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Food crisis looms amid fear of coronavirus spread in north … further spike in food prices ODINAKA ANUDU & JOSEPHINE OKOJIE

T L-R: Oladipupo Jadesimi, chairman, FCMB Group plc; Funmi Adedibu, company secretary/general counsel, and Ladi Balogun, group chief executive, during the 7th Annual General Meeting of FCMB Group plc held in Lagos, yesterday.

Nigeria gets lifeline as IMF approves $3.4bn loan request ONYINYE NWACHUKWU, SOLOMON AYADO (Abuja) & LOLADE AKINMURELE (Lagos)

he International Monetary Fund (IMF) has approved Nigeria’s $3.4bn emergency loan request to assist the country tackle anticipated huge impact of the coronavirus pandemic, authorities familiar

Shelves planned external borrowings in 2020 budget Senate approves N850bn bond issuance for FG

with the matter told BusinessDay on Tuesday. Hit by crashing oil prices and the COVID-19-induced

economic standstill, Nigeria requested the total of its existing holding with the IMF under the Rapid Financing Instrument to

stabilise the economy. The programme offers fundContinues on page 31

he rising cases the coronavirus pandemic in Kano State could trigger a food shortage in Africa’s most populous nation if the government fails to take proactive measures to mitigate the severity of a looming food crisis, farmers say. Kano has emerged as one huge burial ground owing to the recent deaths in the state suspected to be linked to COVID-19, although investigations are ongoing to ascertain the true causes of the deaths. Kano/Kaduna axis accounts for 75 percent of Nigeria’s fresh fruits and vegetables, with the rest of Katsina, Benue, Kebbi, Sokoto and Jos sharing the rest 25 percent. The state also controls most of the grains in the market, including rice, maize, beans and millet. With the two-week lockdown already in place, rapid spread of COVID-19 in the ancient city could trigger high food prices and upset a number of manufacContinues on page 31

Inside

FMDQ Exchange admits United Capital, Sterling Bank commercial paper notes to its platform P. 30

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Maturing government instruments worth N304.2bn to hit financial market ...CBN rolls over N131.5bn NTB Wednesday, as naira/dollar trade unchanged Hope Moses-Ashike

iquidity in the Nigerian financial market will rise as inflows from government instruments worth N304.2 billion are expected to hit the market this week. The Central Bank of Nigeria (CBN) is expected to roll over N131.5 billion worth of maturing Nigerian Treasury Bills (NTBs) on Wednesday at the Primary Market Auction (PMA). Inflows from Open Market Operation (OMO) maturities worth N30.7 billion, FGN Bond coupon payments (N142.0bn) and Federal Account Allocation Committee (FAAC) disbursements are expected to improve system liquidity. “We envisage quiet trading sessions as investors wait on the side-lines ahead of the PMA,” analysts at Afrinvest Securities Limited under the leadership of Ayodeji Ebo, managing director, said. Liquidity levels further rose to

N1.1 trillion on Thursday following inflows from OMO maturities worth N226.8 billion. However, on Friday, a special Cash Reserve Requirement (CRR) debit by the CBN to the tune of N1.4 trillion occurred, pushing system liquidity down to N3.3 billion, Afrinvest report showed. Notwithstanding the CRR debit, average yield shed 36bps W-o-W to settle at 2.7% with most buying interests skewed to the long end on the curve, particularly the 11-Feb-21 (-84bps), 26-Nov-20 (-75bps) and 28-Jan-21 (-74bps) bills. The CBN also sustained its weekly OMO intervention by mopping up a total of N112.6 billion on Thursday. Although a total of N100 billion was offered across 89-day (N10.0bn), 180-day (N10.0bn) and 341-day (N80.0bn) instruments, investor demand tilted to the 89-day instrument which showed a 6.4x bid to cover ratio. Consequently, the CBN allotted across offered tenors at 11.5%, 11.5% and 12.7%,

respectively. Nigeria’s currency gained N1.50k against the dollar as the foreign exchange market opened with an indicative rate of N384.54k on Tuesday compared with N386.04k per dollar opened on the previous day at the Investors and Exporters (I&E) forex window, data from FMDQ revealed. The CBN in March 2020 adjusted the exchange rate from N360 to N380/US$ at the I&E window, to stem the pressure in the foreign exchange market. At the black market and the retail Bureau, the naira/dollar exchange rate traded unchanged at N450 and N465 per dollar, respectively, on Tuesday. The CBN on March 26, suspended foreign exchange sales to the Bureau De Change (BDC) operators until further notice due to the Covid-19 lockdown as requested by the operators. The suspension, notwithstanding, some BDCs are still active in the market.

COVID-19: NSC tells OPS to decongest ports using existing incentive windows AMAKA ANAGOR-EWUZIE

he Nigerian Shippers’ Council (NSC) has advised members of the Organised Private Sector (OPS) to take advantage of the opportunities created by the various incentives the Council has brokered with service providers at the ports, to take delivery of their consignments during the period of lockdown, imposed to contain the spread of Coronavirus (COVID-19) pandemic. The Council, which expressed worry over the growing number of overtime containers at the nation’s seaports, raised alarm over the looming congestion in the port where majority of the terminals were recording 95 percent yard occupancy due to failure of cargo owners to take delivery of their consignments. Hassan Bello, executive secretary, NSC, made this call in Lagos on Tuesday at a meeting with members of Manufacturers Association of Nigeria (MAN), the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), and Shippers Association of Lagos State (SALS).

Bello, who emphasised on the need to diversify the nation’s economy through export and automated port system, listed some of the incentives to include reducing the cost of doing business at ports by working with truckers to reduce the transportation cost by 30 percent during the period of lockdown. According to Bello, the Council has also worked with shipping companies to suspend the collection of demurrage charges on cargoes discharged at port terminals between March 30 and May 5, 2020, to reduce the financial burden on businesses. “We have also brokered a meeting between the terminal operators and Nigerian Railway Corporation (NRC) as well as barge operators. We are presently developing a standard operating produce (SOP) that would ensure that goods are evacuated using multi modal system of land, sea and railway. We have also worked with the Presidential Taskforce on COVID-19 to ensure free interstate movement of cargoes during the lockdown,” he noted. He also assured the OPS members that the Council was

working to get other government agencies to reduce their charges in order to bring the economy back post COVID-19 period. He noted that the Council had also eliminated movement barriers for port workers and freight forwarders by deploying about 10 buses in different locations to lift workers, adding that some banks were able to return to operations in Apapa to deal with cargo clearing and payment of duties. Responding, Muda Yusuf, director-general of Lagos Chamber of Commerce and Industry (LCCI), who commended the Council for the incentives, said it was a big relief for the members. Nigeria cannot look up to the oil sector for foreign exchange or revenue within the rest of this year, judging by the slump in oil prices in the international market due to decline in demand, Yusuf said. He however stated that the country would likely rely on nonoil sector to salvage the economy post COVID-19, adding that the challenge of the private sector people was having to deal with the bottlenecks in the port processes and procedures.

Rosabon unveils N10bn asset acquisition fund for FMCGs, pharmaceuticals, others Daniel Obi

s part of measures to help corporate organisations and businesses mitigate the impact of the Coronavirus pandemic, Rosabon Financial Services, a nonbank financial services provider, has announced a N10 billion fund targeted at essential service providers to help finance their fleet asset acquisition and maintenance support. Eligible FMCGs, pharmaceuticals, oil and gas firms and other essential service providers, according to a statement from the firm, can access the funds as part of Rosabon’s operating lease facility, to help meet their fleet asset acquisition needs

while they focus their cash flow in meeting their rising demands this period. Speaking on the fund, the managing director, Chukwuma Ochonogor, in the statement, states that the fund provides an opportunity for essential service providers to purchase fleet assets without disrupting their cash flow or hindering other pressing business needs. According to Ochonogor, “Essential service providers in Rivers State deserve our unwavering commitment to provide muchneeded capital to fund their fleet asset acquisition which is vital to their business operations this period. With the Rosabon Operating Lease facility, your business can www.businessday.ng

have fast and convenient access to the fleet assets needed to increase business efficiency and support business expansion, in-spite of the COVID-19 pandemic and economic struggles.” He further stated “the facility is affordable with low monthly repayments and a flexible contract tenor of up to 48 months. A purchase option has also been made available at the end of the contract tenor.” “We consider it the most suitable arrangement for FMCGs, Pharmaceutical companies and other essential service providers to expand and meet rising demands without having to purchase, operate and maintain their fleet,” he added. https://www.facebook.com/businessdayng

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Nigerians pay more for bread as inputs prices rise amid lockdown Josephine Okojie

igerians are paying more for bread – a key staple in the Nigerian diet as the lockdown efforts of the government to contain the novel coronavirus spread induced a spike in prices of key inputs. Master Bakers Association says the situation has forced bakers across the country to increases all sizes of bread by N50. “ The pr ice of bread has gone up owing to the increase in all our inputs prices amid the lockdown,” said Jude Okafor, national secretary, Association of Master Bakers and Caterers of Nigeria. “ P r i c e s o f b u t t e r, preservatives, sugar, and flour have all increased.

A 50kg bag of sugar we normally buy for N13,500 before the lockdown is now sold for N18,500,” Okafor said. He noted that bakers were forced to increase the

prices of their bread despite the economic situation in the country. He stated that bakers have been operating below their production capacity since 2018 when consumer

COVID-19: Givefood.ng partners to provide 1m meals to vulnerable Nigerians Josephine Okojie

ith millions of Nigeria struggling to get access to food amid the lockdown to contain the spread of t h e n ov e l c o ro n av i r u s pandemic, Givefood.ng partners have launched a platform to provide one million meals to vulnerable Nigerians on a weekly basis. The platform - givefood.ng is a coalition of partners that have come together to address the challenge Nigerians are facing in a protracted period of economic and social disruption. Collectively, the partners will provide a technologyenabled logistics solution to help those who want to direct their resources to the most vulnerable, while ensuring the availability

of food packs at easily accessible points for those in need of them. Kola Masha, the coalition founder and CEO of Babban Gona said the partners were inspired by their collective willingness to help their fellow citizens at a critical time like this. “When we have millions of vulnerable people that need help, we cannot rely on the contributions or interventions of others, we must all come together to support them,” Masha said. “This is the vision for givefood.ng; for ordinary Nigerians to have access to a platform that can safely and securely deliver assistance to those that need it,” he further said. “We believe that with the partners we have been able to bring together, the civic spirit we have seen and the support we have received

from Nigeria’s private sector, we can quickly achieve a system that provides 1 million meals for Nigerians each week,” he added. He noted that any individual that wants to give food to the vulnerable in the society without knowing how to go about it can simply visit givefood.ng to make their donations. According to him, givefood.ng has over 100 f o o d c o l l e c t i o n p o i nt s through its partnerships with various supermarket chains across the country. He noted that the food packs for each vulnerable Nigerian may vary from location to location due to availability but are all valued at N2,000 and will usually contain: 2kg swallow, 1 kg pasta, 500g sugar, 7 - 9 packets of 70g instant noodles, 4 packets of 70g tomato paste and soap.

purchasing power has been on the decline. “We have since slowed down our production b e cau s e Nig e r i a n s a re not consuming bread-like before. Most of us are just

operating to still remain in business,” he said. He added the exchange rate volatility has also contributed to the increase in some of the key inputs bakers require for their production. The national secretary called on the government to intervene by having meetings with major millers and sugar producers in the country to address their concerns as bread still remains a key staple Nigerians consume. Nigeria imports about 80 percent of its sugar and wheat needs in the country. The country is experiencing an FX volatility which was also triggered by the pandemic, making prices of imports more expensive amid a breakdown in the global supply chain. “Yes the FX is also an issue for us apart from the

pandemic but we have not increased the prices of our flour,” an executive in one of Nigeria’s largest flour millers who does not want his name mention on print told BusinessDay. “Maybe the middlemen are the ones adding to the price,” he suggested. But Saheed Balogun, a baker at Ketu said that a bag of flour which was sold N10,500 before the pandemic is now being sold for N12,000, indicating a 14.3percentage increase. “Nigerians are suffering now because of the pandemic. They will not be able to survive if prices keep rising,” Balogun said. Currently, a metric ton of United States Hard Red Wheat (HRW) sells for $233 at the time of writing, according to data from the International Grain Council.

Poultry farmers lament low demand for eggs, birds amid lockdown …as pandemic obstructs feeds supply chain IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

oultry farmers in Edo state have lamented of the low demand of eggs and other poultry products in the state. The stakeholders who spoke to Businessday attributed the low patronage o f p o u l t r y p ro d u c t s i n the state to the closure of neighbouring state borders such as Delta and Lagos. They opined that the postCOVID-19 recovery period will not be the same as the pre- COVID-19 era for the industry in the state. Agharese Osifo, a poultry farmer and consultant agricultural finance said the coronavirus pandemic has dealt a devastating blow to Nigeria’s poultry industry while noting that farmers now find it difficult to get feeds for their birds owing to the obstruction in the supply chain. “The decrease in demand

is due to the lockdown in the three locations for feed production: Abuja, Lagos & Ogun State. Small scale poultry farmers are badly affected by the COVID-19 pandemic; they also have cash flow problems as the increased price of feeds and other inputs have made the business unprofitable to them,” he said. “The lockdown has affected businesses; hotels and restaurants that are now operating skeletal services in compliance with the social distance instructions to prevent the spread of COVID-19,” he added. He said that prices of key inputs such as feeds and vaccines have increased. “As of April 21, the 25kg bag of Layers Marsh sells for N3,600 against N3, 200 prior to COVID-19 outbreak while broiler finisher marsh is N4,200 up from N3, 750 pre - COVID-19,” he further said. “We will then have an oligopoly rather than the perfect market with

numerous atomistic farmers,” Osifo added. He urged the Federal Government to release maize, guinea corn and groundnut from its silos strategic grains reserve to the poultry industry in the country. He further pleaded with the government to grant Value Added Tax ( VAT ) exemption for the poultry industry as well as exempt poultry feed manufacturing companies truck like the petroleum products from the lockdown orders. On his part, Kingsley Imasuen, chairman, Edo State Poultry Association of Nigeria (PAN) noted that the stay-at-home directive by the government has affected many industries, of which agricultural products like eggs and chicken aren’t exempted. Imasuen, who said they are witnessing shortage in poultry feed, added that distributors are finding it difficult to convey eggs to other states due to the lockdown.

“Council approved the inauguration of Press and Information Clubs in all secondary schools and tertiary institutions of learning in the State. “Council approve d a Public-Private Partnership for the resuscitation o f C o n f l u e n c e E x p re s s Transport as well as Kogi Wat e r T ra n sp o r t at i o n Initiative and also approved

a process to put the Lokoja Mega Terminal into use. “The Terminal could not be put to use since 2016 because the project was not fully completed. Having completed the project now, it is expedient to immediately set the process of using it in motion to help the State improve its transportation administration and also generate revenue,” he stated.

Kogi approves 1.4bn for Accelerated Agricultural Development Scheme Victoria Nnakaike, Lokoja

o g i S t a t e government has approved the sum of N1.4 billion to ensure the smooth take-off of the state’s Accelerated Agricultural Development Scheme for the development of cassava production. This was disclosed

recently during an executive council meeting held at the government house in Lokoja which was presided by the chairman of the council and the Governor of the state. The said the state has resolved to use agriculture to navigate through the impending economic challenges as a result of the COVID-19 pandemic ravaging the world. www.businessday.ng

According to a press statement issued by Kingsley Fanwo, the Commissioner for Information and Communication it stated that the council has also approved to revise the state’s 2020 budget while charging the economic team to swing into action. “The budget has been cut to N102 billion from the initial N176 billion passed into law.

The move was to embrace the reality of the global economic downturn and to enhance budget performance,” the statement said. “The governor also approved the deployment of the Kogi Open Governance and Accountability System. The system is to be operated and managed by the Kogi State Ministry of Information and Communication.”

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Life after COVID 19: A note of solidarity to the microfinance industry (2) Small Business handbook

Emeka Osuji

his is a continuation, and the final part of the piece we contributed last week, which sought to give some moral support to our friends in the microfinance industry. The times have been hard long before the pandemic. Needless therefore to say how they are today. The entire world is on stop! That cannot be a passing event. The microfinance industry in Nigeria has faced major disruptions over the past several years as insurgency, spreading from the North Eastern part of the country, is gradually sipping down south and sideways to other parts of the north. It is therefore appropriate to infer that the industry has been walking a very tight rope and now has limited breaking strain. What the pandemic has done, to say the least, is to add salt to an open wound and make a bad situation worse. The last point I raised last week was on the need to control expenses

– cost containment; effective cost containment. Being able to bring costs under control is very important at this time; not only because no fresh money is about to be made but because the one in the kitty is vanishing through inflation that is about to have multiple births. This subject has been of interest to me over the past several years. Perhaps this is the most appropriate time to reemphasise it again. Without doubt, every coin hast two sides. Making money and Saving money or reducing expenditure serve the same purpose. They both help to ensure the company meets its obligations at all times. Therefore, cost minimisation is another route to financial stability or the fair side of revenue maximisation. Sadly, many people, as well as institutions, public and private, somehow strangely, and not just the operators in the microfinance industry, find this simple concept hard to accept. Even our national and subnational governments find it so hard to embrace cost containment, despite evident signs of revenue instability and a likely worsening of the fiscal position of governments across the nation. If your income falls and you can no longer make as much money as before, the wise thing to do is to look at your expenses – not just a look but a good hard look. In controlling cost, especially at a time like this, care must be taken not to inflict permanent damage on the business. Cost containment badly implemented has

counterproductive effects. Properly executed, it has been proved that cost containment efforts have many advantages and unintended positive fallouts or consequences. They often lead to the discovery of more effective ways of reducing waste not directly related to cash. Effective cost containment efforts may also lead to better ways of blocking, reducing and combating corruption. For public institutions, especially in developing countries where the integrity of the pay roll and, by extension, the wage bill, is often in serious doubt, cost-containment diligently executed could lead to a reduction in the wage bill. This happens for a number of reasons including the discovery, blockage and eventual elimination of errors. Those seeking to cut costs often discover the real root causes of other negative influences on their costs, such as the now notorious phenomenon of “ghost workers”, which is rampant in public institutions in Nigeria. Ghost worker drain substantial revenue from the Nigerian pubic services. Unfortunately, even after they are discovered and “eliminated”, they mysteriously regroup and re-enter the payroll, drawing salaries every month. The bigger mystery is that we have hardly heard the true story of how ghost workers are recruited, documented and given all necessary pass to the pay roll. In the public service, we always read of how ghost workers are discovered and elimi-

‘

In this regard, while the wage bill may be an important cost element, it should be approached with care. A cut in the wage bill is necessary but not all categories of staff should make the same level of sacrifice

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

The selfish that’s good

s the head of the electricity committee in my residential estate’s association, receiving praise and commendations for what fellow residents regarded as a job well done, by ensuring our electricity service provider lived up to its commitments to us, was quite a common occurrence. As much as I enjoyed all the encomiums poured on me for the little contributions to making things work as they really should; and I won’t lie, I very happily lapped up all the praise, it was often tinged with a little bit of guilt too. Not because I wasn’t as diligent as people believed I was; and the hapless Undertaking Manager, who my itchy fingers were ever ready to call will certainly vouch for the diligence with which I carried out my duties. Any little fault or even suspicion of a fault and I was on her like plaster on skin. I can confidently bet that she must have had regular nightmares of receiving phone calls or messages from Dapo Akande. Don’t blame me, I just can’t help it. I’m someone who can’t rest or take my mind off something that I want done until it’s been done. I get a real “bee in my bonnet” about things and can’t rest until the issue has been satisfactorily resolved or the repair has been done etc. I’ve often been compared to a Yorkshire terrier which relentlessly gnaws at your feet and ankles until you have no choice but to attend to it. Until then, it simply won’t stop. Back to the guilt. It’s because I knew I was doing it as much for myself as I was doing it for my fellow residents. No matter how it may have appeared to them, judging by the level of praise I received, my motive wasn’t entirely altruistic. It was a matter of enlightened self-

interest, which many of the ancient ethicists believed is the most ethically sound, as it ensures you don’t damage your own interest in the process of doing good for others. As a Christian who believes in acts of selflessness, I may not entirely agree with this but still, only the foolhardiest would disagree that enlightened self-interest is a vital ingredient to making the world go round. It is arguably the most important stimuli to making things work, whether it be amongst a group of friends with disparate interests, an organisation or a society. At this juncture, I will like to point out that there is a school of philosophical thought which argues that no action is ever truly selfless. They hinge their position on an observation that everyone gets something out of any action taken. Yes, they agree that the agent may not enjoy any form of material reward, whether this be pecuniary or otherwise, but the proponents of this position argue that the reward the agent seeks may just be the euphoric feeling he gets, knowing he has done someone a good turn. For some, that may be all they need to put a smile on their face when they go to bed at night and to such a person, no other form of reward can come close. It may therefore be argued that they too got the reward they wanted. I would rather leave it to my seniors to decide if this is right or wrong but the challenge it poses to conventional thinking certainly deserves more than a passing thought. To continue with the pragmatic virtues of enlightened self-interest, it is believed that without it, there would be very little incentive to do what’s good for anybody but yourself, because man, by the nature he adopted, is unapologetically self-centred. If it doesn’t

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serve his interest also, at the very least, you can forget it most of the time. He will always place his interest first. I say “adopted” because I don’t believe this is how we were from the beginning. I base this not just on my modest knowledge of what the Good Book says but also on the little enlightenment gained by way of experience. No need to raise your hands but, is there anyone out there, who after sacrificially lending a helping hand to another, found himself or herself overcome by an emotion which words fail to adequately describe? Though these may still come a little short in capturing that unique feeling; words such as fulfilment, utterly gratifying, satisfying, the purest of joy, come to mind. It’s a type of joy which can never be evoked through acquisitions or any material gain. It wells up from deep within and envelopes you completely. Created in the image and likeness of a God who’s the ultimate giver, so were we originally created to be too; giving. And that’s why when we periodically “return” or yield to this nature, nothing compares to how good it makes us feel. I believe I’ll be speaking the mind of many when I say there are few things in this life that lend this life as much meaning or cheer one’s heart, as much as when one puts a broad and sincere smile on the face of another. The feeling one gets from this is priceless. The sooner we recognise the supremacy of cooperative selfishness over crude selfishness, the better. This insight would teach you to back down from insisting on your own way because if you don’t, another time will come when others will do the same. It’s really just a common sense approach which doesn’t take a Professor to recognise but sadly, our inherent selfishness just doesn’t allow us to

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nated but we have never heard of any “paymaster” being queried talk less of being jailed for this crime – one of those uniquely Nigerian phenomena. In this regard, while the wage bill may be an important cost element, it should be approached with care. A cut in the wage bill is necessary but not all categories of staff should make the same level of sacrifice. A graduated pay cuts that recognises that lower levels of staff have little or no savings to fall back upon works. Such staff could be saved entirely from salary reduction. After all, how much do they really earn. A cut in their pay may not make any meaningful contribution in shoring up revenue but will impact heavily on morale. Look for the big fishes and give them a haircut. They will absorb it better. But take my words, if you do it without consulting them, do not say I advised you. Consultation is the first step to dealing with “matters that touch the heart”. Pay cut is one of them. Nigeria is currently served by 907 microfinance banks that were in operation as at December 2019, with most of them (330) located in the South West. This is a far cry from the 1008 operators in existence in 2018. We have therefore experienced considerable attrition and should as much as possible prevent more of such.

