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news you can trust I ** thursDAY 30 april 2020 I vol. 19, no 553

Poultry farmers hurting as lockdown hits demand for eggs, birds …seek inclusion of eggs in government palliatives

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COVID-19 unravels Nigeria’s failing electricity market

JOSEPHINE OKOJIE

ISAAC ANYAOGU

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igeria’s electricity market was already comatose before the novel coronavirus, marked by rising debt, but the pandemic has hastened value erosion with power distribution companies (DisCos) reporting over 50 percent revenue loss as industries who pay the big tariffs are on lockdown.

oultry farmers are stuck with large quantities of eggs they cannot sell as the coronavirus lockdown erases the demand for their products from restaurants, eateries, hotels and confectioners.

The situation has forced farmers to sell their eggs and birds below their production costs.

“There is currently low demand for eggs and birds due to the lockdown and restriction of movement policy across the country,” said Ezekiel Ibrahim, national president, Poultry Association of Nigeria (PAN), in a telephone response to questions.

Three key economic centres in Nigeria – Lagos, Abuja and Ogun State – have been under lockdown since March 30 as part of measures to contain the spread of the deadly coronavirus Continues on page 31

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Experts seek urgent reforms for sector With the increasing impact of rising foreign exchange on operating cost, anticipated gas shortage as the bulk of the commodity used in energy generation is associated gas which will fall as low oil prices drive down demand and production, the pandemic will leave the sector in worse shape.

“The issues have existed be-

fore COVID-19 and this pandemic has smashed any pretense that we can go on managing the way we did,” Ebipere Clark, special assistant to the Central Bank (CBN) governor on power, said on Wednesday at the PwC Nigeria’s power sector webinar themed “COVID 19 and the Power Sector: Macro-economics, consumer purchasing power

and cost-reflective tariff”.

Funke Osibodu, CEO of Benin Electricity Distribution Company, said DisCos have seen supply disruption, rising cost due to exchange rate volatility and loss of revenue.

“Our costs have gone up but revenue has gone down, as our Continues on page 31

Inside

Smallholder farmers and food security - a critical consideration in our covid-19 reality P. 28 Wapic Insurance leads in easing COVID-19 pains for P. 30 customers

L-R: Adesola Adeduntan, managing director, FirstBank of Nigeria; U.K Eke, group managing director, FBN Holdings plc, and Oluseye Kosoko, company secretary, FBN Holdings plc, during the 8th annual general meeting of the group in Lagos.

FG rolls out preparatory rules to gradual re-opening of businesses, offices Tony Ailemen, James Kwen & Godsgift Onyedinefu, Abuja & Joshua Bassey, Lagos

... Offices in Lagos to open from 9am to 3pm – Sanwo Olu

n search for local solutions to coronavirus scourge, Nigerian government is now encouraging its local scientists and research institutes to expand needed capacity and take up critical roles, just as it rolled out new rules for offices and businesses to reopen next Monday.

As at Tuesday, Nigeria has recorded some 1,532 confirmed cases of COVID-19, 44 deaths and 255 recoveries and, according to authorities, there is no end in sight yet to the pandemic in the country.

“There is a huge role for all relevant Research Institutes to play at this time and we must

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encourage our local scientists and deepen our capacity for research,” Boss Mustapha, secretary to the government of the federation and chairman of the Presidential Task Force (PTF) on COVID-19, said at the daily briefing on Wednesday.

Hinting that the Federal Ministry of Health is coordinating

the process in conjunction with the National Institute for Medical Research and the Nigerian Institute for Pharmaceutical Research and Development, Mustapha said government has received information on domestic and international claims about emerging inventions on COVID-19, but insisted that scientific

validation process and protocols will have to be followed.

“We are open to all options for the good of humanity,” he said.

Meanwhile, the Federal Government has mandated various offices, premises and businesses that will be gradually re-opening next Monday to take some key Continues on page 31

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Revaluation of assets drags Seplat into $106.6m after-tax loss in Q1

Experts urge African leaders to include tech in curriculum delivery post-COVID-19

...Amukpe to Escravos pipeline to be commissioned in H1

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DIPO OLADEHINDE

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evaluation of assets as a result of the economic impact of coronavirus has dragged Seplat Petroleum Development Company plc, Nigeria’s largest listed oil and gas firm by market value, into a loss of $106.6 million loss in its unaudited first quarter 2020 result.

