in December 2019. The sector has suffered a drastic fall in ticket sales as well as huge job losses, as countries around the world restrict travels in order to contain the spread of the virus. www.businessday.ng

Danladi Atu (r), secretary to Plateau State government, addressing some street urchins (Almajiris) as the state government begins returning the children back to their states of origin, in Jos.

Stakeholders want law against medical tourism for elected officials TELIAT SULE

igerians and other stakeholders that participated in the BusinessDay Digital Dialogue on health insurance have canvassed for a law that bans elected officials from going overseas for medical treatment while in office. This overwhelming support for a law against medical tourism for elected officials was made known through a poll conducted by BusinessDay Research and Intelligence Unit (BRIU) during a webinar programme last Wednesday, which registered 600 participants from sectors and organisations such as healthcare, insurance, banks, MDAs, embassies, as well as from outside the country. That most of the ruling class in Nigeria are not in tune with the state of hospitals and other healthcare facilities was confirmed a fortnight ago when the Secretary to the Government of the Federation, Boos Mustapha, said he never knew Nigeria’s healthcare infrastructure was such in a deplorable condition until he was made the team lead, Presidential Task Force on Covid 19. BusinessDay, West Africa’s

source of business and financial intelligence, on Wednesday, April 22, 2020, brought together leading public and private sectors’ players in the nation’s health sector to brainstorm on how the healthcare system in the country could be given a facelift. Inadequate investments and the near-abandonment by elected public officials overtime have made the sector uninspiring leading to huge losses to the nation in the forms of brain drain and medical tourism. According to Nigerian health officials, the country loses more than N360 billion annually to outbound medical tourism as the elite and elected officials continue to show strong preference for services rendered by American, European and Indian medical practitioners and facilities. This is in addition to scores of medical practitioners that leave the country yearly in search of better opportunities overseas. The latest BusinessDay Digital Dialogue on “Healthcare Financing: The Challenges and Prospects for Private Capital” was meant to promote universal health coverage in the country. Speakers at the event included Mohammed Nasir Sam-

bo, a professor and executive secretary/CEO of the National Healthcare Insurance Scheme (NHIS); Fola Laoye, CEO, Health Markets Africa; Uche Orji, CEO, Nigeria Sovereign Investment Authority (NSIA), and Tope Adeniyi, CEO, AXA Mansard Health Insurance. The programme was moderated by Pamela Jackson-Ajayi, a distinguished medical practitioner and CEO, Synlab Nigeria. When asked if they would support a national legislation that forbids any elected officials from going for medical treatment abroad, 76 percent of the participants said Yes; 11 percent said No, while 13 percent said they were not sure if they would support such a legislation. Concerning what they considered as the priority for effective healthcare delivery in Nigeria, 34 percent of the participants said the nation’s medical facilities required an overhaul while another 34 percent wanted better training programs for medical workers in the country. On health insurance, 48 percent of the participants said health insurance is good but the scheme is not well understood by many Nigerians just as it is

not yet delivering enough value as it is presently being practised. In addition, most of the participants wanted a public private partnership (PPP) model where the private sector has the larger stake. In other words, 60 percent of the participants supported a PPP led by the private sector. Thirteen percent wanted government to have a higher stake while 28 percent wanted a PPP model where both the public and private sectors have equal stake. “Healthcare coverage talks about the totality of the processes that will make a country mobilise resources to adequately finance its healthcare system. Globally, it is being canvassed that to have universal healthcare provisions, countries have to organise their healthcare systems so the healthcare financing can be done through health insurance mechanism. This engenders equity, and encourages pro-subsidisation which is a system where the rich who are not likely to have frequent health challenges, support the poor. The younger people who are less likely to have health challenges will subsidise for the elderly people”, Mohammed Sambo, Executive Secretary, National Health Insurance Scheme (NHIS), said.

NASS to approve FG plans to jumpstart economy, tackle Covid-19 James Kwen & Solomon Ayado

ational Assembly, particularly the House of Representatives, will reconvene proceedings Tuesday with a very strong resolve to approve government plans to jumpstart Nigeria’s economic and growth development, considering the socioeconomic consequences of the Covid-19 pandemic on the citizens of Nigeria, especially the lockdown and fall in crude oil prices. The House also expressed the intention to attend to proposals before it to assist the Federal Government confront the Civid-19 effectively and undertake critical legislative work required to support the Federal Government to effectively tackle the pandemic. Worried by the negative impact of the Covid-19 on the economy, President Muhammadu Buhari in his last address to the nation had directed the minis-

... issue stiffer guidelines for resumption of proceedings ters of industry, trade and investment, communication and digital economy, science and technology, transportation, aviation, interior, health, works and housing, labour and employment and education to jointly develop a comprehensive policy for a “Nigerian economy functioning with Covid-19”. According to Buhari, these ministers will be supported by the Presidential Economic Advisory Council and Economic Sustainability Committee in executing this mandate. The Economic Sustainability Committee, inaugurated by Vice President Yemi Osinbajo on Monday, is to among other things develop a clear economic sustainability plan from now till 2023, identify fiscal and monetary measures to enhance oil and nonoil revenues in order to fund the plan, develop a stimulus package and come up with other clear-cut

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measures to create more jobs while keeping existing ones. While the National Assembly was on adjournment, the Federal Government through the minister of finance, Zainab Ahmed, sent revised copies of the 2020 budget cutting down the N10.59 trillion budget already passed to N10.276 trillion as well as a proposal for N500 billion Covid-19 intervention fund to the federal legislature. As the National Assembly resume to deliberate on some of these proposals, it has issued stiffer guidelines for proceedings and other legislative activities, to protect the health and safety of the Members and Staff. The Senate in its resumption notice signed the Clerk to the Senate, Nelson Ayewo insitsed that Staff and Senators’ Aides are to work from home and they will be notified when needed in the Office for any special assignment. @Businessdayng

The House of Representatives in its guidelines specified that only those ‘properly kitted’ will be allowed into National Assembly Complex, gallery will be closed and only Sergeant at-Arms will open doors while there will be special pass for those entering. The guidelines said mandatory temperature check will be conducted at the main entrance into the National Assembly by qualified medical personnel and Members and Staff are to fully cooperate on the temperature screening as anyone whose temperature is above the acceptable range will be advised to seek proper medical advice. They demanded Members of the House to notify Clerks before using their offices, there will be three empty seats between sitting members and Members would not approach the presiding officer or clerk until absolutely necessary.

Tuesday 28 April 2020

BUSINESS DAY

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Tuesday 28 April 2020

BUSINESS DAY

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Tuesday 28 April 2020

BUSINESS DAY

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INSIGHT

Here is why Nigeria is missing out on $116bn bitumen market DIPO OLADEHINDE

igeria’s inability to harness its potential might see the country missing out in an opportunity in the global bitumen market which is projected to cross $116 billion by 2026, despite boasting of the second largest deposits in the world. With oil prices hovering around $20 a barrel, Nigeria desperately needs to build an economy that is resilient to the volatility of oil and gas markets. Such resilience includes diversification to other solid minerals waiting to be exploited and processed. One of such minerals is bitumen. Nigeria’s bitumen deposits currently rank second largest in the world spanning approximately 120 kilometres with about 42.74 billion metric tons which can be found mostly in Ogun, Ondo, Delta, Rivers, and Bayelsa States. However, exploration and exportation remain a big challenge. According to the latest study

by United States-based consulting firm Global Market Insights, bitumen market is projected to cross $$116 billion by 2026, thanks to a global growing focus on building new infrastructure, along with renovating present structures across the globe. Global Market Insights noted that the bitumen market size is chiefly driven by increasing government spending towards road construction, maintenance and repair. “Overall construction expenditure valued at approximately $7 trillion in 2013 and is anticipated to mark $13 trillion by 2024 and is likely to help industry demand,” Global Market Insights said in its report. While other countries like the US, Canada, Germany, UK, France, Spain, Italy, China, India, Japan, Australia, Indonesia, Malaysia, Brazil, Mexico, and South Africa have dominated the market share, Nigeria still struggles to develop its capacity and relies mostly on a yearly import of more than N300 billion worth of bitumen.

Experts have said the occurrence of bitumen deposits in Nigeria is twice the amount of existing reserves of crude petroleum when fully explored or developed. “The issue of technical expertise has been nothing to write home about. High cost of exploration and exploitation, continued dependence on oil as major foreign exchange earner have also bedevilled bitumen development in the country,” Yemisi Aboluwarin, lead partner at Coalesce Consult Ltd, told BusinessDay. Stephen Ayodele, site engineer, Quarry Construction Company in Abeokuta, Ogun State, said investing in bitumen in Nigeria promises a high return for investors in the shortest period. Other experts have said local production of bitumen is expected to first satisfy local consumption and remove the huge burden of importation cost while exportation is also anticipated to reduce unemployment in Nigeria, increase foreign direct investment and improve the country’s revenue base.

NDDC orders probe into N5.4bn COVID-19 contract scam, says opponents of forensic audit at work Ignatius Chukwu

he fight against the COVID-19 may be suspended in Nigeria’s oil region to face a scandal over alleged award of N5.4 billion to fight the virus and other recent diseases in the oil producing states. This aligns with the pattern in the oil region where every single activity or contract leads to scandal. A group, the Niger Delta Rights Advocates (NDRA), has issued a statement inviting the Economic and Financial Crimes Commission (EFCC) to probe the contract. The public relations officer of NDRA, Darlington Nwauju, said in the statement that demanded for investigations into what it called the award and non-execution of the over N5 billion contract by the Interim Management Committee (IMC) headed by Kemebradikumo Daniel Pondei, who came into office February 2020. The NDRA shows doubts on the fight against corruption by the

… but group wants EFFC to do the probing Minister of Niger Delta and the entire forensic audit. It however calls on the EFCC to swiftly move in to investigate the latest allegation over the N5.4 billion worth of what it called unexecuted coronavirus personal protection equipment (PPE)/community sensitisation contracts and expose the propriety of such an award, the capacity and competence of the contractor as well as the actual value of such equipment. “And determine if this particular contract passed through standard procurement benchmark”. The NDRA adds: “We wish to query the intentions of those running the NDDC over their preference to purchase PPEs for health workers in the region whereas we lack testing centres or labs that can actually help in the fight against this deadly virus. We ask again: How many health facilities in the region are handling corona virus cases? Who then will be beneficiaries of this latest contract award if

Niger Deltans who should be the primary beneficiaries cannot even be treated here in the region? To the best of our knowledge, there is only but one centre in the region which is located in Edo state. Why can’t the NDDC boost its capacity? Why divert our attention and deceive the gullible public by looking for channels to steal public funds?” The group claimed that the contract award did not emanate from the appropriate department in the Commission. The group in separate interviews, the group said there was no scientific process to determine what was needed, and that asked the NDDC to show how it has intervened in the health of the region before the sudden contract. Reacting, the NDDC said it was setting up enquiry into how the entire contract scam emanated, saying it had only spent N775m to assist the nine states in the fight and another N270m as palliatives to the youths, women and the physically challenged in the region.

Procurement Law: Nasarawa to benefits from World Bank, CBN grants - Governor Sule Solomon Attah, Lafia

ollowing the signing into law of the Procurement Bill 2020 by Governor Abdullahi Sule, Nasarawa State now stands the chance to benefit subsequent from grants from the World Bank, Central Bank of Nigeria (CBN) and other organisations supporting government programmes and initiatives targeted at providing services to the people. Also, with the procurement law in place, Nasarawa is now confirmed as a member league of Elites states for transparency and accountability in Nigeria. Governor Sule, who signed the Bill into law in Government House, Lafia, said government intention was to block leakages of corrupt tendencies in governance and to ensure due process in government procurement.

The governor, who described the event as historic for the people of the state, said it signified that Nasarawa State had finally joined the league of elite states in the country, known for their transparency and accountability. He stated that with the signing into law the state was now qualified to be recognised at the World Bank level as being transparent and accountable. He said this might not be enough, until government was able to put in place a team that would head the State Bureau for Procurement, which would monitor and enforce the tenets of the law, which was inaugurated Monday. According to the governor, only persons of known integrity, who must be competent, experienced and are capable, will make the team, irrespective of political or ethno-religious considerations. www.businessday.ng

“For me and this administration, if this is one of the legacies that we are leaving behind, we are indeed leaving behind a legacy,” the governor stated. “The qualification is not just about the World Bank grant, but to actually show that in Nasarawa State, we understand the rules of accountability, the rules of transparency and will be seen as people who are honest, in what we are doing and we are working very hard to ensure that things are working correctly,” he stated. He then thanked the Attorney-General and State Commissioner for Justice, Abubakar Kana, and his team, the office of the Secretary to the State Government, Ministry of Finance, the speaker of the State House of Assembly, Ibrahim Balarabe, as well as all those who worked hard to ensure the bill was a success. https://www.facebook.com/businessdayng

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Tuesday 28 April 2020

BUSINESS DAY

news Big lessons for Nigeria as Senegal leverages local resources in COVID-19 fight STEPHEN ONYEKWELU

head of all African peers, Senegal is winning the fight against the coronavirus pandemic, thanks to its researchers and local resources. Senegal has built a scientific know-how to beat COVID-19 tapping into its Ebola management infrastructure, and has developed a $1 test kit for the virus. The West African Frenchspeaking country is doing what most countries have not done, testing everyone, symptoms or not. Unlike other countries too, there is no shortage of testing kits, thanks to a laboratory at the Institut Pasteur. Researchers are developing a $1 quick diagnostic test kit originally meant to test for dengue fever. Patients drop blood or saliva onto the devices and wait for a bloodline to appear, like the pregnancy test. “There is no need for a highly

equipped lab. It is a simple test that can be done anywhere. The idea is to rapidly produce two to four million kits, for us and other African countries, so that we can detect and isolate patients quickly,” Amadou Sall, a scientist at Institut Pasteur, told Aljazeera in an interview. The sick are administered chloroquine, a cheap anti-malaria drug commonly found in sub-Saharan Africa where malaria is endemic. With only 50 ventilator machines, for 16 million people, Senegalese engineers are using 3D machines to produce more. Imported ventilators cost $16,000; these are just $60. Senegal is counting the cost and it is paying off. A month into the outbreak, it has suffered eight deaths, with most patients treated healed. The country has the largest rate of recovery in Africa, across third world countries and also ahead of the USA and France. While it has a

tiny health budget compared to those countries, it has a wealth of experience, dealing with infectious diseases and outbreaks. The first Senegalese to be infected with the virus was reported on March 2, nearly three months after the pandemic erupted in China. Twenty days later, President Macky Sall declared a state of health emergency in the country. In most West African countries, measures have been set halfway between freedom of movement and total lockdown. In Senegal, President Macky Sall declared a state of a health emergency on March 23: a curfew was imposed between 6am and 8pm, during which the population is forbidden to roam the streets. The lockdown is therefore limited to certain hours. Also, social distancing measures have been taken during the day, such as a ban on all gatherings, the imposition of a minimum distance of one metre in public

transports, and the closure of many markets and all public spaces, among others. Nigeria’s management of lockdowns has been criticised. Given Africa’s most populous country’s title as the poverty capital of the world, some have argued a better-adapted option could have been evolved. “I believe the choice must not be either death by hunger or death by Covid-19. We can evolve a wholly Nigerian solution to this pathogen based on our unique circumstances,” Chris Akor, a PhD candidate at the University of Alabama, USA, said in a recent column at BusinessDay. The uniquely Nigerian approach “will allow the poor to earn their living and skilfully manage the pathogen until it goes away. In any case, as we would soon discover, poor Nigerians will not remain indoors and watch their children die of hunger.”

COVID-19: Banner Energy CEO makes case for traditional medicine IDRIS UMAR MOMOH, Benin

roup CEO of Banner Energy Limited, Nuhu Yakubu, has urged government at all levels to explore traditional medicine for the treatment of Coronavirus disease in Nigeria. Yakubu, who made the call during the inaugural meeting of the Edo State COVID-19 Fundraising Committee, held virtually, said country like Madagascar had launched traditional medicine named COVID-19 organics herb for the treatment of the pandemic. He said since the outbreak of the pandemic, Madagascar had recorded a total of 121 confirmed cases of COVID-19, 59 recoveries, and no death. The Banner Energy boss, however, urged the federal and state governments to take advantage of the opportunity provided by the pandemic to explore natural medicine for the treatment of the disease. While commending the Edo State government for being pro-

‘TCN, AEDC’s ‘blame trading’ on load dropping could worsen concerns of grid collapse’ HARRISON EDEH, Abuja

he recurring blame trading between the Transmission Company of Nigeria (TCN) and the Abuja Electricity Distribution Company (AEDC) on load and feeder trippings could worsen concerns of overall grid collapse, experts warn. The TCN and the AEDC have failed to take absolute blame on the recent load dropping and stripping witnessed last week in Abuja, Nassarawa and other AEDC’s areas of franchise, a situation that puts intense pressure on the national grid with possible grid collapse. Chuks Nwani, an energy lawyer and power sector governance expert, told BusinessDay in response to this development that “this is an area that I expect the Ministry of Power to wade in and invoke the Electricity Power Sector Reform Act and ensure TCN doesn’t play the role of the

market operator and systems operator.” According to Nwani, “The Electricity Power Sector Reform Act, 2005, made case for bulkanisation of the TCN into market operator and system operator as provided by the act. This is the time for the minister of power, Mamman Sale, to enforce that directive such that each plays its role effectively to avoid blame trading. “Systems operator controls systems frequency and also controls allocations. It is automated, monitors and tracks the fault through SCADA controls. Market operator is supposed to be directing the market. Both roles are controlled by TCN and it is not efficient for the sector. The minister needs to come in and solve this problem.” Nigeria is notorious for recording recurring grid collapse, putting the low performing electricity infrastructure under www.businessday.ng

intense pressure. The TCN, it would be recalled, had restated the need for Discos recapitalisation raising concerns that sudden load tripping had been a seasonal reoccurrence. TCN in its recent statement by Suleiman Mahmud, acting general manager, transmission in Abuja, said: “It is high time for AEDC to do the needful on the issue of frequent tripping on their 33KV feeders’ ad well as reducing the number of point loads. Massive load rejection by Abuja Disco anytime there is rainfall or very high voltage and in turn leads to failure of major equipment.” But the AEDC had also admitted that some of its feeders tripped on April 25 as the rain began, noting however that one principal factor aiding the tripping of a feeder voltage level is the relay setting of such feeders.

active in mobilising resources to respond to the outbreak of the virus, he however urged the state to strengthen its mechanism to manage the influx of persons from other states in the country. “We need to explore traditional medicine, even as we look on the economic side of this pandemic. There is also need to address the fear factor, especially as people are coming from other states. For instance, what is the residual longterm effect this pandemic is going to leave on Edo people? “We ought to start looking at some critical areas in agriculture as well, such as food production and preservation so that we could be self-sufficient in these areas. There is no denying that government would need to continue to prioritise human capital development”, he said. He however advocated the need to step up advocacy about the fundraising committee so that more persons can be reached to ensure a greater spread of those to donate the relief efforts to.

Unilever rolls out food, hygiene products in fight against COVID-19

SEGUN ADAMS

Edward Kallon (r), UN resident coordinator, presents to director-general, Nigeria Centre for Disease Control (NCDC), Chikwe Ihekweazu, documents to the UN’s support to Nigeria’s COVID-19 response, comprising an ambulance, 4.7 million gloves, 10,000 face shields, 19,000 face masks, and thousands of other medical supplies.

n demonstration of its commitment to make sustainable living commonplace through its operations, Unilever Nigeria has commenced donations of its food and hygiene products across Nigeria to complement government’s efforts in helping citizens stay well and maintain hygiene necessary to fight the virus in this period and beyond. Some of the donated products are – Lipton, Knorr, Royco, Glen Tea, Lifebuoy, OMO, Sunlight soaps, Pears, Vaseline, Closeup, and Pepsodent. Speaking on this initiative, Soromidayo George, director, corporate affairs and sustainable business, Ghana and Nigeria, commended the states and Federal Government for leading effectively in the COVID-19 crisis and demonstrating capabilities to stem the spread of the virus with adequate preparation of the right infrastructure set up for affected people to be treated. On the rationale for Uni-

lever’s donations, she said, “as a purpose driven organisation, we understandtheneedforproperhygiene during a crisis of this nature. We are also aware that the restriction of movement has affected the livelihood of many, that’s why we are sending food and hygiene productsworth200millionnairato Nigerians who need them. “So far, we’ve been able to achieve this by partnering with the Ministries of Health in Ogun and Lagos and we are rolling out to other States in Nigeria, as well as partnering with several non-profit organizations who have direct reach to the most vulnerable peoplewithindifferentcommunitiesin Nigeria.Itisreallyheart-warmingto see the impact of donations being feltacrossthecountry,intheplaces where they matter the most.” In a recent communication, the company committed to donating 100 million Euros to help fight the pandemic globally. The company continues to make efforts to complement the work of several governments in different countries all over the world.

56% of Nigerians say palliatives not sufficient for individuals, businesses amid lockdown Josephine Okojie

hile a lot of Nigerians have commended the Federal Government on its lockdown measure to curb the spread of the coronavirus, 56 percent of them say the palliative to help individuals and businesses cushion the effects is not sufficient. A recent online survey conducted by Africa Business Partners for residents in Lagos, Ogun, and Abuja on how they are coping with the lockdown shows that majority of Nigerians are not satisfied with government efforts at cushioning the impact of the pandemic. “Though many hold a positive view on the infection control measure, they are highly unsatisfied with the economic measures,” the report notes. “56 percent responded that the measures are highly inadequate. This indicates a high level of dissatisfaction across board, regardless of income levels,” the

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report further states. On how the pandemic has affected their household income, over 30 percent of Nigerians report that their entire household income has dropped to zero since the lockdown. The report adds that respondents who are employed have been able to maintain their income during the lockdown, while many self-employed and casual workers are unable to sustain their income during the same period. The survey shows that about 3 percent of Nigerians grew their income during the lockdown. “Africa Business Partners separately surveyed manufacturers in Lagos, and some companies indicated a revenue growth despite the lockdown, demonstrating that some have creatively adapted to the situation for business continuity.” Over 60 percent of the selected sample size surveyed online is bothered about the negative impact of the pandemic on the economy and lack of food in @Businessdayng

contrast to 70 percent of Kenyans worried about contracting the virus. The report also reveals that 85 percent of Nigerians in lockdown states wash their hands frequently as part of measures to avoid contacting the novel coronavirus. “Out of the respondents, 85percent answered that they are washing their hands frequently, and 84percent are avoiding crowds. Nearly half are refraining from going outside entirely,” the report states. “Perhaps due to the frequent public awareness campaigns about misinformation and fake news, 55 percent are making conscious efforts to stay aware,” the report explains. “Due to the lockdown in place, facemask usage remains relatively low compared with other countries,” says the report. Online banking was the top choice services used during the lockdown, the report says. While nearly 70 percent of the respondents increased their usage of online tools such as WhatsApp for communication.