Character Matters with Daps

Dapo Akande

see the obvious. More advanced nations have long recognised this and the near perfection attained through centuries of practice has all but successfully masked, in many instances, cooperative selfishness as selflessness. Ethics, contrary to the belief of many people is not morals in itself but the study of morals and human conduct. It seeks to set the standard to which human conduct should conform. It concerns itself with the standard of behaviour that we should institute and entrench as our collective values, for our collective good. I make bold to aver that the primary purpose of ethics is to evolve a more just society. It has as much to do with guiding those in governance to lead by example, by treading the path of good moral judgement as it does with establishing codes of conduct that would make for healthy business relations and morally sound transactions in the corporate world. Changing the nation...one mind at a time. Akande is a Surrey University graduate with a Masters in Professional Ethics. An alumnus of the institute for National Transformation and author of two books; The Last Flight and Shifting Anchors. Contact: dapsakande25@ gmail.com

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Before the next loan syndication wave arrives Tonna Ejiofor

n 2011, as I summarised my article on “Missed Milestones of the Nigeria Power Sector”, published in BusinessDay, I put forward the conclusion that syndicated loans will underpin the long-term future of Infrastructure Financing in Nigeria. A syndicated loan is offered by a group of lenders who work together to provide credit to a large borrower under common terms and administered by a facility agent. At the time the referenced article was published, the whirlwinds of the global financial crisis had begun to settle. A few years later, the Nigerian debt market executed and closed the largest wave of syndicated loans ever witnessed in Nigeria. Most of the syndicated loans closed were driven primarily by three events: (i) the 2013 privatisation of the successor companies of the Power Holding Company of Nigeria, (ii) the second round divestment by Shell Petroleum Development Company (SPDC) of onshore Oil and Gas assets on the back of increased militancy and a deliberate strategy by SPDC to push further offshore and (iii) concurrently, Dangote and MTN initiated robust greenfield and brownfield expansion projects. Specifically, between 2013 and 2015, up to 15 syndicated loan facilities achieved financial close driven primarily by the above policies and initiatives. These deals were mostly structured as Project Finance transactions whereby lenders agreed to rely on the free cash flows to be generated by the projects as the primary source of repayment of the loan facilities. Although it is usual to find most syndicated loans being structured as Project Finance deals on the back of Special Purpose Vehicles (SPV), it is imperative to mention that direct lending to the corporate is not unusual

and indeed, works quite well. It depends on the nature of the project to be executed, the contemplated financing structure and the financial standing of the corporate. However, Nigerian banks have consistently shown preference for Project Finance structures on the back of SPV’s and the strong backing by the corporate in the form of corporate Guarantees. Essentially creating a “limited recourse” to the corporate. Project Finance literature have debated (and still debate) the concept of limited recourse vs non-recourse. But that is a matter for future discussion. As the “loan syndication wave” swept through the Nigerian debt market between 2013 and 2015, the balance sheets of Nigerian banks soared. Every bank wanted a ticket no matter how small. Lead banks developed novel structures to mitigate all perceived risks. In Africa, South African banks - Standard Bank, Nedbank and RMB led the charge. Although Nigeria had emerged the leading African syndicated loan market by 2014, International banks had a different view and opted not to participate on most of these deals but instead, pushed for “Structuring Bank” roles. The rationale for this strategy was obvious. By the end of 2015, the African syndicated loan market had grown from $11.3 billion in 2010 to $27.7 billion in 2015 with Nigeria maintaining 40 percent of the wallet (Bloomberg data). Unfortunately, within 24 months, most of these facilities had to be restructured as the assumptions and revenue drivers faced serious headwinds. In addition to the Oil Price crash of 2016, most of the Oil & Gas loans had challenges achieving base case production projections. Likewise, the liquidity challenges of the Nigeria Electricity Supply Industry since the 2013 privatisation has been well documented. Battered, Nigerian banks retreated from syndicated loans. However, as most of these syndicated facilities have now been successfully

restructured, the terrain is ripe to reflect on some of the other “non-market factors” that threatened the long-term sustainability of syndications in Nigeria. It is important to reflect on the core principles of syndicated facilities in the context of future syndications and the long-term credibility of the syndicated debt market in Nigeria. Without a doubt, the post syndication wave debris included corporate governance matters. Matters that conflicted with globally accepted principles of syndicated facilities and threatened to, once again, expose the Nigerian penchant for doing things differently. It is therefore pertinent to reflect on some of the mistakes 2013 – 2015: No prices for the largest ticket: Spread the risk Although some Nigerian banks have the expertise and the balance sheet to solely write tickets of between $150 - $250 million, it is prudent to share the financing risk. A well-structured syndication helps manage the financing risk associated with projects. When evaluating your participation ticket, Nigerian banks should develop a methodology. Of course, yield and voting rights should be somewhere in the mix but definitely not “ego”. There should be more strategic reasons for writing the largest ticket. Read the facility agreement: One of the core principles of a syndicated facility is that all the participating banks have to sign up to a single agreement. Unlike a bilateral term sheet or loan agreement, the syndicated facility agreement is drafted - typically by the lenders’ legal counsel - from the prism of a group of lenders working together to advance a loan to a borrower. Under the circumstances, there is a tendency to assume the lead bank will read it with a “fine tooth comb” and herd everyone else in the right direction. This has been a dangerous assumption, particularly for lenders with smaller tickets. As with all contracts, it is expected that all parties

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As most of these syndicated facilities have now been successfully restructured, the terrain is ripe to reflect on some of the other “nonmarket factors” that threatened the long-term sustainability of syndications in Nigeria

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Ejiofor is the Head of Debt Solutions at FBNQuest Merchant Bank Limited Tonna.ejiofor@fbnquestmb.com

COVID-19: Strengthening West Africa’s fragile food ecosystems!

t has only been a few weeks since governments across West Africa ordered partial or complete lockdowns in response to the COVID-19 pandemic, and already the region’s fragile food ecosystems are suffering. There are disruptions of supply chains, challenges transporting produce from farms to markets, restrictions in movements between states and countries, rising unemployment, and reductions in remittances from the diaspora. Food prices have risen by 10 to 50 percent in Nigeria and other countries have faced similar trends. Despite the efforts of government agencies, private sector, faith-based, community and non-profit organisations to feed the most vulnerable, many families remain hungry. In fact, the Economic Community of West African States (ECOWAS) estimates that the number of people at risk of food insecurity and malnutrition will rise from 17 million to 50 million between June and August 2020. Many global experts have underscored that this pandemic is a 12-18-month battle and that the world should expect future pandemics and shocks linked to climate change and other crises. As a result, there is an urgent need to transform and strengthen our food ecosystems so that we are better prepared to keep people nourished going forward. We can start by taking these four critical steps. First, we urgently need reliable and credible data. Just like the medical community is instituting systems and structures for effectively

allocating ICU beds and ventilators, we must leverage technology to accurately track the supply and demand for food in our cities and our countries. In addition, we need to collate data on the activities of input providers, urban and rural farmers, importers, aggregators, processors, wholesalers, distributors, retailers, cooks, caterers, restaurants, and food banks. We also urgently need to register and monitor our vulnerable populations, especially those under 5 and over 60 years-old, leveraging the vast branch networks of our financial institutions, post offices, community health care centres and faith-based organisations. Understanding where there is an abundance or shortage of food, and who needs it most will enable actors to design and implement rapid and effective interventions to meet the urgent needs. It will also compel our policy makers to continue to recognise stakeholders across the sector as essential workers and enable the free flow of inputs, produce and processed food. Second, all actors in the food ecosystem need to collaborate by sharing information across value chains and between sectors. This is especially critical during times of crises, given the irrational behaviour of actors around hoarding and price gouging that is often fostered by fear or misinformation. Similarly, data on the excess capacity in restaurants and catering facilities will enable a more coordinated and cost-effective response towards the distribution of food to the most vulnerable populations. In addition, we need centralised databases that match the numerous interventions attempting

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to feed the masses, with the biggest pockets of need. This would significantly address the mass movement of the unemployed to higher income communities where they believe they can find food and minimise the rising rates of unrest and crime. BeatingCorona.ng is one exciting attempt to address the information asymmetry. It outlines the different public, private, and non-profit COVID-19 initiatives being deployed across Nigeria and where needs still exist. Clearly, we must strengthen our industry and sector associations and encourage them to leverage technology and create incentives for collaboration and widespread information sharing. Third, we need to re-organize the places where people go to buy and eat food. Currently, the food distribution mechanisms in cities and towns do not allow for social distancing and even foster the quick spread of diseases. Addressing this major challenge will require the establishment of clear guidelines and protocols by governments, working in close collaboration with the leadership of market, retail, and food service associations. These protocols must stipulate the mandatory use of face masks, the provision of automatic handwash facilities at the entrance points, clear schedules to control crowds and mechanisms for managing waste. In addition, we must invest in extensive consumer education to ensure behavioural change and to foster compliance. Finally, we must support small and medium-sized enterprises in the agriculture and food landscapes to redesign their business

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take time to read the Facility Agreement and get comfortable with all clauses. The facility agents’ role is not fiduciary: During the restructuring and refinancing exercises undertaken post the syndication wave of 2013 – 2015, it was common for lenders to ask the Facility Agent’s view on controversial matters or general discussion points. In most cases, the Facility Agent declined to comment. Lenders interpreted this silence in different ways. It is worth clarifying that the Facility Agent in a syndicated loan serves as a link between the borrower and the lenders and owes a contractual obligation to both the borrower and the lenders. The role of the Facility Agent to the lenders is to provide them with information that allows them to exercise their rights under the syndicated loan agreement. However, the Facility Agent has no fiduciary duty and is not required to advise the borrower or the lenders on legal, technical or other related matters. The agent’s duty is mainly administrative. Keep to transaction timelines: The arranger would typically communicate a transaction timetable as part of the syndication package. Most times, the timetable is driven by a larger project schedule which is agreed between the borrower and a counter party. For example, advance payments to be made to an offshore Original Equipment Manufacturer. To the extent the timelines advised by the arranger would be challenging, participating banks should engage the arranger accordingly as delays achieving financial close could jeopardise some of the assumptions driving the project. A precursor for a restructure / refinancing.

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Ndidi Nwuneli models to ensure resilience to shocks. This will require that they leverage technology, innovations, and data to enhance their productivity and agility. Nourishingafrica.com has stepped up to help SMEs across Africa during this tough time, by providing access to financing, data, training, and support to ensure that they reposition themselves to create value and fill critical gaps in the food ecosystem. In addition, these SMEs need an enabling policy environment, and strategic and tailored financial support to enable them to survive and thrive beyond COVID-19. This pandemic is an urgent wake-up call for the West African food and agriculture landscape – to invest in data, collaborate, re-organise, and rebuild! While I recognise that fixing our food ecosystems will be difficult, given the complexity, and largely informal nature of operations within the sector, I am convinced that none of us will survive the fall out of COVID-19 if we continue to ignore this urgent need. Nwuneli is a social entrepreneur based in Lagos Nigeria. She is the managing partner of Sahel Consulting Agriculture & Nutrition Ltd, CoFounder of AACE Foods and Founder of LEAP Africa. She is currently a fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School where she is writing a book on “African Entrepreneurs Nourishing the World.”

Wednesday 29 April 2020

BUSINESS DAY

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Protecting Nigeria’s entrepreneurial future Eloho Gihan-Mbelu

e all want a swift end to this crisis. In the midst of a global pandemic, there is, of course, the immediate task of securing public health, and supporting the most vulnerable in society. The second urgent task is securing private enterprise, specifically the SMEs, high-growth start-ups and scaleup companies that are the custodians of Nigeria’s economic future. 42 million MSMEs underpin around 60 million jobs, at last count by the NBS and SMEDAN. By some estimates, 30 percent of those jobs could be wiped out by business failures due to COVID-19. 99 percent of MSMEs are sole proprietorships, often with no employees and little formality. They can be supported through the existing conditional cash transfer system for households. However, the most productive of the MSME segment, the employer firms, cannot. Employer firms are critical, not just for the capacity of our nation’s response to the immediate health crisis, but also for the pace of our economic recovery on the other side. In a moving recent diary article

for the Financial Times, Ken-Ofori Attah, Ghana’s finance minister, described the coming recession as a “long winter, even a mini ice age”, with two to three years of downward momentum before a recovery. The significance of the private sector’s capacity to respond to the COVID-19 challenge is evident in big business initiatives like the CACOVID fund, but also in startups like Lifebank, that crowdfunded donations to pilot our nation’s first COVID-19 mass testing centre with NIMR. Through the COVID-19 Innovation Challenge, seven tech start-ups are now working with the NCDC to support its efforts to contain the virus. Nigeria cannot afford to lose a generation of thriving small businesses, high growth start-ups and scaleups to COVID-19. NITDA has already constituted an advisory committee to make recommendations to cushion the impact for tech and tech-enabled businesses. There is concern that 80 percent may not survive. 75,000 SMEs, high-growth startups and scaleup companies make a disproportionate contribution to our economy. They are drivers of innovation and capital accumulation, growth engines for high-quality jobs, and wealth creators. They inspire millions of young people to consider meaningful futures as high-impact entrepreneurs, and COVID-19 threatens their existence.

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If we are to save as many small businesses as possible, this urgent imperative goes beyond the government

These entrepreneurs will face cost pressures, liquidity issues, supply chain challenges, bankruptcies, closures and job losses. Their companies are nimble enough to adapt quickly, and their ambition is audacious enough that they will not give up. They only need a fighting chance. Three things are critical: preserving business liquidity, protecting their employees, and stimulating demand. Their businesses will need to shore up their balance sheets and build enough resilience into their teams and operations to bounce back quickly in the recovery. In the entrepreneurship ecosystem, we (rightly) make distinctions between the financial profiles of traditional SMEs, on the one hand, and high-growth start-ups and scaleups, on the other. Tech start-ups and scaleups are sometimes growing their revenues so quickly that they are yet to make a profit, but they are the key to Nigeria’s digital future. A smart stimulus package must consider their very different financial profiles, and complementary roles, in a vibrant economy. A healthy stimulus for 75,000 small businesses would run into hundreds of billions of Naira. The CBN has announced a N50 billion credit facility for SMEs and households, but this isn’t wide enough or deep enough. In times of crisis, the stimulus toolkit should include a mix of grants, debt & equity, loan forgiveness, government guarantees,

and tax incentives & write-offs. As our central bank and finance ministry negotiate fiscal support with the IMF, World Bank, multilaterals and other governments, it will be important to keep issues affecting this community firmly on the agenda. There will be opportunities not only to raise cash, but to seek concessions that favour them. With a limited purse, support must also first go to those businesses facing direct disruption to revenues and cash-flows due to COVID-19, and which were otherwise healthy. If we are to save as many small businesses as possible, this urgent imperative goes beyond the government. It extends to big business, and private sector custodians of capital, including banks, large corporate, institutional investors, HNIs, family offices, philanthropies and nonprofits, that share a common interest in securing the vibrancy of our future economy. The business community needs to organise to provide a structured support program for SMEs, start-ups and scaleups, including liquidity loans, small grants, bridge financing to stalled equity raises, and hybrid instruments. They will also need experienced business advisory and mediation support. We must act quickly to protect a generation of Nigerian businesses. Gihan-Mbelu is the Managing Director & CEO of Endeavor Nigeria.

After the pandemic

e are living in the most uncertain times for humanity since the Second World War. It is not an exaggeration to imagine that just like the immediate aftermath of that seminal global catastrophe resulted in a fundamental re-ordering of world affairs, the post-pandemic world order will be a radically altered one. Obviously, the immediate and most important question that is occupying the minds and efforts of global leaders and citizens everywhere is that of surviving the present crisis. This is exactly as it should be. The pace and extent of the rapid response efforts being deployed globally have been impressive to observe, a testament to the underlying survival instinct and fundamental goodwill of humans everywhere. But not all fingers are equal. Some response options (ranging from a trillion-dollar economic stimulus programs to universal cash hand-outs and rapid roll-out of hospital infrastructure) are simply not feasible or available to the leadership and people in the poorest parts of the world. Substantially all the countries in Africa fall into this latter category, and it is not yet clear what the credible paths to containment, mitigation and widespread treatment availability will be for us on the continent. As I am not a healthcare expert or medical professional, I will refrain from sharing any views on the response options for dealing with the public health crisis triggered by this pandemic. However, I am optimistic that a credible path forward will be discovered and implemented soon enough, deploying a mix of the more accessible response tools being developed and utilised everywhere in the world (testing, masks, sanitary practices, social distancing, therapeutics and ultimately vaccination). One thing that is already clear however, is the emerging scale of the unprecedented damage

that this pandemic has wrought on the global economy. Here in Africa, where we are still largely sustained by commodity exports while struggling to develop globally competitive local production capacity, the impact will be even worse. For millions of Africans already living in extreme poverty or struggling to make ends meet, the economic consequences are not abstract, but a matter of life and death. It is therefore useful for leaders and citizens alike to begin thinking about what the most appropriate policy responses should be, and what kinds of international economic partnerships we should be advocating for. Already, talk is rife about debt forgiveness, write-offs or moratoriums on outstanding sovereign loan and bond obligations (ostensibly to provide African governments with some fiscal headroom to address the crisis). Some of the ideas being promoted are complex and quite involved to implement, with potential adverse consequences for sovereign credit ratings, future financing costs and international geopolitical rivalry. But beyond historical sovereign debt, there is another (possibly more important) issue to consider, and that is enhancing the future capacity of Africa to maintain its access to international capital for development. We already have a sense for the significant damage that is being done to trade flows, business conditions and fiscal balances in our economies. How are we going to maintain Africa’s capacity to attract desperately needed international capital and expertise in these difficult times to come? This is one of the most important questions that must be answered, if Africa is to meet the challenge of the post-pandemic era. The good news is that there is no shortage of potential solutions. The key issue is for African leadership and citizens to rally around the best ideas. As someone working in infrastructure fi-

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nance, I can think of no better method for creating a massive post-pandemic economic stimulus in Africa (and catalysing a boon in private investment and employment) than bringing to life an ambitious program of international aid for African infrastructure development. The critical infrastructure projects that need to be built in Africa (hospitals, dams, potable water and sanitation, roads, irrigation systems, power plants, pipelines, seaports) are already well-known. However, the fiscal wherewithal and organisational capacity required to implement them are probably now at an all-time low. What if this global crisis were to result in a rare convergence in international goodwill (alongside unprecedented financial generosity) and local political commitment to cut through the normal bureaucratic obstacles (on both sides) to implementing such projects? Africa cannot (by itself) carry the financial burden of development in these difficult times, whether as sovereign governments or individual citizens. Further, under current conditions, foreign investment will simply not bridge the gap. International support must be actively sought. But the form of support is also important. Handouts and concessional loans to governments have not really served us best in the past and are unlikely to now become efficient service delivery mechanisms under present circumstances. There is however one established approach that has worked with great efficiency in the past and with strong advocacy, might be easily re-purposed to meeting the current challenge. Export credit insurance from agencies backed by the sovereign credit standing of wealthy foreign governments has proven to be an effective mechanism for transferring long-term, international private capital, technology and operational expertise into the successful delivery of projects in Africa. Clearly, the historical raison d’etre of

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Fola Fagbule these (essentially) policy institutions has been for the promotion of exports, technology and services from rich foreign countries to be purchased by developing market sponsors. Yet, the same private-sector led project financing rigor upon which ECA financings depend might be applied to an ambitious new policy objective: securing massive foreign aid (rather than debt) in direct support of high-impact infrastructure projects in Africa, in response to the economic consequences of an unprecedented global pandemic. After the current chaos, a new world order will emerge. Africa must be proactive in forming the international diplomatic partnerships necessary for advocating its best economic interests in this re-ordering of global affairs. Humanitarian aid to meet the immediate public health and disaster relief challenge is important, but it will not be enough. Relief from past debt burdens is a noble idea, albeit with potentially problematic consequences. A private-sector led, policy-backed framework for coordinating transfer of large amounts of private capital alongside significant technological expertise into Africa from the developed world already exists. Should African leaders not be leading the political and diplomatic advocacy to repurpose this critical tool for kickstarting the post-pandemic recovery? Fagbule, is Senior Vice President, Africa Finance Corporation. His Twitter handle is @folafagbule

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BUSINESS DAY

Wednesday 29 April 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun

Interrogating our low baseline demographic and health data Enables preparation for the turbulence ahead

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

s Nigeria stands at a strategic inflexion point concerning health, demographics and economics, it is critical to take a second look at our baseline indicators. The federal government yesterday decided on the lockdowns in a manner that may have positive or negative consequences for the economy, our health and demographic indicators some months and years down the line. We should know where we stand, where we are coming from and how to go henceforth. One significant resource is the National Demographic and Health Survey (NDHS). The 2018 survey is the sixth since 1990 and the latest available. The NDHS provides reliable estimates of demographic and health indicators. It covers health as well as socio-economic indicators such as fertility levels, marriage, sexual activity, family planning, breastfeeding practices, nutrition, childhood and maternal mortality, maternal and child health, malaria, domestic violence, disability, and female genital mutilation. The belief is that the information “is essential for programme managers and policymakers to evaluate and

design programmes and strategies for improving the health of Nigerians.” The survey claims “a nationally representative sample of 41,821 women age 15-49 in 40,427 households and 13,311 men of age 15-59 in one-third of the sampled households”. It is a response rate of 99 percent of women and men. “The sample design for the 2018 NDHS provides estimates at the national level, for six zones and 36 states and the Federal Capital Territory (FCT), and urban and rural areas”. There are vital socio-economic indicators of interest in the survey. Only three percent of Nigerian households have health insurance, a telling sign of the absence in Nigeria of a strategic tool for health funding. Nigerian families have an average size of 4.7 members, with women heading 18 percent of them. That means women run one in five homes. Forty-six percent of the population is under 15 years. NDHS 2018 claims that 66 percent of Nigerian households access improved drinking water: 78 percent of urban dwellers and 58 percent of rural dwellers. Sanitation levels are high at 56 percent, but 25 percent engage in open defecation, and another 20 percent utilise low-quality facilities.

The neonatal mortality rate is 39 deaths per 1,000 live births. At these mortality levels, one in every 8 Nigerian children does not survive to their fifth birthday. Childhood mortality rates have declined since 1990. Infant mortality has decreased from 87 deaths per 1,000 live births in 1990 to 67 in 2018. Similarly, under-5 mortality dropped from 193 to 132 deaths per 1,000 live births. Only 31 percent of children age 12-23 months have received all eight essential vaccinations—one dose each of BCG and measles vaccine and three doses each of DPTHepB-Hib and polio vaccine. Less than half of children have received the third dose of polio. Nearly one in five children have received no necessary vaccinations. “In the two weeks before the survey, three percent of children under five were ill with symptoms of acute respiratory infection (ARI) such as chest-related short, rapid breathing and difficulty breathing. Parents sought treatment or advice for 75 percent of them. Thirteen percent of children under five had diarrhoea in the two weeks before the survey. Diarrhoea was most common among children in Bauchi (34 percent) and Gombe (35 percent) states and children age 6-11 months and age 12-23 months (both 20

percent). While half of the children under five with diarrhoea received ORT, 17 percent received no treatment. Nearly one-quarter of children under five with diarrhoea received ORS and zinc (23 percent). Only 59 percent of households in the country can access electricity. Forty-eight percent of men and 40 percent of women have secondary education on a national aggregate. While secondary schooling is common, the next most significant number belong to those who did not go to school. Thirty-five percent of males and 22 percent of females belong here. The other way of looking at it is the survey result of 72 percent male literacy and 53 percent of women. Internet usage is at 35 percent for men and 16 percent for women. Internet usage is an important indicator currently with its significance set to rise in the post-covid19 era of social distancing and online interaction. The numbers here have to scale up if Nigerians would play well in that dispensation. Baseline data such as this would be critical parameters for assessment as we struggle to contain and then overcome COVID-19 and commence the management of our social, demographic and health status.

HEAD, HUMAN RESOURCES Adeola Obisesan

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

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Wednesday 29 April 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

BANKING

ETI sees 20% decline in Q1 profit on higher financial asset impairment charge SEGUN ADAMS

an-African lender Ecobank Transnational Incorporated (ETI), the Lome-based parent of Ecobank Nigeria Ltd has announced a profit after tax of $67.49 million in Q1 2020, 20% less than for the same period last year after a noticeable increase in an impairment charge on financial assets. In naira term, profit decline 19% to N24.69 billion, the bank said in its financial report to the Nigerian Stock Exchange (NSE) on Monday. The decline in profit was due to a 47% increase in impairment charges on financial assets to $42.23 million (N15.45 billion) although this was due to lower recoveries in the quarter while impairment losses on loans and advances and other financial assets declined. In dollar terms, Gross earnings for ETI down 3% to $532.5 million (in naira terms down 2% to NGN 194.9

billion) while Revenue rose 1% to $392.7 million (up 2% to NGN 143.7 billion). Net Interest Income of the lender rose 21% to $209.34 million after interest expenses dropped 13% and interest income grew

by 5% in the period. On the other hand, Non-interest revenue suffered a 15% decline to $183.3 million following a 12% decline in fees and commission income, 16% decline in net trading income which offset a 21%

ort concessionaires under the aegis of the Seaport Terminal Operators Association of Nigeria (STOAN) have collectively donated the sum of N700 million to the Federal Government to support the country’s effort to contain the spread of the coronavirus disease (COVID-19). Vicky Haastrup, STOAN Chairman, who disclosed this in Lagos on Monday, said no effort should be spared towards curtailing the pandemic. “The world is facing its worst health crisis in more than 100 years. This fight is not for the Federal or State Governments alone. The virus is an enemy that all of us must join hands to fight. I commend government and the Nigerian Ports Authority (NPA) for rising up to the challenges posed by the pandemic, and I pray that very soon, we will all sing songs of victory. Nigeria will triumph; humanity will triumph against this virus,” she said. According to Haastrup,

pense also rose 1% to $259.3 million. Operating profit before impairment losses and taxation in the quarter was 2% higher at $133.35 million. Profit before tax down 12% to $90.3 million (down

L-R: Maryjane Ogeah, personal assistant to the managing partner, Zenera Consulting; Meka Olowola, managing partner, Zenera Consulting; Monday Eze, Zenera Pro Golfer; Bekeme Masade, chief executive, CSR-in-Action, and Idongesit Edet, client service manager, Zenera Consulting, at a reception for Eze upon turning pro-golfer in Lagos.

Terminal operators’ donations to COVID-19 relief fund hits over N700m MODESTUS ANAESORONYE

decline in fees and commission expense and a 46% growth in other operating income. This resulted in a 1% growth of operating income to $392.66 million for the quarter while operating ex-

APM Terminals Apapa Limited; ENL Consortium Limited and Apapa Bulk Terminal Limited (ABTL), all operating at the Lagos Port Complex, Apapa, donated N150 million; N70 million and N10 million respectively to the COVID-19 Relief Fund Account at the Central Bank of Nigeria (CBN). She further stated that the Port and Terminal Multiservices Limited (PTML) and TinCan Island Container Terminal (TICT) both at the Tin-Can Island Port Complex donated N100 million each while Port & Cargo Handling Services; Five Star Logistics, and Josepdam Port Services, who are also operators at the Tin-Can Island Port Complex, donated N75 million; N75 million and N60 million respectively. Haastrup also said that West Africa Container Terminal (WACT), Onne Port donated N50 million, while ECM Terminal, Calabar Port donated N10 million. She said terminal operators also made donations of various personal protective items such as face masks, hand gloves, coveralls, hand sanitizers and

infrared thermometers to the NPA, Nigeria Customs Service (NCS) and other government agencies at the various port locations across the country. “I thanked my colleagues for their support and generosity. The times are hard; shipping and port operations are badly affected by the pandemic but we cannot close our eyes to the needs of the society, hence we tasked ourselves and made this sacrifice,” she stated. While applauding Hadiza Bala Usman, managing director of NPA, and all other relevant stakeholders for sustaining port operations during this crisis, she noted that operations at the port were crucial to ensuring uninterrupted supply of food, medicine and other essentials to Nigerians. “We must also reiterate the need to stay safe. We must all take responsibility by following the guidelines and safety measures issued by the Nigeria Centre for Disease Control (NCDC) by maintaining social distancing, washing our hands regularly or using alcoholbased sanitizers and avoid large gatherings,” she added.