With Brent oil price averaging $50.90 in the first quarter of 2020 compared to $63.59 in the corresponding quarter last year, Seplat recorded after-tax loss of $106.6 million in its unaudited Q1’20 result, mostly driven by a $145.5 million impairment loss (compared to a gain of $14 million in Q1 2019) charged on its oil and gas assets.

“Following a reassessment of the business models and assumptions to establish its reasonableness and practicality particularly in the oil price environment principally driven by the pandemic, the Group decided to raise a provision at this stage and the result is an aggregate impact of US$145.5 million across all assets,” Seplat said in its report.

Seplat’s total revenue was

down by 18.2 percent to $130.5 million while crude oil revenue was reduced by 8.8 percent to $107.4 million, reflecting lower realised oil prices.

“Against the twin crises of significantly reduced oil demand and the price war, Seplat continues to demonstrate its resilience because of its ongoing philosophy of prudent financial management, the careful mitigation of risk and a keen focus on managing factors of the business that are within our control,” Austin Avuru, Seplat’s CEO, said.

In Q1 2020, gas sales contributed about 17.7 percent of total Group revenue compared to 26.2 percent in Q1 2019, thanks to decrease in gas revenue by 44.6 percent to $23.1 million due to lower realised prices and lower gas sales volumes.

“The lower gas sales volumes reflect higher downtime at the third-party infrastructure and a planned 15-day week shutdown of the gas plant for the turnaround maintenance executed in March,” Seplat said.

The company successfully completed a 15-day turnaround maintenance for Oben Gas Plant in March.

“We have the benefit of longterm contracted gas revenues that are insulated from oil market volatility. We are achieving substantial cost reductions from our suppliers and managing our own costs even more carefully in this unprecedented and challenging period,” Avuru said.

Gross profit decreased to $33.1 million compared to $81.4 million in Q1 2019 as a result of $29 million lower revenues, higher crude handling fees and non-production costs primarily consisting of royalties and DD&A, which were $59.8 million compared to $49.7 million in the prior year.

These increased costs reflect the additional production volumes from OML 40 and resultant increase in royalties and crude handling fees. On a cost-perbarrel basis, production operating cost was higher at $7.7/boe compared to $$6.2/boe in Q1 2019.

Earnings were further weighed by the 55.1 percent year-on-year rise in finance costs to N20.3 billion, which was mostly driven by the $350.0 million revolving credit facility drawn down in December 2019 to finance the Eland Oil acquisition.

NITDA grants data protection compliance licence to Digital Encode Jumoke Akiyode-Lawanson

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ational Information Technology Development Agency (NITDA) has licensed Digital Encode, a firm that specialises in IT infrastructure, under the Data Protection Compliance Organisations (DPCO).

The new licence means that the consulting and integration company that focuses on management and security of business-critical networks, telecoms and other Information Technology infrastructure, has been recognised by NITDA to provide training, auditing and consulting services throughout Nigeria in line with the Nigeria Data Protection Regulation (NDPR) principles.

On January 25, 2019, the NDPR was issued by NITDA, the ICT regulator for the nation.

Among the objectives behind this regulation were the protection of the privacy rights and freedoms of Nigerian citizens, on the one hand and the promotion of local and foreign investments in the digital economy by safeguarding the information systems infrastructure against breaches and implementing internationally compatible rules.

As a DPCO, Digital Encode is expected to verify self-audits prior to submission to NITDA. This is a means of decentralising compliance activities for more efficiency.

Peter Adewale Obadare, cofounder and chief operating officer of Digital Encode, thanked the management of NITDA led

by Kashif Inuwa Abdullahi, for the confidence reposed in the organisation.

Obadare, who doubles as the director of governance, risk

Josephine Okojie

o ensure that learning processes are not obstructed in the face of any future pandemic, experts in the educational sector have urged governments on the continent to include technology in their curriculum delivery.