Tuesday 28 April 2020

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New urgency to diversify the economy

Gregory Kronsten

here is no shortage of experts to tell us that life post-pandemic will be unrecognizable. Faced with an invisible threat for which there is today no definitive cure, it is tempting to create negative scenarios. Many of our comforts have been taken away from us and everybody is talking about mental health. Globalization has taken another large hit, and will take one more when the time comes for post-match analysis and official commissions of enquiry. The re-election of President Trump in November would reinforce this trend. Because of Nigeria’s well-known macro frailties, analysis that writes off the oil industry has found a ready home. When WTI trades below zero (i.e. you pay to get rid of it) and UK Brent at +/- $20/b, it looks bad. The US is buying to increase its strategic reserve. The money to be made is in storage rather than production or refining. Bonds issued by several US shale producers are trading at default

level. Remember also that the current reworking of the 2020 FGN budget was said to be based upon a crude price of $30/b and that Bonny Light trades at a discount to Brent. That said, for businesses and households across the world there is generally no substitute for fossil fuels. This is particularly the case in the faster-growing large emerging markets such as India and China. (We don’t hear much talk of BRICS these days.) We expect many casualties among the small oil and gas producers. A recent study by the Federal Reserve Bank of Dallas estimates that drilling becomes profitable with a WTI price of $49/b. This floor is rather higher than we were previously told when investors were buying into acreage in the industry in the Permian Basin. Consolidation on a large-scale beckon. Just last week the UK-based Tullow Oil sold its remaining stake in the Lake Albert project in Uganda to Total for a reported $575 million, said by an analyst to be a decent return for a seller desperate to realise cash. This is likely to be the first of many such transactions. The oil majors have generally adopted the same strategy: cut capital spending, secure new credit lines, conserve cash and end buyback programmes, all with the aim of maintaining generous dividends. Their thinking is that institutional investors could trim their exposure to fossil fuels without these payouts. Provided that prices come off the floor at some point this year, the majors should be

able to pay dividends and scoop up choice distressed assets. The other leading players in the industry are the state-owned producers such as Rosneft, Aramco and Petronas, which will also be looking for acreage and other assets in fire sales. As we suspected, the fighting talk that followed the spat between Saudi and Russia within OPEC+ did not last long. On developmental grounds, they could not leave all the taps open and had to push for production restraint. The delivery of Russia’s budget for 2020 requires an oil price of $90/b. While elections do not present a serious challenge to those already in power, voters in Russia, as elsewhere, want regular improvements in services and the infrastructure. We see therefore a streamlined oil industry, say, 18 months ahead. Demand will pick up as lockdowns come to an end and the price will recover once stocks held by governments and on supertankers on the oceans are exhausted. We also suspect that the momentum behind climate change will slacken as heavily indebted governments everywhere focus on revenue generation and social cohesion. One casualty of the pandemic has been the flagship international conference on climate change, previously scheduled for November in the UK. Civilian and military administrations in Nigeria over at least the past three decades have pledged to diversify the economy away from oil. None has accomplished the mission. It has been easier to maintain the rentier economy, distributing the spoils in the good

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Civilian and military administrations in Nigeria over at least the past three decades have pledged to diversify the economy away from oil. None has accomplished the mission

Kronsten is the Head, Macroeconomic & Fixed Income Research at FBNQuest

Nigeria’s secondary licensing market “Do you know a Nigerian holder of petroleum acreage who is interested in funding partnership for field development?” t’s a question I have been asked, quite routinely, in the last 10 years. The geography is very specific and so is the nationality of the preferred licensee: Nigeria and Nigerian. The follow up statement to that query hardly varies; “I have people who have money to invest”. These enquiries are always about the marginal fields, awarded 17 years ago, that haven’t been developed, as well as over 20 oil prospecting leases; exploratory tracts which have been granted to Nigerian companies, as far back as 29 years ago, but never experienced an active work programme. “What do you know about them?”, the inquiries always state. Nigeria has not conducted a bid round since 2007. And discretionary awards by the government have been few and far between. So, a semi-official secondary market has grown to fill the gap. One recurring challenge in consummating the transactions in the secondary lease market is the ministerial consent, a condition that stipulates that any transfer of asset, either in whole or in part, has to have the nod of the political head of the Ministry of Petroleum Resources. The hurdles as well as transparency concerns around the Ministerial consent are identified in a recent report published by the Nigerian Natural Resource Charter NNRC. But I am getting ahead of myself. The secondary lease market has in the past 12 years, had a turnover of close to $15 billion, if not more. Shell started the contemporary round of divestments of Nigerian assets in 2008 when it sold 15 percent of the total equity in Oil Mining Leases (OMLs) 125 and 134 to Oando. It upped the game in 2010, when it began what has now

become its recurring “bid round” of sale of onshore assets, leading its co-venturers TOTAL and ENI to collectively divest their 45 percent in eight acreages for a sum of around $7 billion. Between 2013 and 2015, ConocoPhillips, the world’s largest independent, received close to $1.5 billion for its sale of, mainly, 20 percent equity in four leases in the country, from Oando, a transaction that marked its exit from Nigeria. Chevron has, quietly earned over $800 million from the sale of its stakes in six acreages (three onshore and three shallow offshore) since 2014. Last year witnessed the $520 million purchase, by the Canadian junior Africa Oil Corp., of 50 percent stake in POGBV a vehicle which holds 8 percent and 16 percent stakes in Oil Mining Leases (OMLs) 127 (Agbami) and 130 (Akpo & Egina fields), with combined output in excess of 475,000BOPD, in crude oil volume only. But these are the big-ticket items, in which the cost of buying stakes in each acreage has ranged from $50 million to $2.5 billion, as most of the assets involved are producing properties. Far less expensive have been the deals involving farm ins into and operatorships of marginal fields and exploratory tracts. One company that thrived in this segment of the market was Afren. Between its founding in 2004 and its demise in 2015, the London headquartered independent signed MoUs with seven Nigerian marginal field acreage holders. In the end it consummated a deal with one; Oriental Resources, on the Ebok field, which it brought into production. It also farmed into Amni Petroleum’s Okoro field, which it took to first oil. At the height of its powers, Afren was producing over 52,000BOPD gross from these two fields. It was convenient for the company not to quote the gross figures, since its equity volume from these two assets, at over 30,000BOPD, was not exactly marginal. So Afren had taken advantage of Nigeria’s informal secondary lease market. In spite of the

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times, and duck the challenge of taking on formidable vested interests. The mission cannot be postponed indefinitely, however. There is a shift away from fossil fuels, albeit slow. Further, the population is growing by about 3 percent per year, and has needs and expectations that cannot be met by the revenue accruing from flat oil production. The unemployment rate is close to 35 per cent, and growing each year. The healthy GDP growth of the first half of the last decade was achieved with limited job creation. The present administration also pledged to diversify the economy and has stuck to the task. We can point to some successes, mostly in agriculture and mostly driven by CBN interventions. If its reforms in the downstream petroleum industry do really amount to fuel deregulation, it will have taken a large step forward. More substantially, the federal government of Nigeria needs private investment to create jobs, household wealth and tax revenue. Its contribution is to build an infrastructure fit for purpose, and tackle the issues that crop up every year in the doing business, competitiveness and transparency surveys, including: solidity of property rights, adequacy of power supplies, enforcement of contracts, efficiency of the judicial system and speed of the customs service. The clock is ticking, as we have noted, to diversify the economy.

Toyin Akinosho access of some of the company’s principals to the upper reaches of Nigerian political power structure, Afren never won an acreage from the Nigerian government, either in an open lease sale or a discretionary award. Indeed, the largest producing Nigerian independents: AITEO ~80,000BOPD, Shoreline ~70,000BOPD, Seplat ~60,000BOPD, Neconde ~50,000BOPD, Eroton ~45,000BOPD, came in to being through the secondary market. The only licencing round focused on marginal fields was conducted in 2001-2002. Out of the 24 such fields awarded to 31 Nigerian independents in 2003, 11 fields were either not developed, nor worked up to sustained production. For most of the last 10 years, these fields were the hottest candidates around, for investors keen on having a piece of the Nigerian marginal field basket. They were Bicta Energy’s Ogedeh field, which has never really had an operationalized work programme; Sogenal’s Akepo field, which has faced serious operational challenges in the journey to development; Goland’s Oriri field has experienced failed re-entries; Movido’s Ekeh field has had intermittent production, with expensive, short term production facilities and the field had been shut in for upwards of five years; Dansaki/Associated’s Tom Shot Bank field has not had the benefit of a robust development partner. Finally, Del Sigma’s Ke Field needed a working up. There were also Guarantee/Owena held Ororo marginal field and Sahara’s Tsekelewu Field. Licenses to all these 11 marginal fields have now been revoked by the government. But that is another story. Outside of the marginal fields league are a number of Oil Prospecting Licenced acreages that would seem, on the surface, available. There are over 15 of them, mostly onshore Niger Delta, some in shallow water. But holders of these assets are not in a hurry to do deals. The fact that they escape even paying signature bonus after being awarded these assets, in cases for over 20 years,

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says something about state/regulatory capture in the Nigerian petroleum industry. The Nigerian government has been severally criticised for infrequent petroleum licencing rounds. I am not one of those critics. I have been more concerned about routine, day to day management of licences and in the ministerial consent. In the former, Companies hold on to asset, especially if it is awarded by the state, without payment of the most rudimentary charges and unwilling to embark on a work programme. And when investors approach them for farm outs, the first agreement is a sign on fee, the second is to agree on a regular, quarterly fee paid to license holder and the last is to pay the signature bonus on the asset to the state. Very often, licence holders orchestrate disagreement with one investor, so that he storms off, leaving the opportunity on the table for another investor. The situation is repeated many times. So, acreage licence holders sit on assets, without working them, without payment to the state, and yet feed fat on them. When investors come for farm in into Nigerian assets, the Ministry of Petroleum Resources conducts due diligence investigations on the transfer to ensure technical and financial capacity and also ensure that there is no revenue loss to the nation. Great. But in practice, however, “events suggest that ministerial discretion has undermined the process, leading to poorly coordinated transfers and multiple prosecutorial cases in domestic and foreign courts”, notes the just released Benchmarking Exercise Report of the Nigerian Natural Resource Charter. As everyone knows, it was in the ministerial consent process stage of the Shell divestments of 20122015, that the murkiest of dealings took place in the era of Diezani Allison Madueke, the last petroleum minister before this administration. Akinosho is the Publisher of Africa Oil+Gas Report.

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COVID-19: Can Africa survive without a lockdown?

STRATEGY & POLICY

MA JOHNSON

he coronavirus pandemic is still on the move and Africa is not spared from the devastating effects of the plague. COVID-19, according to medical experts, is a pathogen of high consequences: why? The pandemic is of severe consequences in any community it enters because there is no drug and vaccine to cure the pandemic. It is only the immunity of individuals that can fight this pandemic, according to health experts. The impact of the coronavirus on humanity are economic and heath areas. Many sons and daughters of Africa are concerned about the strategies being implemented by most African countries to combat the dreaded virus. A few of Africa’s bright minds have asked whether Africa can afford lockdowns. Some have advocated that Africa must copy best practices in a few countries where a flat curve of infection and minimum casualty have been achieved. They are worried because prior to the COVID-19 pandemic, practically all economies in Africa are weak with shambolic health facilities across the continent. Why have most African governments adopted the lockdown strategy? It is not to eliminate the virus per se. Essentially, it is to accept the social costs as a price worth paying in order to flatten the curve of infection and most importantly, protect the weak healthcare systems from being overwhelmed. Some Africans believe that African countries must not lockdown because most of its 1.3 billion people

are poor. Africa, according to some scholars, is a continent where most of its leaders are both inept and corrupt. For these scholars, they see these two negatives- corruption and ineptitudeas more deadly than COVID-19. Africa has raw materials, but this has not created wealth for most of its people. In fact, there has not been peace in many African countries in the past 50 years because of inequality in sharing resources. While resources have not been channelled into productive use, Africa with over a billion people according to statistics, has “about” the same GDP with France whose population is about 65 million. Insecurity has pervaded the continent particularly, sub-Saharan Africa, and this has disabled economic development in the region before the arrival of COVID-19. Frankly speaking, Africa can survive without lockdowns, but the casualty figure occasioned by COVID-19 will be very high. In Africa, it is common to find large gatherings in religious places, seminars, pubs, parties, schools, political gatherings, markets, and motor parks amongst others. Large gatherings can be sources of infection, and it will be worthwhile and commendable if African governments restrict them temporarily. No lockdown is an option, but it is suicidal. If any government chose not to lockdown for whatever reason, it shows that it has adopted a defensive strategy rather than use an offensive strategy to fight the “invisible enemy”. Whatever strategy is adopted by African governments have risks and there are consequences. The lockdown as prescribed by the World Health organisation (WHO) is to restrict the flow of the virus from getting a foothold at humanity, and to ensure that enough people are tested for COVID-19. But many people have not been tested during lockdown in most countries globally. In fact, Africa’s diversity- culture and level of development- will not permit a uniform governmental response to the COVID-19.

A panel of policy experts have been discussing various ramifications of COVID-19 and assessing its potential impact on Africa. Some policy analysts are of the opinion that it is to make accurate forecasts as Africa will see a more rapid increase in absolute poverty this year (2020) and in the years ahead. They talked about danger of unrest when the poor reach a certain level of despair. And its likelihood in many African countries, which do not offer even rudimentary safety net. Slower global growth, according to some policy experts, will mean fewer commodity exports from the African continent, and the result could be greater dependence on China which has been an important trading partner in the future than it is currently. At the same time, the virus will threaten the stability of states. “The impact could be to reignite regional instability as volatility in one area may spread to neighbouring countries. We have seen that the virus will weaken governments in their fight against organised crime, rebels and terrorists. The capacity of national armies involved will be tied up in the fight against the pandemic.” Having briefly x-rayed the impact of COVID-19 on poverty and conflict in Africa, one may say that there should be no lockdown to mitigate the impact of COVID-19 on the social, political and economic spheres of nation building. But there must be palliatives to the poor in the society. Honestly, lockdown or no lockdown, two things may happen: Africa may have low casualty figure. Or it may be hit harder than anywhere else on the planet. What is clear is that the cost of lockdown could be high in a continent where many live in a cramped and overcrowded accommodation without clean water and in most cases reliable power supply. All this make handwashing and staying at home a challenge. Going by the analysis of the World Bank, Africa will likely face its first recession in 25 years, with the economy contracting by up to 5.1 percent in

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Lockdown or no lockdown, two things may happen: Africa may have low casualty figure. Or it may be hit harder than anywhere else on the planet. What is clear is that the cost of lockdown could be high in a continent where many live in a cramped and overcrowded accommodation

2020. The implication is that Africa will not have a strong financial weapon to fight the pandemic. As we have seen in Nigeria, our local currency is weakened/ adjusted, food prices rising, local agrifood supply chain disrupted, and food imports decreased. Health is wealth. A healthy society will drive any economy. Equally an economically vibrant society is necessary for the people to prosper. Bearing in mind the peculiar circumstance of Africa, what is our survival strategy? Do we lockdown or not? Do we prioritise and phase the opening of the economy? Do we start with the-organized private sector (OPS) or the informal sector? When and how is this to be done? Endless questions, but many of them are begging for answers. Importantly, we need to firm-up our own strategy of combating the “invisible enemy” since Africans have decided to take their destiny in their own hands. But I think there is no one-size-fits-all solution to the pandemic. Whatever strategy adopted will not stop the pandemic but may reduce the casualty. Until we have an approved vaccine and drug to destroy the pandemic, we may have to adopt what I call “A Hybrid Strategy”- combination of lockdown and gradual opening up of the economic space as deemed necessary. Opening of the economic space must be gradual and all must abide by instructions from governments, health authorities and the Presidential Task Force. As we await further instructions, we must wash our hands with soap, wear face masks and maintain social distancing. To save humanity, we all must tread with caution and detach ourselves from sentiments. No strategy is perfect until the case of those with symptoms and the number of the dead drop significantly. We must continue to appraise our strategies and come up with new ones as deemed necessary. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Nigeria’s economy – COVID-19 and its aftermath

he negative impact of coronavirus (COVID-19) is no longer news. It has hit the world and its economies very badly to the extent that nations and governments all over the world have been shaken to their roots. Millions of organisations and employees around the world are already out of business, jobs and it is expected that more will be lost. It is already certain there is global recession especially because most nations and economies have already slide into recession because of the huge negative impacts of the pandemic. Many parts of the world are presently locked down to contain the pandemic due to rise of the outbreak and its associated cost. This when coupled with the dwindling oil price makes it double crisis for Nigeria due to its high dependence on crude oil which is currently trading below federal government’s benchmark for this year’s budget. The challenge of sustaining our economy and all its sectors e.g. health care, production, power, transport, petroleum and other relevant sectors are also becoming difficult, because of the current dislocations which is having adverse impacts on our economy and its various supply chain networks. The government has been exploring several options to hedge the negative impact and the accountant-general of Nigeria, Ahmed Idris not long ago had to give insight into Nigeria’s excess crude account (ECA) that has depleted from

$324.96 million to $71.81 million as at February 2020, in addition the recent statement of the managing director of the International Monetary Fund Kristalina Georgieva that Nigeria’s economy is being threatened by the twin shocks of the COVID-19 pandemic and the sharp fall in international oil price will shrink our economy by 3.4 percent to face a recession this year which could last until 2021. These are confirmations of the challenges our nation and economy, is expected to face in months to come, even after we have overcome COVID-19 pandemic and so we must begin to brace up to manage the crisis. The health sector and other sectors are currently facing harsh situations, in fact transportation impact has shifted from just moving people to sustaining the sector with skeletal workforce and to ensure freight and other key essential workers can move around to perform their duties and also keep the economy running with very little value added, will further add more pressure to our economy. The impact of this shift has resulted in an unexpected shortfall in the finances of both the private and public organisation and so we need to urgently start planning ahead by adopting strategies to cushion the negative economic impact of this pandemic and also start upgrading our health infrastructures to accommodate a wider competitive approach to manage expectations after the lockdown. This current economic crisis is expected to www.businessday.ng

hit vulnerable economies harder, especially those of developing nations, because of weak healthcare system, poor economic management system, poor maintenance culture, poor monitoring and regulation strategies, failures to properly address social inequalities, lack of proper diversification of our economy etc. If urgent steps are not taken to reposition our economy by upgrading and increasing more investments in our health, safety and security systems in preparation for the hard times ahead, this crisis can become overwhelming due to our large population (over 200 million). Building more COVID-19 test centres is very important or even outsourcing testing to private organisation should be at the back of our minds at this time and there is great concern at the moment in Kano State where figures were frozen for almost 4 days (the most populated state in Northern Nigeria with almost 9.5 million people) and with 77 positive cases as at 25th April,2020 . The Honourable Minister of Health, Osagie Ehanire recently at the Presidential Task Force briefing 15th April, 2020 stated that there are 12 functional COVID-19 testing laboratories, with a capacity to test 1,500 samples daily and as at 11.55pm, 25th April 2020 there was 1182 confirmed cases with 35 deaths. The total confirmed cases of 1182 as at 25th April, 2020 does not correlate with our laboratory capacity to test 1,500 samples daily as stated by the minister, which shows anomaly

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Festus Okotie

and our poor approach to governance (lack of determination), believed to be the same reason why past governments could not provide basic social amenities(power, water, security, roads and free education etc) for our people. The urgent need to revamp and reorganise agencies such as national orientation agency and other relevant information dissemination platforms to educate, orientate and communicate government policies on the need for obedience are partly responsible for the wide communication gap and why most Nigerians are still ignorant and yet to fully understand the implications of the magnitude of the impending disaster of COVID-19 we are in currently for.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Tuesday 28 April 2020

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Online disinformation and the African firm (3) Rafiq Raji

ow have firms in Africa been dealing with online disinformation thus far? I explore some case studies. South Africa’s MTN & xenophobia-linked fake news & promotions Established in 1994, MTN is a mobile telecommunications firm headquartered in Johannesburg, South Africa. It offers voice, data and digital services to over 100 million subscribers in 21 countries across Africa and the Middle East. In early September 2019, MTN had to close its outlets in Nigeria after reprisal attacks on them because of reported xenophobic attacks on Nigerians in its home country, South Africa. When the truth finally emerged, it turned out no Nigerian was killed in the South African attacks, with some of the videos and images purported to be about the incidents turning out to be false. This is an example of how even a politically motivated online disinformation campaign between countries could end up affecting firms with no part in the affair from the outset. Later, a Facebook page “MTN Awoof ” claimed MTN was giving out free data as compensation for the purported xenophobic attacks on foreigners by South Africans. According to Africa Check, which partners with Facebook to curb fake news and false information, this was a false promotion. Africa Check offered some clues as to how it came to that determination. Even as the Facebook page had what looked like the company’s official logo and ordinarily looked genuine, the posts, some of which are highlighted below, used a mix of uppercase and lowercase letters, numbers or special characters in place of letters in some cases, and indicated that customers contact MTN via comments or its inbox on the platform. “In Order to compensate Africans for the XENOPHOBIA att@chs by South Africans. We

are giving out 100GB worth of Data” “All you have to do is type ‘MTN CARES’ then use the (SEND MESSAGE) button below and send us a message now” “MTN is giving out 122GB data to Customers for free. All you have to do to qualify is type MTN AWOOF AND SEND US A MESSAGE” But MTN did not leave it to the fact-checkers alone. And even before the highlighted incident, it already had a culture of informing customers of these fake social media accounts and posts when it happened on them, and would typically get the respective internet platforms have them removed. Furthermore, MTN had been sponsoring training and capacity-building programmes for media practitioners on how to identify and manage fake news. Fake news, bogus social media accounts, and false product announcements remain a recurring problem for MTN. Collapse of Kenya’s Chase Bank due to social media-fuelled fake news Defunct Chase Bank, now owned by the Kenyan subsidiary of State Bank of Mauritius, was founded in 1996, with headquarters in Nairobi. In its 2015 financial statements, its last before it was put under receivership by the Central Bank of Kenya in 2016, Chase Bank had total assets of 142 billion shillings, revenue of about 7.5 billion shillings, and more than 1,000 employees. Whatever is left of the hitherto relatively wellregarded bank was taken over by “SBM Kenya” in 2018, after about two years in receivership. How did this state of events come about? In April 2016, Chase Bank was rumoured via social media to be having financial challenges. While the rumours about the bank’s troubles originally emanated from WhatsApp, it was a tweet by Twitter influencer Mumbi Seraki that proved to be devastating. Seraki tweeted as follows: “After Imperial, CBK focused ON forensic audits and found a similar ALLEGED FRAUD at Chase Bank where close to 15b is missing from the books”. As the timeline of the events that ensued shows, the bank’s communication team did not think much of it. They acted as if everything was normal, issuing a press statement urging the public to instead ignore the rumours. Nyabola (2018) provides a good narration as follows: “The Chase Bank social media ac-

counts were running as normal. Users frantically tagged the bank in Seraki’s [author of original tweet] tweets, urging them to respond. The people managing the bank’s social media urged customers to ignore such rumours: ‘that information is completely false and we urge the public to ignore it’. The bank drafted and issued a press statement asserting that Chase Bank was ‘strong, sound and transparent’.” The steps taken by the bank were clearly not enough to douse the tensions. This is because irate customers, probably feeling unheard as official communication was so slow in coming, took to social media to express their frustration” (Nyabola, 2018). With panic-stricken depositors scrambling to withdraw their funds, the Central Bank of Kenya (CBK) had little choice but to take over the bank two days later. The CBK put the reason for the run on the bank rather succinctly: “Chase Bank Limited experienced liquidity difficulties, following inaccurate social media reports…”. It is important to point out that there were preceding and concurrent events that made

the online rumours more potent than they could have been. Chase Bank had reported a significant financial loss for 2015 just a week before. And in reporting the poor 2015 results, it released two conflicting financial statements, with an audit revealing the bank understated insider loans to staff and directors. Besides, a similarly-sized bank, Imperial Bank, went under only a few months earlier. It was hardly a time for Chase Bank’s communication team to resort to classical tactics. Edited version of article was first published by Nanyang Business School’s NTU-SBF Centre for African Studies. References available via link viz. https//nbs.ntu.edu.sg/Research/ResearchCentres/CAS/Publications/Documents/NTUSBF%20CAS%20ACI%20Vol.%202020-17.pdf

“Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

Nigeria’s elites taking a more toxic route

etween 1509 and 1511, the Italian Renaissance artist, Raphael, did a mural called The School of Athens. Notable for its accurate perspective painting in an era when there was an argument between those who wanted to paint more lifelike stuff and those who felt that all art should glorify the church, The School of Athens was a painting about philosophers. Most of us know the same general story about the history of philosophy. First, there was Greece, where democracy and philosophy were invented. Then came Rome, who reached the zenith of imperialism and government in the Western world, eventually fell throwing Europe into the Dark Ages, and then after centuries of darkness and ignorance came the Renaissance, when people like Leonardo da Vinci, Michelangelo and yes, Raphael, basically painted, invented and wrote Europe’s way out of ignorance. This tale is partially true and ignores the long period of about five centuries, where the Islamic world preserved the knowledge of Greece and Rome and was the world’s centre of learning. One of the great Islamic scholars of the day was a man called Abu al-Walid ibn Rushd, or simply Averroes. He was a 12th-century polymath and jurist who wrote more than 100 books and treatises on many subjects, including philosophy, theology, medicine, astronomy, physics, psychology, mathematics, Islamic jurisprudence and law, and linguistics, who he featured on Raphael’s painting. You can find him in the painting, wearing a turban, second row, standing and trying to read something that Pythagoras was writing. An acknowledgement by Raphael of his greatness.