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11% to NGN 33.0 billion) while Profit after tax down 20% to $67.5 million (down 19% to NGN 24.7 billion). Total assets down 2% to $23.2 billion (up 4% to NGN 8,973.7 billion) with Loans and advances to customers down 5% to $8.8 billion (up 0.4% to NGN 3,396.8 billion), meanwhile Deposits from customers down 1% to $16.1 billion (up 5% to NGN 6,223.9 billion) and Total equity down 4% to $1.8 billion (up 2% to NGN 702.7 billion) Shares of the lender declined 2.17% to N4.5 on the Lagos bourse on Monday according to Bloomberg data. Ecobank Transnational Inc. is a bank holding company. The Company, through its subsidiaries and branches, provides a full range of wholesale, retail, investment and transaction banking services and products to governments, financial institutions, multinationals, international organizations, medium, small and micro businesses and individuals.

AVIATION

COVID-19: Delta Airlines records adjusted pre-tax loss of $422m for March quarter 2020 IFEOMA OKEKE

elta Air Lines has announced an adjusted pre-tax loss of $422 million for its financial results for the March quarter 2020 and outlined its response to the COVID-19 global pandemic. “These are truly unprecedented times for all of us, including the airline industry. Government travel restrictions and stay-at-home orders have been effective in slowing the spread of the virus, but have also severely impacted nearterm demand for air travel, reducing our expected June quarter revenues by 90 percent, compared to a year ago” said Ed Bastian, Delta’s chief executive officer said. “Delta is taking decisive action to prioritize the safety of our employees and customers while protecting our business and bolstering liquidity. I am especially proud of the incredible work the Delta people are doing to keep our nation’s airways open, playing an active role in the fight against the virus.”

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Bastian continued, “I would like to thank the President, members of Congress, and the Administration for their bipartisan support of the Payroll Support Program under the CARES Act, which recognizes the important role the airlines play in the U.S. economy. The Payroll Support Program will help safeguard Delta jobs while positioning our nation for recovery.” Response to COVID-19 The company expects June quarter total expenses to decline by approximately 50 percent, or $5 billion, over prior year due to reduced capacity, lower fuel and cost initiatives, including parking more than 650 aircraft and consolidating airport facilities, with temporary concourse and Delta Sky Club closures. The airline also plans to institute a company-wide hiring freeze and offering voluntary leave options with 37,000 employees taking short-term unpaid leave. The airline also plans to reduce salary expense through pay reductions for executive management and @Businessdayng

reduced work schedules across organization. Balance sheet, cash and liquidity Delta’s top financial priority remains preserving cash and enhancing liquidity. Accordingly, the company has taken the following actions: Raised $5.4 billion of capital since early March, including securing a $3.0 billion secured term loan, closing $1.2 billion in aircraft sale leasebacks, issuing $1.1 billion in AA, A and B tranches of our 2020-1 Enhanced Equipment Trust Certificates (EETC), and funding $150 million in private aircraft mortgages to enhance liquidity and satisfy maturing obligations. The airline also drew down $3 billion under existing revolving credit facilities and reduced planned capital expenditures by more than $3 billion, including working with original equipment manufacturers to optimize the timing of its future aircraft deliveries and deferring aircraft mods, IT initiatives, and ground equipment refreshment.

Wednesday 29 April 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

ECONOMY

Key takeaways from IMF Webinar on impact of coronavirus on markets & households OLUFIKAYO OWOEYE

General Outlook frica seems to be suppressing the curve so far. It looks like it might escape the worst of the pandemic, but will have to be cautious about it. The possibility of W Curve – i.e. There is a good chance of re-occurrence of the virus, which could see a possibility of regular lockdowns. Businesses need to plan accordingly. Capital would look for countries that are less battered. Western economies are badly battered while countries in Africa, etc are not so battered. Global Capital could flow there, if we can act efficiently to pull it. The Emotional and Economic backlash against China is expected. Already, countries and companies are working on strategy to pivot away from China as part of their supply chains. Japan Government has announced packages for its companies bringing back manufacturing home. Businesses need to keep this in mind and work accordingly. Discretionary Spending For individuals, health and safety will become top priority on their agenda from the 3rd of 4th place. There will be more spending on this area and reduction in other discretionary spends. The ticket size of spending will drop for a while. People will spend on cheaper goods than on expensive goods, or delay spending for a while. There will also be extreme acceleration in digital economy. I.e. Home education, home entertainment, home fitness, etc. Loyalty shock. People will be less loyal towards brands as other aspects will take over. People will switch brands faster due to various other concerns like safety, etc. General Trust deficit. There will be trust deficit amongst stakeholders like vendors, customers, employees, borrowers, banks, etc. Banks will have trust deficit with borrowers, companies will have trust deficit with suppliers, etc. Liquidity and Profit & Loss Segregate Good Costs and Bad Costs Good costs (Eg. Digitization, tech costs, digital marketing, best employees, etc) need to be insulated and protected. While bad costs (Eg. Fancy office, unnecessary spending, bad performers, traditional working methods) need to be ruthlessly eliminated. Don’t be emotional

about non-core businesses. Concentrate on core business. Be Frugal Not necessary to have fancy office, fancy cars, excess employee strength, etc. Remove all the flab and be lean. Maintain Good behaviour Do have a frank and open conversation with all stakeholders like suppliers, employees, etc and try to find the middle ground, so that the burden can be shared justly. Be Future Ready In this crisis, there will be winners and there will be losers. Those who re-orient their strategy will be winners. Government Stimulus. Economy was in poor shape even before Covid. The Government has little leeway to provide large stimulus. Government earns alot from taxes, with losses experiences how will this be pushed up? Inequality has already sharpened. The gap between rich and poor has further increased. Government needs to concentrate on mass health and mass welfare. If not, 40 million people could sink into poverty. Government t must explore printing currency (Quantitative easing), but there are limitations here. It has side effects like inflation, etc. Rich countries have more leeway for such quantitative easing. Government t must concentrate on grabbing more capital from outside and do reforms to enable that. Result of backlash against China Internationally, there could be an emotional and economic backlash against China.Businesses with supply chains passing through China will need to keep this in mind and insulate themselves and build alternatives. Africa and african businesses need to try to become the contract manufacturer of the world, just like China is. They need to make use of this opportunity smartly. All big wealth funds and soverign funds will be awash with Liquidity. This liquidity needs to be attracted. In every sector, there are good and bad companies. Management has to invest correctly in manufacturing and modern tech, be honest and fair to all stakeholders, etc., Those companies with good management and displaying good behaviour will come out victorious. Export Business African exporters need to build trust. They need live up to promises made. They need to deliver on time and deliver the promised quality. They shouldn’t make incorrect www.businessday.ng

promises just to get more business. Asian export business has built trust and a good reputation. Despite a chequered past (low quality, human rights issues, etc) they have managed to overcome and are winning. Wholesale, Retail More people will prefer to buy from retail stores where there is perception of safety (Eg. Sanitation, cleanliness, crowds, etc). They will move more towards malls away from markets. Many will move towards online stores. Wholesale suppliers also need to concentrate on such retailers. Customers also need to be ringfenced: A high end restaurants need to give high percentage of bill value as gift coupons to be used anytime upto December 2020. Car companies and mortgages should give buy back offers, incase the customer loses his job in the next one year. Pricing needs to be re-approached. People are looking for cheaper prices or cheaper goods. Brick & Mortar in Discretionary Spending Private academies could take a big hit in the near future. Entertainment could move home. Because of this, cafes and restaurants might see some increase in business. Many chains are implementing measures like social distancing like lesser furniture, etc, to build confidence to consumers. Smaller retailers need to send a message of safety. Eg: Have sanitisers, put up notice of no Covid positive employee found in the store, maintain social distancing, etc. Since travel and tourism will take a big hit, connected purchases will also shift. Purchases that happened abroad will happen at home. (Eg. Electronics, Luxury goods and apparel, etc.,). But travel related purchases will drop. Financial Markets There will be value destruction and value creation in different companies in the same sector. High Debt low margin companies will find it difficult. (indicates risky or unscrouplus management) High Debt high margin companies could be rewarded, but caution needs to be exercised. (may indicate sharp or dynamic management) No debt high margin companies are best rewarded now. Know more about the CEO and management and their actions and activities. New tech unicorns will be born. Those involved in cyber security, cloud services, online education services, etc.

L-R: Jubril Enakele, MD, Iron Capital; Oyinda Olaniyan, head of media, The Ben Enwonwu Foundation; Chijioke Uwaegbute, partner, Tax (West Africa), PricewaterhouseCoopers; Odunayo Sanya, executive secretary, MTN Foundation; Yvonne Ike, head Sub-Saharan Africa, Bank of America Merill Lynch, and Femi Akinsanya, chairman, First Ally Capital, at the 5th edition of the Point of View series hosted by The Ben Enwonwu Foundation in Lagos

L-R: Otto Orondaam, founder, Slum2School; Fregene “Chef Fregz” Gbubemi; Kemi Lala Akindoju, and Abubakar Suleiman, MD/CEO, Sterling Bank, at the FregzDucation Charity Fundraising Dinner in Lagos.

L-R: Wilson Erumebor, senior economist, NESG; Titilope Oni, head, Think Tank Operations, NESG; Ola Brown, founder, Flying Doctors Nigeria; Solape Hammond, SA to Lagos State governor on SDGs and Investments, and Yinka Iyinolakan, head, corporate communications, NESG, at a panel session at the 2020 Social Media Week in continuation of it’s ‘’Nigeria 2050: Shifting Gears’’.

L-R: Olayinka Oye-Bamgbose, representative of the ministry of wealth creation and employment, Lagos State, director for partnership; Abigail Ogwezzy-Ndisika, head of department, mass communication, University of Lagos; Nwamaka Onyemelukwe, public affairs, communications & sustainability manager; Olufunmilola Johnson, founder and CEO, Whitefield Foundation, and Adenike Josephine Coker, justice of Lagos High Court, at the launch of the SHAPE 2020 programme sponsored by The Coca-Cola Foundation in Lagos.

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@Businessdayng

Wednesday 29 April 2020

BUSINESS DAY

cityfile Covid-19: Gombe sends 700 almajiris to states of origin

Some street sweepers who benefited from Cycology Club’s gesture displaying their gifts.

Covid-19: Cycology Club donates to Eti-Osa isolation centre, Lagos street sweepers Joshua Bassey

ycology Club, a n o n - g overnmental organisation of like minds with common interest in cycling, has extended economic palliatives Lagos street sweepers, to cushion the harsh effect of the Covid-19 lockdown. The club also donated Personal Protective Equipment (PPE) to the Eti-Osa isolation centre located at the Landmark Centre, Victoria Island, as parts of its contributions towards sav-

ing lives already infected by the deadly disease. Food items extended to the street sweepers include 200 1kg bags of rice, beans, garri, salt and vegetable oil while 100 front line workers would benefit from the PPE donated to the isolation centre. Tunde Laoye, Captain of Cycology Club, explained the rationale behind the gesture: “We targeted the road sweepers because they are part of the essential workers. They’re out daily on the roads, exposing themselves to the risk of contracting the dreaded

Covid 19,” said Laoye. Also, Yejide Taiwo, Corporate Social Responsibility (CSR) secretary of Cycology, said the club reached out to the sweepers to encourage them this period of lockdown. “Community service is one of the key objectives of our club. We like to contribute randomly but especially in times of need. We recognise that we’re part of a community and hope these items can bring some relief in these times of hardship,” said Taiwo. She believed that the PPE donated to the Eti-Osa

isolation centre would go a long way in encouraging doctors and nurses designated to treat Covid-19 patients at the centre. The isolation centre was jointly set up by Lagos State government and Young Presidents Organisation (YPO). “We recognise that the virus can infect anyone but the front line workers are especially at risk. So we decided to extend our support at this trying time to them to protect them against contracting the virus while treating others already infected,” said Taiwo.

Oyo records 191 fire disasters in 2 months, loses 20 lives REMI FEYISIPO, Ibadan

total of 191 fire incidents occurred between January and February this year in Oyo state,Chief Fire Officer Moshood Adewuyi has revealed. Adewuyi disclosed that 266 calls were received between January 1 and April 20, with eleven of such as false alarm. He put the value of property saved within the period

under review at N767 billion while estimated loss was put at N375.4 million. On the efforts of the State Fire Service, Adewuyi said in 2019 alone, 567 fire calls were received with 44 of such being false alarms, while 18 lives were saved with 20 others lost. The chief fire officer regretted that “in many instances, carelessness of our people gave room for avoidable fire disasters. “Majority of these disasters are caused when peowww.businessday.ng

ple left electrical appliances unattended to. Also, many left cooking gas unattended to. Leaving such things unattended to caused many of the disasters that we have experienced overtime,” Adewuyi said. Speaking to journalists in Ibadan, he appealed to residents of the state to be cautious in handling cooking and electrical appliances to minimise incessant fire disasters. On the recent inferno at Dugbe commercial area of

the city of Ibadan, Adewuyi said a welder who was working close to where an inflammable content was kept, ignited the avoidable fire that caused business owners in the area to lose millions of naira to the disaster. He, however, urged people to stop the habit of using phones to record disasters, instead of making calls to appropriate places to alert them of the need to race to where disasters are taking place.

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ombe State government has sent 700 almajiris who are non-indigenes studying in Gombe State, to their states of origin across the 19 northern states. The state commissioner for education, Habu Dahiru, made this known while speaking with newsmen in Gombe on Monday. He said the first batch of 700 almajiris had been conveyed to their various states in the north in 60 buses accompanied by security personnel. Dahiru said that the almajiris were also given a covering letter to the ministry of education in their respective states. According to him, the decision of government is informed by the collective agreement of the Northern Governors’ Forum that all almajiris should be returned to their home state for better management. He said the 700 were the first batch and subsequently other batches

would follow as part of measures to curtail the spread of Covid-19. “We had a meeting with teachers of Islamic Almajiri schools in the state to let them know why the decision was taken. “Primary to tertiary institutions are closed in the country as part of measures to reduce the spread of the Coronavirus. Almajiri schools cannot be an exception,” Dahiru said. According to him, on Sunday, Nasarawa and Plateau States sent almajiris, who are Gombe indigenes, studying in their states back. “They were referred to the Taskforce on Covid-19 for necessary check up to ensure that they are in good health before taking a step further,’’ he said. Dahiru further said that they had received a phone call from Kano State government that they sent almajiris who were Gombe indigenes back home and they were waiting for their arrival.

Woman killed as building collapses in Ibadan

ne person was killed in a storey building which collapsed last Sunday at Onipasan area of Ibadan, the Oyo State capital. Spokesperson of the police in Oyo, Olugbenga Fadeyi, confirmed the incident on Monday. The deceased, it was learnt, was the wife of the owner of the collapsed building located behind Oluyoro Hospital. It was also gathered that the au-

thorities of Ibadan North East local government area evacuated the debris to retrieve the body of the deceased on Sunday. “I cannot say if there were other people in the building because I don’t have the details. What I know is that there was a collapsed storey building and a woman died. “The deceased is the wife of the owner of the building and she has since been buried,” the police said Fadeyi.

Kano: Speaker wants mass deaths investigated

peaker, Kano State House of Assembly, Abdulazeez GarbaGafasa has called on the state government to urgently constitute a committee of professionals to investigate the reported mass deaths in the state. In a statement by Ali Bala, director press to the assembly, made available to the media, the speaker, who visited some graveyards in the state, said there was the need to es@Businessdayng

tablish the truth of the reported mass death. He said it was necessary to ascertain the causes of the mass deaths in the state and also to find a lasting solution. He also appealed to the public to pray for God’s intervention in the Covid-19 pandemic in the country. The legislator further called on the people to abide by the medical professionals’ advice on preventive measures.

Wednesday 29 April 2020

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

5 ways to stimulate cash flow in a downturn EDDIE YOON AND CHRISTOPHER LOCHHEAD

usiness leaders have rightly focused on the most urgent issues regarding COVID-19, such as the safety of their employees and customers, and the security of their supply chains. The critical next step is to try to keep cash flowing by managing near-term revenue and expenses. Companies that successfully navigated prior crises pursued near-term cash-flow strategies that were both radically generous with customers and partners — and thoughtfully aggressive with near-term revenue and expenses management. To achieve this balance, leaders can take five complementary actions: — SECURE NEAR-TERM SALES BY TAKING RISKS WITH WARRANTIES, GUARANTEES AND RETURN POLICIES: Companies can secure near-term revenue by reassuring customers who are nervously navigating lots of uncertainty. Taking a risk with generous warranties and return policies can both calm nerves and close sales. — IMPLEMENT NEW REVENUE/PRICING MODELS: Companies should test new revenue and pricing models with their “superconsumers,” many of whom will gladly jump at the chance to secure goods and services they know they will want and need at a meaningful dis-

count. While the revenue must be recognized over time, this has cash flow, balance sheet and forecasting benefits. — ACCELERATE INNOVATION: Launch near-ready innovations in the pipeline now. Customers who may typically nitpick new innovation will now be grateful for new and improved products/services — even if they’re released before all the

kinks are worked out. — CUT “SACRED COW” MARKETING COSTS: Trim marketing costs that are suspected to not pay back but are too politically difficult to cut during better times. These are often hard-tomeasure marketing costs and/or are geared toward motivating distributors/channel partners more than consumers. — ENGAGE IN NEW KINDS

OF CUSTOMER ACQUISITION: Finally, companies should seek to acquire customers during this crisis. A great way is by strategically sampling. This is especially true of companies that sell intellectual property, like software, training and services. Mergers and aquisitions will also drive customer acquisition. Valuations are low now, so companies with the means should

aggressively shop for acquisitions that bring new customers, crossselling opportunities or new business models and categories.

(Eddie Yoon is the founder of Eddie Would Grow and the author of “Superconsumers.” Christopher Lochhead is the host of the podcasts Follow Your Different and Lochhead on Marketing.)

A radical solution to scale AI technology ATHINA KANIOURA AND FERNANDO LUCINI

ost senior corporate executives know they need to integrate artificial intelligence capabilities to stay competitive, but too many of them fail to move beyond the proof of concept stage. According to our research, three out of four executives believe that if they don’t scale AI in the next five years, they risk going out of business. To fix this, we offer a radical solution: Kill the proof of concept. Go right to scale. After surveying 1,500 C-suite executives across 16 industries in 12 countries, we discovered that only 16% of them have actually moved beyond experimenting with AI. The companies that successfully

implemented full-scale AI had all abandoned proof of concepts. The result? They achieved nearly three times the return on their AI investments when compared with their lower-performing counterparts. WHY PROOF OF CONCEPT DOESN’T WORK Let’s say an organization sets aside six months www.businessday.ng

to build a customer experience optimization platform as a proof of concept to improve customer service. They get it running, confirm that it works and then move it to production. Here’s the mistake: They didn’t think about what was needed to put it into production, the model risks, data bias, data privacy or ethical considerations. The result? They never

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built it for scale from the beginning. Successful companies did the following: — PIVOT TO PILOTING: A piloted technology takes a fully baked capability and launches it directly into the real world (albeit on a smaller scale). It allows AI technologists and company leadership to accurately see how the new technology will be received by customers and derive value. — COMMIT TO ACTION: Instead of conducting endless proofs of concept, organizations should consider just a few valuable projects and focus on doing the proper research and putting them into production. — MAKE SURE THE RIGHT TEAM IS IN PLACE: A collaborative team is crucial. @Businessdayng

When initiatives lack the support of a large, multidimensional team championed by the chief AI, data or analytics officer, they miss a crucial connection to business outcomes, and ultimately fail. To scale value in the AI era, think big and start small: prioritize advanced analytics, governance, ethics and talent. It demands planning. Don’t sacrifice your future relevance by being so focused on delivering for today that you aren’t prepared for the next wave.

(Athina Kanioura is the chief analytics officer and global lead, and Fernando Lucini is the managing director of the artificial intelligence lead UKI, at Accenture Applied Intelligence.)

Wednesday 29 April 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Survey shows insurance sales, revenue most hit during COVID-19 era Modestus Anaesoronye

nsurance companies operating in the country have lost sales and revenue as result of the COVID-19 pandemic, which is taking a huge toll on economy and businesses in Nigeria and across the globe. COVID-19 has lead to shutdown of businesses and lockdown of economic activities by government in an effort to contain the pandemic and minimize contraction of the virus by the larger population. According to a survey conducted for attendees at EY Nigeria Webinar Conference held last week, 41 percent of the participants voted that sales and revenue was most hit during the COVID -19 period. The theme of the conference is: ‘COVID-19: Responding to Disruption: Now, Next and Beyond: An Insurance Sector Webinar’. As contained in the report, another 14 percent voted operations as next most hit aspect of their business during the period.

Marketing got 12 percent, as most of the people said they have deployed digital means of marketing to reach their customers and intermediaries. On how companies are supporting their distribution partners, including agents and brokers, the EY Nigeria survey report shows that 52 percent voted in favour of digital platforms for intermediaries. This is as 29 percent voted in favour of remote marketing. On regulatory interventions post Covid-19, 26 percent of participants who were largely from insurance companies and partners at EY Nigeria, said they will expect policy palliatives from the National Insurance Commission(NAICOM) to enable then go through the cycle and recovery period fast. Another expectation will be tax incentives and returns submission to the Commission, which about 25 of the participant voted to support as critical in enabling them survive during the post Covid-19 era.

Rotimi Okpaise

Rotimi Okpaise, partner, Actuarial Services at EY Nigeria who provided background to the discussion noted the global economy is challenged at this time as result of COVID-19, stating that there is public health crisis and risk of mass unemployment. Okpaise also observed drop in economic performance due to lower demand for oil, reduced import transactions from major

Old Mutual deepens access to insurance benefits with e-claims channels Modestus Anaesoronye

s businesses lockdown to halt the fast-spreading COVID-19 pandemic in Nigeria, Old Mutual Nigeria, has launched an electronic channel to ensure unbroken and convenient access to insurance benefits for its customers. The firm, which is the Nigerian subsidiary of the panAfrican insurance firm and global financial services provider, Old Mutual Limited, announced that policyholders, despite the lockdown, can make claims through its digital and mobile-friendly, e-commerce web portal, to ensure that their access to the benefits of insurance remains sacrosanct. The e-claims channel is in line with the brand’s commitment to providing accessible, swifter, convenient, affordable, tailor-made and exceptional customer-service inspired insurance services to the Nigerian customers. Commenting on the de-

velopment, Alero Ladipo, executive head, Marketing, Old Mutual Nigeria, said that the launch of the brand’s revamped e-commerce web portal aligns with its continuous leverage of digital innovations to deepen accessibility to its insurance solutions to its customers. “We are committed to deepening accessibility to insurance solutions to our customers in Nigeria. With the rapid spread of COVID19, businesses have resorted to working remotely. Also, the Federal and State Governments had to carry out the responsible constraint on movement and large gather-

Alero Ladipo, executive head, Marketing, Old Mutual Nigeria www.businessday.ng

ings in its effort to break person-to-person spread of this virus. So, it is expedient that we meet our customers at the point of their needs. “To ensure that everyone gets the benefits of their insurance policy, our customers can now initiate a claim by simply visiting our website www.oldmutual.com.ng, click on ‘Make a Claim’ button at the top right corner of the home page, fill the form with the relevant details and select Claim under the dropdown menu. After this seamless process, the customer’s claim will be paid within 48 hours”, she added. Other requests that can be made are to make a partwithdrawal on your Savings Policy or surrender when required. Old Mutual is committed to building trust with customers and offering solutions to both their prospective and existing customers through innovative services and products that meet unique needs for both individual and corporate customers all available at their fingertips.

Eddie Efekoha, president CIIN

trade routes as well as supply chain disruption and financial market downturn. He said going forward, insurers in Nigeria and other West African countries will have to show resilience to be able to weather the storm and remain relevant. Responding to Covid-19 demands a cross-functional approach to crisis management, particularly in the short term. On workforce manage-

ment and employee health, Okpaise said management must identify contingency working arrangements; put in place measures to improve employee productivity, mental and physical health, as well as communicate to reassure employees. Another approach is customer and brand protection, which according to EY Nigeria will focus on building customer trust; implement communications and rel-

evant societal value actions; put measures in place to manage claims leakage as well as review competitor and market situation. Another critical issue will be maintaining solvency, which will require activating real-time solvency monitoring; increased liquidity monitoring; identify and evaluate material default triggers and covenant, as well as ensure proactive stakeholder engagement. Also of importance in the short term is business continuity, which will require that companies activate business continuity Plans; monitor new business channels; revisit recovery & resolution plan (RRPs); as well as frequently re-assess third party dependency and status. Corporate actions post COVID-19 will be engagement with external stakeholders to shape societal response; assess strategic growth opportunities and defense measures; consider tax planning and fiscal reliefs, as well as implement recovery actions to restore capital and or liquidity.

AIICO despite lockdown pays N1.7b claims in 21 days Modestus Anaesoronye

IICO has presented its scorecard detailing its performance within the first 21 days of COVID-19 lockdown. The company has paid out about N1.7 billion to its customers in fulfilment of its contractual obligations covering claims, benefits, loans, maturity payments, etc. According to Sola Ajayi; executive director, Retail Business, “Within the first 3 weeks of the lockdown, we have paid N907 million in life insurance benefits to 1,441 individual customers and over N480 million to 10,275 Annuitants who are on our Life Annuity plan. For us, commitment is an act, not a word. These are extraordinary times, and we have evolved; we keep producing great results. This is part of the AIICO culture, and it has accounted for our high customer retention rate.” He concluded by saying “We are poised to do even more.”