The experts, who spoke at the second edition of a fourpart virtual series titled ‘Technology and Innovation,’ say the continuity of educational activities amid a pandemic can only be ensured when leaders on the continent embrace technological learning solutions.

“There has to be a shift towards online and open education in Africa during a pandemic, and technology has to be included in curricula delivery to make this happen,” says Aravinda Ram, deputy pro-vice-chancellor- employability and technology, Bothe University, Botswana.

Ram states that the gradual inclusion of technological tools into schools’ curriculum delivery will aid the quick transition to e-learning in the

advent of a pandemic.

She urges governments across the continent to provide necessary digital tools that will enable students learn from home amid a pandemic using Botswana’s model amid the novel coronavirus pandemic.

Also speaking, Mansur Liman, director-general, Federal Radio Corporation of Nigeria, notes that 210 countries have currently closed their schools with 1.5 billion children affected, accounting for 90.2 percent of enrolled learners since the spread of the coronavirus.

Liman states that what the world is currently facing is unprecedented and it will reshape educational delivery on the continent.

He notes that the millennia children who are currently affected are tech savvy but owing to the peculiarities on the continent, radio remains one of the most effective technological learning tools amid a pandemic.

“Radio remains the most commonly available and accessed technology across the globe with 80 -90percent of households in sub-Saharan-

and compliance, says as a panAfrican cyber security company, Digital Encode will continue to keep assisting individuals and businesses protect their information assets.

Also, Seyi Akindeinde, the chief technical officer of Digital Encode, says the licence is a testament to Digital Encode’s unique methodology rooted in the concept of professionalism.

Akindeinde, who is also the chief research officer and director of security assurance at Digital Encode, notes that while assisting companies to achieve the data protection goals through a well-defined secure process, Digital Encode will continue to translate strategic business objectives into sound, achievable technology solutions. “This approach ensures that the technology never obscures the business goals”, he states.

NDDC sends home key staff to avoid interference as forensic audit gets underway Ignatius Chukwu

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taff members of the Niger Delta Development Commission (NDDC) described as key to its operations have been sent on indefinite leave to allow for a smooth audit of the Commission.

In a statement in Port Harcourt, the Commission said it had to place some members of staff on mandatory leave with full benefits, pending the conclusion and outcome of the ongoing forensic audit.

The action is said to be based on the advice of the lead consultant on the forensic audit exercise, which has been accepted by the Interim Management Committee (IMC).

Forensic audit is a form of audit ordered by the Presidency into all contracts of the NDDC from the onset and to determine the correctness, due process, and amounts paid and owed on them. Over 8000 contracts have been verified and handed over to the lead consultant to begin auditing, but many contractors stayed away from verification exercise.

Genuine contracts should have been properly signed by the appropriate officers with the bidding attachments, but many of those without such documents seemed to stay away.

The statement gave categories of staff sent on the mandatory leave to include those indicted by security agencies www.businessday.ng

like the Police, Independent Corrupt Practices Commission (ICPC), and the Economic Financial Crimes Commission (EFCC) for acts of impropriety.

It also includes those whose acts are the subject of investigations by the forensic auditors, and those who held key and sensitive positions in the Commission during the period covered by the forensic audit and whose continued presence in the Commission would interfere, impair, undermine or compromise the objective of the forensic auditing of the affairs of the Commission.

The Commission says the mandatory leave takes immediate effect and that the affected staff have already been notified. https://www.facebook.com/businessdayng

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Africa having access to it,” he states.

“It also helps reduce the digital learning divide by addressing critical issues of people in remote areas across Africa who have no access to basic infrastructure and cannot afford data cost,” he says.

He calls for the combination of radio with other digital tools to help resolve issues of feedback and teaching of practical subjects such as mathematics.

Similarly, Ade Adekola, partner, LV Partners, and advisory board member, Axiom Learning Solutions Nigeria, defines innovation as an application of better solutions that meet new requirements.

He calls for public-private collaboration to provide critical learning educational solutions that will help the continent leapfrog as the pandemic has changed African values and attitudes to education.