Averroes’s first patron was the Almohad Caliph, Abu Yaqub Yusuf (Yusuf 1), who impressed with his knowledge, ordered Averroes from Cordoba in today’s Spain, to the Royal Court in Marrakesh in today’s Morocco, paying for Averroes to stop working, and simply to think. That investment paid off. Averroes became known for his writings on Islamic theology, philosophy, jurisprudence, and medicine. He was the first known person to describe what is now known as Parkinson’s disease. He was both the court physician for the caliph’s family, as well as the chief judge of Cordoba. Unfortunately for him, Yusuf I died in 1184 and was succeeded by Yaqub Al-Mansur; Averroes, for political reasons, fell out of favour and was exiled to Lucena in disgrace. At some point in 1198, AlMansur decided that he needed a thinker around him, and sent for Averroes to return to court. Averroes died a few months after returning to Marrakesh, and even though he was buried initially in Marrakesh, his body was exhumed and returned to his native Cordoba for burial. Another great featured on The School of Athens is Leonardo da Vinci, who though a contemporary of Raphael, was one of those few people whose greatness was never in doubt even among his contemporaries. As a renowned polymath, Leonardo adopted an empirical approach to every thought, word and deed, and accepted no truth unless verified or verifiable. Leonardo wrote, “Anyone who conducts an argument by appealing to authority is not using his intelligence; he is just using his memory.” Naturally, this approach brought him in conflict with the very powerful Catholic Church, but

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why did he not end up in prison as another polymath who lived a generation later, Galileo Galilei did? Galileo was not even given a proper funeral because Pope Urban VIII insisted that he was a heretic. What was so special about Leonardo? Well, like Averroes four centuries earlier, Leonardo had some powerful patrons. Francis I, King of France and Restorer of Letters; Lorenzo de Medici; and Cesare Borgia, one of Italy’s most powerful condottiere or mercenary leader, were among those who liked Leonardo. Those were men whom even the Pope in those days would think twice before crossing. Borgia was the son of Pope Alexander VI. Nobody was going to touch Leonardo. But this manner of sponsoring the arts and sciences changed in the late 19th and early 20th centuries, and perhaps the man most responsible for that change was Andrew Carnegie. Carnegie who died in 1919, overtook John Rockefeller as the richest man in the world when he sold his steel company to JP Morgan in 1901. After winning that battle which he had been fighting with Rockefeller for decades, Carnegie devoted the rest of his life to giving his wealth away, and by the time he died 18 years later, had given away the equivalent of $65 billion today, almost 90 percent of his wealth, to charitable causes, foundations and universities. It was Carnegie’s generosity, which was copied by Rockefeller and billionaires till this day, that set the template for financing the philosophy and the arts which we now enjoy and often take for granted. Very importantly, this newfound institutional heft gave artists and creatives an independent voice, as they no longer had to rely on individual patrons to keep body and soul together. These

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Cheta Nwanze billion-dollar foundations are institutions that will continue to sponsor artists regardless of what the artist’s body of work says or what she does in her personal life, save in some cases for when a personal affair is of such an egregious nature as to void the terms of the artist’s grant. Why have I told these stories? A few weeks ago, the son of a sitting state governor made a threat on social media. He threatened to rape the mother of someone who was heckling him. The governor has become a known patron of literary festivals since he got into office, sponsoring the country’s most prestigious literary festival, and being a friend to writers and feminists. In the aftermath of his son’s behaviour, Nigeria’s literary community immediately divided itself into those who were for, and those who were against an utterly condemnable act of cyberbullying. The kerfuffle has thrown up for the public’s glare, the deep divisions within the literary community.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Cheta Nwanze is the lead partner at SBM Intelligence and heads the company’s research desk.

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Tuesday 28 April 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

FG needs to investigate suspicious Kano deaths Many more deaths may have gone unreported

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

Bashir Ibrahim Hassan

he reports of suspicious deaths in Kano State is fueling a national hysteria that our worst fears about the Coronavirus pandemic is coming true and the federal government cannot no longer afford to ignore the issue. A full-scale investigation is now required to determine the cause(s) of these deaths. Reports say that at least 23 high-profile deaths have occurred in a few days due to reasons yet to be ascertained. The State Government has instituted an investigation to determine the causes of these and other recent deaths. The Ministry of Health is conducting the investigation. We think this is not enough, a high-level investigation involving the Federal Ministry of Health, National Center for Disease Control (NCDC) and health experts.

Reports say one of the high-profile deaths includes that of Ibrahim Ayagi, Kanobased professor of economics, a former head of Nigerian Economic Intelligence Bureau, and until his death was the chief executive officer of Hassan Gwarzo Group of Schools. Ayagi was aged 80 years. Other notable deaths in the state are of the former Grand Kadi of Kano, Dahiru Khadi, Musa Umar Gwarzo, as well as Musa Tijjani, editor of the state-owned Triumph Newspaper. But these are individuals whose names seemingly carry weight in the state but it helps to imagine that the many deaths that may have gone unreported. If the deaths are indeed linked to COVID-19, it assumes a more frightening dimension. In Italy, it started with a few cases and soon snowballed into a national pain. It asks questions of Nigeria’s preparedness

to contain the pandemic. Nigeria’s testing figures are so abysmal that it pales into insignificance when compared to smaller African countries. For example, Ghana has been able to test over 50,000 people and South Africa has already tested over 150,000 people but Africa’s most populous country has only tested about 10,000 people. A few days ago, there was outcry on social media that the Nigerian Center for Disease Control (NCDC) has failed Kano as these deaths occurring at alarming frequency followed by inaction from the government is to say the least frightening. Some say that the NCDC officials in the city are not responding to people’s distress calls because they lack manpower and adequate facilities. There is a national shortage of Personal Protective Equipment (PPE) which has led to reliance

on donation from China and other countries. There is also limited reach for the coronavirus communication meant to sensitise the people in a state where the literacy rate is under 50 percent. Without official investigation and determination of facts, there is no factual basis to link them to COVID-19 but the frequency and the period they occur points suspicion at the pandemic which has so far killed over 160,000 people worldwide and sickened over 2 million people. Medical experts have cited several other reasons for the high wave of deaths being recorded in the state, which they believe has to do with the present unfavourable weather condition being experienced in the state. Prior to suspending COVID-19 tests, the state had confirmed 73 patients cases with the novel coronavirus disease.

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

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Tuesday 28 April 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

MARKETS

Money market funds shed N49bn in March as investors seek new bride in bond market ENDURANCE OKAFOR

he value of asset managed by Money market funds, an asset class of mutual funds that invests in debt instruments like treasury bills dropped by N49.04 billion in March as investors seeking high-yielding securities switched to other instruments with fat returns. The net asset value (NAV) of Nigeria’s Money market funds at N830.15 billion as at March 6 2020, declined by 2.29 percent, to N781.1 billion as at April 9, 2020, data sourced from the Securities & Exchange Commission (SEC) show. “Yields from money market have plunged over the past 6 months, this has led to declining investments on these funds,” Ayorinde Akinloye, research analyst at CSL Stockbrokers said. According to the analyst money market funds are built on Treasury bills investments and as a result, low yields from T/Bills fueled the mas-

sive withdrawals from money market mutual funds. Meanwhile, more than N65.79 billion worth of unsuccessful transactions were recorded at the Nigerian Treasury Bills auction conducted on April 1, 2020, by the Central Bank of Nigeria (CBN) on behalf of the Federal Government of Nigeria (FGN) due to the excess liquidity in search for investments options. Investors seeking highyielding securities were disappointed, as attempts to

buy the federal government short-term debt instruments at attractive rates were denied as the current economic crisis presented fewer investment opportunities. The T/bill rates offered by the central bank was at a record low of 2.2 percent, 3.2 percent, on the 91-day, and 182-day maturities respectively, this was a drop from the 2.6 percent and 3.4 percent recorded in the previous auction. Analysis of the data by SEC

revealed that Fixed income funds, the mutual fund asset class that invests in bonds grew its net asset value by N6.16 billion in the space of one month. The asset managed by the Fixed income funds appreciated by 3.03 percent from N201.2 billion as at 6 march to N207.3 billion as of April 6. Meanwhile, the Federal Government’s bonds for the month of April worth N60bn offered on Wednesday were over oversubscribed

by N215.67billion, the Debt Management Office disclosed on its website. The total subscription received from investors for the bonds was N275.67billion, out of which N49.7billion was for 12.75 percent FGN April 2023 bonds; N107.47billion for 12.5percent FGN March 2035 bonds; and N118.5billion for 12.98percent FGN March 2050 bonds. Further analysis of SEC data revealed that the net asset value of the Real-estate funds also appreciated in the period under review. This made the asset class the only one that grew its NAV after Fixed income funds. The funds that is focused on investing in the property industry added N887.37 million to its NAV to post N45.02 billion as at April 9 from the N44.13 billion it reported on March 6 2020. Apart from the Fixed income funds which lost the highest value of its market share, other top losers in the review period were Bond funds, Mixed funds and Eq-

uity funds. With the least asset depreciation, Ethical funds shed N338.87 million in the month under review. Bond funds, Mixed funds and Equity funds had a NAV depreciation of N6.59 billion, N1.7 billion and N1.26 billion respectively. The drop in the net asset value of the six mutual funds asset classes dragged the value of the asset under management (AUM) of the Nigerian mutual fund industry. The country’s mutual fund AUM at a record high of N1.22 trillion as at March 6 declined to N1.167 trillion as at 9 April 2020, a depreciation of N52 billion. Mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities such as stocks, bonds and short-term debt. The primary advantages are that they provide economies of scale, a higher level of diversification, provides liquidity, but investors are required to pay various fees and expenses to manage the fund.

Facebook launches Zoom-like features on COVID-19: WACT donates nose masks, Messenger, Instagram other PPEs to NPA, Customs in Onne Port FRANK ELEANYA

acebook has released new features on Messenger and Instagram which it hopes will rival Zoom’s dominance of teleconferencing. Messenger Room, the latest feature announced by the social media giant on Friday is a tool for starting virtual hangouts with room enough for 50 people. Facebook is also increasing the capacity of video calls on WhatsApp from four people to eight while adding video calls to Facebook Dating, and new live streaming features to both Facebook and Instagram. Apart from an expanded capacity, Room also has no time limit so users can drop in and spend time with friends, family and people who share their interests. “Video presence isn’t a new area for us,” he said. “But it’s an area that we want to go deeper in, and it fits the overall theme, which is that we’re shifting more resources in the company to focus on private communication and private social platforms, rather than just the

traditional broader ones. So this is a good mix: we’re building tools into Facebook and Instagram that are helping people find smaller groups of people to then go have more intimate connections with, and be able to have private sessions with.” Virtual conferencing and video calls have grown and become the ‘normal’ way people stay in touch with friends, family and business in the last three months. Zoom and a few other platforms have grown popular on the back of growing demand from government institutions, companies and individuals. Following its new found popularity, Zoom Video Communications announced on Thursday that it surpassed 300 million daily active users, representing a 2,900 percent increase from December 2019 when the company had 10 million daily active users. The company’s popularity has also seen Zoom become the toast of many investors. On Friday, the share price rose by 7 percent to $181.50. Zoom stock is up more than 400 percent since pricing its initial public offering at $36 in April 2019. Microsoft Teams another

virtual conferencing has also seen a surge in usage. In April the company reported said meetings Teams service hit a new daily record of 2.7 billion meeting minutes in one day. That marks a significant increase of 200 percent from 900 million in mid-March. That figure includes just meetings in Teams. The company’s newly released Work Trend Index report showed the meaning behind the numbers and how the desire to connect online is changing the way people work, live, and much more. Facebook is looking to tap into the changing dynamics with its latest features. Messenger Room is rolling out to some users on Friday with a smaller unit and will expand to the rest of the world in coming weeks. The company said there are now over 800 million daily active users across Facebook and Instagram Live. It is bringing live videos to desktop and adding a feature that lets users save live videos to IGTV. On the Facebook app, the company is bringing back Live With and has made it easier to donate and raise money directly in Live.

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AMAKA ANAGOR-EWUZIE

h e We s t A f r i c a Container Terminal (WACT) has donated personal protective equipment (PPEs) including surgical nose masks, latex gloves and hand sanitizers to the Nigerian Ports Authority (NPA) and the Nigeria Customs Service (NCS) in Onne Port, Rivers State to support efforts at containing the spread of coronavirus (COVID-19) at the port. The company also donated similar items to its host communities of Onne and Ogu towns in Rivers State. Aamir Mirza, managing director of WACT, who commended NPA for keeping the nation’s gateway operational in the face of the global health crisis, said the donation was necessary to support efforts at stopping the spread of the virus. Stating that the virus has created the worst public health crisis of our generation, Mirza said prevention

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remains the best option available in the absence of vaccine and treatment for COVID-19 infections. “The best way to prevent and slow down transmission of COVID-19 is to be well informed about the virus, its symptoms and how it spreads. It is in realisation of this that we carried out a lot of awareness and enlightenment campaign around the port community to educate our staff, port users including agents and truckers on the need to stay safe and adhere to the guidelines issued by relevant government agencies,” he said. According to him, the donation was also in line with the effort aimed at enhancing preventive measures at the port. “We all have the responsibility of protecting ourselves and others from the infection by maintaining social distance, regularly washing of hands and avoid touching our face,” Mirza, who was represented by @Businessdayng

WACT’s Chief Financial Officer, Lewis Sarpong, said while presenting the items to Ismaila Al-Hassan, Port Manager of Onne Port. Mirza said that in addition to the items donated to NPA, Customs and the host communities; WACT has contributed N50 million into the Federal Government’s COVID-19 Relief Fund Account through the Central Bank of Nigeria (CBN). Ismaila Al-Hassan, Onne Port Manager, who received the items on behalf of NPA, said COVID-19 has created severe challenges for the Nigerian economy, stating that the sooner the pandemic is over, the better for the people and the economy. “A donation like this to assist the workers and the communities around the port is a welcome development,” he said. Each donation made to NPA, Customs and the host communities include 1,100 surgical nose masks; 50 packs of latex gloves and 60 bottles of hand sanitizer.

Tuesday 28 April 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Mixta Africa, FMBN discuss ways to automate mortgage applications processing in wake of Covid-19 MODESTUS ANAESORONYE

s the Coronavirus pandemic (Covid-19) ravages the world with its impact on economy and wellbeing of individual households, experts in real estate are seeing declining liquidity and prioritization of consumption as factors that might inform rethinking new ways around doing things in the industry They believe that this period present a huge challenge to both consumers and investors in real estate, and therefore offer another opportunity for providers of housing, estate properties to think outside the box and come up with strategies to not only sustain available consumers but provide value to make investors look towards the industry. The experts who spoke during a panel discussion at the Mixta Africa’s Webinar talks held on Thursday, 23rd of April with the theme “Making Informed Investment Decisions in the Covid-19 Era: A real Estate Perspective”, said governments early response with policies and palliatives will enable the economy go through the cycle and recover quickly. Panelists at the talk include Kola Ashiru-Balgun, managing director, Mixta Africa Plc; Ahmed Musa Dangiwa, managing/CEO, Federal Mortgage Bank of Nigeria; Ude Okonjo, chief executive officer/VC Fine and Country West Africa; Temitayo Oshikoya, managing principal, Nextnomics Advisory; Chinua Azubuike, managing director, CBRE Excellerate and Chukwunonso Onny-Ezeh, chief executive officer, Asset-

2-Sell Properties Limited. Kola Ashiru-Balgun, who was the moderator of the talk provided background on how Covid-19 is impacting the economy including growing risk of sentiments globally, weak economic outlook, lower crude oil prices, which Nigeria is currently experiencing, and concerns of further currency devaluation. He noted that these have resulted to a slowdown in investment (both government and private) hinging it on anticipated strain on federal government receipts and consumer income. Oshikoya stated that the situation provides opportunities in the residential property area, particularly for investors who want to take advantage of long term opportunities. According to him, pension funds and equity investors will find a great future in residential real estate as affordable housing will continue to be in high demand post Covid-19. Looking at the opportunities in both residential and commercial properties, Oshikoya said while demand for real estate at the moment might reduce as households and individual are concerned on meeting basic needs, healthcare, job security companies will be concerned with savings cost, contract space, and conventional ways of doing the job, may be from home. Dangiwa, an architect who spoke on efforts of government to increase access to affordable housing post COVID-19, said efforts are on to ensure the inclusion of the informal sector affordable housing schemes in the country using their banks BVN.

According to him, efforts are also on to open up Diaspora mortgage market, stating that documentations for this was being worked out and will be presented to the minister soon for further development. In addition, he discussed the importance of exploring technology to review the current mortgage application process Chinua Azubuike, on his own discussed on how critical it is for the government to restart the economy with policy response as key in going through the COVID-19 cycle and launching to recovery. “We will see supply outstrip demand, and in the short and medium term, this will impact consumers, he said. Udo Okonjo of Fine and Country who was upbeat on opportunities during and post Covid-19 said players should think outside the box, expand the market, and bring in Diaspora opportunistic investors increase liquidity in the sector. Udo Okonjo said players in the industry must digitalize their product offerings to provide convenience, varieties and consumer engagement in the new world. She noted that, there will be price adjustment to reflect the psychological and financial impact of the situation on investors and consumers, but the opportunities are there as there will always be long term investors. So, our responsibility is to create value that will be above inflation in the near future. The panelist also discussed on strategies on incentives, price cut, rebates, tax holidays to assist investors, stakeholders, private and corporate buyers in the short-run.

Seven-Up Donates to Ijora Community: L-R: Head of Human Resources, Seven-Up Bottling Company(SBC) Ltd, Yinka Olufade, Ojora of Ijora Land and Iganmu kingdom, HRM Oba Abdul Aromire; Managing Director, SBC, Ziad Maalouf and National Marketing Manager, SBC, Segun Ogunleye at the presentation of rice and SBC products as part of the company’s palliative to Ijora Community in Lagos on Friday

L-R: Dayo Lagide, director, grant management, Lagos State Ministry of Health; Ituah Ighodalo, senior pastor, Trinity House; Moyo Adejumo, director, pharmaceutical services, Lagos State Ministry of Health, and Stella Olurakinyo, pastor, Trinity House, during the presentation of relief materials to Lagos State COVID-19, lead by the senior Pastor Trinity House, in Lagos.

DBN donates N100m to fight against COVID-19 SEYI JOHN SALAU

he Development Ba n k o f Ni g e r i a (DBN) Plc, a development finance institution, established by the Federal Government in collaboration with global development partners to address key financing challenges faced by Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria, has announced a donation of N100 million towards the fight against t h e C o ro nav i r u s ( C OVID-19) pandemic . Tony Okpanachi, Managing Director and Chief Executive of the bank, who announced the donation, said it is a demonstration of the bank’s commitment to the fight against COVID-19 pandemic that has infected over 2.6 million people

globally. “I wish to express the bank’s profound appreciation for the measures introduced by the Federal Government and the initiatives of mobilizing resources towards controlling the spread of the disease in Nigeria. “The donation is borne out of our sincere concern and commitment towards curtailing the spread of the deadly COVID-19 and finding a lasting solution to the pandemic,” said Okpanachi. He described FG’s invitation to all Nigerians to support the fight against the pandemic as a clarion call that must be heeded for a better Nigeria. According to him, the fight against COVID-19 is indeed a fight for all of humanity, hence the need www.businessday.ng

to heed the clarion call to come together and demonstrate commitment towards eradicating the deadly pandemic for a better, safer and more resilient country. While expressing his optimism for a quick and successful eradication of the disease, not only in Nigeria, but in the world at large, the DBN’s managing director prayed for all those who, in one way or the other, have been affected by the pandemic. “Our prayers are with the infected persons, those who have lost their lives to the disease and their b e r e av e d f a m i l i e s, t h e medical personnel at the forefront of this battle, as well as, all those who are managing the efforts of the government in the fight against this pandemic,” he stated.

Ifeanyi Agujiobi, permanent secretary, ministry of health, Enugu State, being the Enugu State Government (r) receiving cartoons of hand sanitizer from the and EEDC Head of Communication, Mr Emeka Ezeh during the donation of items to fight the spread of COVID-19 to Enugu State government by EEDC in Enugu.

L-R: Nwosu Chizibere, student, Holy Trinity College (HTC); Olorunfemi Tomiwa, student, HTC, Lagos; Toki Mabogunje, president, Lagos Chamber of Commerce and Industry (LCCI); Adewole Moyinoluwa Patricia, student, HTC; Asuku Favour, student, HTC, and Celine Onwukwe, teacher, HCC, during a courtesy visit of the School to the President of the Lagos Chamber of Commerce and Industry at Commerce House, Victoria Island, Lagos.

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Tuesday 28 April, 2020

BUSINESS DAY

Media business Tough test for business owners, managers as Covid-19 disrupts workplace “How well companies pivot in this environment and in the aftermath could have a lasting effect on their reputations and brands”, says Protiviti Inc, an equal opportunity employer. Daniel Obi

oronavirus pandemic may be the second major disrupter of workplace after digital. But how managers respond to the implications of coronavirus in the workplace will determine productivity, success and sustainability of many companies. Before the emergence of new technology, companies were dealing with a lot of paper work with more labourforce, meetings holding in boardrooms, operational and communication issues were almost manual. But technology has changed most of these operational issues, enhancing collaboration, work organisation, streamlining processes

and reducing cost. Similarly, Covid-19 has given many companies the opportunity to try new ways of doing business, including allowing the staff to work from

home and holding virtual meetings. As the pandemic upends and halts businesses globally with revenues and salaries pausing, the situation chal-

lenges board members on strategic thinking for the business especially on decisions of downsizing, salary cut, or asking a number of staff to proceed on months of leave without pay and whatever decision taken by management is expected to be backed by thorough thinking with future of the business in mind. A senior staff in a PR firm in Nigeria told BusinessDay that even if the lockdown is relaxed, workplace may never be the way it has always been. Already, an international agency based in Lagos has asked some its staff to proceed on compulsory leave while others were asked to resign. Similarly, some international airlines have fired a number of their staff. Other organisations in Nigeria may be contemplating

similar actions, but according to the PR expert, “sacking this time may not be the best option as finding and replacing them with experienced staff after Covid-19 may be a big issue for the companies that are focusing on sustainability. Many of the staff already understands the culture of the company”, he said. This is the time internal communication is effective to ensure the staff continues on the track of productivity from wherever they are working from, ensure customers continuous loyalty and jot management lessons from Covid-19. A report monitored in the Protiviti website while stating that the Covid-19 crisis is a new test of resiliency for directors, managers and employees alike, it advised that everyone must learn how to

meet it together with a focus on continuous improvement, shared values and mutual trust. “It is an opportunity for the board to advise management along the lines of ensuring the culture will be stronger and more focused when the company emerges and moves full speed ahead to ramp back up to more normal operations. “For sure, the crisis presents a test of leadership. Prioritizing and reprioritizing tasks and activities are going to be a necessary art for most organizations over the next several weeks, if not longer. Keeping teams focused on the greatest issues and risks while avoiding needless distractions, positioning themselves to ramp back up to normal operations, and building a culture of trust and empathy is the name of the game”, the report said.

COVID 19: Total Upstream, partners support people living with HIV in Lagos

PZ Cussons Foundation donates products to encourage hand-washing against COVID-19

NPC/NAPIMS and Total Upstream Nigeria Limited with its partners (CNOOC, SAPETRO and PRIME) have joined forces to support the people living with HIV in Lagos with palliatives within this period of the lockdown as a result of COVID 19. During the presentation of the 755 bags of food and livelihood support items to representatives of people living with HIV at the Secretariat of Nigeria Business Coalition against AIDS, Wokoma Ajukura, General Manager Corporate Social Responsibility Total Upstream Ltd representing the Managing Director Mike Sangster said Total Upstream and partners saw the need to provide support for people living with HIV at this time due to the challenges confronting them in terms of assessing the need treatment and drugs and the challenge of eating well to enable the drugs work well. He said “our decision to support the People living with HIV is based on the vulnerability of the people living with HIV and the fact that Lagos is on lockdown, thus the decision to support them with some welfare palliatives such

as food items and livelihood support to enable them to comply with the stay- at- home order”. In her remarks on the initiative and partnership, Bunmi Lawson, Supervisor Community Relations who represented Bala Wunti Group Managing Director, National Petroleum Investment Management Services (NAPIMS) said this action is in line with the company’s goals -”touching your lives in

many positive ways”. According to her, NNPC and its partners are committed to supporting any initiative that can alleviate the discomfort of citizens of the Federal Republic of Nigeria. She went further to encourage Nigerians to follow the instructions of the experts such as stay at home if it is not necessary to go out, wash your hands frequently for at least 20 seconds under running water and observe social distancing.