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Adewale Kadri, executive director, Corporate Business Division was equally bullish saying, “We are operational despite the lockdown and we are accepting discounted premium from our clients as palliatives to our loyal customers during this trying period. We deliver insurance certificates including policy documents within minutes. Over 250 valued Brokers have had their claims of over N300 million settled within 48 hours. Our online real-time platform has delighted all our Brokers in this regard, and we receive compliments almost daily on our service delivery.

Babatunde Fajemirokun, MD/CEO, AIICO @Businessdayng

According to the Babatunde Fajemirokun, managing director/CEO “The daily volume of transactions is proof that our investment in infrastructure for Business Continuity is worth every penny and built for the long term. AIICO’s Business Continuity Management System (BCMS) is certified using standards set by the British Standard Institute. Our wellmotivated employees, who are working remotely, have played a significant role in making things happen. In addition to this, we are monitoring the COVID-19 situation closely and its effect on consumer behaviour. As a Company with a long obsession for excellent customer experience, we are evolving and adapting to changing customer preferences. Our mode of operation is continually evolving to cater to the needs of existing and prospective customers. We have not only been paying out, we have also been attracting and underwriting new businesses within the period.”

Wednesday 29 April 2020

BUSINESS DAY

insurance today E-mail: insurancetoday@businessdayonline.com

Insurers reaffirm commitment to support Govt on fight against COVID-19 Modestus Anaesoronye

he nation’s insurance industry said its prepared to continue its support for the government in the fight against COVID-19 until a final solution is found to the pandemic. Yetunde Ilori, director general of Nigerian Insurers Association (NIA) who was reacting to the providing of N11 billion insurance cover for frontline health workers in the fight against COVID-19 said it is part of the insurance industry support to the Federal Government as the battle against COVID-19 continues. “This is part of the insurance industry support to the Federal Government as the search for a solution continues. There are other initiatives at the state level and the main idea is that the industry must join other stakeholders in this battle” She said “We thank the Federal government for its faith in the Nigerian insurance market as exemplified by its wholehearted acceptance of the policy and to restate our support for other initiatives that will boost the

L-R: Bola Onanuga, president, Nigerian Council of Registered Insurance Brokers; Sunday Thomas, acting commissioner for Insurance/ CEO, National Insurance Commission; Folasade Joseph, member of NIA Governing Council at the presentation of life insurance cover for frontline health workers in the fight against COVID -19

morale of those in the frontline in the fight against this dreaded virus” she added. Speaking further, she stated that “although the insurance programme

is the initiative of the insurance industry which also funded premium payment for same, the industry is ever willing to contribute its quota towards the search for a solution to

FBNInsurance supports Lagos Govt on fight against COVID-19 …donates ambulance, feeds the needy Modestus Anaesoronye

s part of its Corporate Social Responsibility and contribution towards flattening the curve of the health hazard caused by the outbreak of the dreaded coronavirus (COVID-19) disease in Nigeria, the life insurer, FBNInsurance and its subsidiary, FBN General Insurance has once again demonstrated commitment to their community by donating an ambulance to the Lagos State Government as well as food items to the needy communities within Lagos. While presenting the ambulance to the Lagos State Government, Valentine Ojumah, managing director/ CEO of FBNInsurance explained that the gesture was to support the State Government’s effort in curbing the spread of COVID-19 in the state. He further stated that both companies in collaboration with the other insurance companies was putting together resources to provide an insurance cover for medical personnel who are in the frontline of the fight against the virus. Receiving the ambulance on behalf of the State Government, the wife of the Governor, Ibijoke San-

wo-Olu alongside the Lagos State Tayo Ayinde applauded FBNInsurance for the donation and assured them that the Lagos State Government would put the ambulance to adequate use to serve the purpose. Dr. Sanwo-Olu said the donation would also help the State Government in the management of other health related issues. Bode Opadokun, managing director of FBN General Insurance, a subsidiary of FBN Insurance, Mr. used the occasion to urge Nigerians to adhere strictly to the precautionary measures as stipulated by the medical practitioners to flatten the curve of the virus.

Valentine Ojumah, managing director/ CEO of FBNInsurance www.businessday.ng

In a related development, over the weekend, FBNInsurance provided food items (Rice, Beans and Semolina) to 6,000 Lagosians in Ajegunle, Iwaya and Agege areas of the state. This donation was designed to cushion the effect of the coronavirus pandemic on the less privileged in the area. A resident of Iwaya who pleaded anonymity said “Before now, I do not believe in insurance companies. I always feel all they do is take people’s money, but with this kind gesture from FBNInsurance and FBN General Insurance, I am amazed. This simple act of kindness from their organisation has changed my perception about insurance. The people of Iwaya are grateful to these reputable insurers for coming to our rescue at this critical time.” Recall that FBNInsurance and FBN General Insurance recently donated various items to homes and hospices across three geographical regions: Lagos, Abuja and Port Harcourt. The life insurer, FBNInsurance Limited, is an FBNHoldings Company associated with the Sanlam Group of South Africa.

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this disease and wish all stakeholders well as the search continues” She called on all stakeholders to support the government so that the nation can defeat this virus. “Let us

support the government and observe all the safety protocols” she noted. The Nigerian insurance industry last week provided a whopping cover of N11,000,000,000 being the sum assured for Insurance Cover for front line health workers in the battle against COVID-19. The cover which is being provided by the Insurance industry comprising all Insurance, Reinsurance and Broking companies, will cover Doctors, Pharmacists, Nurses and other ancillary personnel and volunteers in the frontline of the battle against the Virus. Under the cover announced by the Presidential Task Force on COVID-19, the industry is providing Life Insurance for a maximum of 5000 frontline health workers engaged by the Nigerian Centre for Disease Control across the thirty six (36) states of the Federation and the Federal Capital Territory, Abuja. The premium of N112.5m (one hundred and twelve million, five hundred thousand naira) which is for one year coverage (12months) has been duly paid in line with the extant law on Insurance contracts especially as it relates to No Premium No Cover.

GNI supports intervention fund to fight COVID-19 pandemic Modestus Anaesoronye

reat Nigeria Insurance Plc says it made a financial commitment to support the insurers’ umbrella body Nigerian Insurers Association (NIA) intervention fund in fight against the COVID-19 pandemic. The coronavirus disease (COVID-19) pandemic marks an unprecedented time in modern history that will require the best of humanity to overcome. The new coronavirus has taken thousands of lives and spread to nearly every country in the world. The Nigerian Insurers Association (NIA) Intervention fund aims at raising funds from member companies of the association to support immediate and long-term relief and recovery in vulnerable communities during one of the most challenging times aimed at curbing the spread of coronavirus disease (COVID-19) pandemic in the country. Addressing the issue, Cecilia O. Osipitan, managing director/ CEO, Great Nigeria Insurance Plc, said “as a result of the exponential spread of COVID-19 pandemic around the world and increase in confirmed cases in Nigeria; it is very important that as a responsive @Businessdayng

corporate entity, Great Nigeria Insurance Plc remains committed to supporting every effort of the Federal government and the insurance industry aimed at combating the COVID-19 scourge in Nigeria”. In the same vein, Osipitan further said the underwriting firm will always comply with the directive of the Federal Government as regards the lockdown pronouncement with effect from Monday, March 30, 2020 by 11pm made by the President on Sunday, March 29, 2020 when he delivered the Presidential Special Address. She said in compliance with the directive and in line with the implementation of the company’s business continuity strategy which is hinged on ensuring the safety of health, wellbeing and safeguarding the lives of our valued customers and workforce. We remain committed to delivering quality service to our customers via our alternative communication channels. Please explore our USSD Platform for all insurance products and services available under the stable of GNI Plc. We will keep all our stakeholders abreast of new developments as they unfold while we enjoin everyone to continue to observe all recommended precautionary measures by the government and health authorities to remain safe.

Wednesday 29 April 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

FG dithers on ventilator production as COVID-19 cases surge

InnoTrans 2020 moved to springtime 2021 new date

MIKE OCHONMA Transport Editor

MIKE OCHONMA

…Innoson can produce 50 ventilators daily

espite the increasing number of daily recorded cases of people who have tested positive to the novel coronavirus, COVID-19, the federal government is yet to respond to proposals sent to it through the Federal Ministry of Industry, Trade and Investment by indigenous companies, including Innoson Vehicle Manufacturers (IVM). The National Centre for Disease Control (NCDC) recorded a total of 1273 coronavirus positive test cases on Monday, April 27, 2020, the highest number of such cases reported on a day by the agency since the first day the virus broke out in the country. Speaking to BusinessDay on Wednesday, Cornel Osigwe, head of corporate communications of Innoson group said, the company had submitted proposal to the federal government many weeks ago for the production of ventilators, masks and other medical equipment required for the fight against the deadly disease threatening the economic and social lives of nations worldwide. “The Innoson group has the capacity to produce 50 ventilators daily in addition to other medical equipment to complement federal government’s fight against coronavirus. Apart from a state-ofart facility in our factory, we have concluded arrangements with our foreign technical partners

in China for the manufacture of ventilators. I am not saying that government will not respond to our proposal, but cannot categorically state exactly when that will happen,” Osigwe said. The Innoson spokesman stated that the automobile assembler was still expecting a response to its proposal from the federal government to start making the ventilators and a strong assurance of an enabling environment to operate. Innoson group is seeking N4billion loan funding from the Central Bank of Nigeria to augment its existing facilities to jumpstart the production of ventilators and other medical equipment to complement the country’s decadent health infrastructure. A ventilator is an automated equipment that pumps air in and

out of the lungs of patients unable to breathe on their own. All that Innoson needs to produce it, is to install a separate production line or retrofit its existing factory to manufacture medical equipment rather than cars and trucks. The federal government confirmed recently that there were ongoing discussions with Innoson and two other local car companies that had expressed the interest to manufacture the much-needed ventilators to fight the coronavirus pandemic. However, more than two weeks after this move became public knowledge, no concrete action seem to have been taken while the battle against coronavirus devastation rages. Niyi Adebayo, minister of industry, trade and investment,

who disclosed this to journalists in Abuja, said Innoson had specifically sent in a proposal seeking government’s support to make ventilators and expressed its interest in partnership. Adebayo also noted that the government, in partnership with the Manufacturers Association of Nigeria, was ramping up local production of food and pharmaceuticals needed to curb the impact of coronavirus, saying the manufacturers are efficiently closing the gap of what is required. “As you know, world over the coronavirus pandemic has exposed the world to health and economic crisis and countries are shutting borders. We’ve thrown that challenge to our manufacturers and they are responding accordingly,” Adebayo said.

Daimler, BMW, Ford expects Q1 earnings to plunge …Stuttgart to publish results today MIKE OCHONMA

mid the coronavirus spread, authorities at Daimler said it expect first-quarter earnings to plunge as customers shunned Mercedes-Benz showrooms just like every other carmaker. In a statement by the automaker, preliminary quarterly earnings before interest and tax fell 78 percent to 617 million euros ($668 million). Daimler’s forecast provides further evidence of the financial damage inflicted by the pandemic on the auto market, as global vehicle sales and production get pummeled by tight restrictions governments have had to impose on business activity and the movement of people to control the spread of

the virus. Earlier this month, luxury rival BMW reported a 21 percent drop in first-quarter vehicle www.businessday.ng

sales and said it was expecting a further decline in global demand. Ford Motor estimated a loss

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of about $2 billion for the first quarter, and had to raise $8 billion from corporate debt investors to shore up its cash reserves. Overall passenger car sales tumbled by more than 50 percent in Europe’s major markets last month, with Italy -- hit particularly hard by the pandemic -- reporting the biggest drop, 85 percent. Germany, Europe’s largest economy, has begun to ease some restrictions, allowing automakers to restart production. Mercedes, which had suspended most of its production in Europe, said it was ramping up engine output at its factory in Bad Cannstatt, near Stuttgart, as it gradually reopens European plants using lessons learned from resuming production at its assembly sites in China. @Businessdayng

esse Berlin has rescheduled the InnoTrans 2020 trade fair, the biggest event in the rail industry calendar. The venue has more than 3 kilometer of outdoor tracks for rail vehicles to be displayed. InnoTrans 2020 was to have been held on September 22-25, 2020, but as part of measures to tackle the coronavirus pandemic, the Berlin senate issued a decree on April 21 banning events with more than 5,000 people from being held in the city before October 24, 2020. InnoTrans 2018 had attracted 3,062 exhibitors from 61 countries, and 153,421 trade visitors from 149 countries. ‘We are already finalising an alternative event date and will announce it in early May’, a Messe Berlin spokesperson told Railway Gazette International on April 22, adding that the new date would be in ‘springtime 2021’. The rescheduled InnoTrans railway and transport trade fair will now take

place from April 27 to 30 2021. Following the rescheduled event in April 2021, Messe Berlin says InnoTrans will revert to its original pattern of being held in even-numbered years. The following event would therefore take place in September 2022 as planned. ‘The health and safety of exhibitors, trade visitors and all the employees at the trade fair have the utmost priority’, said InnoTrans director Kerstin Schulz. ‘We would like to take this opportunity to thank our exhibitors for their co-operation and loyalty’. Welcoming the announcement, the Chief Executive of the German rail industry association VDB Dr Ben Möbius said that postponing the trade fair had been ‘a painful but absolutely right decision’. He predicted that the revised date would ‘create new perspectives for the economic re-start’, adding that ‘climate-friendly mobility, digital mobility and networked mobility will remain central challenges, even after the crisis. Realising the Clean Mobility of the Future together with partners all over the world remains our mission and that is what InnoTrans 2021 will be all about’.

Wednesday 29 April 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Battered automakers mull production restart next week Tips for buying a used …Buyers to be lured with carrot incentives

car after lockdown

MIKE OCHONMA

onfronted by the heavy impact inflicted on their ope r a t i o n s, i t appears the auto global industry is shuddering back to life, after a six-week coronavirus-induced shutdown. Most carmakers, including FiatChrysler, Toyota and Honda, say they are targeting a gradual rampup of production starting by next week Monday, May 4. Other automakers like General Motors and Ford appear to be on a similar schedule, although they have yet to announce an official resumption date. In United States for instance, VW said its Chattanooga, Tennesse plant will resume operations in phases, starting May 4, and gradually increase production over several weeks while progressively lifting restrictions. While some industry analysts say resuming production will not only be a shot in the arm for many economies, others believe it could also set the tone for how other automotive-allied businesses may throw their gates under strict health safety precautions. On whatever side of the shape and form the decision to go back to the assembly lines may take, the big picture here is that, it is easy to quickly shut down

interested in engines, brakes, tyres, bodywork and other mechanical aspects, but value for money and practicality, and to some extent, durability are sure to be high on their list. Across th e ch oice spectrum, some visitors to the car mart and dealer outlets will still want a vehicle based on a feeling; you might love the TV ad, the shape of the car, or the range of paint colours. You don’t have to put your motoring dreams on hold in these challenging times if you shop sensibly and with a good budget that you can afford. With this in mind, here are a few top tips to consider when tyrekicking ranges of prefereed vehicles of choice after lockdown:

the cheapest maintenance basket is, arguably, your best bet. 6 . Fi n d o u t i f re placement parts can be sourced locally. If the vehicle you like needs parts from overseas, it can get expensive. 7. Look at acquiring a demo model as these cars are usually well priced and have low mileage as they are almost new. 8. Ask for the car’s paperwork and service record as this will also give you some idea of the car’s history and how well it has been cared for. 9. Be aware that a roadworthy certificate isn’t a guarantee that the car is problem-free. It simply means that the car meets the minimum safety requirements.

production in the face of a global pandemic, but restarting factories is more difficult. It also requires a carefully orchestrated process that involves hundreds of global suppliers, perfectly timed logistics and hundreds of thousands of employees in addition to the further complication of social distancing to protect workers from illness at all companies throughout the supply chain. In the submission of Kristin Dziczek, vice president, Industry, Labor & Economics at the Center for Automotive Research; “It’s an incredible synchronization problem,” “It means getting enough people to show up and be healthy, getting enough parts to show up when you need them and having enough customers ready to buy”.

As a precautionary measure, it is expected returning factory and industry workers will have their temperatures checked and receive masks, gloves and other protective gear while keeping six-foot distances from others. Parts suppliers generally need a week or two head start to ensure vehicle manufacturers have the components they need to build cars. While auto sales forecasts have fallen by millions of units from where they were in early 2020 due to the ravaging coronavirus pandemic, it will be sparking automakers to roll out unprecedented deals and adopt new tech-heavy methods of selling vehicles to shoppers stuck at home in many parts of the world. Experts are unsure how long incentives will last, but say the pandemic could make an enduring change

to the way consumers buy cars. Globally, carmakers are confronted with several hindrances in the manufacturing processes including supply chain challenges, restrictions on production, and, perhaps most worrying, severe dents in consumer demand sparked by shelter-in-place orders from governments and economic effects, such as job vacations or layoffs. With the escalation of the coronavirus scourge and the accompanying devastating effects of the automotive busiess, dealerships are also trying some entirely new things: they are moving online. While online car sales were already a growing force in the automotive world, the spread of the virus has sped up dealer participation.

Toyota’s new Yaris Cross adopts ‘baby RAV4’ styling MIKE OCHONMA

n what looks like a baby RAV4, Toyota Motor Corporation recently pulled the virtual covers off its new Yaris Cross, and the summation of the new entrant into the automakers stable is that it looks more like a shrunken RAV4 than a Yaris on stilts. Sharing a platform with the recently revealed global Yaris, Toyota has put considerable effort into distinguishing the styling of the Cross derivative, which has its own unique sheet metal and square wheelarches of the kind that one expects to find on a more off-road oriented SUV. Although the Yaris Cross is not meant to be

hile we will all be looking for ways to reduce our mobility costs in the coming months as nation’s battles to wrestle the killer coronavirus disease, it is still possible that prospective used car custoers can still drive a decent vehicle if you shop sensibly. As companies slash jobs and salaries in the wake of Covid-19, buying a second-hand vehicle is the only option for countless consumers these days particularly. In poor economies with low purchasing powers and impoverished middle class, car shoppers might not be

1.If you don’t have the time or inclination to go around and look for a vehicle, spend some time online as all brands and dealers are represented. 2. Decide how much you can afford to spend before you start looking. If needed, get a pre-approved loan from a bank. 3. Often mechanical problems are not disclosed when buying a vehicle, so obviously it’s important to find a trusted dealer that will reveal the vehicle’s history and divulge any potential problems. 4. Find out if the vehicle still has a service plan and warranty and when both will expire. 5. The vehicle with

MIKE OCHONMA

one of the most-sort-after among rivals, it will be one of the only vehicles in its class to offer all-wheeldrive as an option. Depending on the derivative, the Yaris Cross will offer high-end convenience features such as a powered tailgate, while the safety aspect is looked after by a whole suite of Toyota Safety Sense ac-

tive safety systems, which provide driver warnings as well as braking and steering intervention when needed. Presently, the new Yaris Cross is not on the cards for Nigeria, according to BusinessDay findings, as it is a European-focused model especially when the local market sources a different Yaris line-up

from Asia. The new Yaris Cross joins the latest global Yaris on Toyota’s new GA-B platform and although it shares a 2560mm wheelbase with its hatch sibling, the Yaris Cross is 240mm longer, with 60mm added to the front overhang and 180mm to the rear end. The SUV model is also 90mm taller and 20mm wider, while 30mm has been added to the ground clearance. On the engine front, Toyota is only mentioning a hybrid variant for now, and as per the new Yaris, the drivetrain pairs an electric motor to a 1.5-litre three-cylinder Atkinsoncycle normally aspirated petrol engine for a system output of 85kW.

Wednesday 29 April 2020

BUSINESS DAY

BANKING Digital operation, partnership with FinTech to drive future of banking post Covid-19 Stories by HOPE MOSES-ASHIKE

he future of banking in the post COVID-19 era would be driven by digital operation and strong partnership with Fintech companies that would yield enhanced service deliveries to their clients. This was the submission of Okechukwu Unegbu, managing director of Maxifund Securities Limited. Other features of the banking in the post pandemic environment include enhanced cyber security, widening of financial inclusion, improved lending and creation of credits, mortgage financing and staff training. “Banks should encourage the evolution of mortgage firms that can offer facilities with repayment period of between 10 to 25 years. They should also provide adequate training to their staff on critical areas bank-

ing operations and relationship with clients rather than harping on deposits mobilisation alone,” Unegbu said. The former President of the Chartered Institute of Bankers of Nigeria (CIBN), spoke on ‘COVID-19 and the Future of Banking’, at the monthly forum of the Financial Correspondents Association of Nigeria (FICAN), via a Webinar.

He advised Nigerian banks to grant their debtors who had suffered huge losses in the aftermath of COVID-19, a generous leeway that would enable them to bounce back and be able to settle their credit obligations. Unegbu also advised the operators of the banking industry to stay away from litigation or any form of legal processes in resolving any

dispute with their customers. Banks he said should tell their debtors something about their plans on managing the interest rate on facilities they have given to them. All parties, including the banks and their customers, have been adversely affected by the COVID-19 pandemic. There is no exception. “But I expect banks to sit down

with their clients and find out ways to enable them to launch back and then settle their indebtedness,” he said. He suggested that banks should offer their debtors a moratorium on the principal and at least 50 per cent reduction on the interest rates. “Banks should get mediators instead of being legalistic,”. Uche Uwaleke, professor of Finance and Capital Market and former Chairman CIBN, Abuja branch, said Post COVID’19 is likely to witness an increase in risk aversion by Deposit Money Banks and as a consequence a reduction in private sector credit. “So, there is no doubt that many lending institutions will be loan shy. This will have a negative impact on profitability and may result in some cost cutting measures including laying off staff. Nevertheless, it is hoped that the Central Bank of Nigeria, through its Loan to Deposit Ratio and other measures including a pos-

sible relaxation of monetary policy, will assist the banks in weathering the storm and help to get the economy out of recession,” Uwaleke said. Unegbu expressed hope that Nigeria should witness a “U” curve rather than a “W” curve in the management of the COVID-19 pandemic. He pointed out that the “U” curve would enable the country to exit the pandemic once and for all while a “W” curve would mean another resurgence of the pandemic after the current experience, which he said, would be very devastating to the economy. Unegbu also said Nigeria should encourage, through the banking sector, the promotion of product incubation that would promote local manufacturing rather than relying on importation. “We should stop living on denial. We have seen it happen during the Biafra-Nigeria war how Biafra produced most the things it needed within its boundries,” he said.

Access Bank to rewards customers LAPO Microfinance Bank refutes in DiamondXtra savings scheme report on debtors chase

igeria’s leading retail financial institution, Access Bank Plc, is set to reward lucky customers who will emerge winners in the forthcoming DiamondXtra monthly draw in May 13, 2020. “We have been encouraging our customers to stay safe and stay connected by using our various digital channels this period. We know these are trying times and our customers need funds to pay essential domestic bills, send money to their loved ones and also save up for unforeseen circumstances since we don’t know how long the lockdown will last,” said Adaeze Ume, group head, retail products and segments, Access bank. “To deliver on our promise to continually reward our customers for their loyalty and savings culture, 10 lucky customers will be rewarded with N1million each in the May monthly draw. We are also going to feature a special Women’s draw - WX-

tra - where 27 Women will win N100,000 each and one Woman will win the WXtra star prize which is a monthly allowance of N100,000 for one year”. She said to join the winning train or stand a chance to win in the forth coming monthly draw, simply fund your DiamondXtra account with N5000 or more for an opportunity to participate in the draw to win N1million and a lot of other mouthwatering cash prizes. “For those who do not have a DiamondXtra account, simply dial *901*5#

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from your phone to open a DiamondXtra account and fund it with a minimum of N5,000 or more to stand a chance to become a winner in the monthly draw. Now our customers can stay safe, stay connected and stay winning. Ume concluded”. DiamondXtra is an interest yielding hybrid account which allows deposit of both cash and third party cheques. Hybrid means a combination of both savings and current account features. The DiamondXtra reward scheme was launched in 2008 and has been running till date.

APO Microfinance Bank Limited on Sunday exempted itself from an online report captioned “Nigeria Microfinance Banks Chase Debtors as COVID Lockdown Cripples Businesses”, by SaharaReporters. A statement by the management of the bank stated that LAPO Microfinance Bank closed down its operations, credit operations inclusive, across Nigeria on Wednesdays, March 25, 2020 few days before the Lockdown directive for Lagos, Ogun and the Federal Capital Territory and a full month before the said publication. “For the notice of our clients and the public, the decision was widely publicised with a press statement in some national Newspapers; radio jingles were deployed in pidgin, Hausa and Yoruba. In addition, information banner was displayed on all our Social Media handles while bulk SMS were sent

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Godwin Ehigiamusoe, managing director, (LAPO) Microfinance Bank

to our clients,” the statement reads. L A P O Mi c ro f i na n c e Bank has been distributing food items, mainly rice and tomatoes paste to its Clients across the country, to alleviate the obvious hardship caused by the crisis. Also, LAPO Microfinance Bank has also made cash contributions to two states to complement their @Businessdayng

ongoing efforts to provide palliatives to low-income Nigerians, a segment to which our clients belong, the statement said. The statement further said all senior manager of LAPO Microfinance Bank and key field managers have been making thousands of telephone calls weekly, to our Clients checking on their well-being and educating them on COVID-19 precautions. “We take strong exception to this attempt to ‘perfume’ lazy reportage on microfinance with the name of LAPO Microfinance Bank. Simple verification exercise would have been helpful and saved the online publication from speculation of unethical pecuniary motive”. LAPO Microfinance remains committed to its over thirty 30 years (first as a non-profit) old mandated of social and economic empowerment of low-income households in Nigeria and beyond, the statement said.