Ani Charles Bassey-Eyo, CEO, Lani Group, and cofounder, Axiom Learning Solutions Nigeria, says the continent needs to be innovative and structured in a way it can pilot and scaleup quickly.

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Our middling approach to coronavirus The Public Sphere

CHIDO NWAKANMA

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ompromise is one of those words that have double meanings. One definition paints it as positive and the other clothes it in negativity. “An agreement or settlement of a dispute that is reached by each side making concessions” is one take. The other side defines it as, “The expedient acceptance of standards that are lower than is desirable”.

Compromise is the middle path.

PMB chose this route Monday, 27 April 2020 as he added one more week to the 28-days lockdown of Lagos, Ogun and the FCT as part of coronavirus containment measures. Nigerians and how things play out would determine which side of the coin of compromise the Federal Government chose on Monday.

From 4 May, Lagos and FCT as the epicentres of the COVID-19 spread in Nigeria would embark on a hermaphrodite lockdown. People would be free to do their stuff all day and then be locked in all night. Lagosians are already pointing out that Lagos does not shut down at

8 pm ordinarily, but they should know that these are not ordinary times.

Nigeria, through the Presidential Task Force on COVID-19 (PTFCovid19), chose the well-travelled road. Many countries in Africa are lifting lockdowns as those in Europe and America with higher incidents and death tolls also move for changing the lockdown model. More significantly, the federal government listened to the Governors on the road to travel with coronavirus management.

PMB’s new measures closely aligned with the prescription of the governors.

They said in a letter that somehow leaked onto WhatsApp, just like the Presidential address, that Mr President should incorporate their recommendations. These are inter-state lockdown, excluding the movement of essential supplies; internal free movement but with restrictions on large gatherings and assemblies; and overnight curfew -the FG made it 8 pm to 6 am. Others are lockdown of flights (not mentioned in PMB’s address) and the compulsory use of facemasks/coverings in public.

I commend the PTFCovid19 for heeding the counsel of the 36 state governors on the matter. The governors have been at the forefront of managing the pandemic much more than the Federal Government. It is appropriate for the government to listen to those handling the case.

Everyone is concerned about the poor attitude and performance of the Kano State Governor, contrary to the examples of his colleagues. Now that the President has promised deployment of the three Ms of men, money and materials to Kano, we must hope that

Abdullahi Ganduje will raise his game.

Compromise featured again in the presidential address concerning accountability. PTFCovid19 owes Nigerians responsibility for how the Federal Government and its agencies handle COVID-19. One significant area is testing. The other is the management of the donations and funds with which companies have generously endowed the government.

How many tests have we conducted?

There is talk of “about 10,000” against the backdrop of a presidential charge to NCDC to deliver 4000 tests a day. PMB demanded this a day after disclosing to Nigeria that the nation had a capacity for 1, 500 daily. He read in his address on Monday that we could now do 2,500 daily.

In “The next 14 days in Nigeria”, I surmised that given the presidential order, NCDC should deliver at least 25,000 tests by Monday 27 April. They only kept at their pace of adding 5000 tests in 14 days or 357 per day.

Sadly, we are such a laggard with testing. What are the challenges? What can we do to ramp up the numbers?

We are not meeting up either with our targets or in parallel with our peers. Do better, and do it quickly.

Mr President was evasive on the matter of funding. The Federal Government, he disclosed, took the commendable step of insuring our frontline health workers. What did it cost? The Nigerian insurance industry provided an N11billion cover for 5000 health workers as their contribution to the COVID-19 fight. They paid premiums amounting to N112 billion. The life insurance would give beneficiaries

‘

COVID-19 is a new frontier in public health management.

It offers opportunities for countries to innovate and take bold steps. Even Madagascar is trending for such bold steps, yet PTFCovid19 that listed developing a new framework for scientific enquiry as one of its objectives has said nothing about that bromide

Abba Kyari: Judging the parts by the whole (2)

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he reason why some Nigerians, want their leaders dead is not far-fetched.