L-R: Wokoma Ajukura, general manager Total Upstream Nigeria LTD; Monsurat Adeleke, CEO, Lagos State Aids Control Agency and Patrick Akpan Coordinator, Lagos State Network of People Living with HIV/ AIDS in Nigeria at the presentation of food items to People Living with HIV BY Total Nigeria Upstream in partnership with Nigeria Petroleum Investment Management Services(NAPIMS), SAPETRO, PRIME and NOOC, recently in Lagos. www.businessday.ng

Z Cussons Foundation in collaboration with Foundation for Refugee Economic Empowerment are donating soaps to over 40,000 people towards controlling the spread of COVID-19 in six Nigerian cities, a statement has said. Foundation for Refugee Economic Empowerment (FREE) is a UK and Nigerian Charity that aims to provide high quality, timely, accountable, and inclusive humanitarian assistance to displaced persons towards enabling them to return to normal and sustainable productive lives. This, according to the statement was disclosed by Eyitayo Lambo, the Chairman of the Board of Trustees of PZ Cussons Foundation. Eyitayo Lambo said, “We have since learned that one of the simple ways to stay protected against the coronavirus is by consistent handwashing with soap. Sadly, however, not everyone can afford to do this. So, the PZ Cussons Foundation has partnered with FREE to ensure that even the most vulnerable communities are catered for at such a time as this to support the ongoing efforts to stem the spread and contain the virus in Nigeria.” According to him, this kind gesture is to be extended to

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L-R: Mohammed Danbauchi, regional Services manager North, PZ Cussons; Abubakar Widi- Jalo, coordinator Widi-Jalo foundation Kano, and Musa Anzaku, area sales manager PZ Cusssons, at the presentation of the relief materials against COVID-19 by the PZ Foundation in collaboration with Foundation for Refugee Economic Empowerment in Kano recently.

many vulnerable communities in other regions in the country. He also added, “The PZ Cussons Foundation has been a major advocate for proper sanitation and hygiene standards and has, for the past five years, partnered successfully with United Purpose in increasing awareness and understanding about the importance of handwashing with soap as an easy, effective, and affordable way to prevent diseases and save lives. We, therefore, encourage every@Businessdayng

one to stay at home and stay protected by washing their hands with soap, among other preventive measures.” Launched in 2007, the statement said PZ Cussons Foundation has been helping Nigerian communities by supporting projects in areas of roads, and other infrastructural improvements such as water, sanitation, health and education. “The Foundation has completed over 100 projects in different parts of Nigeria”.

BUSINESS DAY

Tuesday 28 April, 2020

BUSINESS DAY

Branding Nigerians express more worry over Covid-19 demonstrates that media’s value is on the rise impact of Covid-19 on economy than falling sick - Survey Nick Efstathiou

Daniel Obi

igerians are increasingly concerned about the coronavirus situation and its implications on life and the economy. With 1182 cases of Covid-19 as at last Sunday, 35 deaths and the four weeks lockdown, the socio-economic effects are hard-hitting. This unease is evident in latest Kantar report which indicates that about 150 million Nigerians out of about 200 million population are afraid of national financial breakdown followed by economic recession and hardship occasioned by Covid-19. The increasing fear negates the earlier confidence expressed in some markets, including Nigeria that their economy will recover quickly once the Covid-19 situation dies down. In a survey conducted by Kantar mid-March, this year, China with 67% was more optimistic of economic re-bound followed by Nigeria with 58%. Saudi Arabia came third with 49%. South Africa 32% and Spain was less optimistic with 20% of economic recovery after Covid-19. The survey had polled 25,000 consumers across over 30 countries. But the latest survey says almost three-quarter of Nigerians (74%) are fearful of a national financial breakdown followed by an economic recession. Kantar in this second wave of study conducted 500 interviews in Nigeria: through both mobile online and computer aided telephone interviewing (CATI). It also conducted two online focus groups discussions to elicit a deeper feel of consumer experiences, challenges and desires during this time. During the interview, it spoke to Nigerians in

Lagos, South West, the Northern States, South East and South South geo-political zones of the country. The present apprehension about financial uncertainty related to the lockdown is not helped by the fact that crude oil; Nigeria’s major source of foreign exchange is selling around $30 in the international oil markets, which is far below the projected $60 in the 2020 budget by the Federal Government of Nigeria, the report said. “The majority of Nigerians earn a daily wage from informal activities. Unfortunately, they have not been able to fend for themselves and their families throughout the lockdown and this is the deepest concern that the people have today”. Kantar further noted that the trust in national and international media agencies remains high at 70% while new media has seen growth from 60% to 80%; thus, lifting up non-traditional media to become

mainstream. “Engagement with social networks and other online platforms is ahead of TV in the short term for now as people seeking real-time information regarding the pandemic and essential information to either access relevant services or products or to entertain themselves as they while away time until the lockdown is lifted”. In the earlier report, it said traditional media still remains most trustworthy source of information for news consumers. The coronavirus situation has compelled consumers to embrace all forms of online services as website and phone orders are purposefully done to maintain physical distance (30%). “In line with this, physical distancing is becoming a norm as more consumers are shopping less in physical outlets and avoiding the big malls (66%) and majority (70%) is opting for electronic payment options”.

adio, digital and print media is playing an important role in the Covid-19 response. New research shows between 80% and 90% of people consume news and entertainment for an average of almost 24 hours during a typical week. The Covid-19 pandemic is disrupting every industry. On the one hand, social distancing has led to a spike in at-home radio, digital and print media consumption, and growing numbers are turning to news providers for timely and trusted information on the crisis. The crisis is being well documented by radio news teams, digital news teams and print news teams. The current disruption may be unprecedented, but the media industry has been upended many times before. Since the turn of the century, digitisation of content, the rise of social media and acceleration in mobile consumption have all forced changes. At the Central Media Group, subsidiary brands and products the likes of OFM, Bloemfontein Courant, and Get It Bloemfontein, with their webpages and social media platforms, have embraced the changes in consumption, seeing between 10% and 14% rise in engagement levels, from February 2020 to April 2020. Kantar completed a research study, which indicated that terrestrial radio listenership is up 30%. In a research study conducted by the Central Media Group, with 1,545 respondents taking part in the study, it was highlighted that radio listening is on the rise, during this pandemic. Engagement with reliable news sources is also on the rise, to include the OFM news pages on ofm.co.za, and Bloemfontein Courant news page, on bloemfonteincourant.co.za. What has stayed constant is the crucial role that media play in society. Media don’t just help us pass the time; they keep us informed. Evermore, media create shared moments and reflect who we are as individuals.

One of the most direct ways to gauge value is engagement, and on this front media is doing well. Between 80% and 90% of us read, watch or listen to news and entertainment for an average of almost 24 hours during a typical week. It’s no surprise that engagement with media is high. The Central Media Group, with its brands and products, cover all these sensory needs to read and listen. At least 12% of respondents in the Central Media study, indicated that during this lockdown period, that they are reading more local newspapers, 51% are engaged with more social media and, collectively, indicate that they are spending more time on trusted Central South African media webpages or social media channels. As many as 71% of Central South African’s are listening to more radio than usual during the current lockdown. This shows that majority of our Central South African’s are very reliant on the radio to get the latest information. Asked, where are you getting reliable information from about Covid-19 during the lockdown? At least 39% of respondents indicated that they rely on radio, 47% of respondents indicated they rely on local news websites, and 14% indicate that they rely on local newspapers, and 37% rely on local media social pages. The Central Media Groups brands and products are here for you, during this very difficult time. We did not create the Covid-19 pandemic, nor are we responsible for the Covid-19 pandemic, but we are accountable for our actions during the Covid-19 pandemic, to ensure the sustainability of our businesses, for the sake of our staff, their dependents and stakeholders. “Business can be hard. Man, life can be hard. We’re all on a journey, and we’ve all been down in the dumps before, wondering if what we’re doing is worth it. Wondering if what we’re doing is making an impact. But, we must be always moving forward,” Andrew Roach. Covid-19 demonstrates that media’s value is on the rise. Culled from Bizcommunity Nick Efstathiou is CEO – Central Media Group

Standing with Nigeria against COVID-19: NB Plc announces N600m support Daniel Obi

igeria’s foremost brewer, Nigerian Breweries Plc has announced a donation of N600 m to the Federal and some state governments, as part of efforts to support the fight against COVID -19. The Company’s Managing Director, Jordi Borrut Bel, according to a statement confirmed that the N600 million donation comprises of the following: N250 million cash donation to the Federal Government, through the Coalition Against COVID-19 (CA-COVID), the private sector led special intervention fund managed by the Central Bank of

Nigeria (CBN); N250 million cash donation to 7 State Governments’ Task Force Against COVID-19. Lagos and Ogun States will receive the sum of N100m and N50 million Naira respectively being COVID-19 frontline states while five other states of Kaduna, Oyo, Enugu, Abia and Imo will get N20m each. The donation also include N100 million worth of relief materials comprising: Provision of 5 doublecabin vehicles for use by the National Centre for Disease Control (NCDC) in Abuja, Lagos, Ogun and Kaduna States. This is to help meet their critical operational needs, especially contact tracing and movement of materials/personnel to isolation and treatment centres. The cost of fuel, maintenance and driver’s salaries www.businessday.ng

will also be covered by Nigerian Breweries. There will be Personal Protective Equipment such as face masks, 500 gowns and 141,000 units of hand sanitizers for nationwide distribution to our key states. The donation also include supply of malt, energy and soft drinks to the various Covid-19 NCDC

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centres nationwide. This will be done over a period to ensure steady support and to meet the nourishment needs of the Centres during the crisis, the statement said. Jordi Bel stressed that the company has already taken various steps to ensure that it continues to protect the jobs of its 3000 employees, while supporting its vendors/suppliers during this difficult period. He added that these contributions are in line with the company’s belief that publicprivate partnership is essential to overcome the threat of the COVID-19 virus. The statement said that Cheque presentations have already been made to the Ogun and Lagos State governments with other states to receive their donations in the com@Businessdayng

ing days. The parent company of Nigerian Breweries, the HEINEKEN Company had previously donated 15 million Euros to the International Red Cross and Red Crescent Society to support their relief efforts towards the most vulnerable people and communities affected by COVID -19 especially those in Africa, Asia and Latin America. Additionally, the Heineken Africa Foundation has decided to replace its regular grants and projects this year with a plan to spend up to 5 million euros in partnership with various NGOs in Africa to significantly upscale and accelerate its WASH program, which focuses on providing access to safe water, sanitation and hygiene (WASH), the statement said.

Tuesday 28 April 2020

BUSINESS DAY

BDTECH

In association with

E-mail: jumoke.akiyode@businessdayonline.com

The inevitable takeover of robots and artificial intelligence in businesses Jumoke Akiyode Lawanson

he question of how quickly businesses and economies should make a timed shift, not only with its infrastructure but with its culture, offerings, supply chain and its core processes is often asked, especially with technology rapidly evolving. Well these changes and digital transformation, although necessary, take time, and is not as simple as just moving data to cloud. Today, it is estimated that companies and countries have increased their innovations spend by up to 80 percent from 15 years ago, and the increase in automation through the rise of ‘bots’ have become the next big thing for organisations across various industries in the world. Speaking in an interview with journalists during 2019 SAS Analytics Experience in Milan, Italy, Desan Naidoo, vice president, SAS Africa, said there would certainly be a tier level of workers that would be displaced due to the evolving nature of jobs brought about by technology. “There is going to be a tier of jobs that will definitely be lost due to machine learning and computers being able to fulfil a certain sector of roles within that space, but using machine learning and Artificial Intelligence (AI) to enhance people’s roles,” Naidoo said. Asked what the future of Africa would be with regards to machine learning, especially as it is projected

to displace millions of people from jobs in the near future and the company’s plans for this evolvement, Naidooo told BusinessDay that; “As an organization that is looking to displace these jobs with technology, we are definitely having conversations on how to train people for new level jobs. I think there needs to be a lot of education around that, and how we actually retrain our people which is important.” “The evolution of technology is inevitable, it is going to happen, and it is going to make our lives easier and better, so we as humans need

to make sure that we are evolving,” he said. In Nigeria today, the use of robots and artificial is not new, especially with banks, e-commerce companies, insurance industries and fintechs. Other industries such as agriculture, health, education, etc. have also imbibed the use of certain AI technologies to enhance operations. In an interview with BusinessDay a while ago, Wole Adesiyan, head, business transformation of Stanbic IBTC bank said the bank had gone ahead to introduce robots which is

a game changer in its operations as it has significantly improved operational efficiencies, created shorter resolution times, enhanced data security and improved data handling. “We believe in preparing for the future without ignoring our environment and the culture of our people. We also encourage our colleagues through learning and development to prepare for a future that includes Artificial Intelligence and robotics process automation. If a machine can do your job, prepare for a better one,” Adesiyan said. Almost all banks in Nigeria have

introduced chat bots and automated a considerable amount of their customer service centres, displacing a number of customer service representatives. However, some people have argued against the take over of some jobs by automation and robotics. Speaking on the significance of robotic process automation (RPA) in the workplace, Alistair Hofert, associate director, finance and accounts, PwC South Africa, said that robotic process automation will make it possible to fully automate highly rulebased/repetitive processes, thus reducing headcount and associated costs but that not all RPA’s are intrusive and may still need some sort of human intervention. “I think it is important that people in finance and technology know that the RPA is not an intrusive robot and will not take over jobs of people as is the popular scare in many industries. Rather, the RPA software sits on existing software, learns and is very good at understanding and applying intelligence. When you add machine learning to basic robotics, you must teach the robot how to understand voice and language so that you can use things chat bots and natural language processing bots. So it still needs human beings,” Hofert said. Research has shown that there is a high likelihood for companies to invest more in automation and innovative technology, hence the pressing need to train citizens for the job of the future.

COVID-19: 9mobile upgrades virtual channels to keep Nigerians connected

mobile has reinvigorated its online and virtual channels to ensure customers on its network have round the clock access to airtime and data. The telco says this move is one of the initiatives designed to help its customers cope with the disruptions occasioned by the Coronavirus (COVID-19) pandemic and a demonstration of support for ongoing efforts to contain the

spread of the disease and keep them connected to their loved ones. “As more people work remotely from home while others need to stay in touch with loved ones while maintaining social distancing, 9mobile is continuously innovating around ways to meet people’s needs for reliable availability of airtime and data. With this move, subscribers can easily recharge airtime by dialling

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*695# or *200*3# for data services, all from the safety of their homes,” 9mobile stated. Speaking on the initiative, Layi Onafowokan, 9mobile’s Ag. director of marketing said: “These are trying times, and we want everyone to stay safe in their homes. The lockdown is a necessary and well-considered precaution that has been adopted globally to reduce the transmission of COVID-19. As a caring network, we

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want to support our customers to continue to maintain social distancing while they are still able to work from home and connect with loved ones without the challenge of getting airtime and data.” Onafowokan encouraged everyone to continue to comply with lockdown directives and observe other safety measures to stay safe while expressing optimism that there would soon be light at the end of the tunnel.

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In an earlier communication to customers and Nigerians, Stephane Beuvelet, acting managing director, 9mobile empathised with people impacted directly or otherwise by the disease and acknowledged the toll the pandemic was having on everyone’s lives. He affirmed the company’s commitment to doing everything possible to keep people connected with their loved ones round the clock.

Tuesday 28 April 2020

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Facebook introduces messenger rooms, more ways to connect with people virtually ...To expand WhatsApp group voice, video calls to take eight people Jumoke Akiyode-Lawanson

ue to increased feelings of isolation and loneliness as a result of the Covid-19 pandemic and lockdown, Facebook recently introduced new products that will make it easier for people to virtually connect and spend quality time with loved ones. The company said last Friday, 24 April 2020, that it had taken time to monitor a rise in demand for real-time video with Video calling on Messenger and WhatsApp video more than doubling in areas most affected by COVID-19, while usage of Facebook Live and Instagram Live has increased significantly indicating a need to do more to make real-time feel real. Facebook therefore announced features across its products that make video chat and live video more easy, useful and natural. One of the new features are Messenger Rooms which are joinable group video calls that make it easy for users to spend quality time with friends, loved ones and people who share their interests. Users can create a room right from Messenger or Facebook, and invite anyone to join, even if they don’t have a Facebook account. According to Facebook, “Rooms will soon hold up to 50 people with no time limit.”

Users can also host celebrations, organize a book club or just hang out on the couch with friends. They don’t need to call someone and hope it’s a good time or check everyone’s calendar first. They can start and share rooms on Facebook through News Feed, Groups and Events, so it’s easy for people to drop by. Facebook says it will soon add ways to create rooms from Instagram Direct and WhatsApp too. Users can join from both mobile and desktop application. When a user creates a room, they can choose who can see and join it and can remove people from the call and lock a room anytime they don’t want anyone else to enter.

Messenger Rooms is rolling out a test in some countries this week and will expand to the rest of the world in coming weeks. Expanding WhatsApp group video calls WhatsApp video calls are another way to stay in touch. Facebook has promised that soon users will be able to have group voice and video calls with up to eight people on WhatsApp. As before, these calls are secured with end-to-end encryption so no one else can view or listen to your private conversation, not even WhatsApp. New live video features for Facebook and Instagram People are turning to Face-

book Live and Instagram Live for workout classes, cooking lessons, faith services and more, to respond to this Facebook says it is adding interesting features to make them even more useful. On Facebook... • Bringing back “Live With” a feature that enables users add another person into their live video, no matter where they are in the world. The feature will also allow users to bring on a guest speaker, interview an expert or perform with a friend. • Users will also be able to mark Facebook Events as online only and, in the coming weeks, integrate Facebook Live so that they can broadcast to their guests.

To support creators and small businesses, Facebook plans to add the ability for Pages to charge for access to events with Live videos on Facebook – anything from online performances to classes to professional conferences. • To help users raise money for causes, users can now add the donate button to live videos wherever nonprofit fundraisers are available. • Facebook is making it easier to access live video so its users can watch or listen anywhere. For those with limited data or a spotty connection, there is now the option to listen to the audio only. For those who don’t have a Facebook account, most public live videos are

now available on the web and some Pages can share a toll-free number that lets users listen to the audio through any telephone. • Facebook users can also live stream games from their phone to Facebook using the new Facebook Gaming app available on Google Play. The app also lets users play games instantly, watch their favorite streamers and discover new gaming groups. Tournaments are another new feature for game streaming on Facebook that lets users create, play and watch the competition in one spot. Tournaments are available on Facebook today, and coming to the Facebook Gaming app soon. • To help users support some of their favorite creators, Facebook says it’s expanding Stars to more Pages and more countries. Once users buy Stars you can send them to creators while they’re streaming, and they’ll earn 1 cent for every Star. On Instagram… • Instagram fans can now watch and comment on live videos from their desktop. They can also follow along with that yoga class on a bigger screen or listen to a live performance as they work. • After going live, Instagram users will soon be able to save their videos to IGTV so they stick around longer than the 24-hour limit in Stories and are easier for others to find.

Inlaks joins fight against COVID-19, donates power systems, IT gadgets to Lagos Isolation Centre Jumoke Akiyode-Lawanson

nlaks Limited, an integrated technology solutions provider in Sub-Saharan Africa, has announced a donation of power and information technological equipment worth N12 million to support the battle against coronavirus in Nigeria. Two units of 30KVA Uninterruptible Power Systems (UPS) as well as a Multimedia digital screen were delivered and installed at the Onikan

Isolation Centre as the Lagos State government intensifies efforts in tackling the COVID-19 global pandemic. In recognition of its longstanding relationship with GTBank as a trusted business partner, Inlaks Limited joined hands with the bank to provide clean and uninterrupted power for medical equipment at the isolation centre. The power system at the Onikan Isolation Centre, Lagos is expected to deliver continuous and conditioned power that can provide life www.businessday.ng

support for patients; aid accuracy in testing and data collection; ensure constant illumination of the centre; improve the life span of medical equipment as well as the productivity of health care workers. In addition, Inlaks provided a Multimedia digital screen to further aid widespread public sensitization and awareness creation. The gadget is a channel best suited for dissemination of authentic news, updates and information related to COVID-19 and measures to curb

the spread. Femi Adeoti, managing director/CEO, African operations, Inlaks said; “From global indications, it is clear that curbing the spread of coronavirus outbreak is a responsibility for all. As cases rapidly increase in Nigeria, government, non-government institutions, and individuals need to work together to bring an end to this pandemic. “Containing the spread of the virus requires aggressive and collective contribution in terms of time, energy, and resources from every pos-

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sible sector. Knowing the importance of power supply in managing Isolation Centres, relying on resources from our sub brands - Inlaks Power and Inlaks Energy, we can channel our support majorly towards ensuring regular power supply in isolation Centre,” he said. Adeoti said Inlaks commends the efforts of governments, health workers and international bodies in the face of the situation. “We are keen to contribute our resources to the collective effort that will ensure @Businessdayng

swift and effective response to the pandemic,” he said. With the growing concerns around the spread of COVID-19 in Lagos and Nigeria as a whole, Inlaks is imploring members of the public to observe social distancing and other safety regulations put in place by relevant government agencies across the country. Inlaks is a system integrator in Sub-Saharan Africa. The company partners with leading OEMs in the technology industry to provide information technology solutions.