Wednesday 29 April 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

APM Terminals: Sustaining investments, operations in Nigeria amid Coronavirus crisis amaka Anagor-Ewuzie

he outbreak of Coronavirus (COVID-19) pandemic in the last lap of 2019, has created global health crisis that is forcing nations to shut down non-essential businesses through the imposition of movement restriction as part of efforts to contain the spread of the deadly virus. Sadly, the COVID-19 induced lockdown has resulted to serious economic shock for nations as famous financial capitals of the world such as London and New York, were forced to go to sleep. Consequently, businesses are now losing revenue due to shutdown of factories and disrupted supply chain. US oil prices, for instance, turned negative in mid-April 2020 for the first in record before rebounding to $1 per barrel as stockpile overwhelmed storage facilities. Presently, firms are beginning to cut down staff strength amid the warnings by the International Monetary Funds (IMF) that the pandemic would instigate an economic downturn not experienced since the great depression of 1929. Surprisingly, when businesses are cutting down on spending to deal with the economic shock, firms such as APM Terminals Apapa had continued to sustain its operations in the nation’s seaport in line with the Presidential directive. It also joined private sector efforts in the fight against COVID-19 by contributing over N400 million in cash, Personal Protective Equipment (PPEs), media awareness among others. Located in the nation’s premiere seaport at the heart of Nigeria’s commercial hub, Lagos, APM Terminals took over operation of the Apapa container terminal in 2006 under the Federal Government’s port reform programme. It has also continued to deliver on its concession agreement of providing the needed port infrastructure and cargo handling equipment to enhance ease of doing business at port, amid lockdown. Business continuity APM Terminals, despite lockdown, continues to maintain

L-R: David Skov, head of terminals, Africa and Middle East region of APM Terminals; Hadiza Bala Usman, managing director, Nigerian Ports Authority (NPA) and Onari Brown, NPA’s executive director, Marine and Operations, at the commissioning two new multimillion dollars state-of-the-art Mobile Harbor Cranes acquired by APM Terminals Apapa on Thursday.

operations in Lagos Port Complex in line with the Federal Government’s directive that seaports in Lagos (Apapa and Tin-Can Island) must remain operational as part of essential service sectors. In doing this, the terminal operator adopted stringent measures in line with the guidelines of the World Health Organisation (WHO) and the Nigeria Centre for Disease Control (NCDC) to ensure the supply chain remains uninterrupted, and availability of essential supplies. “As an essential service provider, our terminal operations are running normally. Therefore, we urge importers to continue to take delivery of their containers to enable the discharge of incoming cargo and avoid congestion,” said, Mohammed Ahmed, managing director of APM Terminals Nigeria. Daniel Odibe, general manager, external relations, said that as a responsible corporate citizen of Nigeria, APM Terminals Apapa has complied with the directive of the Federal Government and the Nigerian Ports Authority (NPA) to maintain continuity in port operation. He added that the terminal had been in full operation since the lockdown in Lagos. Acquisition of new cranes On Thursday 23 April, 2020 the managing director of the NPA, Hadiza Bala Usman commissioned two new multi-million dollars stateof-the-art Mobile Harbor Cranes (MHCs) acquired www.businessday.ng

by APM Terminals to boost service delivery at the port. The new cranes were acquired as part of the firm’s additional investment of USD80 million (N33.6 billion) for the year 2020-2021, bringing its total investment in Apapa since 2006 to USD438 million (about N184 billion). David Skov, head of terminals, Africa and Middle East region of APM Terminals, said before now, the company had invested USD358 million (N150.36 billion) in port infrastructure development, information technology upgrades and modern cargo handling equipment to improve both quayside and landside operations. “The additional investment we are making is to handle the increased trade volumes into Nigeria. Trade in Nigeria is growing due to the many favorable policies of the Federal government including but not limited to the policy on ease of doing business; stabilisation of foreign exchange; closure of the land borders which has increased the use of seaports; and diversification of the economy,” he said. The additional investment, according to Skov, would create capacity to handle trade growth and improve service delivery across the logistic chain in Nigeria. He said with the acquisition of these new cranes, the terminal now operates with a total of 10 Mobile Harbour Cranes; 23 Rubber-Tyred Gantry Cranes; six Empty Handlers; 48 specialised Truck Terminals, six Reach Stackers and 11 Forklifts.

The huge investment has resulted in significant improvements in productivity, reduction in vessel waiting time and doubling of container volumes at the port. While commending the management of APM Terminals, Bala Usman said ports were concessioned by the Federal Government to private operators to improve service efficiency and free government resources for other developmental purposes. According to her, NPA would continue to engage with private terminal operators to rise up to the challenge of the increased cargo traffic. “NPA’s engagement with terminal operators is yielding tangible results as evidenced by the commissioning of the two new Mobile Harbor Cranes. As ports become more efficient, efforts must be made to enhance cargo delivery process and free the ports of longstanding cargoes,” she said. Us m a n h o w e v e r e xpressed worr y over the growing volume of overtime container in the port, calling on cargo owners and their agents to utilise the period of the lockdown to take delivery of their consignments. Supports fight against Coronavirus To support Federal Government in the fight against the pandemic, APM Terminals Nigeria joined other private sector operators to make series of donations towards the fight. First, it earmarked N100 million in which, N75 million was contributed to the

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United Nations in Nigeria basket fund while the remaining N25 million was committed on community awareness through radio, social media as well as fliers to sensitise Apapa community on how to curb the spread of the pandemic. With this contribution, the leading terminal operator was afforded the opportunity to play its part in strengthening Nigeria’s capacity to respond to the deadly virus. It also enhanced the UN support to the country’s preparedness and provision of healthcare support to those with the virus. It was said that the funds would go into acquisition of ventilators and other lifesaving hospital apparatus needed to aid the healthcare response to the pandemic. On the donation, Edward Kallon, resident and humanitarian coordinator of UN in Nigeria, said the UN in Nigeria would support and complement government’s efforts in setting up a national response fund that would serve as a single national platform and financing framework, coordinating partnerships and mobilising resources for the fight. In coordination with the government, the UN mobilises funds to ensure that essential health equipment needed for testing and medical care, including equipping of temporary hospitals/ quarantine centers and designated emergency centers, are provided. BusinessDay check shows that two weeks after donating N75 million into the UN in Nigeria Basket Fund, APM Terminals Apapa donated additional N150 million into the Federal Government’s COVID-19 Relief Fund Account created by the Central Bank of Nigeria (CBN). It also donated 1,000 units of nose masks; 500 disposable protective coveralls; 400 litres of hand sanitizers; protective goggles and hand gloves to the Lagos Port Complex of the NPA. The fight against COVID-19 is one battle everybody must join hands, and with the strong leadership being provided by the Federal Government, Nigeria will overcome this difficult time, said Martin Jacob, managing director of APM Terminals Apapa. According to him, the @Businessdayng

items donated were aimed at preventing the spread of the virus at the port. “The only option available to us this time is prevention. The responsibility lies on all of us to protect ourselves and render all possible assistance within available resources. The basic precautionary measures such as not touching our eyes, nose, or mouth; regular washing of hands with soap and water or alcohol-based sanitizer; maintaining social distance and avoiding large gatherings must be respected by all including at the port where we provide essential services,” Jacob said. While receiving the PPEs, Funmilayo Olotu, Port Manager of Lagos Port Complex Apapa, expressed appreciation to APM Terminals Apapa for the donation. Also, the firm went further to pay for a chartered flight to deliver vital health supplies acquired by UN to support the fight against Coronavirus in Nigeria. The chartered flight, which delivered the essential items to Nigeria on Thursday April 16, 2020, landed at the Murtala Mohammed International Airport, Lagos with various health items made up of 10,000 test kits, 15 oxygen concentrators, and various PPEs, vaccines, IEHK/PEP kits, and other vital health supplies. “We are happy to support in flying vital equipment to families in Nigeria because it is important to keep the flow of food supplies, medicine and PPEs running to be able to navigate through the COVID-19,” said Ahmed. These supplies, according to him, would support the government through the NCDC to prevent and respond to the COVID-19 pandemic in affected states. “COVID-19 is no respecter of persons, boundaries or territories. All hands must therefore be on deck to curtail its spread across the world. Our various contributions, which collectively amounts to over N400 million so far, show our high esteem for the country and for our people. We believe that when we work together, we would overcome soon,” Ahmed assured. He also emphasised the importance of strict adherence to the various safety measures issued by the WHO and NCDC in curtailing the virus.

Wednesday 29 April 2020

BUSINESS DAY

tax issues

Implications of Automatic Exchange of Information Agreement for Nigeria Victor Adegite and Oluwatoyin Bello

Overview of the Regulations Reporting Financial Institutions According to the Regulations, a reporting financial institution is an institution that is resident in any country that is a signatory to the CRS-MCAA (i.e. participating jurisdictions). These financial institutions include custodian institutions (i.e. asset and fund management companies), depository institutions (all banks), investment entities and specified insurance companies (life insurance companies). However, Government institutions, central banks and retirement funds are exempted from complying with the provisions of the Regulations. These institutions will be required to conduct due diligence procedures to identify persons resident in any of the participating jurisdictions. This involves the use of indicia such as mailing or residence address, phone numbers in a reportable jurisdiction, standing instructions to transfer funds to an account maintained in a reportable jurisdiction etc. to identify reportable persons. Information to be reported Upon completion of the due diligence procedures and identification of reportable persons, financial institutions will be required to report information such as name, address, jurisdiction of residence, Tax Identification

Number (TIN), date and place of birth to the FIRS in respect of an individual account. For entity accounts, financial institutions will be required to report information such as name, address, jurisdiction of residence, and TIN. Where the entity has one or more controlling persons resident in participating jurisdictions, the institutions will be required to report the name, address, jurisdiction of residence, TIN, date and place of birth of the controlling persons. Other information to be reported for both individual and entity accounts include account number, account balance, nature of income (i.e. gross interest, dividend, income generated from disposal of financial assets) etc. Timeline for compliance and penalty for non-compliance Reporting financial institutions are required to file an Information Return (containing the information listed above), in relation to every reportable financial account (identified during due diligence) that is maintained by the institution during the calendar year. The return is to be filed with the FIRS on or before 31 May of the year following the calendar year in which the return relates. For example, financial information relating to 2019 financial year should be filed with the FIRS on or before 31 May 2020. The Regulations imposed stiff penalty for non-compliance, for example, the penalty for late filing of return is N10 million in the first month of default and N1 million for each subsequent month the failure continues. Similarly, making false statement, false report or false declaration or gives any false www.businessday.ng

information or omission attracts a penalty of N5 million. Implications of the Regulations for Financial Institutions The major implication of the implementation of AEOI in Nigeria is increased compliance cost for financial institutions ranging from development/ purchase of necessary technological tools, manpower i.e. training cost, sensitization of customers etc. Given that the first reporting date is fast approaching and the nature/ volume of information to be reported, reporting financial institutions are advised to begin to make modifications to its internal processes, starting with their Know Your Customer (KYC) procedures, to ensure that the re-

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It is hoped that the implementation of AEOI in Nigeria will deter taxpayers from future noncompliance and encourage timely compliance, given that taxpayers are now aware that financial institutions will report their offshore financial information directly to the tax authorities

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n August 17, 2017, Nigeria joined 106 other countries to sign the Common Reporting Standard -Multilateral Competent Authority Agreement (CRS-MCAA), which will enable signatories to automatically exchange the financial information of residents in their respective jurisdictions. To domesticate the CRSMCAA, Nigeria published the Income Tax (Common Reporting Standard) Regulations, 2019 (the Regulations), with an effective date of 1 July, 2019. The Regulations will enable financial institutions in Nigeria (effective May 2020) to turn over certain financial information relating to some categories of companies and individuals to the Federal Inland Revenue Services (FIRS). In this article, we shall review the provisions of the Regulations and examine its implications for stakeholders..

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quired information are captured. This will include a design of the self-certification form which will be issued to account holders to identify their tax residency and update to account opening forms to capture the necessary information. The institutions will also be expected to invest in necessary technological tools that will assist them to comply with the provisions of this Regulations. It may also be necessary for financial institutions to begin to sensitize their account holders about the new requirement and the information that will be shared with the FIRS. In order to comply fully with the Regulations, financial institutions may consider training their employees, especially, the account opening officers, relationship managers etc. on the relevant information to be requested from the customer during onboarding. An alternative to this is for financial institutions to provide a platform on their website, where customers can go to update their records. Finally, it is noteworthy that reporting financial institutions must put in place measures to ensure strict confidentiality of their customers’ information to ensure compliance with the necessary statutory requirements e.g. the Nigeria Data Protection Regulation. Implications for Account holders – companies and individuals The major implication of AEOI for account holders is that tax authorities will now have full access to their offshore investments held in participating jurisdictions, hence bringing to light their offshore financial assets. Based on the provisions of the tax laws, @Businessdayng

taxpayers with tax filing obligations in Nigeria are required to disclose their income from all sources to the relevant tax authority in Nigeria. Hence, where it is discovered that taxpayers have not disclosed or have under-disclosed their income, there is a risk of the imposition of penalty for false statements and returns as provided under the relevant tax laws. Hence, the days of hiding financial assets offshore away from the reach of the Nigerian tax authorities are over. While the Regulation does not prohibit companies and individuals from operating offshore accounts, to the extent that the financial assets in such accounts are appropriately disclosed and taxed, such companies and individual have nothing to worry about. Implications for government and tax authorities The major objective of AEOI is to curb tax evasion and improve international tax transparency. Hence, the implementation of AEOI in Nigeria will assist tax authorities to discover formerly undetected tax evasion. It will also enable the Nigerian Government to recover tax revenue lost to non-compliant taxpayers and will further strengthen international efforts to increase transparency, cooperation and accountability among financial institutions and tax authorities. Further, we expect that AEOI will increase voluntary disclosures of concealed assets and will encourage taxpayers to report all relevant information. Overall, we expect that the new Regulations to boost Government revenue previously lost to offshore tax evasion. Conclusion Nigeria becoming a signatory to the CRS-MCAA demonstrates tax authorities’ continuing commitment to tax transparency and efforts to tackle tax evasion and illicit financial flow. It is hoped that the implementation of AEOI in Nigeria will deter taxpayers from future non-compliance and encourage timely compliance, given that taxpayers are now aware that financial institutions will report their offshore financial information directly to the tax authorities. The implementation of AEOI should also boost revenue collection for Government and hopefully increase the Country’s tax to GDP ratio, given that tax evasion will now be more difficult. Victor Adegite is Senior Manager and Oluwatoyin Bello is Manager in KPMG Advisory Services, Lagos, and may be contacted by email at: victor.adegite@ ng.kpmg.com and oluwatoyin. bello@ng.kpmg.com

Wednesday 29 April 2020

BUSINESS DAY

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Wednesday 29 April 2020

BUSINESS DAY

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Wednesday 29 April 2020

BUSINESS DAY

Live @ The Exchanges Nestle, GTB, Zenith, others lift stock market by 0.49% Stories by Iheanyi Nwachukwu

igeria’s stock market sustained gain on Tuesday April 28, thanks to investors who see value in shares of Nestle Nigeria Plc, GTBank Plc, Zenith Bank Plc, Dangote Sugar Refinery Plc and FBN Holdings Plc. The significant positive movement in these large cap stocks helped the market to defy analysts expectations of a bearish session. Increased bargains in the counters impacted positively on their prices, leading to N98billion increase in value of listed stocks on the Nigerian Stock Exchange (NSE). Nestle led the basket of advancers after its share price moved from day open low of N910 to N920.2, adding N10.2 or 1.12percent. It was followed by GTBank which increased from N20 to

N21 adding N1 or 5percent; while Zenith Bank share price moved from N14.2 to N14.85, up 65kobo or 4.58percent. The Nigerian Stock Exchange (NSE) All Share Index (ASI) which tracks the performance of the Bourse increased by 0.49percent from 22,616.28 points to 22,727.87 points on Tuesday April 28. Unilever Nigeria Plc recorded the highest decline after its share price moved from N11 to N10.5, losing 50kobo or 4.55percent while Lafarge Africa Plc followed after its share price moved from day open high of N11.45 to N11.2, losing 25kobo or 2.18percent. The market’s negative return year to date stood at -15.33 percent. Also, the value of listed stocks increased by N98billion from N11.786trillion to N11.844trillion. In 4,259 deals, investors exchanged 266,627,724 units valued at N2.75billion. UBA, FBN Holdings, Access Bank, Zenith Bank and FCMB were actively traded stocks on the Bourse.

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Ardova Plc says well-positioned to respond to changes in business environment ...gives update on response to COVID-19

he management of Ardova Plc led by its Chief Executive Officer, Olumide Adeosun has updated stakeholders and the investing public the efforts of its emergency response team amid the spread of the COVID-19 pandemic in Nigeria. The team, according to the CEO has put in place a focused response programme designed to minimise organisational impact, while also contributing to the corporate efforts in flattening the disease’s growth curve in the country. Adeosun summarised these efforts by Ardova Plc along three key themes : “Safeguarding our people & customers, Empowering our communities to fight the disease, and Business continuity & deliver ing customer needs”. “As soon as news of the global spread of the disease was communicate d, w e immediately took preemptive measures of ensuring

thermal scanning and escalated hygiene practices for all employees,visitors and customers at all our operational locations. “Once the index case in Niger ia was confir med, we commenced intense monitoring of the spread of the disease. Once the growth curve crossed our internally benchmarked threshold, we transitioned to remote work as a means of increasing social distance. This transition occurred before the Federal and Lagos State Government mandated lockdown began”, the CEO said. “Being an energy provider means we have to remain o p e ra t i o n a l d u r i n g t h e lockdown, as transport fuels, lubricants, and cooking gas are essential to everyday life for Nigerians. “A s s u c h , w e h a v e heightened safety & hygiene standards at all our facilities: staff at our retail stations, lubricants. and chemical plants have been provided with the

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necessary Personal Protective Equipment (PPE), to ensure that they are protected while getting their jobs done”, he added. “We are living in scary and uncertain in times but what is clear is eliminating that defeating the pandemic requires all of us being involved; as government, businesses and communities, all hands must be on deck. “As part of an industrywide effort, Ardova Plc has donated N50 million to the Nigerian National Petroleum C o r p o r a t i o n ’s ( N N P C ) collective industry fund, via the Major Oil Marketers Association of Nigeria (MOMAN). This fund was instituted to upgrade at least one hospital and build an isolation centre”, Adeosun stated. He further said that; “In our own firm, we have also donated solar energy systems to isolation centres in Lagos and Abuja to ensure that patients and medical personnel in these facilities do not experience

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Olumide Adeosun, Ardova Plc CEO

interrupted power supply. We have also donated fuels to power isolation centres and pandemic nerve centres in Lagos State. We are also working with our CSR partners, Five Cowries Initiative, to make donations to community focused causes, as part of our efforts to support the most vulnerable; most particularly the children in the neighbourhoods in which we have operations.”

Wednesday 29 April 2020

BUSINESS DAY

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Wednesday 29 April 2020

BUSINESS DAY

Corporate governance

Governance and leadership mindset during uncertainties Olayimika Phillips

e now live in a world which has become unimaginably integrated but more unpredictable and veracity of facts is objectively questionable. Nowhere is this felt more than the corporate sphere where decisions must be based on “hard” facts and data; hence decision making, and sustainable growth are more difficult for leaders and directors. At the centre of this discourse therefore is the proposition that for an organisation to be successful under the current global circumstances, a unique mindset must be forged. The important question then is what type of mindset should drive business managers and directors in boardrooms? Is it a fixed mindset impervious to evolution or growth mindset which constantly adapts, adjusts to changing situations? Kodak, and Nokia have always been the template of multinationals that failed for one reason: fixed mindset of the leadership, who assumed that what had always worked will continue to infinitely. However, it is always easy to, with hindsight, vilify them; but the reality is, falling into organisational fixed mental complacency is terribly easy. When CEOs and boards become ossified to ideas which challenge their notions of what works; demonstrably uncommitted to defined corporate values which they profess; and incapable or unwilling to admit to fallibility/ limitation, the result is almost always a fixed mindset in management which will only be identifiable in hindsight. How do we shift mindset? In order to have shift in corporate mindset, one key step which must be taken is to define a resilient strategic intent for the mindset to be manifested. In other words, a growth mindset is not just something to be mouthed-it must be for a definite purpose to which the entire spectrum of the organisation can firmly commit. The intent is the destination for which the growth mindset is required to arrive. Having a growth mindset

without a purpose will certainly lead to chaos. Nonetheless, it is not enough to have defined intent, decisions of the board must be constantly evaluated to ascertain whether they converge with or diverge from the growth mindset and the agreed intent. On an individual level, the CEO and each director must be an avid journalist, detailing her thoughts, questions, concerns, and insights on the direction of the organisation and constantly testing them. Importantly, a keen sense of awareness of triggers of fixedmindedness is fundamental to overcoming it. Fear of failure or being seen not to have all the answers is a common indicium. The board must be willing and able to say “educate me”-whilst not being lazy. As the industrial and scientific revolutions have shown, growth mindset often underlies the humility to admit limitation in knowledge that drives R&D. Relatedly, a CEO/ board that is growth driven must consciously pay attention to how she reacts when outperformed. True growth mindset does not become resentful when outperformed; rather it learns, unlearns and relearns from the experience. The same approach must be taken when the organisation is faced with challenges-rather than skirt around the issue, it ought to be confronted with the understanding that it is an www.businessday.ng

opportunity. Therefore, to thrive in volatile, uncertain, complex and ambiguous situations, and develop a growth mindset, there are competencies which leadership of organisations must demonstrate. First, leadership must be nimble in learning, unlearning and relearning knowing that the “trusted-old ways” may not work and even where they do, that such may not align with present needs. This can be achieved by being open to

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The sort of confidence proposed here is not the ego-driven, “I’m the centre of the universe” type; rather it is confidence built on knowledge, acceptance of limitations, willingness and ability to learn, keen perception of developments, and demonstrable commitment to the corporate purpose

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draw from diverse experiences, people and sources; being mindful that the boardroom is not simply about striking off items on the agenda but a collective learning experience. Second, there must be concerted drive to develop and propagate a shared corporate purpose. This will serve as a beacon, a guiding light for the company in times of uncertainties. For a purpose to be meaningful, it must transcend the ego-bloating affectation of individual directors or empire building aspirations of the CEO. In other words, it must bear a meaning greater than and beyond individuals or the board as a collective, considering the larger society and other stakeholders. This way, the shared purpose can serve as a useful motivator and enhancer of high performance through commitment by management and employees. Third, building strategic collaborations has always held promise of success. Although not immune to its own peculiar challenges, history is replete with alliances and partnership between individuals, societies, organisations and nations which have transformed the course of humanity in ways unimaginable. Collaboration not only births influences and forces the leadership of companies to change/improve on default thought systems, it opens up the institutional mind to new @Businessdayng

possibilities for tremendous growth-which ensures not just survival in chaos and uncertainties but also assurance of thriving. At the board level, ideas must be the tradeable commodity being exchanged between directors respecting differences and appreciating divergent perspectives to foster trusted relationships, while at the same time encouraging growth-focused constructive conflict of ideas. Finally, without question the sort of governance and leadership required in uncertain times must be one imbued with deep confidence and tested resilience. The sort of confidence proposed here is not the ego-driven, “I’m the centre of the universe” type; rather it is confidence built on knowledge, acceptance of limitations, willingness and ability to learn, keen perception of developments, and demonstrable commitment to the corporate purpose. Resilience must be both individuated and systemic. A leader who as an individual is resilient, but managing a company not built to withstand systemic shocks will be swimming against the tide. The converse is also true of an organisation structured to withstand negative externalities may flounder in the hands of a leader with no understanding of how to use the tools at her disposal.

Olayimika is a Partner in the law firm of Olaniwun Ajayi LP and has over 34 years of professional experience. She specializes in corporate governance, providing pragmatic solutions to the diverse challenges which confront corporates at different growth stages and serves on the board of several companies (listed and privately held).”

Wednesday 29 April 2020

BUSINESS DAY

news FG targets to test 2m people for COVID-19 within 3 months ... US promises to send ventilators to Nigeria ... SGF says next stage in pandemic is a ‘period of personal responsibility’ ANTHONY AILEMEN, INNOCENT ODOH & weazu noted that a major way to stop transmission of the GODSGIFT ONYEDINEFU, Abuja

n a bid to scale up aggressively the number of COVID-19 tests conducted in the country, the Federal Government has set a target to test 2 million Nigerians in the next three months. This comes as the United States has indicated that it will send ventilators to Nigeria to enable government strengthen capacity to fight the pandemic. Chikwe Ihekweazu, director general, Nigeria Centre for Disease Control (NCDC), who spoke on the new testing target on Tuesday, said the plan entails ramping up testing up to 50,000 per state within the period, and that the collaboration of state governments and citizens would be critical. “This is a very ambitious target, we are working hard with development partners to equip our labs to be able to do this, it’s going to cost us a lot of money and we need collaboration of every one,” he said at the daily briefing of the Presidential Task Force on COVID-19. “We need collaboration and cooperation of every state government in Nigeria, every department of public health and citizens in the state.” The DG added that there is also a need to build on the supply side to see that the samples come in. Admitting that the country was lagging behind in number of tests conducted compared to other African countries and needs to catch up, Ihek-

coronavirus disease is to increase testing. He said this had necessitated the laboratory strategic group responding to the outbreak in the country to set up the target which is in line with President Muhammadu Buhari’s directive to embark on aggressive testing and contact tracing in his last nationwide broadcast. “The only entry point to control this is through testing because of the number of asymptomatic and mildly symptomatic, we can’t understand the size of the problem is we do not test. We are lagging behind and now we must catch up,” Ihekweazu said. “The laboratory strategic group that is responding to this outbreak has set itself a target of testing two million per in the next three months.” He said over the next few weeks he will be engaging aggressively with every state, “as we increase capacity to test and send in samples”. The DG further highlighted non-essential inter-state travel as a major factor fueling the transmission of the virus. He said inter-state travel is counter-productive and therefore urged every citizen to limit travelling and adhere to other preventive measures. Meanwhile, US President Donald Trump on Tuesday said the United States will send ventilators to Nigeria, an offer he made during a telephone conversation with President Muhammadu Buhari on Tuesday.