When the coronavirus broke out, a lot of the Nigerian masses expressed their desire for the virus to visit and wreak havoc at the seat of power. The desire to have death fight the course of perceived injustice or poverty is nothing but a timid willingness of the “querulous”. The change of leadership and systems during the Arab springs were examples of people who went beyond wishing their leaders dead, but people who are truly united in purpose and action. A desire strong enough to change nations and political status quo.

The recent demise of Mallam Abba Kyari, the former chief of staff to President Buhari was an eye opener just like the virus that killed him. Abba Kyari’s death and the reactions are two edges of the same sword of governance in Nigeria. While the poor are at most indifferent but want more of such news, the affluence, and people in the corridor of power are eulogising Abba’s virtues known to them and unknown to the suffering masses. What a paradox! While the masses who care less are judging the parts by the whole, the eulogisers are judging the parts by the parts as it concerns or favours them and, not by the whole.

Some in-depth analysis and synthesis of systems are required for us to dissect and understand the feelings of both the masses and a few elites as expressed by the responses to Abba’s death. In the book, Decoding Potential: The Science of Achievement, the author, Robert J. Fowler, posited some facts on systems. He wrote ‘breaking the whole into its parts is an analysis which helps one to gain knowledge.

Building parts into wholes is synthesis. When you take a system apart and analyse it, it loses its properties. To understand systems, you need to look at them as wholes.’

You need to see the video of a Nigerian in Italy who collected a palliative fund sent to his account at the cash machine. He thereafter

rains curses of abuses on Buhari and his team up to the local government councillors wishing them dead by thunder. Why is he wishing for the demise of the political officers in Nigeria? He has simply compared two systems as a whole and not in parts, and if you care to know, his position is likely to be an objective analysis and synthesis of governance in Italy and Nigeria.

For him, an ordinary immigrant in Italy, to have qualified for a palliative fund to cushion the effects of the lockdown is unimaginable compared to Nigeria where the palliative is done in parts and with unaccountable sentiments. It is a mockery of governance intents and organisation for a minister of the federal republic to be moving around sharing food and cash. Evidence of no or poor system in place.

Where are the BVNs and much talk about development in Nigeria?

In Africa, it is a moral crime to speak ill of someone in the higher realm. We are beclouded by religion and culture. A commissioner lost his appointment in Kano state for the same offence. However, making fair comments about what one has used his (or her) lifetime to do or fail to do should not be a taboo except there are no lessons from such experience.

Let us now look at Abba Kyari, representing the parts of a system viz-a-viz the responses from the two sides of the divide-the ruling elites and the poor masses.

President Buhari scored a good leadership point by appointing Abba Kyari as his Chief of Staff. He takes a secured leader to appoint someone more qualified and intelligent as his aid. In the private sectors, it is rampant to see unsecured leaders who are timid by the brilliance of their subordinates for fear of their positions.

I was a victim of such insecurities and had to go the unnecessary miles to give comforts to the unsecured leaders. No doubt Abba Kyari with his education, exposure and experience is no match for the President. He was a better-quali-

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fied candidate to govern a complex system like Nigeria save for the President’s predestination.

He wasn’t a product of the quota systems that helps the backward parts of a system to equate and dominate the progressive parts. His appoint was merited from education and experience perspectives, but more likely on religion and political ideology.

He was a detribalised Nigerian who cannot be better described than how his friend, Geoffrey Onyeama, the minister for foreign affairs did. Abba, a devoted Muslim Kanuri man, was so sociable to have agreed to be the best man of a catholic man at a wedding ceremony. He was also the godfather of Geoffrey’s first son, which mean Abba has entered the church as a full participant of events on two occasions to count the least. Geoffrey Onyeama could not have done better in his tribute to Kyari. His tribute reinforces the possibility of a united Nigeria if our diversity is not mismanaged.

Nigeria is a case study of a mismanaged diversity on the platform of religion, ethnic superiority, greed, and power hustling. That is a topic for another day. Onyeama is truly Abba’s friend in life and in death with his defence and response to some allegations against the deceased. There are relationships lessons to be learnt from Geoffrey and Abba’s friendship.