Tuesday 28 April 2020

BUSINESS DAY

The challenges of keeping staff safe and boosting capacity in a crisis Co-founder of Indian online grocery app Grofers went from ‘freaked out’ to revving up operations in lockdown AMY KAZMIN

lbinder Dhindsa, the co-founder of Indian online grocer Grofers, was home with his family on March 24, when Prime Minister Narendra Modi, in a primetime television address, abruptly imposed a three-week, nationwide lockdown to stop the spread of coronavirus. While Mr Modi was still admonishing 1.4bn Indians to stay inside their homes, Grofers’ app crashed under the pressure of consumer panic. Nearly 300,000 people were trying to order simultaneously — eight times the company’s previous concurrent order peak. It took nearly a day to get the app up and running again. With that, Mr Dhindsa, 37, was catapulted into the biggest crisis — and opportunity — of his career: the struggle to ramp up Grofers’ capacity to meet a surge in demand from housebound, middle-class Indians, despite severe operational constraints. “The next 21 days will define our resolve and culture for years to come,” Mr Dhindsa — a graduate of the prestigious Indian Institute of Technology Delhi and Columbia Business School — wrote in an email to staff just minutes after the lockdown was imposed. “I am uncertain of what lies ahead as you are but what I am certain of is — we, as Grofers, will not walk away from this challenge.” For all his bravado, Mr Dhindsa was “freaked out,” he admits. Though grocery supply was defined as an “essential service”, Grofers’ operations had already been disrupted severely by the intensifying effort to contain coronavirus. Deliveries had come to a standstill during a one-day “people’s curfew” on March 22, and subsequent state-level restrictions meant many of the company’s warehouses were sealed and employees barred from coming to work. The sudden imposition of a national curfew raised the spectre of further chaos. But Mr Dhindsa says he felt his sevenyear-old company — whose investors include Sequoia Capi-

tal, Tiger Global and SoftBank’s Vision Fund — had a “moral obligation” to rev up its stalled operations. “When the lockdown happened, I did not see it as an opportunity,” Mr Dhindsa recalls in a video interview from his home in Delhi’s satellite city of Gurgaon, where he lives with his wife, parents and grandmother. “My frame of mind was more fear.” “If I had to take a cold hard look at it, I knew our costs were going to go up,” he continues. “It would be generally good for us in the sense that more people would realise the value of online grocery and platforms like ours. But short term, we would face a lot of pain.” His assessment proved prescient. Prior to the lockdown, Grofers had an average of 85,000 orders per day, and monthly sales of about $60m. Since the lockdown, demand has surged, with about 1.5m people visiting the app each day, and nearly 500,000 trying to order. But labour shortages, social distancing and sanitising at warehouses, and restrictions on movements in officially designated coronavirus “hot zones” means Grofers can only fill about 12 per cent of attempted orders each day. Overall, despite huge demand, revenues have fallen, though Mr Dhindsa hopes to return to pre-lockdown levels by June as restrictions on movements ease. When the lockdown began, Mr Dhindsa and senior team members were out meeting www.businessday.ng

officials to get permission to reopen warehouses, and obtain curfew passes for staff. Two days in, Grofers — which like other ecommerce companies had been forced to temporarily suspend services — resumed operations in 10 of the 26 cities where it normally delivers, adding more cities in the following days. Early on, Mr Dhindsa visited one of the big warehouses to meet workers, assure them of their safety, and emphasise Grofers’ importance as an essential service that enabled Indians to adhere to stay safe at home. “People in the warehouses need a sense of purpose to come to work, and they need to feel safe,” Mr Dhindsa says. “If your bosses say, ‘our warehouses are completely safe,’ but they themselves are not showing up, it defeats the purpose.’” Labour has been a big challenge, as many of Grofers 14,000 employees — mainly warehouse workers — weren’t turning up either due to a lack of public transport to get them to their jobs — or fear. “People are afraid and don’t want to come to work, and we are paying extra in our supply chain as hazard pay to get people out,” Mr Dhindsa says. The company has also provided transport to get workers to the warehouses. Despite these efforts, the company’s capacity remains constrained by the need to keep a safe distance between workers. “Even with only about 55 per cent of our workforce turning

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up we are back to 90 per cent capacity,” he says. “We are trying to do more with less. The net impact is that we have some sort of a path forward to what a more efficient delivery system looks like.” When Mr Dhindsa met officials and staff, he confined himself to a single room of his home — to protect his family from potential exposure to the virus. These days, he is sequestered at home, but his days still start and end with group calls with Grofers’ senior leadership team to discuss operational obstacles and how to overcome them. Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here. “Mostly I leave it to the teams — they make good decisions,” says Mr Dhindsa. “My job is to make sure we don’t freeze in the face of uncertainty, and that everything keeps moving . . . A bad decision is better than no decision.” The young entrepreneur has navigated tough times before. Grofers began as an “assetlight” tech platform to match online shoppers with supplies from the neighbourhood mom-and-pop stores that still dominate India’s grocery retailing. But the model proved unworkable as the small shops had such limited stock. In 2016, Grofers scaled back and re-engineered the business, developing its own back-end supply chain, including building 26 warehouses. @Businessdayng

But Mr Dhindsa says the current challenge is another order of magnitude. “The nature of this crisis is very, very different,” he says. “It’s not like you are reorienting your company. The entire world is reorienting. Today, I can’t even say ‘this is where we need to be six months down the line.’ I genuinely don’t know what the world six months down the line even looks like.” Three questions for Albinder Dhindsa Who is your leadership hero? Marshal Stacker Pentecost from Pacific Rim (the Guillermo del Toro movie). His individual conviction to challenge popular wisdom, paired with the trust in the team and the ability to rally them, albeit in a fictionalised world, really resonated with me. If you were not a CEO/Leader what would you be? Prior to moving into business, I was a researcher in transportation systems. I really liked the hunt for new solutions and probably would still be wandering in research if I wasn’t doing what I do now. What was the first leadership lesson you learnt? When I was an intern at Renault in 2003, my boss showed me the value of communication within a team. I had spent weeks trying to figure something out and she just raised her voice and asked the team if anyone could help. It took minutes (literally). As I had come from a competitive education system, this was never my first instinct. Direct communication — without fear of judgment — really helped me along the way.

Tuesday 28 April 2020

BUSINESS DAY

Coronavirus bursts the US college education bubble Soaring fees, worthless degrees and dicey investments have hurt the economy RANA FOROOHAR

ubbles are bursting everywhere and America’s most prestigious export — higher education — won’t be immune. Universities are like landlocked cruise ships: places with all-you-can-eat buffets and plenty of beer, but almost no way of social distancing. Many colleges are considering running online classes into the autumn and beyond. But that requires additional resources that most are ill equipped to afford. Even before coronavirus, 30 per cent of colleges tracked by rating agency Moody’s were running deficits, while 15 per cent of public universities had less than 90 days of cash on hand. Now, with colleges shuttered, revenues reduced, endowment investments plunging, and the added struggle of shifting from physical to virtual education, Moody’s has downgraded the entire sector to negative from stable. The American Council on Education believes revenues in higher education will decline by $23bn over the next academic year. In one survey this week, 57 per cent of university presidents said they planned to lay off staff. Half said they would merge or eliminate some programmes, while 64 per cent said that long-term financial viability was their most pressing issue. It’s very likely we are about to see the hollowing out of America’s university system. US universities are world class. But the system as a whole is in trouble. Cost is a big part of the problem. I’ve written many times about the US’s dangerous $2tn student debt load. Soaring tuition fees, worthless degrees and dicey investments made by both universities and the

government have become a huge headwind to economic growth and social mobility. If you don’t believe me, take it from the New York Fed, which two years ago called out student debt and the dysfunctions of higher education as problems for the overall US economy. That’s a sad irony, given that a college degree is supposed to increase wealth and productivity. Unfortunately, the US system of higher education — like healthcare, housing, labour markets and so much else in America today — is bifurcated. Those with fancy brand-name degrees from top schools do great. So do many who attend highquality, low-cost community and state programmes. But millions in the middle get neither a cheap nor a useful education. Underemployed and debt laden, they were struggling even before coronavirus struck. One study by the think-tank Demos found that the average student debt burden for a married couple with two four-year degrees was www.businessday.ng

$53,000, and resulted over their lifetimes in an overall wealth loss of $208,000. Economically, young people have been hit especially hard by the crisis as they do much of the lowpaid, high-touch service work that has been shut down. Some 11m college students work: almost threequarters of them for 20 hours or more a week, and 4.4m full time. Yet few are eligible for federal bailout money. Colleges, however, will get plenty. Many of the top recipients of federal aid are big state universities, such as the University of California, which incurred $558m of coronavirus-related costs in March alone. But a number of rich Ivy League colleges have received aid, too. Harvard, with its $40bn endowment, was given a nearly $9m CARES grant. It is returning the funds, as are many other top private schools, following public pressure. They are right to do so. Covid-19 has put moral hazard front and centre on the national agenda. The

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US cannot have taxpayerfunded bailouts that put big rich companies — or colleges — ahead of those who need help more. We need to focus on the most productive use of funds and worry first about helping the most vulnerable individuals and worthy public institutions. Still, some schools — particularly second tier private institutions — will go under, as many did in the 1930s Depression. That’s appropriate given the froth in the sector today. As the Roosevelt Institute has outlined, educational institutions have become highly financialised in recent years. Many have engaged in dicey debt deals and complex swaps arrangements that backfired, leaving institutions and students with even more costs. In that sense, the coronavirus-induced crisis could be a welcome chance to take on some of the problems in US higher education. As economists from Michael Spence to Joe Stiglitz have shown, a good chunk of the value of a college de@Businessdayng

gree lies in market signalling rather than the acquisition of skills. Moreover, paying $75,000 a year for a private, four-year degree isn’t the only way to learn. My daughter will graduate this spring from Bard High School Early College in Manhattan, a public high school associated with Bard College, where students earn two years of college credits as well as a high-school degree in four years. It’s one of many such “6 in 4” schools, which should become a new national model for secondary education. We m i g h t a l s o l o o k closely at the effects of our pandemic-induced, realtime experiment with online learning. Institutions are under pressure to drop fees for classes conducted virtually. The fees may go back up whenever business might return as usual. But, given the likely decrease in enrolment rates, some may stay down for good. If so, that would be the beginning of some much needed deflation in the price of US higher education.

Tuesday 28 April, 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Nigeria can develop COVID-19 vaccine if... Says ASUU MARK MAYAH

he Academic Staff Union of Universities (ASUU), has assured that vaccine for the treatment of COVID-19 disease could be developed in Nigeria, if the country leaders empower the nation’s biomedical and behavioural scientists among other scholars to undertake cutting edge research into the deadly virus. The union National President, Biodun Ogunyemi, gave the assurance in Abeokuta, the Ogun state capital when he led members of the association to donate 1,000 pieces of 125ml bottled hand sanitizers to the state government. According to Ogunyemi, Nigeria stands to learn from the pandemic ravaging many countries and if invested in education, it would yields immeasurable dividends, with explanation that public education and public health were inseparable. “For instance, conscious and determined investment in university education at national and sub-national levels Would give our country quality medical scientists, behavioural scientists, creative scholars

Osagie Ehanire

and other creams of informed citizens who can respond intelligently to challenges like the COVID-19 pandemic. “To achieve better results, we believe Nigerian governments at the federal and state levels need to work with public intellectuals and patriotic trade unions like ASUU”. “We also believe such collaborative efforts should be channelled towards addressing issues of funding, conditions of service, academic freedom and university autonomy and other matters which are germane to repositioning Nigerian universities for global

competitiveness”. O g u n y e m i , t h e re f o re stressed that ASUU’s involvement in the war against COVID-19 pandemic was consequent upon the directive issued to all its 70 branches and 13 zones to play active role in the fight against the spread of the dreaded Coronavirus (COVID-19) in Nigeria. Turning to the state deputy governor,Salako-Oyedele, the ASUU President said: “Your Excellency, I wish to place on record that ASUU decided to free our members for participation in COVID-19 control efforts, inspite of our ongoing

nationwide strike action, to demonstrate our concern for the health and wellbeing of Nigerians”. Said he: “ASUU’s branches and 13 zones have been involved in the production, presentation and distribution of information, education and also communication (IEC) materials, hand sanitizers, facilities for hand washing, among others in not less than 20 states of the federation. “As the saying goes, prevention is better and cheaper than cure. So, through it, we can fight together and push back the dreaded virus from our land. The donation of some items to the Ogun state government is a practical demonstration of that belief”. Receiving the items on behalf of the state government, deputy governor, Salako-Oyedele, appreciated ASUU’s support to the state government in its efforts at overcoming the dreaded disease. He disclosed that the state government has started rigorous campaign and enlightenment at the border communities towards preventing escalating of the pandemic, Salako-Oyedele added that the Dapo Abiodun led administration would leave no stone unturned towards curtailing the spread of the pandemic in the state.

Experts call for policy to tackle gaps in school emergency preparedness Post COVID-19 …says e-learning now a necessity JOSEPHINE OKOJIE

n a bid to ensure that schools in Nigeria become prepared for any future pandemics, experts in the educational sector have called for the development of a national policy framework. The experts who spoke at the inaugural session of a fourpart virtual series title ‘Disruption &Innovation – Reshaping Education in Africa Post COVID-19’ say that governments across the African continent must have a policy in place to plan for any future pandemic and on the disruption of educational activities. They also call on the African leaders to build the capacity of teachers on ICT and the deployment of such technologies. “We need to have a policy

plan for pandemics and framework both at the national and subnational levels that allow players to be innovative,” said Charles Bassey- Eyo, cofounder, Axiom Learning Solutions. “We need the right leadership and policy that creates preparedness for pandemic,” Bassey-Eyo said. He called on the African leaders to provide critical infrastructures for the deployment of e-learning processes across the continent, noting that the world is in an era of disruptions. Also speaking, Muhammed Junaid, former executive secretary, National Commission for Colleges of Education said that Nigeria is currently in an educational crisis that requires a new kind of policy that can address the crisis. “The challenges point to adopting the open and diswww.businessday.ng

tance learning education with particular emphasis on technology,” said Junaid who is also chairman of Axiom Learning Solutions Academic Board. “What we are missing in Nigeria is that we are not addressing the capacity of teachers. We need to look inward to see where the weaknesses are, which for me is the capacities of teachers,” he added. He called for the training of teachers in the country on ICT and its deployment while giving an example of how SierraLeone trained its teachers on technology during the Ebola epidemic. Rebecca Stromeyer, founder and CEO of eLearning Africa urged African leaders to lead in creating a post-pandemic emergency preparedness. Stromeyer called on gov-

ernments across the continent to learn to find solutions to its educational problems at the grass root and build on it. She recommended for the creation of a national task force to include experts across the educational sector to foster e-learning. Speaking on what Lagos Nigeria’s commercial centre is currently doing to ensure continuous learning in the state amid the coronavirus pandemic and lockdown, Folasade Adefisayo, Commissioner of Education, says the state has partnered with some radio and Tv stations to provide learning programmes for students. She noted that the state adopted the offline strategy after considering the socialeconomic status of students in the school and infrastructural challenges in the ecosystem.

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Higher

Human Capital

LASU among top 600 universities in latest impact rankings …As VC urges use of technology to acquire knowledge KELECHI EWUZIE

he Lagos State University, (LASU) for its commitment to tackle global issues such as gender inequality, quality education for all, climate change, achieving peaceful societies and economic growth, has been ranked among the first 600 Universities globally. The 2020Times Higher Education University Impact Rankings shows. The Times Higher Education Impact Rankings are the only global performance tables that assess universities against the United Nations’ Sustainable Development Goals (SDGs). This ranking is a crucial resource for students choosing a university, because it moves away from assessing universities on their research output, and focuses instead on the impact that universities are having on some of the world’s most pressing issues. A breakdown of the ranking figure released shows that University of Ibadan, Oyo State was the highest ranking university in Africa most populous black nation while Covenant University, Ota, Ogun State secured the 401600 ranking spot with University of Lagos and recorded 601spot out of the more than 700 universities ranked this

Olanrewaju Fagbohun, LASU VC

year across the SDGs. Olanrewaju Fagbohun, vice chancellor of the university expressed satisfaction at the University’s performance in the global ranking but added that there was still much to be done. Fagbohun observes that participating in that ranking is to put ourselves on our toes, to know where we need to improve. This is not the best we can do, but it’s a good start. According to him, we must be targeting to be in the first 200 band by the time the next ranking will be done while lauding the director, Directorate of Research Management and Innovation, Olumuyiwa Odusanya and his team for putting together the submission that earned LASU the ranking. Meanwhile Fagbohun challenged members of Staff of the University to embrace the use of technology to deepen knowledge acquisition.

Akanbi assumes office, pledges best practice of academic culture SIKIRAT SHEHU, Ilorin

he Vice-Chancellor of the Kwara State University (KWASU), Malete, Muhammed Mustapha Akanbi, professor of Business Law has finally assumed office, pledging to consolidate the good legacies initiated by his predecessors. Akanbi, who is also SAN, gave the assurance on Thursday during the official handing over by the immediate past Ag. Vice Chancellor of the University, Sakah Mahmud (Prof), at University’s Contact Office in Ilorin, the Kwara State capital. A release signed by Hamidat Sulyman Yusuf, Acting Director, University Relations stated that the Vice-Chancellor explained he had begun moves to make KWASU a University of first choice in Nigeria through the introduction of best practice in academic culture, robust staff welfare programmes, impactful community development initiatives, and sellable academic programmes. @Businessdayng

Akanbi called on staff and students of the University to join hands with him in his efforts to promote the Institution to more enviable heights, adding that all his line up of programmes can only be achieved with the cooperation and support of the staff and entire stakeholders of the Institution. The new VC appreciated the pioneer Vice-Chancellor of the University, AbdulRasheed Na’Allah (prof ), for laying a solid foundation for the Institution, saying that his pioneering contributions to KWASU will not be forgotten in a hurry. He also commended the immediate past Acting ViceChancellor, Sakah Mahmud (prof) for contributing to the progress and development of the University within the period he led the Institution. Akanbi, had while expressing appreciation to Mahmud (prof ) for his loyalty to the system and openness since he came on board as the substantive Vice-Chancellor on April 1, 2020 pledging to continue from where he stopped.

Tuesday 28 April, 2020

BUSINESS DAY

EDUCATION

COVID-19: Kwara Govt organises virtual Digital training for 2,000 youths ...KWASSIP partners Google, Wootlab Foundation SIKIRAT SHEHU, Ilorin

wara State Government on Mo n d ay 2 7 t h April commenced a twoweek virtual digital training for youths, an initiative that is part of the Digital Kwara component of the state’s social investment programme (KWASSIP). The virtual training, which is the first phase of a programme that would benefit up to 30,000 young people over the next three years, targets at least 2,000 youths

Abdurahman Abdulrazaq, Kwara state governor

Anchor University Classes Go Virtual as Students Begin Learning Online MARK MAYAH

n a bid to ensure that the global disruption caused by Covid-19 pandemic does not significantly impede students’ programmes, the Management of Anchor University, Lagos (AUL)has approved the commencement of virtual classes for all students of the University. Information made available to Businessday said classes for the semester officially commenced on Monday, after students received their login accesses and invitations to class over the weekend. It would be recalled that Joseph Afolayan, a professor and the Vice-Chancellor of the university, had before the declaration of the lockdown declared that the university may administer classes online should the lockdown become prolonged. “We didn’t plan for classes outside of the University campus before the lockdown order as the University had con-

cluded the first semester and students had gone on semester break. “However, we will continue to observe the developments and may revert to online classes if the need arises,” he said while discussing the possibility of classes going virtual after the lockdown. Excited at the turn of events, Adekoya Ayomide, a 300 level student of Accounting described, the online session as a welcome development. “I’m happy about this development and I look forward to taking my classes online. For this, I am happy that I’m a student of Anchor University because I used to think this kind of experience is only possible in European countries. I can’t wait to be a part of the session.” Another student, Lawal Emmanuel, a 400 level student of Political Science, also gave his views. “My own concern is the attitude of the students to the sessions and the quality of information to be given by lecturers. If students are serious about the classes, considering that there would be distractions

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around and lecturers provide good quality visuals, it’s going to be as good as traditional classrooms. The best part is, we will maintain the required distance while still having our classes.” However, a couple of students expressed fears and concerns for the sessions. According to Eshiet Abigail and Nkama Ugochi, 400 level students of Business Administration and Accounting respectively, the sessions will also come with their stress and challenges, but we are happy that this will keep us busy and remove the possible delays in our academic progress. However, the Deputy Vice-Chancellor, Fatokun, J.O (Prof ), allayed the fears expressed by the students, saying the classes would be seamless and productive as activities get busy across different departments. “The truth is there are many challenges to having seamless virtual classes due to poor infrastructures across the nation but these cannot stop us from going ahead. I know there will be a couple of hitches as we commence but as classes continue both students and lecturers will adjust and we will have very productive sessions learning online. We are also very confident of robust interactive sessions between lecturers and students as we have deployed the newly developed video component of Google classroom, Meet link, in our online classes,” he said.

who would be tutored in basic digital skills and be given certificates. Chief Press Secretary to the Governor, Rafiu Ajakaye said in the statement that the training is free and was timed to ensure the youths make the best of the lockdown season by acquiring some digital skills that are relevant for the 21st century economy. “Digital skills are becoming increasingly invaluable and Kwara youths shouldn’t be left behind in the global surge for the skills of the future. “The technology skills training under KWASSIP is

multi-layerd. It is originally designed to train 30,000 young kwara residents in basic digital skills, while an additional 1,500 youth will be trained in advanced digital skills over the next 3 years. The programme will expose Kwara youths to digital skills and certifications, and prepare them for employment and entrepreneurial opportunities within the technology space. This fits into Governor Abdulrahman Abdulrazaq’s agenda to make Kwara the ‘go-to’ place for digital skills in Nigeria.” It further stated that

KWASSIP is partnering with Google and Wootlab Foundation to organise the free virtual training programme Registration is free and open to all youths who may register for the programme through www.wootlab.ng/ foundation/digital-kwara. The long-term objective of Digital Kwara is to set up digital skills centres across Kwara where the youths would be equipped with globally-relevant technology education (software development, data science, machine learning etc.) to advance human capital development in the state, the statement added.

Prepare for post COVID-19 Era , Bowen Varsity VC tells Govt, Organisations MARK MAYAH

he Vice Chancellor, Bowen university, Iwo, Joshua Ogunwole has urged Nigerian governments, various organisations, institutions, as well as the private sector to start preparing for the after effect of Coronavirus on the economy and the general wellbeing of the people, aside the ongoing palliative measures embarked by the state and the federal governments in the country. He gave the charge during the donation of food items to the people of Iwo and Oluponna towns in Osun State last weekend. According to him, it has become expedient for govern-

ment and non-governmental organisations, including private companies in the economy to be proactive by engaging in viable business development proposal to revamp the collapsing economy caused by these COVID-19 pandemic challenges. He said: “We need to start thinking what to do after this COVID-19. No doubt, Coronavirus has affected many people economically. This is an indication that the countries cannot remain the same, the entire world will depend more on a new method of doing business. Our palliative measures initiative was designed to support the government’s efforts in alleviating the sufferings of people at home as a result of

the lockdown directive of the government. “As a christian university, we are our brothers’ keeper. This is why we are out to give this welfare package to the people, not minding their religious inclination. We have invited the leaders of Christian Association of Nigeria (CAN) and the leaders of the Islamic Society of Nigeria, the representatives of the development unit of the towns, and other classified groups for the welfare package which is meant for the vulnerable under their umbrella. “Since the Coronavirus outbreak in the country and the lockdown issues which forced our students to return to their houses, we are not in any way be affected academically.

COVID-19: FG grants Nigerian students, free subscription to e-learning MARK MAYAH

he Federal Government granted Nigerian students free subscription to e-learning through some selected sites in partnership with some major networks in the country. Emeka Nwajiuba, Minister of state for Education announced the incentive during the Presidential Taskforce on COVID-19 daily press briefing in Abuja.

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According to him, the federal government granted the free subscription to students during the lockdown as a result of the COVID-19 pandemic, adding that some selected sites could now be accessed by the students for free lectures. He said that Airtel users can browse the site for free while MTN and GLO are still adjusting their technical system for their subscribers to access the free site, stressing that both radio and television stations could also be accessed for the lecture. @Businessdayng

The minister said, the online classes were conducted like the offline, adding that classes could be taken in real time if the students were online and they could also get the lectures after the classes were over and such student was not online at such time. Nwajiuba, further explained that, what the ministry was doing was to synchronise them in order to meet the yearnings of the students during the lockdown period occasioned by COVID-19 pandemic challenges.

Tuesday 28 April 2020

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

NLNG contributes $30m to support fight against COVID-19 ISAAC ANYAOGU

LNG donates two vehicles to Rivers State for the fight against COVID-19. Princewill Chike, Rivers State Commissioner of Health, received the donation on behalf of Nyesom Wike, Rivers State governor, from Joseph Alagoa, NLNG’s GM, Corporate Service who represented Tony Attah, NLNG MD in Port Harcourt …recently The Nigeria LNG Limited (NLNG) has restated its support for the fight against the Coronavirus (COVID-19) pandemic and contributed over US$30 million in financial support to the Federal Government through the Oil and Gas Industry Collaborative initiative spearheaded by the Nigerian National Petroleum Corporation (NNPC) to fight the virus. According to a release from the company signed by Eyono Fatayi-Williams general manager, External Relations & Sustainable Development, the company has urged resilience and adherence to social distancing rules and other precautionary measures advised by the health authorities, in order to control the spread of

NLNG donates two vehicles to Rivers State for the fight against COVID-19. Princewill Chike, Rivers State Commissioner of Health, received the donation on behalf of Nyesom Wike, Rivers State governor, from Joseph Alagoa, NLNG’s GM, Corporate Service who represented Tony Attah, NLNG MD in Port Harcourt …recently

the disease in the country. NLNG says that it takes the health and safety of its stakeholders very seriously; adding that the measures it proactively put in place to prevent the spread of the disease was in line with its obligation to staff and social responsibility to stakeholders, host communities and Nigeria as a whole. NLNG stated further that it is working with relevant stakeholders to contain the spread of the

virus in Rivers State and in its operational base, Bonny Island (currently with no confirmed case of infection), committing to some N1 billion in various interventions in the state. The Company revealed that it has committed to the refurbishment of a building and set-up of a 10 bed Isolation/Holding Centre at the Bonny Zonal Hospital. In addition, NLNG has donated equipment and Personal Protec-

tive Equipment which include five suction machines, three single air conditioners for consulting rooms, five split air conditioners for wards and 10 patient monitors. Other items donated for use on Bonny Island include one oxygen bank consisting of 5 bull nose cylinders, 10 drip stands, 10,000 one-fit N95 health care particulate respirator and surgical masks, 250,000 surgical masks, 50,000 nitrile gloves, 12,500 hooded cov-

eralls with boots, 70 respirators, and wall mounted hand sanitizers. The Company added that it is also partnering with a committee set up by the Bonny Local Government Council to develop and implement a strategic plan to protect all those who live on, or visit the Island. At the State level, NLNG is donating equipment and materials to upgrade specific facilities at the Rivers State University Teaching Hospital (RSUTH). The Company also donated items to the Government which includes two transport vehicles for contact tracing, five ventilators, 30 patient monitors as well as over 100,000 surgical masks. Other items donated by the Company include 30,000 nitrile gloves, 5,000 hooded coveralls, 8,000 respirators, 200 goggles and 200 face masks. The Company also continues to support the Government through its membership of an advisory team constituted by the State Ministry of Health to guard against the spread of the disease. To help palliate hardship resulting from the stay-at-home order in the State, NLNG donated food items to its host communities.