FMDQ Exchange admits United Capital, Sterling Bank commercial paper notes to its platform Iheanyi Nwachukwu

oming shortly on the heels of the issuances and subsequent successful admission of the Flour Mills of Nigeria Plc Bond, the Nigeria Infrastructure Debt Fund and the Coronation Merchant Bank Limited Commercial Paper (CP) notes, FMDQ Exchange Limited (FMDQ Exchange or the Exchange) had approved and admitted the United Capital Plc N1.35billion Series 1 and N3.97billion Series 2 CP under its N20billion CP Issuance Programme. Also, the Exchange has admitted the Sterling Bank Plc N6.85billiin Series 1

Tranche A and N8.15billion Series 2 Tranche A CP under its N100billion CP Issuance Programme onto the Exchange’s platform. Despite the economic headwinds experienced by businesses around the world owing to the COVID-19 pandemic, FMDQ Holdings Plc (FMDQ Group or FMDQ) has through its subsidiary, FMDQ Exchange continued to avail necessary support to governments, corporates and individuals through the provision of capital market solutions. The Nigerian capital market and indeed, the commercial paper market Continues on page 31 www.businessday.ng

L-R: Akin Abayomi, commissioner for health; Oba Adeyeye Enitan Ogunwusi, Ooni of Ife; Babajide Sanwo-Olu, Lagos State governor; Obafemi Hamzat, deputy governor, and Folashade Jaji, secretary to the state government, during the donation of Motorised Modular Fumigators to the Lagos State Government by the Ooni of Ife, to fight against the COVID-19 pandemic in the state, at Lagos House, Marina, yesterday.

Nigeria seeks documents from Citi, JPMorgan, others to overturn $9.6bn P&ID case DIPO OLADEHINDE

igeria is seeking documents from 10 banks, including Citigroup Inc. and JPMorgan Chase & Co., in a bid to overturn a $9.6 billion arbitration award related to a business deal shrouded in allegations of corruption. Nigeria asked a federal court in New York for permission to subpoena information about transactions involving former government officials, including former President Goodluck Jonathan. The politicians were in office when the state signed a contract with Process & Industrial Developments Ltd., and later became involved in a costly dispute with the company. “There is good reason to believe that ministers at the highest level were involved

in a corrupt scheme to steal money from Nigeria,” Attorney General Abubakar Malami said in court filings submitted on March 24. Nigeria’s chances of annulling the giant penalty hinge on proving the 2010 gas supply arrangement was a sham designed to fail by P&ID and government officials. Officials in the country went on a full frontal attack mode last August when a U.K. judge ruled P&ID could enforce an arbitration tribunal’s 2017 ruling, now totaling $9.6 billion including interest, which found the country breached the agreement. Nigeria is seeking the bank documentsaspartofaninternal investigation into the contract andthearbitrationproceedings. The findings will form the basis of the U.K. appeal. P&ID “had no ability or intention of ever performing”

the contract, which required the company to build a gas processing plant and the government to supply it, Malami said. Nigeria wants the U.S. court’s permission to obtain information from the banks relating to companies and individuals affiliated with P&ID, as well as former government officials, to aid the ongoing investigation by the country’s Economic and Financial Crimes Commission. The 10 institutions are likely to have processed U.S. dollar transactions connected to P&ID’s operations, as either correspondent banks or the New York branches of foreign lenders, the filings said. U.S. District Judge Lorna Schofield allowed Nigeria to send copies of its application to the banks, eight of which had been served by April 15, according to filings. The court, however, hasn’t

decided whether to give Nigeria access to the financial documents. The country’s request may run into opposition from the banks. JPMorgan complained in a court filing that it has “substantial concerns about the breadth of the proposed subpoena.” Nigeria is seeking documents from lenders including Citigroup and JPMorgan, as well as the New York branches of Deutsche Bank AG and United Bank for Africa Plc. The EFCC is probing the roles of two former oil ministers, the late Rilwanu Lukman and his successor Diezani Alison-Madueke, according to Nigeria’s court filings. Lukman signed the contract while Alison-Madueke was responsible for the “flagrant mishandling” of the government’s arbitration strategy until 2015, the country said.

Poor awareness on guidelines may render locally-made facemasks unsafe … expert calls for study into sterilisation process, materials DESMOND OKON

ikirat Ayinde (not real name), a local fashion designer in Alapere area of Lagos, Nigeria’s commercial capital, says she is not aware of the Barrier Masks Guide for makers and users published by the Standards Organisation of Nigerian (SON) on its social media page on Monday. “No,” she said, feeling jittery, when asked if she knew about the guide, a six-page document available on the Twitter page of the quality watchdog.

Ayindespecialisesinallkinds of clothes, but the move by the Lagos State government to implementcompulsoryuseoffacemasks in public places in a bid to contain the spread of COVID-19 in the state has made her delve into making of facemasks. Last week, the governors of the six South West states of Ekiti, Lagos, Ogun, Ondo, Osun, and Oyo resolved to make wearing of facemasks compulsory for residents of their states. Also during his nationwide broadcast on Monday, President Muhammadu Buhari said the government “will

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strictly ensure the mandatory use of facemasks or coverings in public in addition to maintaining physical distancing and personal hygiene”. “State governments, corporate organisations and philanthropists are encouraged to support the production of cloth masks for citizens,” he said. Ayinde and other tailors like her have been responding to this call, churning out all types of fashionable facemasks in many parts of the country. However, like Ayinde, many tailors around the country who are making brisk @Businessdayng

business sewing reusable facemasks are unaware of the guidelines for production published by SON, and this lack of awareness may render these locally-made masks unsafe for use, experts say. “These nose masks are becoming fashionable,buttowhat extent are they sterile? How clean are they? Should the personwashitbeforeuse?Thereare some messages that need to be reinforced around the use of the masks,”saidFelixAbraham,asenior programme officer/health financing engagement officer at Results for Development.

Wednesday 29 April 2020

BUSINESS DAY

news Food crisis looms amid fear of... Continued from page 1

on the state and north-west region for inputs. Farmers who spoke with BusinessDay said food crisis is imminent because the pandemic has already obstructed the country’s fragmented farming supply chain which has led to the recent spike in food prices. They also foresee high prices based on the ongoing Muslim Ramadan period – when most farmers tend to be less productive due to their religious obligations. They further said that the country is approaching the peak period of the wet season – May through July – when vegetables such as tomatoes and pepper become scarce owing to their inability to do well during the period. “We are going to experience food scarcity next year if the government fails to act now,” said Ibrahim Kabiru, national president, All Farmers Association of Nigeria. “The coronavirus pandemic has obstructed the farming systems and the two-week lockdown of Kano State will further worsen the problem,” Kabiru said. He called on the government to adopt disruptive innovative solutions to address the impact of the pandemic on the agricultural sector. Since the lockdown started four weeks ago in Lagos, Ogun, and Abuja, prices of key staples have surged by more than 20 percent across the country. Similarly, the hunger rate has risen fast as the government fails to provide sufficient social safety net to protect the poor from the economic fallout of the COVID-19 pandemic. “There is going to be a food shortage next year and it is not just in Nigeria but globally,” said Abiodun Olorundenro, manager, Aquashoots Limited. “The grains we are consuming now are the ones grown last year. We are supposed to start growing the ones for next year now but

the pandemic has obstructed the supply of essential inputs,” Olorundenro said. “If we are to avert this food crisis next year, we need to do much more to grow enough food this year,” he added. He stated that the government has been trying to support the sector but much more will be required now, saying that inputs must be made available to farmers at affordable prices and security of lives and property must be guaranteed on farmlands. Apart from Dangote Tomato located in Kano, other tomato paste or puree processors will be impacted by the spread of the virus as they rely on fresh tomatoes from Kano for inputs. Many flour millers and packaged food companies source their maize, wheat and other inputs from the Kano axis and would likely be hurt by that. Ifeanyi Okeleke, managing director of Kenfrancis Farms, an agro-based manufacturing firm, said the spread of the virus in Kano could worsen an already high cost of inputs, piling more pressure on already stressed manufacturers’ margins. Recently, the World Food Programme (WFP) warned that the coronavirus pandemic would push an additional 130 million people to the brink of starvation. “There will be a 10 or 12 percent reduction of farm produce this year and if the coronavirus continues to spread to rural communities the reduction might get to 25 percent,” Ayodeji Balogun, country manager, AFEX Commodities Exchange Limited, said. “We need to declare a state of emergency on the cultivation of wet farming and ensure that there is free movement of trucks conveying food on the roads and ports,” Balogun said. Some analysts urge more participation in agriculture, urging Nigerians to embrace aeroponics (growing crops without the soil) while freezing their fruits for storage purposes.

businesses, communities and individuals, FMDQ Group remains committed to the well-being of the markets and shall continue to deploy strategies to promote market development amidst the volatilities, in collaboration with market participants, towards boosting the resilience of the Nigerian financial market. FMDQ Group is Africa’s first vertically integrated financial market infrastructure (FMI) group which

provides a one-stop platform for the seamless and cost-efficient execution, risk management, clearing, settlement and depository services, as well as data and information services across the debt capital, foreign exchange and derivatives markets in Nigeria, through its wholly owned subsidiaries – FMDQ Exchange, FMDQ Clear Limited, FMDQ Depository Limited, FMDQ Private Markets Limited & iQx Consult Limited.

turing companies relying

Frederic Oladeinde (l), commissioner for transportation, Lagos State, and Tolulope Opayinka, MD/CEO, Letshego Microfinance Bank, during a courtesy visit to the Lagos State government. Letshego Nigeria during the visit contributed Personal Protective Equipment (PPE) and cash donations worth N3m to the state to fight the COVID-19 pandemic.

Nigeria gets lifeline as IMF approves... Continued from page 1

ing without the strings of a

full programme. Nigeria’s success in raising the IMF loan will ease some pressure on the foreign exchange market which has witnessed acute dollar shortages lately. The parallel market rate weakened to as low as N450/$ Monday as dollar demand outpaced supply. Analysts, however, say the IMF facility will only serve as a short-term relief for a dollarthirsty Nigeria which may have bigger problems than $3.4 billion can solve. The country’s balance of payment deficit for 2020 is estimated at around $9 billion, although the country expects another $3.5 billion in multilateral loans from the World Bank and Africa Development Bank. “The IMF loan will improve FX liquidity in the interim but whether that is sustainable in the long term is another thing entirely,” said Omotola Abimbola, a fixed income analyst at investment bank, Chapel Hill Denham. “Nigeria’s current account deficit is quite large and the IMF loan will not be able to finance it entirely which means it will not completely solve all the structural problems we have,” Abimbola added. As at April 15, 2020, up to 100 countries had approached the IMF for similar support under its rapid financing instrument, as calls heighten on the Fund to ramp up crisis response for emerging markets and developing countries to enable them combat impact of coronavirus. Announcing the request to IMF earlier in the month, Zainab Ahmed, minister of finance, budget and national planning, had insisted that Nigeria does not intend to negotiate any formal bailout programme with the IMF.

“This loan will not be tied to any conditionalities,” Ahmed had said. Ahmed also confirmed then government was in talks with the World Bank for some support of up to $2.5bn, and had sent a similar request to the African Development Bank for up to $1bn as well as the Islamic Development Bank. With the IMF approving the $3.5 billion, Nigeria has now shelved the external borrowing plans that were accounted for in the 2020 budget. The Senate on Tuesday approved President Muhammadu Buhari’s request to raise a fresh loan of N850 billion from the domestic capital market to finance projects in the 2020 budget. Buhari, in a letter which was read in plenary by Senate President Ahmad Lawan, explained that the loan was to replace the external borrowing provision and to ensure adequate funds to finance projects outlined in the 2020 budget. The president said the change of tack had become necessary after the oil price downturn severed external borrowing conditions. The 2020 Appropriation Act provided for N1.59 trillion of new domestic borrowing and N850 billion of new external borrowing which were to part finance the 2020 budget deficit of N2.2 trillion. “The Senate may wish to note that external borrowing from the international capital market increases Nigeria’s external reserves, provides access to lower costs as well as avoids crowding out private sector borrowers who also wish to access the domestic capital market,” Buhari said in the letter. “However, recent developments in the global economic environment as a result of the coronavirus pandemic and the decline in international oil prices have made it less www.businessday.ng

attractive to borrow from the international capital markets at this time,” he said. Buhari said it, however, remains the government’s intention to access the international capital market when conditions improve to refinance the N850 billion of new borrowing and epitomise the benefits inherent in external borrowing. “Presently, the conditions in the domestic capital market are favourable in terms of availability of funds and relatively low interest rates. This cause of action is deemed prudent given our current realities,” he said. In a note on Tuesday titled “Conversion of N850 billion New External Borrowing in the 2020 Appropriation Act to Domestic Borrowing”, the Debt Management Office (DMO) said the 2020 Appropriation Act approved a total of N1,594.99 billion as new borrowing to part-finance the deficit in the budget. This was made up of N794.99 billion domestic borrowing and N850 billion external borrowing. “With the COVID-19 Pandemic and its attendant effect on the world economy and the International Capital Market, the Federal Government reappraised its borrowing plans and decided that it would be more expedient to

raise the N850 billion, earlier approved as external borrowing, from domestic sources. This conversion from external to domestic is to ensure that the implementation of the 2020 Appropriation Act is not jeopardised by lack of funds,” DMO said. “Thus, the N850 billion is not new or incremental borrowing, rather it is an amendment of the source of borrowing from external to domestic. With this change, the total new domestic borrowing under the 2020 Appropriation becomes N1,594.99 billion which is the same as the total new borrowing in the 2020 Appropriation Act,” it said. For compliance with the law, the DMO said President Buhari forwarded requests to the Senate and House of Representatives to convert the source for raising the N850 billion from external to domestic. “The Senate approved the request on Tuesday, April 28, 2020, while the approval of the House of Representatives is expected. Upon approval of the request by the House of Representatives, the Debt Management Office will issue FGN Securities in the Domestic Market to raise the N850 billion, thereby providing high-quality investment opportunities for the investing public,” the DMO said.

FMDQ Exchange admits United Capital... Continued from page 30

has in recent times provided the much-needed succor for corporate entities looking to raise funds to meet shortfalls in their working capital needs as well as capital expenditures. These commercial papers like all other securities listed, quoted and traded on the FMDQ Exchange platform shall be availed global visibility through the

FMDQ Exchange’s website and systems, transparency through its inclusion in the FMDQ daily Quotations List, governance and continuous information disclosure to protect investor interest, credible price formation amongst other benefits derived from the preferred admission to the FMDQ Exchange platform. As the realities of the aftermath of the COVID-19 pandemic hit

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Wednesday 29 April 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Markets point to deflation risks for US economy

Severity of economic blow from coronavirus pandemic raises possibility of falling prices COLBY SMITH

arket measures of short-term inflation expectations remain at the lowest levels since the financial crisis, putting pressure on the Federal Reserve to address deflation risks at its meeting this week. Investor expectations are reflected in prices for derivatives that can be used to hedge inflation risks. One-year inflation swaps indicate an inflation rate of minus 1 per cent, while two-year inflation swaps are pricing in an inflation rate just below zero — the lowest levels since 2008. “Demand has just collapsed,” said Steven Blitz, chief US economist at TS Lombard. “It is going to take time for that to come back.” Mr Blitz wrote in a recent note that “deflation and very low inflation is the clear call for the next 18 months”.

A closed diner in Colorado. Investors are calling on the Fed to offer more guidance on the future path of its monetary policy measures to shore up confidence © Bloomberg

The impact has yet to show up in the Fed’s favourite inflation gauge, the core personal consumption expenditures price index (core PCE) as the most recent reading covers the period before much of the US was shut down to stop the spread of coronavirus. In February the index rose 1.8 per cent year over year, up from 1.7 per

cent the previous month. Analysts also caution that market inflation expectations are particularly sensitive to changes in oil prices, which have plunged in recent weeks. But they say the severity of the economic blow from the coronavirus pandemic raises the possibility of falling prices. “In the near-term, I worry

about deflation,” said Bob Michele, chief investment officer at JPMorgan Asset Management, adding that he did not expect a “prolonged period” of price declines because he anticipated the Fed remain will accommodative for an “extended” amount of time. Longer-term market gauges show investors do not expect the extraordinary rescue measures undertaken by the US central bank and the federal government are likely to trigger a surge in consumer prices. The 10-year “break-even” rate, which is derived from prices of inflation-protected government securities, is 1.16 per cent. Meanwhile, a swap rate that measures expectations of the average level of inflation over five years from now sits slightly higher at 1.9 per cent. “We are not of the view that we will have structurally higher inflation,” said Mike Riddell, a portfolio manager at Allianz Global Investors. He described current market

pricing of short-term inflation expectations as “excessive” and forecast inflation to eventually rise but fall short of the Fed’s 2 per cent target. Ian Lyngen, the head of US rates strategy at BMO Capital Markets, said longer-dated Treasuries were benefiting from the inflation backdrop. He noted that investors were nonetheless paying up to protect against future inflation, pointing to strong demand at an auction of five-year Treasury inflation-protected securities last week. Investors have called on the Fed to offer more guidance on the future path of its monetary policy and liquidity measures to shore up confidence, but many are sceptical the central bank will be able to achieve its inflation goals. “The Fed is not going to say it is out of bullets or that there is nothing they can do [about inflation],” Mr Blitz said. “But as analysts and economists, we should recognise the limits of the Fed.”

Low Covid-19 death toll raises hopes Africa may be spared worst | Free to read

Continent has limited confirmed virus fatalities but experts warn it is too early to draw conclusions

DAVID PILLING

ince the first African coronavirus case was confirmed on February 14 when a Chinese national was diagnosed in Egypt, the virus has spread to virtually all corners of the continent. Bill Gates, the Microsoft founder whose charitable foundation is focused on the pandemic, has warned that, if left unchecked in a region of crowded slums and flimsy health systems, the disease could claim a horrifying 10m African lives. Yet, more than two months on, some are daring to whisper a more hopeful message. Maybe, just maybe, the continent could be spared the worst of the pandemic. “I don’t get it,” said Kennedy Odede, a grassroots organiser who said that of 400 people tested randomly in Nairobi’s huge Kibera slum last week, only three were positive. “For me, it was good news.” Africa has more than 32,000 official cases of the virus that has infected more than 3m people around the world, and suffered fewer than 1,400 deaths. Given the limited testing capacity, the numbers may greatly underestimate the true burden, although Mr Odede, like others, said there was little evidence of unexplained outbreaks of the virus. At face value, the figures suggest that a continent of 1.2bn people had suffered fewer Covid-19 deaths than the US was recording each day. “People are very cautiously beginning to breathe a sigh of relief, although it is too early to say that

An activist explains how to wear a face mask in Nairobi’s Mathare slum. Africa has more than 32,000 official cases of the virus and fewer than 1,400 deaths © Fredrik Lernery/AFP/Getty

we’ve dodged a bullet,” said Murithi Mutiga, a Nairobi-based analyst with the Crisis Group think-tank. John Nkengasong, director of the Africa Centers for Disease Control and Prevention, warned it would be wrong to draw any firm conclusions. There was, he said, no hard evidence that any factors specific to Africa — whether a younger population, warm weather or even the prevalence of BCG vaccinations against tuberculosis — had any impact on the disease’s spread. “I would be extremely cautious at this point to make any statement that we are moving slowly and that there are special factors,” he said, adding that confirmed cases have risen by more than 40 per cent in a week. That suggested Africa might simply be behind the curve, with the pandemic picking up speed now. “Our testing level is extremely low,” he said, implying many cases www.businessday.ng

might have gone undetected. About 415,000 tests meant only 400 per million had been carried out, which is much lower than in Europe. Rather than speculate about unproven factors retarding the disease’s spread, Mr Nkengasong said he preferred to praise the decisive action taken by governments. “African countries took very radical steps very early on by shutting frontiers and doing lockdowns,” he said. Paul Hunter, professor of medicine at the University of East Anglia, said the authorities were right to be cautious. Still, he said, there were reasons to suspect the virus might be less deadly in Africa where droplet-spread diseases, such as flu, have tended to spread more slowly. The continent had only one case of severe acute respiratory syndrome (Sars) during the 2002-03 outbreak, with a sole

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infection in Cape Town. Slower spread of airborne infections, said Prof Hunter, might be attributable to less dense populations, the effect of ultraviolet light or a climate that meant people spent more time outside. In the case of coronavirus, he said, Africa’s youthful population may also help to explain the low death rate so far. The median age in Africa is 19.4 years, compared with 40 in Europe and 38 in the US. Prof Hunter said: “There have been so few cases of severe disease in people under 20 in the west that, when you have a population that is median age 19, the risk of high numbers of fatalities is substantially reduced.” Nor was there strong evidence, Prof Hunter said, that the benefit of young populations was undermined by poor nutrition. “Malnutrition may be a contributing factor to mortality, but there is no evidence for what is at this stage just a hypothesis,” he said. One way to judge whether coronavirus deaths might be being under-reported was to search overall fatality statistics for deaths in excess of normal levels. In South Africa, deaths in the year up to April 14 were “generally within the bounds of expectation”, according to the country’s Medical Research Council, suggesting few hidden coronavirus deaths. Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here. In Egypt, a country of 100m @Businessdayng

people that has recorded 4,782 infections and 337 deaths, one epidemiologist said the data released by the health ministry was insufficient to predict the course of the disease. But he doubted that the official statistics were wildly inaccurate: “If infections were drastically higher, we would see hospitals being overwhelmed, which is not happening. But it could still happen.” Trudie Lang, director of the Global Health Network at the University of Oxford’s Nuffield Department of Medicine, said it would be wrong — and potentially dangerous — to jump to conclusions. It was far too early to conclude from the data available that the disease was spreading more slowly, she said. However, Prof Lang said it was possible the virus was spreading “differently” in Africa, including with more asymptomatic cases. It was possible, too, that people with underlying conditions such as tuberculosis might respond differently to Covid-19, conceivably making patients more resistant, because of a previously triggered immune response, rather than more vulnerable as is usually surmised. “It is really important to have evidence-based conclusions,” Prof Lang said, adding that it was vital to conduct research into the disease’s progress to help governments implement informed policies. Until health experts knew exactly what was going on with the disease, she said, governments were right to err on the side of caution. “We need to keep measuring and to keep testing,” she said.

Wednesday 29 April 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

US oil prices swing as coronavirus fuels storage fears

Traders are worried WTI crude could again turn negative as pandemic pummels global economy DAVID SHEPPARD, ANNA GROSS, AND THOMAS HALE

S oil prices endured another day of volatile trading on Tuesday as concerns over storage capacity prompted fears the American crude benchmark could again plummet into negative territory. The West Texas Intermediate contract for June delivery fell 20 per cent to a low of $10.07 a barrel in early London trading, before rebounding to trade near $12 by late afternoon. The volatility came on the heels of a 25 per cent plunge in the price of the same contract on Monday. Extreme price swings have rocked global oil markets in recent sessions. Last week, WTI crude for May delivery fell to negative $40 a barrel shortly before expiry, marking the first time in history that the price of an oil contract had fallen below zero. The coronavirus pandemic has reduced demand for oil by close to a third, raising concerns that a glut of unwanted supplies will overwhelm global storage capacity. Oil tanks have been filled up or booked out by traders, while the amount of crude and fuel being stored on vessels at sea has surged, with IHS Markit putting seaborne crude stocks at 175m barrels, up from 100m in late March. Robert Rennie, Sydney-based head of market strategy at Westpac, said the industry was approaching the limit of its storage capacity, including floating storage, which was having a “depress-

Oil tanks have been filled up or booked out and the amount of crude and fuel being stored at vessels at sea has surged © SeongJoon Cho/Bloomberg

ing effect” on prices. Traders said the only resolution will be for production to start shutting down or throttling back, but most oil companies are hesitant to make the first move. Oil-producer group Opec and its allies such as Russia are due to start cutting about 10 per cent of global supplies from early May — though that may be accelerated — but the size of the demand drop at the peak of lockdowns and travel restrictions is closer to 30 per cent of the normally 100mbarrel-a-day global market. “Very little supply has been cut,” said Martijn Rats, global oil strategist at Morgan Stanley. “It’s a negligible amount.” Volatility in crude markets has been exacerbated by exchange traded funds. The tumble in US

prices on Monday was driven by the world’s largest oil-backed ETF starting to sell off its positions in June futures contracts, moving into contracts for later delivery. S&P GSCI, one of the largest indices tracking a basket of commodities, said on Tuesday it would make an “unscheduled” move out of the June WTI contract at the close of trading — as long as prices were not already in negative territory — adding a further wave of selling pressure as funds following the index will need to shift positions in response. “No one wants to be among the last to close out their position ahead of expiry, fearing a repeat of the May expiry,” said Warren Patterson, Singaporebased head of commodities

strategy at ING. “The move we are seeing suggests that the June contract is going to become increasingly illiquid, and as a result, will likely suffer from increased volatility in the lead up to expiry.” Brent crude for June delivery also initially slid on Tuesday, falling to a low of $18.73 a barrel before recovering to $20.15 by early afternoon, putting it almost 1 per cent higher on the day. The international oil marker last week dropped below $20 a barrel for the first time in almost two decades. Prices for physical cargoes in the spot market for delivery in the next couple of weeks are even weaker. The price of dated-Brent, a physical benchmark based on a

basket of North Sea crudes that is assessed by pricing agency S&P Global Platts, fell to $13.65 a barrel on Monday, down almost 15 per cent on the day — a sign that traders have little appetite for cargoes anywhere in the world. Other energy markets have also been hit, with the price for cargoes of liquefied natural gas (LNG) falling to the lowest on record, trading at less than $1.90 per million British Thermal Units (MMBTU). That is down more than 60 per cent from the start of this year. Equity markets in Europe shrugged off volatility in oil prices to push higher. The European benchmark Stoxx 600 added 1.5 per cent while London’s FTSE 100 rose 1.6 per cent and Frankfurt’s Xetra Dax gained 1.3 per cent. Wall Street opened higher before retreating at midday in New York. The S&P 500 was flat while the tech-heavy Nasdaq Composite edged 0.1 per cent lower ahead of the release of closely watched earnings results from leading groups, includes Alphabet, Google’s parent company. Equity markets across AsiaPacific had also been largely unmoved by ructions in the oil market overnight. Japan’s Topix was flat, while South Korea’s Kospi edged up 0.6 per cent and China’s CSI 300 added 0.7 per cent. Brokers said broad support from big central banks had provided some support for stock markets. The Bank of Japan on Monday said it would buy an unlimited amount of government bonds and keep interest rates low. Investors are also focused on meetings this week by the European Central Bank and US Federal Reserve.