You can trust me to write out the lessons in another article to teach my readers and followers the importance of building diverse and mutual relationships.

There is no doubt to the intelligence and competence of Late Abba Kyari, and all the eulogies are likely to be a representative sample of the late chief of staff. The first problem is that those who have been in the corridors of power, describing the positive sides of Abba are not trusted by the poor Nigerian masses.

Nigerians don’t trust their leaders. Of course, they can’t be trusted after many failed elections promises and selfish enrichment of few political appointees. How come the masses

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N3 million (doctors) N2 million for pharmacists/nurses and N1 million for all others. In other words, it did not require the FG spending a kobo! On what has PTFCovid19 spent funds and how much?

PTFCovid19 ought to have included in the presidential address the figure of all donations they have received.

Nigerians deserve to know, as is the best practice all over the world.

COVID-19 is a new frontier in public health management. It offers opportunities for countries to innovate and take bold steps. Even Madagascar is trending for such bold steps, yet PTFCovid19 that listed developing a new framework for scientific enquiry as one of its objectives has said nothing about that bromide.

Instead, we have progressed only in empowering fashion designers to do face masks but nothing in science and technology, medicine, pharmacy, fabrication or medical laboratory science.

We are middling through.

What is the strategy and direction of our fight against COVID-19? Now that we have a combination of lockdown and open-the-economy with low testing, what are the expectations? If the modelling had projected 2000 cases, but we delivered 1230 on little testing, what happens if the assumptions or the reality of testing changes? What if the numbers suddenly increase? To the reader, be a Boy Scout; be prepared.

Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Positive Growth with Babs Babs OlugbemI who should feel the impacts of leadership, especially the good qualities and acclaimed contributions of Abba Kyari are indifferent or happy when people in power are socked with calamity? Is it the personalities we are electing or the system that is producing bad out of good or average political class?

Going by the way I started, the reason for the diverge opinion of the person of Kyari is not farfetched. The masses are judging from the whole and not by the parts. The essence of leadership is to influence the systems to make lives better. The Nigeria system is bad enough to make worse of any great intention to serve Nigerians.

Garba Shehu in his attempt to prove how honest Late Abba Kyari was exposed the failure of our system. Before the President was elected after a series of failed attempts, he was polished and repackaged with only one song. The song is fighting corruption. Nigerians believe corruption was the only problem standing against their prosperity as individuals and as a nation.

That was right when common stealing is not corruption under President Jonathan Goodluck. Is the President fighting corruption they way corruption should be fought?

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

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‘Coromentality’: Conspiracy theories all the way…Doing the right things this season

ik MUO

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etween February 28 and April 28, the number of “active cases” in Nigeria leapfrogged from 1(just 1) to 1337, just as the global figure is 3m as I write! I am not a quant and as such I wouldn’t know whether this is arithmetical, geometrical or exponential progression. As we continue to worry what next, as we move from total lockdown to gradual easing and compare Global Mandatory Vaccination with the Madagascar/Senegalese options, I want to focus on certain developments on the side-lines of the global war against this unseen and unpredictable enemy. Coro has proved, in the words of Bob Marley (1973), to be “the small axe ready to cut the big tree down”! Indeed, a small microbe which one needs a microscope to see has “cut down” the entire humanity, leaving the world desolate, prostrate and on all fours, within such a short period of time and without any notice!

When I made my first commentary on Coro (COVID-19: The come has come to become! 19/3/20) I had planned to do a one-off commentary and face several other issues awaiting my attention, including the Sanusi affair. Since then, I have done 5 commentaries and it appears we are in for a long haul.

I have therefore decided to suspend every other thing (unless those that can be contained with the limits of ‘other matters’ for now0. I have decided to face coro frontally in the meantime.

And so, I start today with the various conspiracy theories While the world was, and has been, busy doing everything to collectively overcome this wicked adversary, a lot of conspiracy theories have been afloat.