Oil major Eni performance shows what to Energy sector non-profit NNRC, proposes expect from local producers reforms to tackle Covid-19 shocks DIPO OLADEHINDE

talian Oil Major Eni, reported a 94percent drop-in first-quarter profit and cut its production forecast giving a clue to what investors, shareholder’s and industry experts should expect from its Nigerian counterparts. Oil producers are under immense pressure as the coronavirus decimates demand and drives prices to levels never seen before. Unlike the oil majors with a huge balance sheet, some of the most overleveraged or conservatively manage Nigerian oil companies will not survive the current price collapse which might remain low throughout Q2 2020. Eni said it will cut CAPEX by 30percent lower than the initial targets, and anticipates further reductions of 30percent35percent lower than original plans in 2021. Eni’s CAPEX cuts will be focused in the exploration and production segment with the “rephasing” of some projects. However, the projects

are “expected to resume quickly once market fundamentals improve, thus recovering any lost production volumes,” it said. Also, Eni’s operating profit was down by 44percent, compared to first quarter 2019 while net cash from operations including a cash draw at the working capital which normally features the first quarter due to seasonal factors in gas and other products consumption were also down by 54 percent. In 2020, Eni is planning three oil and gas field startups along with seven FIDs, four of which are in the UAE. Mozambique’s giant Rovuma LNG development is also on the cards. The company could also pare back drilling on the 2.5 billion boe of resources it is targeting with exploration wells over the next three years and slow its downstream projects. Eni is not the only oil major lowering cost, Norway’s Equinor announced last week it will cut its quarterly dividend payment to shareholders by two-thirds, potentially www.businessday.ng

paving the way for other oil majors to follow suit over the coming days. Coronavirus-induced slump in demand has left millions of Nigeria’s bonny light crude unsold and prices as low as $12, which is way below current production cost, a development that means the liquidity of most local oil firms such as Seplat would be severely hit. S e p l at i s t a rg e t i ng 2020 production capacity 57,000 bpd and capital expenditure of $100 million with a target of three new wells across its portfolio. “The emergence of the COVID-19 pandemic in the first quarter of 2020, as well as pressure on oil prices in March, have placed a premium on solid financial management that focuses upon low-cost production, robust cash management,” Seplat admitted in its last financial statement. “However the business is hedged against low oil prices and a significant proportion of our revenues now come from gas, which offers further protection from oil price volatility,” Seplat said.

ISAAC ANYAOGU

n the wake of the global coronavirus pandemic and the fall in oil demand hemorrhaging economies of oil producing countries including Nigeria, the Nigeria Natural Resource Charter (NNRC), a nonprofit policy institute that implements the Natural Resource Charter (NRC), has canvassed for local solutions and sustainable, long-term interventions to get out of the current crises. Tengi George-Ikoli, program coordinator of NNRC, said the group’s position was informed by the gaps identified in its recently published Benchmarking Exercise Report (BER 2019) which x-rayed the state of the Nigerian petroleum sector, highlighting policy options to support the Nigerian government’s efforts to stimulate growth of the economy and its post covid-19 recovery. The group is canvassing for maintaining peace and stability in the Niger Delta to sustain revenue flows from oil production. Sustaining beneficiation schemes by NDDC, MNDA and other interventions will support the governments stabilization efforts, the organisation said. NNRC also advocates

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for improved coordination between federal and Niger Delta state governments on the response to the Covid-19 pandemic including the design and implementation of stimulus plans. “Liberalize the downstream sector to allow market forces determine pump prices for petroleum and other products. This will ensure the availability of revenues necessary for more critical areas of the economy “Improve the efficiency of the downstream oil sector by reviewing its policies, regulations and operational guidelines to ensure profitability, improved private sector participation and improved employment; “Adopt and constitutionalize a savings mechanism with clear and transparent operational rules. This could be by retaining the more effective sovereign wealth fund (SWF) in the NSIA and transferring funds from the Excess Crude Account, the stabilization fund and other similar funds to the SWF. This will help fortify the Nigerian economy from oil price volatilities and other economic shocks. Ramping and prioritizing domestic gas-based industrialization projects, to diversify Nigeria’s energy supply, increase local employment and reduce domestic demand and @Businessdayng

Nigeria’s reliance on oil; “Support a major and urgent shift to gas in terms of investment focus. Gas supply to domestic market for power, industrial & manufacturing feedstock and enabler to economic development. Emphatic shift to the gas value chain offers Nigeria the leverage for socio-economic development in the medium to long term; “Fast-track the passage of the petroleum industry bill to bring about the fiscal, governance and regulatory clarity required to monetize Nigeria’s 200+ tcf of gas reserves. Speedy passage of the Petroleum Industry Bill will provide a clearer strategic direction to the entire industry, re-engender trust, thereby increasing investments which will in turn increase national revenues required for development; “Review the existing fiscal framework to ensure competitiveness and support Nigeria’s ability to attract investments into the upstream sector, effectively shoring up Nigeria’s diminished reserves; “Institutionalize cost management strategies within the sector with the overall objective of reducing the high unit production cost of crude thereby improving governments revenue from the sector;

Tuesday 28 April 2020

BUSINESS DAY

ENERGY INTELLIGENCE Four things Nigeria’s oil, gas companies can do to manage COVID-19 crisis Stories by STEPHEN ONYEKWELU

rude oil has become a basic commodity to the whole world exposing it shifts in global movements, such that local geopolitical tensions in one location generate shocks across the globe. This makes oil and gas companies vulnerable. The last shock in 2014 shaved a collective $63 billion in revenue receipts of the crude oil-exporting countries in Africa. Additionally, the environmental cost of oil, as well as the socio-political tensions it engenders is driving climate change policy, technological change and consumer preferences to switch global demand away from it. The severity of each shock and cyclicality of occurrence is driving countries and firms to seek ways to mitigate its exposure. Presently, the COVID-19 pandemic induced shock is anticipated to cause an estimated $14b - $19b drop in crude oil exports and an overall 5 percent decline in Nigeria’s real gross domestic product (GDP) growth according to the International Monetary Fund. “Rather than fear, a better approach is to take positions, develop frontier fields and wait for resurgence,” Ayodele Oni, energy partner at Bloomfield Law Practice said.

These are unprecedented times that are challenging the entire oil and gas industry. EY, providers of advisory, assurance, tax and transaction services, recently held a webinar with key industry experts to understand the impact of the COVID-19 pandemic and future implications for the industry. It turns out 70 percent of board members state that their organisations are not very well prepared to deal with a crisis event. Experts who participated in the webinar outlined for actions point to help oil and gas companies manage the crisis and build resilience. To build resilience requires putting people first, the experts stated. People are the most important asset. While the need

to ensure business continuity remains, technology such as mobile working, remote monitoring of operations or designation of alternating onsite teams should be leveraged in developing contingency working arrangements. The report advises clear communication regarding operational activities. “This situation requires proactive engagement with all stakeholders.” This may include actions such as keeping customers acquainted with impacts on product or service delivery and staying in contact with suppliers regarding the ability to deliver goods and services. Others involve mitigating disruption risk with technology, innovative business models and collaboration; consulting legal teams for advice on potential liabilities

with governments or regulators and proactive dialogue with creditors and finance providers. In the context of this crisis and in building resilience, the cash is king mentality is needed. Visibility on short term cash flows may be limited and given the fluidity of the situation, forecasting may be unreliable and ineffective. More than ever, focus must be on managing liquidity and cash resources, which may include: maximising one-time revenue opportunities and reducing the cost base, particularly all nondiscretionary costs. Other measures are maximising liquidity by drawing down on all lines of credit before they remain more difficult to access and moving costs from fixed to a variable to increase resilience and agility.

The report argued that this is a time for building financial and operational resiliency designed to navigate through the crisis in order to come out of it leaner, stronger and more dynamic. Fluidity and rapid movement of events means that risk management processes need to be better understood to measure the impact of extraordinary events on business continuity. This will involve establishing regular cross-functional status and decision meetings, confirming responsibilities and delegated authorities under contingency measures, agreeing on trigger points for mitigating actions and agreeing on key measures for tracking developments. For Nigeria as a country, crude oil development has had a long, but unhappy history. The outcome of Nigeria’s oil dependence is a rentier political economy that is focused on creating allocative mechanisms for the sharing of oil rents, at the expense of developing productive capacities in the wider economy. Any urgency with regard to driving economic diversification, beyond reactionary attempts during the period of oil price shocks, is eroded and soon abandoned on market recovery. Nigeria’s budget is still benchmarked on (volatile) oil earnings and the focus is solely on developing oil capital, rather than income from other productive capacities.

Nigeria’s modular refiners seen gathering steam post COVID-19 …amid crashing oil prices

igeria faces an imminent recession thanks to the impact of crashing oil prices and the Coronavirus pandemic but modular refining presents early opportunities for Africa’s most populous nation to restart the engine of its ailing economy. The modular refinery, unlike the conventional, is not very complicated. It produces two or three products, and a bottom product, which can be recycled for more. It is distillation to get basic products. Modular refineries can be assembled faster, but an enabling investment environment is needed. Local refining of crude oil for oil-producing countries improves economic performance, provides job for a large number of people reduces capital flight and builds a new set of industries, especially petrochemicals. Modular refineries may not have the scale of conventional refineries but

offer some quick wins. In a recent exclusive interview with BusinessDay, Sarki Auwalu, the director of the Department of Petroleum Resources listed four modular refineries that are more than 60 percent complete. The Opac refinery in Delta State with 7, 000 barrels per day capacity is at 95 percent mechanical completion. It is expected to start operations. Walter Smith Refining & Petrochemical Limited, a 5, 000 barrel per capacity refinery is 85 percent complete. The Niger Delta Petroleum Refining Company is the first modular refinery in Nigeria. It started with 1, 000 barrels and produced only diesel. It has grown to 6, 000 and produces other basic products such as naphtha, diesel, kerosene with little quantities of premium motor spirit (petrol). Additional 5, 000 barrels capacity is underway bringing the total capacity of NDPR to www.businessday.ng

11000 barrels per day. The Edo refinery, which is 60 percent complete, has a capacity of 6, 000 barrels. The four refineries have a combined capacity of 29, 000 barrels per day. Given this refining potential, Nigeria can take advantage of falling oil prices by boosting local refining. Falling oil prices provide a favourable environment for modular refineries to thrive. “The lower all prices are the better for modular refinery because it takes just bit of crude oil,” Auwalu said. Local refining will reduce the burden on foreign reserves and foreign exchange. The cost of producing a barrel of oil in Nigeria is as high as $38. This means oil companies operating in Nigeria face enormous headwinds at $28 per barrel of Brent crude in the international market. This is two times less than Nigeria’s initial budget benchmark of $57 per barrel and $2 less than

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the recent $30 reduction to reflect the reality of falling oil prices. This supports a strong case for local refining. Although OPEC+ leaders Saudi Arabia and Russia arrived at a historic crude production cut on April 9, effectively halting a bitter oil war which saw prices implode by more than 50 percent from January highs. Nigeria’s continued export of crude oil exposes Africa’s biggest economy to severe external shocks. Two months ago, at Nigeria International Petroleum Summit 2020 in Abuja, Mele Kyari, the group managing director of Nigerian National Petroleum Corporation said Nigeria “can provide energy for the whole of Africa. As we all know, 90 percent of the petroleum products consumed in Africa are imported, and that must stop. Our refineries must come back.” While this is the sensible @Businessdayng

thing to say, there are many unresolved questions around the role of the government in building and operating refineries. Data released in January by the Nigeria National Petroleum Corporation (NNPC) show the country’s three governmentowned refineries had an operating deficit of N123.20 billion between January and October 2019. The highest average capacity utilisation of the three refineries in 11 years from 2008 to 2018 was 26 percent recorded in 2009, while the latest data from NNPC showed the three refineries currently operate at zero percent capacity utilisation. “The problem is not that the refineries are old or obsolete; the oldest refinery in Nigeria is younger than the oldest refinery in Europe. The problem is who is managing them?” Ademola Henry, team leader at the Facility for Oil Sector Transformation (FOSTER), asked.

Tuesday 28 April 2020

BUSINESS DAY

news

Coronavirus: Edo launches digital home-schooling platform with zero-data access, free SMS, others

do State governor, Godwin Obaseki has launched an online home-schooling platform, EDO-BEST@Home, which enables pupils learn from resources downloaded from an online database while at home. The platform provides for downloads with zero-data access or through free Short Message Service (SMS) supported by MTN Nigeria. Governor Obaseki during the launch at the Government House, in Benin City, said the platform is part of steps taken by the state government to ensure academic engagement by pupils and students, who were supposed to have resumed for a new session on Monday, April 27, but would have to remain at home as a result of the partial lockdown imposed to check the spread of coronavirus (COVID-19) pandemic. The governor said the EdoBEST@Home is an extension of the Edo Basic Education Sector Transformation (Edo-BEST) programme, which is now to be supported with mobile tutors to provide daily lessons on the State Universal Basic Education Board (SUBEB) website for parents across the state to keep their children occupied during the holidays. “I remain committed to the provision of quality education

for all as the new academic calendar begins during this period of partial lockdown; it is my pleasure to announce that we have provided an alternative source of schooling for our children and it is called Edo-BEST@ Home,” he said. Obaseki noted that his administration introduced the use of technology in the primary school system with the launch of EdoBEST two years ago, adding, “We have acquainted over 280,000 children with technology-based learning model and trained 11,000 teachers and education managers on model digital teaching and learning methods. Noting that over 40,000 users have accessed the lessons on SUBEB website, he said, EdoBEST@Home is comprised of interactive audio lessons with customised messaging, digital self-study activity packs, mobile-phone-based interactive quizzes, digital storybooks and virtually moderated teacher and student classroom interactions. The governor said the programme will offer four hours of learning content daily, noting that the mobile technology company, MTN Nigeria, is a partner on the e-lesson programme, to provide zero-data access and two-way SMS at no cost to parents.

Agip clears air on safety measures in operational bases OLUSOLA BELLO

igerian Agip Oil Company Limited (NAOC) says it has implemented far reaching measures to ensure safety of personnel and facilities in its operating and field locations. It stated that prior to the lockdown declared by the Federal Government in Abuja, Lagos and Ogun states, NAOC, popularly known as “Agip” took measures to protect its personnel and facilities from the spread of COVID-19 following WHO guidelines and international best practices. The Italian company further stated that before the index case in Nigeria and weeks before the Federal or State governments started declaring lockdowns and movement restrictions, it had already implemented smart working and “quarantine/isolation at home” with its personnel whereby most of the personnel were directed to stay at home to curb the spread of the COVID-19 spread. Sensitisation and awareness campaigns on prevention of COVID-19 commenced long before the first case in Nigeria. “Crew change, which is necessary to allow personnel take rest and be with their loved ones,

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were carefully planned to observe all the measures prescribed by all the relevant agencies of government,” the company stated. Consequently, NAOC also implemented the new crew change of 28 days as advised by DPR and ensured that its personnel observe the thoroughly documented measures including the mandatory 14 days prior to resumption in the operating locations in line with the DPR guide. In addition to the mandatory isolation, rigorous medical screening is performed before any personnel is allowed to resume in the locations at exit and entry points; all resuming personnel wear appropriate personal protective equipment (including face masks, gloves, etc.) and observe all the necessary measures recommended by our medical personnel which are in line with WHO, NCDC guidelines. It stated categorically that its crew change to Brass is usually by chopper and or boats after fulfilling all health and safety requirements. According to the company, it stated that its personnel are our most important assets and we will never embark on any activity if all health and safety standards have not been met.

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COVID-19: Lagos, Echostone educate home buyers on mortgage financing CHUKA UROKO

hile the coronavirus persists with its ravaging impact, and Lagos residents continue to keep safe and maintain social distancing in public places, the state government is partnering Echostone Housing on a virtual showcasing of its first green and eco-friendly estate as well as offering potential home buyers an online enlightenment programme on mortgage financing. Moruf Akinderu-Fatai, the state commissioner for housing, says the virtual showcasing of the estate located in Idale, Badagry has become imperative as the state government, in spite of all challenges, is desirous of moving ahead with its mandate of providing decent and affordable homes for its citizens. Akinderu-Fatai explains in a statement that the virtual showcasing of the Peridot Parkland Estate was necessary because the joint venture housing project has been completed and now available for delivery to the public. “Peridot Parkland Estate Idale is a joint venture housing project which is ready for habitation; we want to move ahead to other projects hence the need to present this scheme to the

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public to generate awareness on its uniqueness,” the commissioner said. He pointed out that the virtual event would also unveil convenient financial solutions which were crafted to ease access and promote affordability of homes in the state. “A major goal of Lagos State Housing Policy is affordability, hence arrangement was made for panellists from various organisations of the housing sector who enlightened participants on convenient mortgage facilities that could bring people on the home ownership ladder with ease,” he said. According to him, the state government was committed to increasing available home units and enhancing access to decent homes for as many people as possible in the state. “We are absolutely committed to reducing housing deficit and removing barriers to home ownership in the state. All hands are on deck to complete all ongoing projects as soon as the lockdown is lifted,” he assured. The CEO of Echostone Housing, Sammy Adigun, said, the event was a good opportunity for intending homeowners to gain expert financial tips and tools on mortgage financing.

Tuesday 28 April 2020

BUSINESS DAY

property&lifestyle Post-Covid-19: Stakeholders see hope for economy in mass production, commoditization of housing CHUKA UROKO

hat national and global economies will struggle after t h e COVI D-19 pandemic is as sure as the weather, but stakeholders in the housing construction sector say there is hope and not much to worry about Nigerian economy if the country mass-produces and commoditises housing. The stakeholders premise their argument on the capacity of housing construction to create jobs in large numbers and, in the process, generate wealth. They believe strongly that the sector can pull Nigeria out of the downturn that is expected in the economy in the aftermath of the coronavirus crisis. Besides Agriculture, housing construction sector has the greatest potential to create employment which is why the stakeholders, who spoke at an online conference facilitated by Fesadeb Communications Ltd, underscored the need to reconstruct obsolete hous-

ing policies in the country to reflect new realities. “Besides agriculture, there is no other economic sector can create jobs as fast as housing construction sector; we estimate that for every unit of housing that is produced, a minimum of four to six jobs are created,” explained Femi Adewole, CEO, Family Homes Funds Limited (FHF). Adewole argued that “if we have a project that will deliver 300,000 homes in Nigeria and it is spread across all the 36 states, that will, over a fiveyear period, bring 10 million people into employment. This is possible and it is time for thinking in that direction.” COVID-19 has helped to emphasize the need for more houses to be built, not only to create jobs but also to shelter the people. Timothy Nubi, a Professor of Housing at the University of Lagos, says most of the solutions to housing in the past were focused on the working class who are in the minority. “But with the present lockdown experience, a vast majority of people living in slums

in Lagos and other places could not be locked down as they do not have access to decent housing, making postCOVID-19 housing a tougher challenge,” he said. Hakeem Ogunniran, CEO, Eximia Realty, is of the view that housing should be commoditized and a legal framework created to facilitate buying and selling of houses at ease. “The industry must, of necessity, move away from the

era of building houses to the era of manufacturing them,” he said. The housing sector has huge investment opportunities that need private capital to tap into and impact the economy positively. The shortage of housing in Africa is projected at 56million units which, if quantified in generic terms, will need at least $3 trillion to resolve. In Nigeria, the shortage is

Coronavirus hard-hits co-working space market, N300m lost in one month ENDURANCE OKAFOR

he outbreak of the deadly coronavirus in Nigeria which has resulted in the lockdown and social distancing being observed in most commercial cities has hit hard on the country’s co-working spaces, turning them into ghost towns with an estimated N300 million revenue loss in just one month. Unlike traditional offices that require long term rent or lease payment, co-working spaces which mostly operate on short-term leases have had their revenue stream cut short as potential tenants have adopted work from home attitude. “In obedience to the directive by the government, we have closed down our

co-working office space. Our business is time-based. Any time wasted is a loss on our end,” a top executive at Glendale Workplaces in Lekki Phase I said on condition of anonymity. Co-working is an arrangement in which several workers from different companies share an office space, allowing cost savings and convenience through the use of common infrastructure such as equipment, utilities, and receptionist. “The COVID-19 pandemic is hugely affecting the co-working space in realtime and a huge way. This would adversely affect the operations of the co-working space business as income rate is now at an all-time low,” John Oamen, Co-Founder of LiveVend.com, a real estate

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price discovery platform, said noting that they typically pay most of their bills upfront for services such as power, security, internet and cleaning services. According to a survey by BusinessDay, a co-working space company in Lagos earns an average of N150,000 per private office in a month. If that is multiplied by the average of 40 private offices (excluding the shared offices and board rooms) in some co-working space buildings, it will amount to a monthly income of N6 million. Checks by BusinessDay shows that Nigeria has over 100 co-working space companies with over 60 percent located in Lagos. If the N6 million is inputted against the number of companies in the industry, the market would

have lost nothing less than N300 million in April amid lockdown in some commercial cities of the country. “There will be a prolonged pause or rather a crawl in demand for co-working spaces. And due to the social distancing rule, they might also have to cut-down their capacity for as long as it takes to find an effective cure or vaccine, Omobola Ayoola, Business Development Manager at a Lagos-based real estate firm, Joe Etoniru & Associates said. To curtail the spread of the deadly coronavirus, President Muhammadu Buhari recently announced a 14-day extension to a lockdown in Abuja, Lago and Ogun states. “It has become necessary to extend the current restriction of movement that was set to expire later in the day,” the president said. Meanwhile, Nigeria Governors Forum has given a hint that it is likely there will be a possible extension of the lockdown across states, as confirmed cases in the country have gone above 1,000. Co-creation Hub, one of Nigeria’s popular co-working spaces announced on March 20, 2020, the suspension of activities in its co-working spaces and hubs until further notice. Two days later, Passion Incubator-owned LeadSpace also announced that its hubs will be closed for co-working as a result of the coronavirus outbreak.

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estimated at 20 million units that require a conservative estimate of $56 billion to resolve. Andrew Chimphonda, chief executive officer of Shelter Afrique, noted that Africa has not been able to meet the expectations of the United Nations in terms of access to decent housing by African people even before COVID-19. He added that the rate at which affordable houses

are being provided is lower than the rate of urbanization, stressing the need for a commensurate provision of housing, else there would be further development of slums even after the pandemic. For housing to truly catalyse economic growth postCovid-19, the stakeholders canvassed the setting up of coordinating body to carry it through. Charles Iyangete, former managing director of the Nigerian Mortgage Refinance Company (NMRC), offered useful insights. Iyangete said there was need for a National Housing Commission that could bring all players in the housing sector together with the aim of defining roles and scope of operation in housing delivery. “We need radical, bold steps to deal with the new world of COVID-19. We are at war and a post-war solution is what is required. Funding is critical to fighting that battle. So, I propose a Housing Commission to play a coordinating role and evolve policies for housing,” he said.