Investors turn bearish on the pound

Short bets rise to highest level of 2020 over Brexit and Covid-19 concerns PHILIP GEORGIADIS

nvestors have increased their bets against the UK pound to the highest level of the year, raising the spectre of a new bout of volatility for the currency. Fund managers and other companies betting in the futures market have turned bearish as concerns over Brexit rise in parallel with the damage the coronavirus pandemic is causing the UK economy, analysts said. Sterling shorts have overtaken longs for the first time since midDecember, according to Commodity Futures Trading Commission data released this week, meaning investors on the whole are wagering on a fall. The net positioning of “noncommercial” players in the futures markets — a category that in-

cludes individual investors, hedge funds and other asset managers www.businessday.ng

— fell to minus 1,380 in the week to April 21, having previously been

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positive all year. Downing Street has said it will not seek an extension to the current post-Brexit transition period, which ends on December 31, despite the business and political upheaval caused by the Covid-19 pandemic. Earlier this week UK prime minister Boris Johnson told EU leaders they would have to change tack to secure a deal, while cabinet office minister Michael Gove said the pandemic should concentrate minds rather than provide an excuse to delay negotiations. The position leaves just two months to go until both sides take stock of whether an agreement is possible, and means Brexit fears are back for investors. “My inbox is full of questions about what a failure to extend Brexit negotiations might mean,” said Kit Juckes, macro strategist at @Businessdayng

Société Générale. “Sterling’s at best stuck in a tight range, at worst vulnerable to a fresh bout of nerves in due course,” Mr Juckes said. Sterling has steadied over the past month after falling to historically low levels as concerns over the pandemic tore through markets in March. The currency was recently trading just below $1.25, around the levels it has been lodged in for most of the month. The return of Brexit uncertainty, combined with concerns over Covid-19, has caused investors to “curtail some long positions on the pound and to build back some of those ‘Brexit shorts’”,said Francesco Pesole, a foreign exchange strategist at ING. He added that unless the prospects for an extended transition increased, “the risk of pound shorts piling up again is high”.

Wednesday 29 April 2020

BUSINESS DAY

ANALYSIS FT Coronavirus apps: the risk of slipping into a surveillance state

Governments are weighing a trade-off between the effectiveness of tech solutions to track the pandemic and privacy PATRICK MCGEE, HANNAH MURPHY AND TIM BRADSHAW

hen Steve Jobs discovered that Google was developing a smartphone platform to rival Apple’s iPhone, he declared “thermonuclear war” on his Silicon Valley neighbour. Now, facing a global pandemic threatening millions of lives, more than a decade of hostilities between two of the world’s most valuable companies have been put on hold. In a new “spirit of collaboration”, Apple and Google are jointly developing a system for tracking the spread of coronavirus. “We view this an existential threat to large swaths of humanity,” says one person involved in the effort. “Rivalries have been set aside for the greater good.” The tech giants are building a contact tracing system aiming to use wireless signals to inform people if they encounter someone who has — or is later diagnosed — with Covid-19. Testing of its first incarnation is set to begin this week and within months the tool will be built directly into two smartphone platforms used by billions of people. Their aim is to give health authorities the world over “track-and-trace tools” that would help isolate infected populations and reopen the economy. But by putting forward their own idea for a single, global system that emphasises privacy over centralised oversight, Apple and Google have set up a new confrontation between Silicon Valley and governments around the world. Many nation states have their own ideas of how best to harness technology to stem the outbreak, including by monitoring their population’s detailed movements and building vast databases of information about their citizens. If governments do press to get access to more data using these apps, they could find public opinion on their side. “[The extent to which] people are concerned about privacy depends on what the relative benefits are,” says Leslie John, associate professor at Harvard Business School, whose research focuses on the psychology of privacy decision-making. “In a time when people are concerned about life and death, people may be more willing to give up information for greater health.” The core issue with the new apps is that there is a direct tradeoff between how effective they might be in helping control new outbreaks and the potential invasion of privacy, whether that involves the type of information that is being used or the level of compulsion to use the technology. Some activists worry that the

apps could start as a tool to help track the contacts of newly infected patients but end up as de facto “immunity passports”, with citizens required to show their health status on their smartphones before they can use public transport or attend a football match. Even President Donald Trump has outlined the debate ahead. Describing the Apple-Google solution as “amazing”, he warned earlier this month: “We have more of a constitutional problem than a mechanical problem . . . A lot of people have a problem with it.” Apple and Google have insisted that their technology will be off-limits to public health agencies that do not abide by their privacy guidelines. In the hopes of persuading as many people as possible to use their tool, the companies are prohibiting more extensive surveillance and want individuals to be able to choose whether to use the scheme. Their tight control of the software gives already powerful companies huge influence over the success or failure of any public-health app. The outcome of this stand-off between governments and Big Tech could help determine how quickly the world can lift its lockdowns and return to normality during the long months before a vaccine for Covid-19 is ready. Yet critics also fear that holding out such lofty goals for these apps puts too much emphasis on a single solution to a complex problem like no other the world has faced in decades. “Everyone’s desperate. It’s technology utopianism; we’re looking for technology to save us,” says Ashkan Soltani, an independent privacy researcher and former chief technologist at the Federal Trade Commission. When combined with other measures, such as social distancing, widespread testing and isolation of affected individuals, www.businessday.ng

contact tracing apps can help to “break the chain” of infection. But, Mr Soltani adds, “the goal and how they’re sold is that they are going to be silver bullets — which they’re not.” Even without conscripting the devices that live in the pockets of half the world’s population, contact tracing is an inherently invasive practice. Traditional techniques involve tracking down every individual and location visited by someone diagnosed with an infectious disease. According to the WHO, infected people are encouraged to “identify every listed contact and to inform them of their contact status”. Now, faced with the challenge of scaling that process up to entire populations, dozens of tech companies led by Apple and Google hope to take this laborious process and turn it digital. By relying on digital connections instead of faulty memories, the hope is they can track the path of the disease with unprecedented clarity. But the effort faces an enormous ethical dilemma. Arguably, the most effective contact-tracing tools would ignore privacy concerns altogether: apps would be mandatory, every user would be identified, and people would be traced constantly wherever they go. The system would rely on every means possible to track a person’s location including credit card transactions and surveillance cameras. One tech start-up has even suggested using artificial intelligence to monitor via CCTV whether people are remaining a safe six-foot distance apart as they walk the streets. China’s ability to dramatically flatten the curve of Covid-19 infections is partly testament to how an authoritarian government can deploy such technology to contain the virus. The west is seeking to replicate

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the success of these efforts — but without turning into a totalitarian state. So when Apple and Google unveiled their scheme in midApril, their emphasis was placed squarely on privacy. The proposed solution uses Bluetooth to send and receive anonymous signals that change every 15 minutes. If an infected person informs the software they tested positive, any other smartphone user that had a recent encounter would be alerted and given information about what steps to take. Most of the data is kept on people’s phones, to minimise the potential for “de-anonymisation” by either hackers or an overeager government. Users can just as easily opt out as opt in, the companies say. And if any government tries to make participation mandatory, collect the information in a central database or overlay additional trackers such as location, the tech companies simply would not let them. Even so, privacy activists and some politicians have warned about over-reach. Last week, Democratic senator Edward Markey wrote to the US vice-president, Mike Pence, urging strict limits on data use. “Contact tracing efforts should collect only the information from individuals that is absolutely essential to achieve specific, evidence-based, pre-determined public health objectives,” he said. However, some believe that an extensive surveillance system is justified in the current situation, as Covid-19 kills hundreds of thousands of people and paralyses the global economy. A survey by pollster Ipsos Mori, commissioned by the FT, found that two-thirds of Britons are in favour of government phone tracking to help tackle the pandemic. Chris Yiu, executive director of technology and public policy at the Tony Blair Institute for Global Change, says the severity of the @Businessdayng

situation justifies measures that would normally be “out of the question” for democratic societies. “This is quite different from the traditional debate about whether confronting security threats to our way of life merits sacrificing the values of freedom and privacy that define us,” he says. “Covid-19 is not an ideology, and rebalancing the contract between citizens and the state to take advantage of new technologies is not capitulation.” Apple and Google’s leverage stems from their control over how any third-party apps can access the sensors in their smartphones. In their current configuration, iOS and Android make it difficult for developers constantly to access Bluetooth when their apps are running “in the background” — such as when a device is locked or the owner is using a different app for a long period of time. Google and Apple have said they would lift these restrictions for public health authorities to do contact tracing, using new tools for developers that would allow near-constant access to Bluetooth. However, that also means any contact-tracing app that is developed without adhering to Apple and Google’s guidelines would face severe technical and practical limitations. To be effective in tracking other nearby users, the smartphone would have to be unlocked with the screen left on for extended periods — likely running down the battery in a matter of hours. An Australian contact tracing app that was launched without using Apple and Google’s new tools tries to get around these limitations by sending users push notifications reminding them to refresh the app. Despite these issues, almost 2m people downloaded it within just a few hours of its release. The Silicon Valley groups are walking a fine line between privacy and efficacy — and many governments fear they have not got the balance right. The French government is pressing the two firms to relax their position on background Bluetooth usage. The crux of the matter is whether contact tracing in the digital era can truly be anonymous and effective at the same time. Unlike GPS, Bluetooth does not track a person’s location, only the proximity between users. Moreover, Apple and Google have been vague about what constitutes “an encounter” with someone who is infected in terms of the length of time the two individuals are close together. If the required duration of contact on the app is set too narrowly — to just a few seconds, say — users might be pinged repeatedly.

Wednesday 29 April 2020

BUSINESS DAY

news Banks resume cheque clearing as CBN lifts suspension Hope Moses-Ashike

he Central Bank of Nigeria (CBN) on Tuesday lifted the temporary suspension on cheque clearing in the country’s clearing system. Consequently, normal cheque clearing resumed

today April 28 as banks have sent notice to their customers. In a circular signed by Sam Okojere, director, banking services department, the CBN in collaboration with relevant stakeholders has reviewed the need for cheque clearing to accommodate users of cheque as one of the payment instru-

ments in Nigeria, despite the lockdown in some states and the Federal Capital Territory (FCT). “Deposit Money Banks are encouraged to advise their customers with this directives,” the circular stated. The CBN had in a circular dated March 30, 2020, sus-

pended temporarily, cheque clearing in the country. A notice from Fidelity Bank Plc to its customers reads: “Further to our earlier communication on the temporary suspension of Cheque Clearing by the CBN, please be informed that the suspension has been lifted”.

COVID-19: FG calls for safe practices in workplace Innocent Odoh, Abuja

he Federal Government has called for the adoption of safe practices in the workplace as preventive measures to reduce the risk of exposure to the COVID-19 pandemic. A statement issued on Tuesday by deputy director/ head of press and public relations of the Ministry of Labour and Employment, Charles Akpan, notes that minister of state for labour and employment, Festus Keyamo, made

the call on Tuesday in Abuja when he spoke on the commemoration of the “World Day for Safety and Health at Work, 2020.” Keyamo said by adopting preventive measures such as good hygiene, physical distancing, use of personal protective equipment (PPE), among others, the risk of exposure to COVID-19 in the workplaces would be lowered. The minister disclosed that tens of thousands of workers have died from the pandemic, while many still attend work ill-

equipped and without the necessary safety measures in place. He enjoined employers of labour to ensure safe and healthy working conditions, including managing the risks of exposure to infectious diseases such as COVID-19, and workers, on their part, to cooperate with their employers, and adopt safe and healthy work behaviour, as part of their respective statutory responsibilities. “To this end, the employer must ensure good hygiene and cleanliness of the work-

place, implement physical distancing measures, ensure training of workers on infection prevention and control measures, and provide the required personal protective equipment, in accordance with the guidelines that have been stipulated by the Nigeria Centre for Disease Control (NCDC). In addition, necessary administrative and engineering controls must also be instituted as required, to reduce risk of transmission of infection in the workplace,” he said.

OPEC optimistic oil price will hit $40 in second half of 2020 … as Nigeria delays export plans Olusola Bello

rganisation of Petroleum Exporting Countries (OPEC) has expressed optimism that the price of crude oil is set to get to $40 per barrel from the third quarter of 2020, with the implementation of production cuts by OPEC+ and gradual lifting of lockdowns around the world in the second half of 2020. This optimism was expressed by Mohamed Arkab, energy minister of OPEC’s rotating president Algeria on the global impact of COVID-19. If this happens respite may come the way of the Nigerian economy, which is already wobbling because of the devastating effect of COVID-19 and price war between Saudi Arabia and Russia. The country was forced to review its budget benchmark from $57 per barrel to $30 per barrel, and the price of the commodity keep experiencing free fall. However, the Nigerian National Petroleum Corporation (NNPC) has delayed publishing its future oil export plans as it negotiates with local companies and international majors about how to cut output in line with a global deal on production curbs, trading

sources said. Official selling prices (OSPs) for Nigerian oil, usually issued in the second or third week of each month, had still not been issued on Monday. The global supply deal, agreed by the OPEC+ group of oil producers, is due to go into effect on May 1. Traders expect the May OSPs to fall below April’s record lows published by the NNPC. Traders of Nigerian oil told Reuters that Nigeria, an OPEC member, had revised its May programmes for oil cargoes and would also have to lower its output in June, based on the OPEC+ deal. “May cargoes will get delayed and new June cargoes may be relatively few,” one of the sources said. He said the global economy would not stay paralyzed for too long, and together with the 9.7 million bpd cuts that OPEC and its allies pledged for May and June, these factors are set to lift the price of oil in H2 2020, Arkab told Algeria’s national radio, as quoted by Turkey’s Anadolu Agency. The Algerian minister who was reported by Oilprice.com, said: “In China, which was hit first by the coronavirus, and which exited the lockdown first, the return to normalization in the transportation sector is driving up global demand,”

Julius Berger becomes first company to slash dividend BALA AUGIE

L-R: Abiola Olayande, executive director, Mindshare Group; Theophilus Ihejirika, group managing director, Havilah Open Door Limited, and Tayo Ayinde, chief of staff, Lagos State, receiving COVID-19 relief cash donation and ED-JOHN School Facility, Ikorodu, as temporary isolation centre.

Interswitch Group shows efforts to support women in tech Jumoke Akiyode-Lawanson

o mark the International Girls in ICT Day, 2020, Interswitch Group, a panAfrican digital payment and commerce solutions firm, joined the world to celebrate and encourage young girls in the Information and Communications Technology (ICT) sector. With this year’s theme being: “Girls in ICT: Inspiring the Next Generation”, two tech women at Interswitch took to Instagram Live, to share their journey through tech while celebrating girls and young women consistently striving to reconstruct the ICT narrative. They were Eddidiong Asikpo and Ifeanyichukwu Onwurah, both of whom shared their journey so far in the ICT sector. They talked about their career trajectories, from young girls in science to now full-blown

women in ICT. They encouraged girls in STEM, related with their current struggles and painted a beautiful picture of the future in the tech sector. Edidiong Asikpo, a software engineer at Interswitch, and anchor of the live session, began the session by reiterating that the ICT Day was created to encourage girls to consider careers in ICT. She went ahead to speak about her transition from medicine to tech. “I never wanted to become anything technical. I applied to study Medicine and Surgery in the university. When that did not work out, I started at Innovation Hub at Akwa Ibom to learn Application Development. Tech started to become cool because I thought I would start doing what the big boys at Facebook do. Indeed, tech has afforded me access to greater opportunities and contributes to making life www.businessday.ng

better,” she said. She went further to add that for the next generation to be copped into tech, they would need to be intentional about it, by searching for opportunities and being open to mentorship. This is one of the many roles Interswitch currently plays, and is willing to continue to play, in raising the next generation of tech girls and women who’ll make disruptive impact in the tech space. Ifeanyichukwu Onwurah, a senior IT service management analyst at Interswitch, talked about her journey into tech as a rough one and described it as “Failing forward”. “At some point in the university, I lost enthusiasm. I failed a lot, struggled through school and didn’t quite understand my purpose. All I wanted to do was look pretty in a pretty job,” Ifeanyichukwu said.

ulius Berger Nigeria plc, the largest construction company in Nigeria, has become the first company to cut its dividend, as the coronavirus crisis threatens future earnings. In a statement on the website of the Nigerian Stock Exchange (NSE), the company says it has decided to withdraw its previously announced intention to recommend the payment of a final cash dividend of N2.75 per share, and instead recommend to shareholders at N2 per share. The construction firm says the dividend cut and slowdown in capital expenditure (CAPEX

spending) spending will ensure that more cash will be retained for future expansion. “These trying times for corporates globally, is expected to force a rethink of spending plans by corporate boards to protect liquidity and ensure long-term sustainability, while balancing the needs for return to shareholders,” said the company. “The Board of Julius Berger has carefully considered the emerging social, operational, financial and economic impact of the COVID 19pandemic, the outlook for Nigeria for the financial year 2020 and the impact on the business and cash flows of the Group,” the company sums.

COVID-19: Resident doctors threaten strike over possible spread of virus in Ondo …FMC Owo in high risks, as hospitals battle non-provision of basic clinical, protective kits

KORETIMI AKINTUNDE, Akure

he National Association of Resident Doctors (ARD) of the Federal Medical Centre (FMC) Owo, Ondo State, have threatened to embark on a three-day warning strike if the management of the centre fails to provide them protective kits to attend to patients with different cases of infectious disease. One of the doctors, who spoke with BusinessDay under the condition of anonymity on Tuesday in Owo, said safety kits, especially nose masks and hand gloves, were being rationed among health workers who were mostly attending to cases of Coronavirus in the government hospital. According to them, despite efforts to get the attention of the management to address the challenges facing them during this pandemic since no clinical kits have been provided for them

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to work, and these Resident Doctors’ requests came on the heels of Governor Rotimi Akeredolu’s announcement of two confirmed cases of Coronavirus at the FMC in Owo. He said, “We just don’t have the sensitive materials we need as health workers, and basically we don’t have gloves, face masks the hospital just gave us clothes, face masks to examine patient which cannot protect anything. “We suppose to use ‘N95’ face masks and for example now, two days ago we have two cases of COVID-19 here in FMC Owo, where younger doctor made contact with a particular patient, and no arrangement from the management they just said everybody should go on self-isolation. We are praying to God now that the doctor should test negative. “Our leaders are just trying to make themselves rich through an unfortunate situation we found ourselves in this country. Now, doctors have to go and buy gloves, @Businessdayng

face masks by themselves, it is very pathetic. “We don’t also have isolation centre, which is not supposed to be, we are going to work under fear with prayer that God should help and protect us because no protective kits from the management.” According to him, various associations within the centre have been trying to appeal to the management to see the reason why they need to do the needful in order to curtail the spread of this COVID-19 pandemic. The doctors, who showed their displeasure over the current situation they found themselves, said the risk involved in treating coronavirus cases is great and it would be unfair to expose health workers to such without any form of protection. He said association may likely direct their members not to attend to any patient with a suspected case of coronavirus without protective kits.

Wednesday 29 April 2020

BUSINESS DAY

news

CACOVID relief fund amounts to N27.2bn - CBN Hope Moses-Ashike

entral Bank of Nigeria (CBN) on Tuesday published the list of contributors to Nigeria Private Sector Coalition Against COVID-19 (CACOVID), which has amounted to N27.2 billion, as at April 23, 2020. The list shows the CBN and Aliko Dangote as the highest contributors, with N2 billion each. In a statement signed by Isaac Okorafor, director, corporate communications, CBN, the coalition conveys its gratitude to all the institutions and individuals that have generously donated to the fund.

“We urge others to consider contributing to this national solidarity to provide not only medical equipment and materials but also to render urgently needed palliatives to the poor and vulnerable segments of our society. We hereby restate our commitment to full disclosure and accountability for all donations made,” the statement reads. On March 26, 2020, the CBN on behalf of the Bankers’ Committee and in partnership with the private sector led by Aliko Dangote Foundation and Access Bank came together to form the CACOVID.

54gene partners Wildfusion, Ogun, others in Covid-19 mobile laboratory launch Obinna Emelike

4gene, a health technology company, in collaboration with Wildfusion Limited, First City Monument Bank and Ogun State government, has launched its first COVID-19 mobile laboratory, a project, which is the pilot of a new solution aimed at expanding testing for coronavirus across Nigeria. The mobile laboratory, which also received support from Argentil Capital Partners, Arnergy Solar Limited and Tempohousing Nigeria, was launched in Ogun State on Monday. The launch was in addition to the recent launch of 54gene’s Nigerian COVID-19 testing fund, which was deployed to support the efforts of the Nigeria Centre for Disease Control (NCDC) by purchasing vital testing equipment for public laboratories across Nigeria. The 40ft structure built with container technology provides a unique plug and play solution that eliminates the logistics of shipping samples to another infrastructure for processing. This reduces turnaround times for test results and allows clinicians to manage and treat patients accurately, sooner rather than later. The mobile laboratory is also fully kitted with vital instruments inclusive of an autoclave, biosafety cabinet, centrifuge, heating blocks, vortexes, pipettes, and PCR machines to support COVID-19

testing. Speaking on the partnership for the mobile laboratory, Abasiama Idaresit, CEO, Wildfusion Limited, noted that the world was experiencing an unprecedented time with the Coronavirus pandemic, which requires concerted efforts from both government and private sector to curtail the pandemic. The partnership is also borne out of the need for more infrastructure to support the increase in testing capacity as setting up a permanent structure requires significant manpower and an extensive period of time. The partners also discovered that speed was of the essence, hence saw the need to increase nationwide testing capabilities, isolate positive cases and thus break the chain of transmission. With the mobile laboratory, the partners noted that the restriction imposed by solid buildings has been removed and allowing them to offer services to multiple states quicker due to the ease of transport and the mobile capability it provides. The environmentally friendly solution, according to them, can also be reused to serve other functions for urban spaces. “We have also helped build capacity by equipping molecular scientists with the necessary skill set required to handle the instruments in the mobile lab as they would in regular molecular testing laboratories”, they assured.

Belo-Osagie, Akufo-Addo to address business leaders on crisis management in Africa Odinaka Anudu

hairman of FSDH, Hakeem Belo-Osagie, and other prominent African leaders will address business managers on crisis management in Africa. The recent pandemic has roiled businesses locally and globally, pushing them to the brink. But it has also brought in consciousness, innovation and creativity. More than ever, business leaders are looking to up-skill their crisis management strategies in order to avoid playing in troubled waters. Africa.com, a media holding company, will be hosting a webinar series to equip leaders in the informal sector in Africa to put their best foot forward in navigating their response to the global crisis. According to the organisers, over 3000 participants are expected from 81 countries— 41 countries on the African continent

and 40+ countries across the world on the event which will take place on April 29. Belo-Osagie will be joined by President Nana Akufo-Addo of Ghana, and Governor Nasir el-Rufai of Kaduna State. Others are Ahmed Mushfiq, a professor at Yale University, and Amandia Ooko, senior engagement manager, McKinsey & Co. It will be moderated by Belo-Osagie, international business man and lecturer at Harvard Business School “It is imperative that leaders remain calm at this time to ensure that the best decisions are made,” Belo-Osagie said. Panel discussion will focus on how Africa’s informal sector responds to Covid-19. According to Teresa Clarke, Africa.com CEO, Akufo-Addo’s leadership of the pandemic has been tailored to the unique social, economic and cultural conditions of his country. www.businessday.ng

Speaker of the House of Representatives, Femi Gbajabiamila, on the floor moving a bill to repeal the Quarantine Act, 2004, at Tuesday’s plenary.