These 3 steps will lead to owning your first home CHUKA UROKO

o any adult in Nigeria, a country where owning a home is more of luxury than necessity, the reality of having his or her dream house creates a sense of fulfillment. It is, indeed, an amazing experience everyone would love to and should have. Buying your first property can be a challenging task, but the beauty of it is that millions of people have been there and have successfully gone through this process to purchase their first property. Armed with the right information, you will have the best possible chance of getting a decent, affordable property at a price you can afford. Chudi Ubosi, an estate surveyor and valuer, advises “one block at a time”, especially where there is no mortgage as it is in Nigeria. Like many other achievements in life, owning a home also comes with some risks. Because of the associated risks with the process, experts advise that one should be cautious. According to them, there are steps to take and you should follow them to ensure it is done safely and properly. The first step is to have financial clarity, which has to do with the size of your budget. Before getting too excited about your dream house and clicking through pages of online listings, there’s need to do a serious audit of @Businessdayng

your finances. First, you need to take a close look at your monthly income and savings. You have to be sure that you earn enough income to generate the amount required to purchase your dream house. “Don’t even consider purchasing a property before you have an emergency savings account with three to six months of living expenses,” warns Udo Okonjo, CEO, Fine & Country. “You need to consider a property you can afford, a property within your means,” she adds, noting that buying a property is a big step involving substantial long-term financial commitment, also requiring thinking hard about what you can afford. The second step is to have clear knowledge of the market or to get market insight. As a matterofnecessity,youwillhave to conduct extensive research about the real estate industrytrends,insights and information that will assist you in making an informed decision. “These can be gotten from real estate experts, property magazines and other online resources as well as real estate reports. Fine & Country also conducts bespoke market research for intending buyers,” Okonjo assures, adding, “having clearly identified your budget and gained relevant knowledge about the real estate market, figuring out a good payment plan for your new home, is very important.”

Tuesday 28 April 2020

BUSINESS DAY

property&lifestyle Opportunity for investors, home buyers as prices will crash on Covid-19 impact ENDURANCE OKAFOR

hile Nigeria’s property market has been disrupted by the outbreak of coronavirus, the impact of the pandemic, which is expected to crash prices of properties, offers opportunity for real estate investors and potential home buyers. Gripped by fear of uncertainty caused by the virus, real estate players paused on their decisions to invest and, according to industry analysts, this will fuel glut in the market and lower property prices. “What will happen is that supply will outstrip demand as the virus outbreak is expected to affect consumer behavior,” Chinua Azubike, MD/CEO, Infracredit, said adding that the demand-supply gap that will be created as a result of the Covid-19 will last for the short to medium term of say 9 months. The social distancing rule and lockdown in some real estate hubs in the country is another basis for the

price increase projections by the industry players. The rampaging virus has restricted both real estate investors and property developers from property inspections following the stay and work from home orders given by the government to curtail the spread of the virus. According to Jemil Dawodu, managing director, CBRE Excellerate, the expected glut in the real estate market is one that is inevitable, but it will also present an opportunity Nigerians can tap from. “Yes, there will be a market correction. Yes, there will be lower prices and that holds opportunity for potential home buyers,” Udo Okonjo, CEO/VC, Fine and Country West Africa said during a recent webinar by Mixta Africa with the title; Making Informed Investment Decisions in the Covid-19 Era. Okonjo explained that real estate investors who have long term capital or funds that have low-interest rate can leverage the opportunity to tap from the impact Covid-19 will have on the

property market. Meanwhile, the slowdown in economic activities which is expected to reduce consumers’ spending capacity is a constraint that is likely to prevent low-income earners who are supposed to leverage the price crash to become first-time homeowners. Studies have shown that Nigeria’s middle class are currently more concerned about sustainability and the health of their family members. “Low purchasing power will pose a barrier due to the economic downturn, Tunde Balogun, CEO of Rent Small-Small said. Before the coronavirus pandemic, access to affordable housing in Nigeria was crippled by the lack of nonfunctioning mortgage system, high cost of property development made worse by the country’s archaic Land Use Act. Despite its large-size population and self-acclaimed biggest economy in Africa, Nigeria is crawling behind its peers in terms of homeownership level. Whereas homeownership

level is 84 percent in Indonesia, 75 percent in Kenya and 56 percent in South Africa, Nigeria, the largest economy in Africa is crawling behind at 25 percent. On how the various segments of Nigeria’s real estate industry will be affected by Covid-19, industry stakeholders said that Grade A commercial office space, for instance, will suffer less demand, lower or static rents at renewal. Chudi Ubosi, an estate surveyor and valuer, said that rents will be paid more and more in Naira, not Dollars. He added that Grade B office space will remain the same; there will be more defaults at renewals while demand will be flat as people and organizations contend with post-COVID issues. Ubosi said further that hospitality will suffer because there will be fewer travels; fewer parties; fewer socials as people want to avoid crowds. “Travel will only be made when it is unavoidable; the fear of infection in the hotel rooms will also account for less patronage,” he added.

Estate surveyors support LASG fight against Covid-19 with equipment, FM consultancy services CHUKA UROKO

s the fight against coronavirus rages amid escalating and frightening daily increase in the number of confirmed cases, estate surveyors and valuers have joined the fray, supporting Lagos State government to curtail further spread of the deadly virus. The estate professionals under the aegis of Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos State Branch, were recently at the State House, Marina, where they donated medical equipment to the state government for use by health workers who are at the forefront of the war against this invisible enemy. The NIESV members who were received at the State House by the wife of the governor and First Lady of the state, Ibijoke Sanwo-Olu, donated critical Personal Protective Equipment (PPE) which included 60 pieces of protective gowns for the use of medical personnel at isolation centres across the state and 100 pieces of reusable, high quality face shields. The institution, which is

Lagos First Lady, Ibijioke Sanwo-Olu, with Exco members of NIESV Lagos who were at the State House, Marina to support the fight against COVID-19 pandemic.

fondly called the ‘The Very Branch’, also offered to support the state government in terms of facilities management (FM) consultancy services to help manage the isolation centers used for treating COVID- 19 patients. Presenting these items to the First Lady, the branch chairman, Adedotun Bamigbola, explained that their visit was to demonstrate support for the state government and the health workers who he described as “our soldiers on the frontline in the fight against www.businessday.ng

COVID-19.” The chairman informed that the institution had been doing a lot lately to sensitize her members as well as the general public by putting out short video clips and flyers to help in spreading the message about Covid- 19 and its negative impact on human lives. This, he explained, was for everyone to obey the social distancing rule and other safety rules and guidelines as directed by the World Health Organization (WHO) and other health agencies.

The First Lady, who represented the governor, Babajide Sanwo-Olu, commended the institution for the visit and generous donation towards the fight against the deadly COVID-19. She assured that the state government would not rest on her oars until a complete stop was put to the spread of the deadly virus. Present at the meeting with the First Lady were members of the institution’s Exco and the chairman of the Welfare Sub-committee of the branch.

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Talking Real Estate

With Oluwakemi Adeyemo

COVID-19 and the new tested definition of real estate

ne question in a survey we conducted in 2018 says: what readily comes to mind when you hear the phrase ‘real estate’? 20 percent of respondents said the word ‘wealth’ comes to mind, 30 percent said ‘land’, another 30 percent said ‘house’, while 15 percent said ‘money’. This shows that real estate takes on different definitions for different people in different phases of life. Several reasons have been found to contribute to each respondent’s perspective of what they think real estate is. Reasons such as background, self-development, migration experiences, exposure and education come to mind. However, the meaning of real estate for an individual is not necessarily limited to just a ‘word’. It can be a combination of two or more words. For instance, land as an asset is defined by the business dictionary to include anything on the ground (such as buildings, crops, fences, trees, water), above the ground (air and space rights), and under the ground (mineral rights), down to the center of the Earth. This definition should broaden your perspective of what real estate is. Definition and meaning can also be progressive. This means that events or improvement in mindset can cause a redefinition of what real estate means to an individual. The economic crisis, as a result of COVID-19, is already causing changes in different sectors and bringing to the fore some previously existing situations. It is expected that the effect of COVID-19, how we have responded, and the resultant economic crisis will trigger changes in consumer behavior and needs. The current crisis will also reveal areas with inherent potentials for economic growth that have previously been neglected. Isolation and social distancing, for instance, have made the need for some kind and volume of space necessary, while the work from home situation has also shown that some work can be done more effectively with less use of space in certain locations. The health challenge as a result of COVID-19 has also caused the conversion of spaces. While real estate provides a framework for many other businesses to function, businesses are having to redesign products and services to meet current needs that drive the economy and have suddenly become @Businessdayng

urgent. A case in point is Tiffany Amber, a Nigerian owned luxury women’s wear brand. To keep operations going, the founder took responsibility for a situation she didn’t cause. Though a luxury brand, she made a switch, within the existing framework, to meet the current needs of customers, which are the essential, non-luxury items. For individual investors who already have their minds fixed on just shelter, it is time to re-imagine real estate and shift from a definition that puts you in the danger of considering and relying on a single aspect of real estate. You must figure out how real estate serves you on different levels which then leads to how you define it and how you approach investing. This is a time to evaluate what should be given up and what is profitable enough to be retained. The CEO of Tiffany Amber suspended a product line that was not only the signature of the brand but one upon which the entire business was built on. However, the business did not give up the excellence, teamwork and value for the human elements that make the business work. This ensures the business will not shut down in this crisis. Real estate business leaders alsoneedtore-imaginehowreal estate serves customer needs. The existing live, work and play design model, may now need to be tweaked to include the post-COVID-19 reality of convenience as well as productivity. Another way to begin to re-imagine real estate is to find out and be part of conversations that capture and expand essential needs around the much projected and common definition of the real estate framework – conversations that, perhaps, solve existing problems or speculate possible outcomes of post-COVID-19. Participating in a process or system helps you create or increase capacity for it. For example,participatinginlearningcreates the possibility and capacity to learn more. And the capacity created leads to a demand that must now be fulfilled. To join our inner circle for stimulating discussions on time-relevant topics on the challenges and opportunities in real estate, send JOIN to info@ futureperfectproperties.com. Oluwakemi Adeyemo is the CEO of Futureperfect Limited. Inspiring you to use real estate in a way that best serves your unique wealth goal.

Tuesday 28 April, 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 27 April, 2020

Top Gainers/Losers as at Monday 27April, 2020 LOSERS

GAINERS Company

Opening

Closing

Change

Company

Opening

Closing

Change

ASI (Points)

MTNN

N104

N104.9

0.9

N34.5

N31.05

-3.45

GUARANTY

N19.3

N20

0.7

GUINNESS

N18.9

N18.55

-0.35

UBN

N6.55

N6.75

0.2

ETI

N4.6

N4.5

-0.1

VOLUME (Numbers)

N14.05

N14.2

0.15

CILEASING

N5.1

-0.1

VALUE (N billion)

N2.3

N2.39

0.09

SKYAVN

N1.52

N1.42

-0.1

MARKET CAP (N Trn)

ZENITHBANK OANDO

DEALS (Numbers)

22,616.28 3,354.00 108,120,797.00 1.332

Global market indicators FTSE 100 Index 5,846.79GBP +94.56+1.64% S&P 500 Index 2,875.58USD +38.84+1.37% Generic 1st ‘DM’ Future 23,954.00USD +296.00+1.25%

11.786

Deutsche Boerse AG German Stock Index DAX 10,659.99EUR +323.90+3.13% Nikkei 225 19,783.22JPY +521.22+2.71% Shanghai Stock Exchange Composite Index 2,815.50CNY +6.97+0.25%

Nigeria’s pressured equities Sunmonu succeeds Aig-Imoukhuede as chairman Wapic Insurance …Bode Osunkoya appointed chairman Wapic Life Assurance market sees mild gain Iheanyi Nwachukwu

he equities market of Africa’s largest economy is no doubt threatened by the Covid-19, coupled with its induced lockdown and the declining crude oil price. While these negatives continue to make listed companies to rethink their business and earnings strategies for the year 2020, equity investors still walked into Custom Street on Monday April 27 with the hope that the market still offers value for bargain hunters. MTNN, GTBank and Zenith Bank were top on the bargain list. MTNN Plc led others after its share price moved from day open low of N104 to N104.9, adding 90 kobo or 0.87percent; GTBank Plc moved from N19.3 to N20 up 70kobo or 3.63percent; while Zenith Bank share price advanced from N14.05 to N14.2 up 15kobo or 1.07percent. Nigerian Breweries Plc decreased most, from N34.5 to N31.05, losing N3.45 or 10percent, followed by its competitor Guinness Nigeria Plc from N18.9 to N18.55, down 35kobo or 1.85percent. Investors may have started pricing in the risk of moderated second quarter (Q2) sales for these brewers due to Covid-19 induced lockdown. The Nigerian Stock Exchange (NSE) All Share Index (ASI) which tracks the performance of the Bourse increased slightly

by 0.07percent to 22,616.28 points from preceding day low of 22, 599.38points. The market’s negative return year to date stood at -15.74 percent. Also, the value of listed stocks increased by N8billion to N11.786trillion from N11.778 trillion. In 3,354 deals, investors exchanged 108,120,797 units valued at N1.332billion. With the continued threat of the Coronavirus pandemic as well as the declining crude oil price to the macro-economic outlook, we expect the equities market to remain pressured in the short term, though current price levels remain good for mid/long term investors. “We therefore expect a similar trading pattern this week, with some sessions filled with bargain hunting and sell offs in others”, said equity research analysts at Lagosbased Vetiva Securities. Lasaco Plc, GTBank Plc, UBA Plc, FBN Holdings Plc and Access Bank were actively traded stocks on Monday. “We believe the influx of first quarter (Q1) 2020 earnings will continue to shape the interest of investors in the equity market. “However, global economic fundamentals and oil market conditions might dissuade interest”, said United Capital research analysts in their recent note to investors. However, the analysts foresee the equities market taking bearish footing as local investors react to the news of a special CRR debit from bank balances.

Modestus Anaesoronye

he Board and Management of Wa p i c I n s u ra n c e has announced the appointment of Mutiu Sunmonu as the chairman of its Board of Directors; and Bababode Osunkoya as chairman of its subsidiary, Wapic Life Assurance Ltd. By this appointment, Sunmonu and Osunkoya succeed Aigboje AigImoukhuede, who retired effective April 27, 2020 after 8 years of diligent and committed service to both organisations. A ig-Imoukhue de was appointed to champion the transformation of Wapic Insurance Plc and its subsidiaries Wapic Life Assurance Plc and Wapic Insurance (Ghana) Limited following the company’s successful execution of a merger between Wapic Insurance Plc and Intercontinental Properties Limited in November 2011. Over the past 8 years, Wapic Insurance Plc and its subsidiary Wapic Life Assurance Ltd has grown remarkably from an industry position of 18 to 8, and transformed into a frontline insurance company in sub-

“I am excited to take on this new role and build on the tremendous achievements of Aigboje Aig-Imoukhuede. I am going to work with management and employees to actualise the aspirations espoused in the second phase of our company’s growth plan, most especially creating value for shareholders”, said Sunmonu, Wapic Insurance Plc’s new chairman. “Both Sunmonu and Osunkoya’s appointments are well-considered because of their pedigree and extensive b o a rd ro o m e x p e r i e n c e, garnered serving on the board of various organisations across multiple sectors of the economy. Sunmonu was outstanding in his role as managing director of Shell Petroleum and Development Company of Nigeria,” said Frank W.K.Beecham, chairman, Wapic Insurance (Ghana) Limited, who also described Aigboje Aig-Imoukhuede’s tenor as “highly innovatory and very successful”. Commenting, Osunkoya, the newly appointed chairman Wapic Life Assurance said, “under Aig-Imoukhuede’s leadership, Wapic Life Assurance Ltd has not only raised the capital to meet the 8 billion naira minimum capital requirement,

it is now one of Nigeria’s top Group-Life underwriters”. He also stated, “It is a great time for me to assume the role of Chairman as we are well positioned to becoming the leading Life underwriters in the Industry” Prior to his appointment, Osunkoya who joined the Wapic Assurance Board in January 2013, was the chairman of the company’s Board Audit and Compliance Committee. A senior partner at the Chartered Accounting firm of Abax-OOSA Professionals. Osunkoya is one of Nigeria’s foremost-certified Forensic Auditors. Wapic Insurance Plc is engaged in the business of underwriting life and non-life insurance risks for corporate and individual customers, and also provides investment risk products for individuals. The Company’s range of insurance services includes, motor, general accident, fire, engineering, special risk, marine and group life insurance for the risk management of businesses and individuals. The Company’s General Business is conducted by Wapic Insurance Plc and Wapic Insurance Ghana Limited. The Company’s Life Business is conducted by Wapic Life Assurance Limited.

FBN Holdings says ready to take on the future Iheanyi Nwachukwu

BN Holdings Plc, Nigeria’s leading financial services group, held its Annual

L-R: Divine Jaja, Chioma Ezenwanna, Wande Adams, Iyanu Aromaye Victoria Aderugba, and Uzo Okonkwo of Avale Africa, facilitating Enov8 Solution Ltd’s corporate sponsorship of Lekki Foodbank on Friday 24 April, 2020 charity outreach on Maroko Lagos. www.businessday.ng

Saharan Africa. According to the companies, “this board-leadership transition heralds the second phase of our growth plan, which is focused on extending our culture of distinction in service excellence, innovation, technology, sustainability practices and operational efficiency”. The companies added “During the first transformation phase under Aig-Imoukhuede’s exemplary leadership, Wapic Insurance and Wapic Life Assurance implemented a number of transformational initiatives that stabilised and returned the 62-year old company to profitability and enabled Wapic to take its place amongst Nigeria’s Top 10 underwriting companies”. As Wapic moves on to the next phase of transformation, Sunmonu and Osunkoya, both respected business leaders with extensive board experience in various organisations across multiple sectors of the economy, will lead the Boards of Wapic’s Nigerian businesses. Over the next 5 years, Wapic Insurance and its subsidiaries aspire to a top 3 position in the Nigerian insurance industry and to expand operations further across the West African sub region.

General Meeting (AGM) on Monday April 27 in Lagos. At the AGM, FBN Holdings Plc reiterated its promise to place its shareholder value at the forefront of its operations, noting that as a Group, it is positioned and driven to not just remain relevant in the future but also involved in the development of the Nigerian economy and its host countries across Africa. The Chairman of Board of Directors of FBN Holdings Plc, Oba Otudeko, stated this in his address to shareholders at the 8th Annual General Meeting (AGM) held in Lagos. According to him, in 2019, FBNHoldings deepened its efforts to realise revenue, “as a result, a 42 per cent increase in synergy revenue was recorded during the financial year, highlighting the Group’s enhanced ability to address customers’ needs through our thriving subsidiaries. It is important to highlight that

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the Board of Directors and Management of FBNHoldings will ensure that all our operating entities have sufficient resources (financial and non-financial) to grow their businesses, deepen market penetration and enhance overall shareholder value,”. The Chairman noted that the year 2020 marks the beginning of another three-year strategic planning cycle for the Group and we have extensively engaged internally and mapped our course of action over the next three years. “In line with current and future trends, we have realigned our vision and strategic priorities across our operating entities. Furthermore, we have identified synergistic opportunities and key services that can be leveraged to further drive efficiency and overall productivity across the Group,” Otudeko said. In his address, Group Managing Director/CEO, FBN Holdings Plc, UK Eke said @Businessdayng

central to its strategy is the threepronged focus of the Group aimed at restoring shareholders value over the last three years, which enhanced the revenue profile of the Group in the context of diversification across multiple streams, markets and sectors. “These primary focus areas are in addition to the long-term strategy of the Group, which is ultimately geared towards ensuring that FBNHoldings becomes one of the foremost financial services institutions in Sub-Saharan Africa. I am pleased to report that we have made material progress on all three fronts (albeit at different levels of success). The 2019 financial results reinforce our optimism in enhancing value for shareholders,” he said. According to him, the 2019 financial results have been a good reflection of our strategy and the directional ratios are consistent with the future we seek to create for the institution.

Tuesday 28 April 2020

BUSINESS DAY

news

How CBN intervention may be make... Continued from page 1

gas sector was equivalent

An official of the Nigerian Correctional Service (NCS) supervising persons convicted by a Federal Capital Territory (FCT) Mobile Court for violating the stay-at-home order to combat the Covid-19 pandemic, yesterday at the Efab Junction, Kado District, Abuja. The convicted persons are performing community service. Pic by John Osadolor

FG to relax lockdown in Lagos, Ogun... Continued from page 1

measures, according to the

president, include that selected businesses and offices can open from 9am to 6pm; there will be an overnight curfew from 8pm to 6am, which means all movements will be prohibited during this period except essential services. The president said there will be a ban on non-essential inter-state passenger travels until further notice, and partial and controlled interstate movement of goods and services will be allowed for the movement of goods and services from producers to consumers, and there will be mandatory use of face masks or coverings in public in addition to maintaining physical distancing and personal hygiene. “Furthermore, the restrictions on social and religious gatherings shall remain in place. State governments, corporate organisations and philanthropists are encouraged to support the production of cloth masks for citizens,” Buhari said. He, however, said this will be followed strictly with aggressive reinforcement of testing and contact tracing measures while allowing the restoration of some economic and business activities in certain sectors. For the avoidance of doubt, the president said the lockdown in the FCT, Lagos and Ogun

States shall remain in place until these new ones come into effect on Monday, May 4. “The Presidential Task Force shall provide sector specific details and timing guidelines to allow for preparations by governments, businesses and institutions,” he said. “The above are guidelines. State governors may choose to adapt and expand based on their unique circumstances provided they maintain alignment with the guidelines issued above on public health and hygiene,” he said. Buhari said the revised guidelines will not apply to Kano State. “The total lockdown recently announced by the state government shall remain enforced for the full duration. The Federal Government shall deploy all the necessary human, material and technical resources to support the state in controlling and containing the pandemic,” he said. Buhari said the decisions were arrived at in line with the need to develop implementable policies that will ensure the economy continues to function while still maintaining aggressive response to the COVID-19 pandemic. The decisions also followed recommendations of the Presidential Task Force on COVID-19, the various Federal Government committees that have reviewed socio-

Moody’s changes outlook on Nigerian... Continued from page 2

corporate borrowers to weaken. Since corporate borrowers account for around 90 percent of banks’ loans, banks’ asset quality will deteriorate. In addition, Nigerian banks have extended large volumes of outsized loans to single customers. Analysts at Moody’s believe the top 100 customers represent more than 40 percent of total gross loans in the banking sector, leaving the banks disproportionately vulnerable to defaults by one or a number of borrowers. The Moody’s report revealed that Nigerian banks’ high exposure to foreign-currency loans will be a further asset quality pressure point in the event of a naira devaluation. Some 41 percent of loans

extended by Moody’s-rated Nigerian banks are denominated in foreign currencies, predominantly dollars. Some of these borrowers are vulnerable to a devaluation of the naira, as they do not earn foreigncurrency income. A weaker naira would increase their debt repayments so reducing their repayment capacity. “We expect some foreigncurrency loans to be converted into local currency if persistent low oil prices pressure the naira exchange rate,” Moody’s said. The US-based investor services firm expects Nigerian banks’ profitability to weaken substantially due to lower lending margins and higher costs, with return on assets falling to 0.5 percent-1 percent in 2020 www.businessday.ng

economic matters, and the Nigeria Governors’ Forum. “For the past four weeks, most parts of our country have been under either Federal Government or state government lockdowns. As I mentioned earlier, these steps were necessary and overall, have contributed to slowing down the spread of COVID-19 in Nigeria. “However, such lockdowns have also come at a very heavy economic cost. Many of our citizens have lost their means of livelihoods. Many businesses have also shut down. No country can afford the full impact of a sustained lockdown while awaiting the development of vaccines or cures. “In my last address, I mentioned the Federal Government will develop strategies and policies that will protect lives while preserving livelihoods. “In these two weeks, the Federal and state governments have jointly and collaboratively worked hard on how to balance the need to protect health while also preserving livelihoods, leveraging global best practice while keeping in mind our peculiar circumstances. “We looked at how our factories, markets, traders and transporters can continue to function while at the same time adhering to the NCDC guidelines on hygiene and social distancing. “We assessed how our children can continue to learn without compromising their

health. “We reviewed how our farmers can safely plant and harvest in this rainy season to ensure our food security is not compromised. Furthermore, we also discussed how to safely transport food items from rural production areas to industrial processing zones and ultimately, to the key consumption centres,” he said. He said he has directed the Central Bank of Nigeria and other financial institutions to make further plans and provisions for financial stimulus packages for small and medium scale enterprises. “We recognise the critical role that they play in Nigeria’s economy,” he said. He assured Nigerians that government will continue to ensure the safety of their lives and property. “Our security agencies continue to rise to the challenge posed by this unusual situation. While we feel deeply concerned about isolated security incidents involving hoodlums and miscreants, I want to assure all Nigerians that your safety and security remains our primary concern especially in these exceedingly difficult and uncertain times. “As we focus on protecting lives and property, we will not tolerate any human rights abuses by our security agencies. The few reported incidences are regrettable, and I want to assure you that the culprits will be brought to justice,” he said.

from about 2.5 percent at yearend 2019. Constrained interest income because of limited loan volumes and lower asset yields, cost pressures from investments in IT, a levy to cover the cost of banking resolution and higher loan-loss provisions will strain banks’ profits. “We expect provisions to increase to 2.0 percent-2.5 percent of gross loans from about 0.5 percent in 2019 for the Moody’s-rated banks. Nigerian banks’ efficiency will also deteriorate as costs outpace revenue, raising their cost-to-income ratios. Nigerian banks were already inefficient compared with other large sub-Saharan banking systems, with an average costto-income ratio of close to 70 percent,” Moody’s said. “Nigerian banks’ capital ratios are expected to decline but remain sufficient

to absorb unexpected losses under our baseline scenario. We expect system-wide tangible common equity (TCE) to decline to 13 percent of risk-weighted assets (Moody’s adjusted) at year-end 2021 from 14 percent at the end of 2019. This is primarily because of higher risk-weighted assets and an anticipated increase in loan-loss provisioning costs, which will erode the banks’ profitability. In the event of a naira devaluation, banks’ riskweighted assets will further increase due to their large volume of foreign-currency denominated loans. “We expect Nigerian banks to counter pressures on capital ratios by reducing their dividend payouts. In addition, banks have high loan-loss reserves at about 90 percent of nonperforming loans,” Moody’s said.

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to N3.4 trillion as at the end of 2019. Oil companies accounted for about 30 percent of banking-sector loans recorded in the third quarter of 2019, and their borrowing took about 24 percent of all non-performing loans (NPLs). Brent crude – similar to Nigeria’s Bonny Light – for June delivery is currently trading at near $20 per barrel, way below current production cost for most indigenous firms. Considering Nigeria’s reliance on the oil and gas industry, industry and banking sources say one would expect that the Federal Government through the CBN would do everything to salvage the country’s independent crude producers, firms which between them pump about 10 percent of national output, failure of which risks inflicting severe pain on the local banks that finance them. Unlike their international counterparts with huge balance sheet, the oil slump has become an existential threat for indigenous Nigerian oil and gas producers. Most analysts and chief financial risk officers (CFOs) have asked the Federal Government to play similar role like their global counterparts who have rolled out measures to protect companies deemed critical to national security. Others recommend that loan contracts should be reworded to reflect the impact of force majeure or attacks while there should also be discussions on moratorium on principal repayments for a longer time period of say two to three years. They add that CBN working with the Department of Petroleum Resources (DPR), the oil regulator, should allow some form of interest waiver and reductiontoallowthefirmsrecover as the oil market rebalances and global economies re-open. “There is a need for a concise research report by the CBN in rally with the Bankers’ Committee in finding solutions to the issues of bad loans by indigenous upstream oil players without adversely affecting their operations and creating buffers for recovery as the global economy gradually opens up,” one senior CFO familiar with the matter told BusinessDay. “There is also a need to include a possible fiscal policy position such as bail-outs or tax concessions to indigenous oil producers in order to aid recovery and help advance the government’s push for local content and a connection of the upstream oil sector with the local economy going forward,” the person said. Other oil and gas analysts have recommended a moratorium on debt repayments to be worked out between banks @Businessdayng

and oil-producing companies in Nigeria in order to survive this critical period. The CBN Governor Godwin Emefiele has unveiled postCOVID-19 policy priorities, targeting sectors that are able to generate mass employment and wealth creation, including light manufacturing, affordable housing, renewable energy and cutting-edge research. The CBN has also set up a N50bn fund that SMEs can apply to for loans and advised banks to provide forbearance to customers. However, there has been no major intervention in the indigenous oil space by the apex bank. Firms like Aiteo E & P Ltd, SeplatPetroleumDevelopment Company and at least 50 small to mid-sized Nigerian producers pump between 1,000 and 100,000 barrels each day. They have now been hit by a coronavirus-induced slump in demand which has led to a massive glut, leaving millions of Nigeria’s Bonny light crude unsold and prices as low as $10 per barrel. Apart from dealing with higher production costs in the $30-$40 per barrel range, a majority of them are exposed to most of the country’s 22 licensed commercial banks through large loans. Luqman Agboola, head of research at Sofidam Capital, can’t foresee global demand increasing significantly which implies “crude oil prices will remain low throughout this 2nd quarter putting Nigeria banks at risk to oil company’s exposure once again excerpt we see a miracle”. “Some of these oil companies have invested a lot in building gas plant or modular refineries. With oil prices down, it would become difficult to service debts and meet contracted obligations except the government comes in,” Agboola said. Nigeria’s largest listed oil and gas firm by market value, Seplat has already announced plans to lower its CAPEX by 20 percent whilealsohedgingabout60percentof2020productionatafloor price of $45/bbl up to Q3 2020. Similarly, the fifth-biggest independent, Eroton Exploration & Production Co, has suspended a planned $1.5 billion, 50-well campaign to more than double output to 100,000 barrels a day by next year. The oil price plunging along with the devaluation of the naira has indirect effects on the Nigerian banking industry and their clients, such as power producers and manufacturers, who may suffer due to a weaker naira which would impact their capacity to service loans. “Government needs to come up, with the independents and the other oil producers, a financial rethink of the funding mechanics for the industry. If not we’ll see a total collapse, which in turn will drag down the banks,” said Karim of Shoreline Group.

Tuesday 28 April 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

US crude prices tumble as world’s largest oil ETF backs out

West Texas Intermediate drops more than 27% one week after sub-zero dive HARRY DEMPSEY AND PHILIP STAFFORD

S oil prices fell heavily on Monday after the world’s largest oil-backed exchangetraded fund said it would sell all its short-term contracts by the end of the month following pressure from regulators. West Texas Intermediate, the US oil price benchmark, tumbled 27.7 per cent to $12.25 a barrel, following a regulatory filing by the United States Oil Fund saying it would sell all of its futures contracts for the delivery of oil in June — 20 per cent of its $3.6bn portfolio — over a four-day period. The drop comes one week after US oil prices made an unprecedented dive below $0 — meaning sellers were paying buyers to take the oil off their hands — and underscores how speculative trading can disrupt this fragile market while demand for the plentiful commodity remains so depressed. “By selling shorter-dated future contracts and investing into longer-dated contracts, they are putting pressure on the front WTI contract,” said Giovanni Staunovo, a commodities analyst at UBS. The fund, known as USO, said it made the move due to “evolving market conditions, regulatory

An aerial view of the oil storage facility at Cushing, Oklahoma, where an acute lack of space has put pressure on US oil prices © Tom Pennington/Getty Images

accountability levels and position limits being imposed on USO with respect to oil futures contracts”. Its move reflects growing concerns from regulators and the CME Group, the futures exchange, about the size of the USO’s positions in benchmark futures contracts, especially given a drop below zero could risk wiping out investors’ funds. The CME has imposed limits

on the amount that USO can hold in the June contract, as well as in subsequent months. Twice this month, it has told USO not to exceed “accountability levels” in some types of oil futures. Last week CME said USO could not take a long position of more than 15,000 contracts for June, of more than 78,000 in July, 50,000 in August and 35,000 in September. It had 150,000 June contracts before

Monday. An acute lack of available oil storage at Cushing, Oklahoma — a key oil tank storage hub for US shale — has put pressure on US oil prices. With little space to hold oil, potential buyers are wary of buying more of the commodity than they need. The international Brent crude price, which is less constrained by storage problems, dropped

to $19.62 per barrel on Monday, down 8.5 per cent. ICE Futures Europe, which operates the benchmark Brent contract, declined to comment. Without significant cuts to production volumes to ease congestion at storage hubs, some fear lasting disruption to the market globally. Oil production has already begun to falter due to lower prices. Drillers cut 60 operating oil rigs in the week to April 24, reducing the total count to 378, the lowest since July 2016, according to a regular report released by energy services company Baker Hughes on Friday. Saudi Arabia is also reported to be slashing production, ahead of cuts agreed by Opec and its fellow producers that are due to begin on May 1. Analysts said that the cuts had not been enough to compensate for the massive hit to oil consumption from measures to prevent the spread of Covid-19. Commodity trading houses say demand could drop by as much as 30 per cent as many economies have in effect shut down. “The oil market still remains strongly oversupplied,” said Mr Staunovo. “There are more reports of inventories increasing. With that, more places are running out of storage, so we need to see production shut-ins.”

US, China researchers collaborate despite government battles Scientists co-operate on hunt for Covid-19 origins despite charges Beijing is withholding data KATRINA MANSON AND SUN YU

S scientists are working with China to investigate the origin of coronavirus, despite criticism from the Trump administration that Beijing is failing to co-operate with outsiders to stem the disease. Ian Lipkin, director of the Center for Infection and Immunity at the Mailman School of Public Health at Columbia University, said he was working with a team of Chinese researchers to determine whether coronavirus emerged in other parts of China before it was first discovered in Wuhan in December. The effort relies on help from the Chinese Center for Disease Control and Prevention. “The China CDC is interested in learning as much as it can about the origins [of] these types of viruses,” said Prof Lipkin, a virologist who worked on the 2003 Sars and 2012 Mers coronavirus outbreaks and advised on the 2011 pandemic film , told the Financial Times. “We share whatever we learn with the entire scientific community.” Prof Lipkin, who has developed longstanding relationships with Chinese officials since he helped develop rapid testing for Sars in 2003, visited China earlier this year to discuss responses to Covid-19. He met premier Li Keqiang, and also received an award, his second from China. Lu Jiahai, a professor at the Public Health School of Sun Yat-

sen University in Guangzhou and Prof Lipkin’s research partner in China, told the FT that China CDC had helped him liaise with hospitals and local CDCs across the country. This was to access nationwide blood bank samples taken from pneumonia patients so the group could study whether coronavirus had been present in the population before it was detected in Wuhan. “We are working across regions and departments to trace the origin of the virus,” he said, adding the study began in early February and may produce results later this year. Prof Lu said the problem with existing research on coronavirus was that it depended overwhelmingly on cases reported by hospitals, but that some people may have been www.businessday.ng

infected with the virus and later developed antibodies before anyone was aware of the disease. “A critical part of our work, which we conducted with the help of Chinese CDC, is to test blood samples of pneumonia patients nationwide in December, November or even earlier,” he said. He added that it was “very important” to study earlier infection cases given indications between 30 to 50 per cent of virus carriers do not show symptoms. Beijing and Washington have lobbed accusations at each other over the origin of the disease, which the World Health Organization says most likely emerged from bats via an intermediary animal in the last quarter of 2019. US officials have criticised China

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for what they say is a cover-up of the early outbreak and failure to share information. Secretary of state Mike Pompeo this week accused China of destroying early samples of the virus and waiting until the outbreak was “in every province” before reporting sustained human-to-human transmission to the WHO. “Even after the CCP [Chinese Communist party] did notify the WHO of the coronavirus outbreak, China didn’t share all of the information it had,” said Mr Pompeo. “We still do not have a sample of the virus nor has the world had access to the facilities or other locations where this virus may have originated inside of Wuhan,” he said, adding this had made it impossible to track the disease’s evolution. Only three of 12 WHO officials who visited China in February were allowed to visit Wuhan, and their final report said “the timely filling” of knowledge gaps including the source of infection was “imperative to enhance control strategies”. “As the animal origin of the Covid-19 virus is unknown at present, the risk of reintroduction into previously infected areas must be constantly considered,” it said. Chinese authorities censored early warnings from the medical community, with one Wuhan doctor who drew attention to the disease and subsequently died from it, hailed as a national hero after police forced him to retract his statement. @Businessdayng

The US CDC offered help to China in the early stages of the outbreak, but has not made a formal request to its Chinese counterpart for research sharing. “CDC has asked China CDC to engage on better understanding the outbreak investigation findings but not on formal research collaboration,” CDC told the FT. It added that it was essential that countries and jurisdictions talked and shared information on effective strategies. Chinese CDC declined to comment. Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here. The US-China research team is also studying blood samples of various wild animals that the team thought might be the origin of the virus, Prof Lu said. “We want to understand how animal-to-human transmission happened,” he said, adding he worked with Prof Lipkin because he was a leading expert in identifying and diagnosing unknown viruses. Prof Lipkin was part of a multinational team that published a March paper in Nature Medicine that noted the illegally imported Malayan pangolins carried a coronavirus similar to the one that causes Covid-19, but which argued neither the pangolin nor the bat were the likely “direct progenitor” of the virus.

Tuesday 28 April 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

US, China researchers collaborate despite government battles Stocks rise but crude drops on concern over global oil glut as crisis hits demand KATRINA MANSON AND SUN YU

Japanese stocks rose after the Bank of Japan pledged to buy an unlimited quantity of government bonds © AFP via Getty Images

could study whether coronavirus had been present in the population before it was detected in Wuhan. “We are working across regions and departments to trace the origin of the virus,” he said, adding the study began in early February and may produce results later this year. Prof Lu said the problem with existing research on coronavirus was that it depended overwhelmingly on cases reported by hospitals, but that some people may have been infected with the virus and later developed antibodies before anyone was aware of the disease. “A critical part of our work, which we conducted with the help of Chinese CDC, is to test blood samples of pneumonia patients nationwide in December, November or even earlier,” he said. He added that it was “very important” to study earlier infection cases given indications between 30 to 50 per cent of virus carriers do not show symptoms. Beijing and Washington have lobbed accusations at each other

over the origin of the disease, which the World Health Organization says most likely emerged from bats via an intermediary animal in the last quarter of 2019. US officials have criticised China for what they say is a cover-up of the early outbreak and failure to share information. Secretary of state Mike Pompeo this week accused China of destroying early samples of the virus and waiting until the outbreak was “in every province” before reporting sustained human-to-human transmission to the WHO. “Even after the CCP [Chinese Communist party] did notify the WHO of the coronavirus outbreak, China didn’t share all of the information it had,” said Mr Pompeo. “We still do not have a sample of the virus nor has the world had access to the facilities or other locations where this virus may have originated inside of Wuhan,” he said, adding this had made it impossible to track the disease’s evolution. Only three of 12 WHO officials

who visited China in February were allowed to visit Wuhan, and their final report said “the timely filling” of knowledge gaps including the source of infection was “imperative to enhance control strategies”. “As the animal origin of the Covid-19 virus is unknown at present, the risk of reintroduction into previously infected areas must be constantly considered,” it said. Chinese authorities censored early warnings from the medical community, with one Wuhan doctor who drew attention to the disease and subsequently died from it, hailed as a national hero after police forced him to retract his statement. The US CDC offered help to China in the early stages of the outbreak, but has not made a formal request to its Chinese counterpart for research sharing. “CDC has asked China CDC to engage on better understanding the outbreak investigation findings but not on formal research collaboration,” CDC told the FT. It added that it was essential that countries

and jurisdictions talked and shared information on effective strategies. Chinese CDC declined to comment. Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here. The US-China research team is also studying blood samples of various wild animals that the team thought might be the origin of the virus, Prof Lu said. “We want to understand how animal-to-human transmission happened,” he said, adding he worked with Prof Lipkin because he was a leading expert in identifying and diagnosing unknown viruses. Prof Lipkin was part of a multinational team that published a March paper in Nature Medicine that noted the illegally imported Malayan pangolins carried a coronavirus similar to the one that causes Covid-19, but which argued neither the pangolin nor the bat were the likely “direct progenitor” of the virus. “Obtaining related viral sequences from animal sources would be the most definitive way of revealing viral origins,” the paper said, adding it would be “highly informative” to sequence the virus from “very early cases”. A separate international group of scientists, including from the US and China, is also working with WHO to pool research in support of developing a vaccine. Drugs designed for treatment of Ebola, HIV, flu and malaria. They try to stop the replication of coronavirus by interfering with enzymes that help it copy itself and spread. They are believed to be most useful in the earlier stages of the disease. The virus uses similar machinery to copy itself as Ebola, giving some experts hope that Gilead’s Ebola drug remdesivir may help patients.

US states move to reopen as coronavirus job losses mount Treasury secretary Mnuchin predicts summer economic rebound as restrictions are lifted KATRINA MANSON

he Trump administration is talking up the chance of a summer rebound in the US as a clutch of state governors take steps to reopen their economies to stem catastrophic job losses caused by coronavirus lockdowns. US Treasury secretary Steven Mnuchin said the economy was going to “really bounce back” in summer, citing efforts to reopen parts of the country and the impact of “unprecedented” fiscal relief worth trillions of dollars. “As we begin to reopen the economy in May and June, you’re going to see the economy really bounce back in July, August, September,” he told Fox News Sunday. The US has recorded more than 940,000 cases of coronavirus and more than 54,000 deaths. Advice from the Centers for Disease Control and Prevention is to lift

restrictions only once the state and regional hospitalisation rate has recorded a decline for 14 days in a row. But states across the political divide, including Colorado, which has a Democratic governor, and Maryland, under a Republican, have committed to sending the workforce back early. “I want to get our economy back opened just as soon as we can,” Larry Hogan, the Republican governor of Maryland, told ABC News on Sunday, despite recording near-record deaths on Friday. He argued that while deaths and new cases were still rising, the number of hospitalisations and critical care requirements across neighbouring Washington DC, Maryland and Virginia were tailing off. You have to understand that this is an unprecedented shock to the economy, that we’re going to be looking at second-quarter negative GDP growth Kevin Hassett, senior economic www.businessday.ng

adviser to Donald Trump The decision by Mr Hogan, who also chairs the National Governors Association, comes amid criticism that states such as Georgia and Oklahoma are reopening too soon. Jared Polis, the Democratic governor of Colorado, said he respected the decision of his own state capital Denver to extend lockdown orders even as he gave the go-ahead for the rest of his state to go back to work with reduced staffing from May 3. He said that while some counties had recorded zero cases of coronavirus, Denver had experienced a much more significant outbreak, affecting 5 per cent of the population. New York governor Andrew Cuomo said he would look at loosening some restrictions after May 15. Dr Deborah Birx, the co-ordinator of the White House coronavirus task force, urged states to ramp up testing to find new cases of the virus as they start to reopen their economies.

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“We . . . have to diagnose the virus before it is evident in communities,” she told CNN on Sunday. She added that states needed to pay particular attention to places where the virus could otherwise spread undetected such as inner-city clinics, care homes and prisons. Kevin Hassett, senior economic adviser to Donald Trump, injected a note of urgency, saying the US was undergoing “the biggest negative shock” the US economy had seen since the second world war. He claimed that while the virus affected only hotspots throughout the country, the uniform nature of the lockdowns had brought the economy to a nationwide standstill. “[You] have to understand that this is an unprecedented shock to the economy, that we’re going to be looking at second-quarter negative GDP growth that’s probably north of -15, -20 per cent,” he told ABC News on Sunday. @Businessdayng

Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here. The economist, formerly chairman of the Council of Economic Advisers, said US job losses far outstripped levels seen in the 2008 financial crisis. “During the Great Recession, remember that was a financial crisis around 2008, that we lost 8.7m jobs and the whole thing. Right now, we’re losing that many jobs about every 10 days,” he said. “A lot will depend on what happens next,” he said. “I think markets are hopeful that we could get the V-shaped recovery that the president is hoping for,” he added. In order to achieve this, he said, everyone would have to pull together over the next three or four weeks to build on recent bipartisan support for a series of stimulus packages and “come up with a plan to give us the best chance possible for a V-shaped recovery”.

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BUSINESS DAY Tuesday 28 April 2020 www.businessday.ng

Africa could take ‘a generation’ to recover from coronavirus, says Kagame Rwanda’s president says continent needs at least $100bn in foreign support to weather shock David Pilling

aul Kagame, presid e nt o f Rw a n d a, the first country in Africa to impose a lockdown to combat coronavirus, said that without co-ordinated action and innovation, some economies on the continent could take “a generation or more” to recover from the shock of the pandemic. African countries, he said, needed international support of “$100bn and probably more” this year alone, though he said this was “a fraction of what wealthy countries are already injecting into their economies with the stroke of a pen”. “We are expecting speedy and decisive action,” he told the Financial Times in written responses to questions. “Raising the availability of SDRs is one mechanism that can make a difference quickly,” Mr Kagame said, referring to proposals that the IMF create or reallocate special drawing rights — a form of liquidity support — to poorer countries. “But more important than the specific implementation method is consensus around ensuring that Africa has the tools to end the pandemic and avoid a major depression.” The World Bank has predicted Africa will sink into its first continent-wide recession in 25 years as a result of the coronavirus shock, as global trade contracts in the commodities on which many of its economies rely. Growth in the region is forecast to fall from 2.4 per cent in 2019 to between minus 2.1 per cent and minus 5.1 per cent, in a continent with population growth of 2.7 per cent. Mr Kagame said he was confident progress could be made following what he called “good engagement” from “partners such as France, Germany, China and the US”. After a G20 pledge last week to suspend debt payments from the poorest countries until the end of the year, Mr Kagame said more would be needed, though he was less strident in calling for debt write-offs than some leaders. Vera Songwe, executive secretary of the UN Economic Commission for Africa, has warned of cascading defaults if more is not

Traders wear protective masks at the Kimironko market in Kigali, Rwanda as they wait for shoppers to stock up on essential items © Maggie Andresen/Reuters

done to alleviate the debt burden of some African countries. M r K a g a m e s a i d : “ We shouldn’t be looking for excuses to cancel debt for its own sake. If there is another idea that would achieve the same results, that is welcome. Stimulus is stimulus, no matter the mechanism.” The Rwanda president, who has effectively led the country since his Rwandan Patriotic Front seized power during the genocide of 1994, struck a cautiously optimistic note that his government could control the virus. By Thursday, the central African country of 12m people had 138 confirmed cases with no deaths, according to official figures. It was testing about 1,000 people a day, he said.

“We are not taking any chances. We are doing what we can to rein in this pandemic. We have been identifying, testing and isolating positive cases, and are now mostly focused on tracing contacts.” The World Health Organisation last week warned that, although there were only 17,000 confirmed cases in Africa with some 900 deaths, infections could leap to 10m within three to six months, according to its provisional modelling. “It’s difficult to make a longterm estimation because the context changes too much,” said Michel Yao, head of emergency operations for WHO Africa, who added that public behaviour could radically alter

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The number of people who died from the west African Ebola epidemic from 2014 was much lower than worstcase projections, because people had changed their daily activities, including altering funeral practices

modelling assumptions. The number of people who died from the west African Ebola epidemic from 2014 was much lower than worst-case projections, he said, because people had changed their daily activities, including altering funeral practices. Landlocked Rwanda, which depends heavily on tourists and visitors to a state of the art convention centre for foreign exchange, closed itself off to all commercial air traffic from March 19, earlier than many other countries. Two days later it shut its land borders with Burundi, Uganda, the Democratic Republic of Congo and Tanzania, except for goods and cargo, and imposed a nationwide lockdown. It has also shut three national parks that are home to gorillas and chimpanzees because of the danger posed to primates by Covid-19. The security forces are reported to have made widespread arrests of people violating socialdistancing measures, but Mr Kagame denied reports that two people had been shot for such offences. “The incident was actually not related to the lockdown, but two citizens still died,” he said, adding that the shooting was being investigated.

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More important than the specific implementation method is consensus around ensuring that Africa has the tools to end the pandemic and avoid a major depression Mr Kagame refrained from criticising US President Donald Trump’s suspension of funding to the WHO, but praised the UN body’s actions in Africa. “Today we are at a point where the WHO needs support from all of us so that it can do its job effectively,” he said. “If any country has concerns about the performance of the WHO, there are ways to address that without compromising the pandemic response.”

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