What CBN’s funding intervention for affordable housing means to economy CHUKA UROKO

s part of preparations to save the economy from collapse in the aftermath of the coronavirus and its devastating impact, the Central Bank of Nigeria (CBN) says it will be making funding interventions in four key sectors with capacity to support mass employment and wealth creation. Affordable housing is one of the four key sectors. Others are renewable energy; cutting edge research, and light manufacturing. On account of the coronavirus pandemic the World Health Organisation has described as a global emergency, all economic activities have been paralysed, putting the global economy at risk of recession. National governments at various levels are putting measures in place to save their

economies. In Nigeria, the apex bank says its funding for affordable housing, the size of which is yet unknown, will target housing construction by developers who provide proof of profiled off-takers with capacity to repay the loan. Bank Verification Numbers (BVN) will be used to verify the information given by the off-takers before the developers can access the facility, according to the bank that said it would also assist the mortgage finance sub-sector, and land administration agencies at the states to build capacity for prompt processing and issuance of land titles. Analysts have described this as a good development, not only for the housing sector, but also for the economy at large, insisting that housing construction is the quickest and surest way to create economic activities that could

jump-start an economy. “At an estimated 20 million units, the housing demand-supply gap in the country is quite huge,” said Johnson Chukwuma, a construction engineer, who spoke with BusinessDay on Monday in Lagos. Chukwuma noted that the structure of the housing market in Nigeria was that of a pyramid where, he explained, the top which is thin, was heavy with oversupply while the base was wide and undersupplied. “This is where you have the low income earners who need low income or what has come to be known as affordable housing. This area is largely underserved,” he said, stressing that CBN’s decision to intervene in that area was good news for the economy because jobs and wealth would be created. It is believed that after agriculture, housing construction sector

has the greatest potential to create employment. Femi Adewole, CEO, Family Homes Funds Limited (FHF), emphasised that housing construction created jobs fast, estimating that for every unit of housing produced, a minimum of four to six jobs were created. Adewole argued, “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 five-year period, bring 10 million people into employment. This is possible and it is time to think in that direction.” Though Chukwuma has his concerns about CBN’s conditions for the loan, which requires the developers to provide proof of profiled off-takers with capacity to repay the loan, the Real Estate Developers Association of Nigeria (REDAN) assures of their readiness to build affordable homes for Nigerians.

Arguments swing back, forth over NIMASA warns public on dangers of temporary spectrum for operators selling, consuming dead fish SEGUN ADAMS

he call to assign temporary spectrum to some operators to address poor network availability has divided stakeholders in the telecoms space with some backing the call while others are seeking an alternative approach to address quality of service provisioning. Spectrum refers to the radio frequencies that data and information are carried. Mobile operators have long argued that access to spectrum will help reduce the cost of mobile data because it will allow them to cover a wider geographical area with existing towers while carrying more data traffic. Olusola Teniola, president, Association of Telecommunications Company of Nigeria (ATCON) supporting the call, says: “We believe strongly in government incentivising and putting in place measures that will improve our members’ ability to render improved quality of service (QoS) and customer experience to those that are working remotely and especially those workers that are directly supporting the fight against the spread of this pandemic. “The assignment of temporary

spectrum to operators that have acquired spectrum through NCC is fully supported and ATCON believes that this will be a great gesture by Government in aiding the delivery of internet services to households. “NCC can allow a 3 month period or window of usage to all operators that currently are using the spectrum assigned and allocated to them just like they allow new technologies to be tested on the spectrum on a trial basis over a 3 month period. “It is important to also highlight the fact that all spectrum in Nigeria has already been allocated for 2G, 3G and 4G type services and it would be very challenging for Government to find and allocate an amount of extra bandwidth when this bandwidth doesn’t exist as spare. So even though it is a great idea/concept the reality suggests otherwise”. Contrary, Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), believes that the way out of the challenge is for operators to build more headroom to accommodate the upsurge in service demand and meet the capacity requirements of subscribers. “It’s more work to be done by all stakeholders.”

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…investigates cause of dead fishes along Niger Delta coastline

AMAKA ANAGOR-EWUZIE

igerian Maritime Administration and Safety Agency (NIMASA) has warned the general public, especially the fisher folks in the Niger-Delta region on the dangers of consuming or selling dead fishes to unsuspecting members of the public. Speaking on the backdrop of recent shoal of dead fish washed ashore along the Niger Delta coastline states of Akwa Ibom, Bayelsa, Cross River, Delta, Rivers, and others, Bashir Jamoh, director-general of NIMASA, said the agency had commenced a scientific inquiry to identify the cause. “We are working with relevant scientific experts to isolate the cause of the abnormal issue of dead fish along the Niger Delta coastline. We want to identify the cause and establish what can be done to alleviate the adverse effect of this occurrence on the people and the marine environment in the affected areas,” Jamoh said in a statement signed by Philip Kyanet, head, corporate communications of NIMASA. He appealed to locals in the affected communities and those @Businessdayng

who trade in aquatic animals to avoid consumption and sale of the dead fishes, as such acts might carry criminal liabilities, especially with regard to deliberate sale of the dead fishes to the public. Jamoh however said the investigation would involve an examination of the dead fish as well as water and sediment analyses. According to Jamoh, NIMASA has the mandate to regulate and protect the country’s marine environment as provided for in the Merchant Shipping Act 2007 and in compliance with the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 (MARPOL 1973/78), and other relevant instruments aimed at protecting the maritime domain.

CHANGE OF NAME

I, formerly known and addressed as Nwanojiechi Ifeanyichukwu Dandyson now wish to be known and addressed as Nwanojiechi Ifeanyichukwu Daniel. All Former documents remain valid. General public please take note.

Wednesday 29 April 2020

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Why Covid-19 should be call to action for financial inclusion boost in Nigeria Stories by Endurance Okafor

he coronavirus outbreak which has displaced millions of Nigerians to become financially vulnerable may have also presented an opportunity to onboard the country’s 40 million unbanked population. With one of the highest financial exclusion rates in Africa at 36.8 percent, Nigeria could leverage its COVID-19 palliatives to grow its included population and thus meet the 80 percent inclusion target of the Central Bank. “Given the current Covid-19 crisis, governments and regulators should take the opportunity to move quickly to allow Fintechs and digital financial services providers to build a clear path toward regulation,” Alicia Levine, COO, Chipper Cash, Africabased instant cross-border mobile money transfers firm said recently at the Innovate Finance’s virtual panel for UK Fintech Week 2020. L i ke m o st c ou nt r i e s around the world, Nigeria has put up measures to ease the pressure that the coronavirus crisis is having on the income of many households, particularly the most vulnerable in society. The nation with the largest economy in Africa however, preferred cash instead of electronic transfers. The Federal government through the Ministry of Humanitarian Affairs embarked on a Conditional Cash Transfer programme. The National Social Investment Programme (N-

SIP), a department under the ministry, handles the cash transfers through its Household Uplifting Programme (HUP). So far, the Federal Government has rolled out the Conditional Cash Transfer (CCT) palliative in Anambra, Katsina, Kogi, Plateau, Oyo, Kano, Cross River, Bauchi, Adamawa, and Nasarawa states. “Two days ago at the task force meeting, the Head of Service told me that the conditional cash transfer from the Federal Government would be N20,000 to people in 10 local government areas of Oyo State,” Seyi Makinde, governor of Oyo State said regarding the outcome of the programme in his state. But, with the choice of physical locations for the conditional cash transfer programme Nigeria is los-

ing an important opportunity to reach the population of the financially excluded through digital payment channels which are safer and cost-effective. Brazil, a South American country with 45 million unbanked population is an example of one of the countries that have leveraged the impact of COVID-19 to boost its financial inclusion rate. The Brazilian government recently launched the emergency aid programme- coronavoucher aimed at giving support to 54 million of its population who became financially vulnerable as a result of the coronavirus crisis. Through the country’s central bank- Caixa Econômica Federal (CEF), Brazil said it would be paying its vulnerable population 600 reais ($117)

monthly until June through the coronavoucher . This includes millions of previously unbanked citizens, who are being provided with a mobile-based savings account. Twenty-four hours after Brazil’s new emergency aid registration website and app, a technology-driven financial inclusion exercise went live; 9.86 million of its excluded population were able to open a bank account. This represents 39.3 percent of those who have opened the digital account offered by the bank to receive the monthly payments from the processed applications from over 25.1 million Brazilians The digital account of Brazil’s coronavoucher provides basic functions such as payments and transfers. With no plans of issuing

physical cards, the five main telecommunications providers operating in the country – Algar, Claro, Oi, TIM and Vivo – are enabling free access to the app. Th e databa s e o f s o cially vulnerable citizens handled by Dataprev, the social security technology company owned by Brazil is automatically assessed and validated against the personal information of citizens applying for financial aid through coronavoucher. According to CEF, the website where citizens can sign up for the financial support programme had 240 million views since launching on April 7, 2020. Some 62 million SMS messages had been sent to confirm the requests. Data by the bank show that the Android version of the emergency aid registration app had been downloaded by 21.8 million users, while the iOS version saw 699,000 downloads. To spur inclusive access to financial services in Nigeria, industry experts have recommended that the Federal Government should use electronic payment channels like mobile money and USSD to transfer the Covid-19 palliative as they have been identified as the easiest way to reach the unbanked population. “Longer-term, we run the risk of more Nigerians becoming financially excluded as a result of this crisis, at the exact moment when they as individuals and the overall economy would need their participation the most,” said Ashley Immanuel, head of Programmes at Enhancing Financial Innovation & Access (EFiNA) said.

Unlike the Telecommunication companies in Brazil, Telco operators in Nigeria which according to the data by the Nigerian Communications Commission (NCC) have a reach of 86 percent, and 182.7 million customers, the single largest customer base in the country have not been allowed to provide financial services despite showing interest. Telcos in Africa’s later economy are cur rently awaiting the Central Bank of Nigeria for a mobile money licence. Te l e c o m m u n i c a t i o n operators’ push to offer mobile money service officially got a nod by the central bank of Nigeria with the issuance of guidelines in October 2018 for players to apply for the licence to operate as payment service banks (PSB). Before October 2018, only banks and licensed financial institutions were allowed to provide financial services in Nigeria. Although telecom operators and other Fintech companies indicated interests to operate in the market, the CBN policy would not allow them. The regulator eventually shifted because of the increasing rate of financially excluded people in Nigeria and the lack of progress in getting banks to provide financial services to people living in areas that lack access. But after almost one year and a half since the apex loosened its policy to accommodate new players in Nigeria’s financial services industry; the direction of the mobile money initiative remains unclear.

COVID-19: Standard Chartered donates $10m to UNICEF, Red Cross

tandard Chartered PLC “the Group” said it has donated $10million to UNICEF and the Red Cross from its $50million Covid-19 global charitable fund towards immediate relief efforts. Explaining the details of the donation the Group said it will provide both shortterm relief, and longer-term assistance, for communities across its 59 markets via the

recently launched $50m Covid-19 global charitable fund. According to the lender, the fund will operate in two distinct components: phase 1-immediate relief for communities by July 2020 and Phase 2 – supporting economic recovery and protecting livelihoods. To ensure funds are allocated on the ground where they can provide rapid and targeted impact, the Group

said it has: Pledged $5m of funding to the Red Cross for urgent medical support, including the provision of primary and secondary health care, communication of protection measures, provision of personal protection equipment (PPE) for Red Cross staff, and the distribution of food, care and education packages for those impacted by Covid-19. Pledged $5m of funding

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to UNICEF for the immediate educational support of vulnerable children across 12 markets in Africa and South Asia. “Funding will focus on the provision of remote education via TV, radio, online and mobile platforms and child protection measures, including alternative care arrangements and family tracing services for children separated from their families due to Covid-19,

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training for social workers to conduct home visits to vulnerable children for mental health support, and alternative care and protection services for children of parents or caregivers affected by Covid-19,” the Group said. It said also that it has provided $15m of funding to the Group’s four Regions (ASEAN and South Asia, Africa and Middle East, Europe and Americas, and Greater @Businessdayng

China and North Asia) to disburse to local NGO partners. To date, $4.2m of funding has already been committed across 17 markets. “The Group will provide $25m of funding to protect employment and educational opportunities, aiding the long-term recovery of communities impacted by Covid-19. Funding will begin in August 2020 with a target to deliver projects by the end of 2021,” it said.

Wednesday 29 April 2020

BUSINESS DAY

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Wednesday 29 April 2020

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 28 April 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 222,157.66 6.25 2.40 259 34,050,298 UNITED BANK FOR AFRICA PLC 201,776.59 5.90 0.85 230 48,830,312 ZENITH BANK PLC 466,237.93 14.85 4.58 597 27,046,686 1,086 109,927,296 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 159,734.05 4.45 2.30 272 39,121,731 272 39,121,731 1,358 149,049,027 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,135,188.42 104.90 - 198 1,500,379 198 1,500,379 198 1,500,379 BUILDING MATERIALS DANGOTE CEMENT PLC 2,215,265.96 130.00 - 193 1,784,181 LAFARGE AFRICA PLC. 180,407.31 11.20 -2.18 259 10,945,477 452 12,729,658 452 12,729,658 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 290,926.99 494.40 - 13 8,669 13 8,669 13 8,669 2,021 163,287,733 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 9,072.12 3.40 - 1 400 1 400 1 400 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 400 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 3 40,222 52,512.75 55.05 - 11 19,767 OKOMU OIL PALM PLC. PRESCO PLC 36,450.00 36.45 - 10 51,129 24 111,118 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,950.00 0.65 - 4 25,450 4 25,450 28 136,568 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 198.47 0.51 - 2 11,571 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 27,640.63 0.68 -2.86 63 4,658,295 U A C N PLC. 17,864.04 6.20 0.81 49 4,229,153 114 8,899,019 114 8,899,019 BUILDING CONSTRUCTION ARBICO PLC. 381.65 2.57 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 34,056.00 25.80 - 75 452,732 165.00 6.60 - 0 0 ROADS NIG PLC. 75 452,732 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 1,922.81 0.74 - 12 265,199 12 265,199 87 717,931 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 6,341.89 0.81 - 4 93,700 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 40,522.08 18.50 -0.27 124 1,860,622 INTERNATIONAL BREWERIES PLC. 123,565.52 4.60 -4.17 26 307,400 NIGERIAN BREW. PLC. 248,303.81 31.05 - 78 474,446 232 2,736,168 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 149,400.00 12.45 3.75 36 520,538 FLOUR MILLS NIG. PLC. 86,107.97 21.00 - 19 286,418 HONEYWELL FLOUR MILL PLC 7,930.20 1.00 - 6 170,650 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 766.26 4.30 - 0 0 N NIG. FLOUR MILLS PLC. NASCON ALLIED INDUSTRIES PLC 26,626.86 10.05 - 16 114,202 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 77 1,091,808 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 14,086.52 7.50 0.67 42 380,061 NESTLE NIGERIA PLC. 729,402.28 920.20 1.12 126 582,996 168 963,057 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,641.31 4.51 - 9 16,629 9 16,629 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,874.53 4.25 - 42 433,065 UNILEVER NIGERIA PLC. 60,322.56 10.50 -4.55 53 714,629 95 1,147,694 581 5,955,356 BANKING ECOBANK TRANSNATIONAL INCORPORATED 82,572.98 4.50 -1.11 69 3,193,114 52,734.13 1.82 1.11 58 5,130,915 FIDELITY BANK PLC 618,054.76 21.00 5.00 550 19,071,899 GUARANTY TRUST BANK PLC. JAIZ BANK PLC 16,205.34 0.55 -1.79 6 463,500 STERLING BANK PLC. 37,427.54 1.30 1.56 32 2,342,386 UNION BANK NIG.PLC. 196,565.08 6.75 - 12 47,173 UNITY BANK PLC 5,260.20 0.45 - 6 116,005 WEMA BANK PLC. 23,530.42 0.61 1.67 29 1,634,638 762 31,999,630 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 9,064.16 0.80 - 11 1,006,162 AXAMANSARD INSURANCE PLC 16,590.00 1.58 - 5 4,735 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CORNERSTONE INSURANCE PLC 8,690.41 0.59 9.26 5 934,323 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,050.56 0.28 7.69 35 10,722,636 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 - 3 29,400 LINKAGE ASSURANCE PLC 4,240.00 0.53 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 4 1,462,250 NEM INSURANCE PLC 11,617.11 2.20 - 4 138,810 NIGER INSURANCE PLC 1,547.90 0.20 - 1 50,000 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 2,800.00 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 5,997.92 0.25 -7.41 37 2,346,791 105 16,695,107 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,858.30 1.25 - 1 350 1 350

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,671.82 1.36 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 6,960.00 3.48 -5.95 55 2,135,612 CUSTODIAN INVESTMENT PLC 33,820.72 5.75 - 4 23,460 DEAP CAPITAL MANAGEMENT & TRUST PLC 495.00 0.33 - 0 0 FCMB GROUP PLC. 33,664.61 1.70 6.25 78 23,692,364 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 1 26,739 299,391.57 28.50 - 23 70,949 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 14,400.00 2.40 0.42 86 2,961,570 247 28,910,694 1,115 77,605,781 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,030.41 0.29 - 2 145,435 2 145,435 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,111.58 2.45 - 13 475,020 GLAXO SMITHKLINE CONSUMER NIG. PLC. 6,397.94 5.35 - 18 48,527 4,658.13 2.70 - 29 470,478 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,139.49 0.60 - 4 21,551 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 64 1,015,576 66 1,161,011 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 5.00 10 1,395,000 10 1,395,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 911.95 0.31 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 0 0 287.07 0.58 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 4.55 2 122,140 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 2 122,140 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 5 58 5 58 17 1,517,198 BUILDING MATERIALS BERGER PAINTS PLC 1,941.82 6.70 - 4 1,397 BUA CEMENT PLC 1,117,523.68 33.00 - 26 49,203 14,630.00 20.90 - 6 39,680 CAP PLC MEYER PLC. 265.62 0.50 - 1 923 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 37 91,203 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 2,113.59 1.20 - 1 1,100 CUTIX PLC. 1 1,100 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 2 172 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 172 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 40 92,475 CHEMICALS B.O.C. GASES PLC. 1,519.29 3.65 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 5 221,386 5 221,386 INTEGRATED OIL AND GAS SERVICES OANDO PLC 29,213.82 2.35 -1.67 65 3,498,383 65 3,498,383 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 58,019.78 160.90 - 5 792 ARDOVA PLC 12,438.69 9.55 - 13 81,850 CONOIL PLC 12,074.77 17.40 - 1 35 ETERNA PLC. 3,116.91 2.39 - 13 109,913 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 0 0 TOTAL NIGERIA PLC. 32,695.95 96.30 - 21 11,293 53 203,883 123 3,923,652 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,686.42 2.90 - 23 1,239,200 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 1 30,000 24 1,269,200 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,181.71 2.70 - 0 0 IKEJA HOTEL PLC 2,224.31 1.07 - 2 6,500 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 2 6,500 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 187.49 0.31 - 1 18,500 LEARN AFRICA PLC 794.59 1.03 - 0 0 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 452.98 1.05 - 5 152,000 6 170,500 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 580.20 0.35 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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Company IN FOCUS

BUSINESS DAY Wednesday 29 April 2020 www.businessday.ng

For Polaris Bank, it’s a table-topping first year

olaris Bank has released its 2019 financial results after securing the approval of the Central Bank of Nigeria (CBN) to its Annual Financial Statements for its first full financial year of operation. By all objective standards, the results are impressive especially given the legacy constraints under which the institution was birthed. Strong Profitability and Profit Potential...Polaris Bank remains Systemically Important... The Annual Financial Statements ending December 31, 2019 show gross earnings of over N150billion, Profit before Tax of N27.83billion and Profit after Tax of N27.35billion showing very strong profitability and profit potential going forward. The bank’s deposits from customers was N857.8billion with Total Assets in excess of N1.14Trillion confirming that Polaris Bank remains a systemically important bank within the Nigerian financial system. The bank’s capital is multiples of the regulatory minimum of N25billion at N82.9billion with a Capital Adequacy Ratio of 14% providing sufficient capital buffers to customers and other counterparties. Very Strong and Competitive Performance Ratios Apart from strong capital adequacy, the bank’s other ratios are equally impressive- Return on Assets (ROA) at 2%, Return on Equity (ROE) is 33%, Return on Sales (ROS) is 18%, and Liquidity Ratio at 81%. These ratios demonstrate operating efficiency, strong inherent capacity for profitability and returns to stakeholders, very comfortable liquidity and asset efficiency. The bank’s Cost to Income ratio of 59% is well in line with industry averages and further reinforces the institution’s underlying reality of operational and cost efficiencies, which is a significant achievement in view of its legacy constraints. Portfolio Clean-up Continues Apace One remaining legacy challenge, perhaps understandably, is that the bank’s Non- Performing Loans Ratio (NPL) is 46%. Even though the management has brought this ratio down to this level from around 80% at the time of the regulatory intervention, it is evident that the work of the management of Polaris Bank to clean up its inherited loan portfolio must continue until NPLs are within acceptable benchmarks. However given their success over the last three years in loan recovery, collateral documentation and cleaning up the portfolio, they appear to be on course to a successful port-

Tokunbo Abiru, GMD/CEO, Polaris Bank

folio repositioning. With the exception of its NPL ratio (which as we have noted is understandable given its context and legacy challenges), Polaris Bank’s ratios compare favourably with the leading Tier 1 and Tier 2 banks and are in virtually all cases better than industry averages. ROA at 2% is at par with Zenith Bank; ROE at 33% is competitive against all Tier 1 banks with the exception of GTbank; ROS at 18% ranks third behind only Zenith and GTBank benchmarked against Tier 1 banks; and the bank’s Cost to Income ratio is as mentioned earlier well within industry averages. Very Commendable Performance Especially Given Legacy Context and Environment These results are commendable especially given the institutional, industry and environmental context and when reviewed along with the strategic and business transformation accomplished within the bank. As the bank’s CEO Mr Tokunbo Abiru explained in internal bank communication which we have reviewed, “...I am confident to

state that our Bank has indeed stabilized and is now headed towards our purpose which is to become a “Top Retail Bank” in Nigeria. This was demonstrated by our collective and sustained performance trajectory in 2019... our prudential ratios-capital adequacy and liquidity ratios are now in full compliance with stipulated regulatory requirements. We returned to profitability on a month- on-month basis throughout 2019; our Cost-to-Income ratio is also in line with industry average---we aggressively pursued our IT infrastructure refresh with a view to replacing and upgrading the aged, obsolete and sub-optimal performance IT equipment. The impact on efficiency, effectiveness, transactions and customers’ experience will become noticeable from the end of the first quarter of Year 2020...” Ongoing Digital and Corporate Transformation In 2019, Polaris Bank pursued strategic initiatives for future growth which have continued this year including digital transformation and launch of the bank’s agency banking platform,

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The Annual Financial Statements ending December 31, 2019 show gross earnings of over N150billion, Profit before Tax of N27.83billion and Profit after Tax of N27.35billion showing very strong profitability and profit potential going forward

Sure Padi. Commencing in September 2018 immediately after the transition to Polaris Bank, the management worked with KPMG, EY, Deloitte and other first class advisory and consultancy firms to develop a strategy and corporate transformation plan and defined aspirational and inspirational new vision statement, “The preferred partner providing superior financial solutions for customers” and mission statement, “We will leverage our knowledge of an ever- changing world to constantly design innovative solutions that facilitate our customers’ enterprise” as well as values-Boldness, Sustainability, Innovative, Continuous Learning and Trustworthy. The bank also adopted a predominantly retail market focus in line with its core strengths and competences and defined new customer value propositions:-Ease, Friendliness and Accessibility: focused on convenience, customer excellence and customer delight; Creating opportunities and providing empowerment for selected sectors: Youths, SMEs, Women and the Underserved; Digital First: providing easy and simple banking through digital and being future focused. The objectives of the Corporate Transformation Plan included sustainability; profitability and capital preservation; regulatory compliance and buy-in; realizing value from investments; aligning business and operating models to strategic aspirations; and execution-achieving quick-wins, and phased implementation. The critical pillars of transformation as designed are Digital Transformation, Enhancement of IT Infrastructure and Technology Platforms, Cost Optimisation and Operational Efficiency, Workforce and Culture Alignment, Brand Equity Enhancement and Business/ Strategic Initiatives. A December 2019 review and our recent assessment confirms progress on all aspects of the Corporate Transformation Plan. Into the Future Polaris Bank’s leadership is intensely focused on building the foundations of a bank for the future. They believe the future of banking globally and in Nigeria would be shaped by technology. Banks would be significantly dependent on technology for mobilising savings, extending and administering loans, payments analytics and management decision making. Polaris Bank had made a clear choice to be a retail bank and that choice meant its core would have to be around capabilities around technology. These convictions underpinned management’s focus on digital transformation and on refreshing and upgrading Polaris

Bank’s IT infrastructure. In 2019, management had overseen significant investment in the bank’s critical IT infrastructure including data centres, digital labs and human capital. Management had also reflected on other trends-the imperative of financial inclusion; increasing pervasiveness of the internet and social media; the revolution in payment systems; rapid development of various streams of technology innovation including artificial intelligence, voice and facial recognition, robotics, blockchain etc.; rise of so-called “fintechs”financial technology firms who were entering financial services based on technology capabilities and business models all meant that increasingly financial services would become a technology play; the combined effect of all these trends meant in their minds that Polaris Bank would need to scale up very quickly! We believe bank management understands that while Polaris Bank is now well capitalised based on regulatory standards, the institution may benefit from enhanced capital levels if benchmarked against the major banks and telecommunications companies in the context of a competitive, technology-led, globalising financial services industry. These considerations coupled with Polaris Bank’s status essentially as a “bridge bank” owned by the Central Bank and AMCON mean that a divestment by these regulatory/government entities and investment by a well-capitalised financial services group would have to be a strong consideration. Our Conclusions Our key conclusions suggest four main themes emerge from Polaris Bank’s first year performance. In our view these themes are overwhelmingly positive:1. The financial performance of Polaris Bank in its first full financial year is impressive and the bank is stable, strong and competitive relative to leading Tier 1 and Tier 2 banks. 2. The Board and Management of Polaris Bank has successfully repositioned a previously troubled bank and created a new, thriving, forward-thinking bank 3. The bank has largely overcome its legacy challenges and constraints and is now very well positioned to compete in the Nigerian Financial Services Industry 4. The Management of Polaris Bank in concert with regulators seeks to assure a sustainable future for the bank and its customers leveraging technology, digital transformation and innovation in the context of a retail banking strategy.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.