Some of them are laughable, some of them a fanatically accepted, some have “been proved”, some have pitched

brothers against brothers (there is an ongoing “war” between Prof Nwosu and Fr (Dr) Nwosu over some of these matters as I write) and some have pitched the whole world against Bill Gates. The first conspiracy theory was (is) that it was a biological weapon developed in China that was either deliberately released or that “escaped” before it matured. Another version of this theory is that China developed and released it, not as a biological weapon but to show its superiority over US in managing infections. So, China developed the bioweapon and tested it on itself! Another “reverse” version raised

by China that it was manufactured and spread by the US through its soldiers who participated in the military games in the same Wuhan in October 2019.

It was also averred that China was not “opendential” with the virus, did not relay the information early enough and only did so when its efforts at coverup failed. There were fears about the safety levels in this now notorious Wuhan Lab and China had rejected assistance to help it in the process to show it could manage its affairs.

Another conspiracy theory is that it was sponsored by Bill Gates so that he could make money from vaccines and that is why, the theory says, he has been pushing vociferously for Global Mandatory Vaccination. I thought that Bill has enough money to last him for 100 generations, money which he and Melinda have agreed to dash to humanity. Some people in the “casting and binding business” (yes; it is a BIG TIME Business) are also alleging that the proposed vaccine is an ingenuous way of engraving the long-expected mark of the beast (666) on the whole world. Others eventually linked this to the 5G technology; that coro was caused by 5G, that the lockdown was to enable Telco’s to install 5G technologies unnoticed and that the 5G would be used to monitor the chip which would be inserted into people through the vaccines. I thought the vaccines are still going through trials but some people argue that those who manufactured the coro also manufactured the vaccines and probably, these vaccines are already on the containers in the high seas! Some of these “vaccines” are even being sold in Kano while some

Pastors are already selling anointing oils that vanquish any element of “covidity”. The 5G theory went a notch higher when Pastor Chris, a “powerful” man of God (who receives more attention and reverence than the God of men) linked it to the end time, the beast and 666. Prof Victor Chukwuma has just done what another Professor would call an “evidence-based” piece, arguing that 5G could not have caused this covidious pestilence.

There was also the theory, which eventually proved to be true, that China deliberately hid the information about its level of casualties, probably to achieve a “feel-good effect” for itself in the comity of nations. China recently and voluntarily reviewed its fatality figures by as much as 50 percent as the number increased by 1290 to 3869.

The authorities admitted that they “omitted” some of the deaths which occurred at home. Already, a study

by Zhaoo, Musa et al(Estimating the Unreported Number of Novel Coronavirus (2019-nCoV) Cases in China in the First Half of January 2020: A Data-Driven Modelling Analysis of the Early Outbreak, Journal of Clinical Medicine,9(2), February 2020) has statistically investigated the matter and shown that the underreporting in China likely occurred in the first half of January, 2020.

Meanwhile, as we discuss the under-reporting by Wuhan/China, questions are being raised about the integrity of figures from some states in Nigeria. The alarm is being raised by the Presidential Taskforce on Coro and as such, it is not a beer-parlour, social media affair. Nobody will accuse me of fake news or hate speech! But this appears to be linked to the overall politics of Coro going on in Nigeria as at now. But as we are busy creating and distributing conspiracy theories, and as America is busy fighting “image” war with China, Coro is waxing stronger, knocking down more victims across the globe.

‘

While the world was, and has been, busy doing everything to collectively overcome this wicked adversary, a lot of conspiracy theories have been afloat.

Some of them are laughable, some of them a fanatically accepted, some have been proved

Other matters: Doing the right things this season What is “this season” now is subject to at least two interpretations. In the Christian world, we are still in the Easter Season but for the whole world,

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

FIRS circular on advance payment of company taxes and the issues therein

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he Federal Inland Revenue Service (FIRS) recently issued a circular calling on corporate organisations to “commence payment of their annual returns earlier than their due dates, apart from their normal monthly obligations.” According to that circular, dated 22 April, 2020 and titled Update on Palliative Measures to Cushion Effect of COVID-19 on Taxpayers, the federal tax collector sad that this appeal “has become necessary in order to ease some of the cashflow gaps being experienced by governments at this critical time.”

The circular went on to rationalise this call thus: “As is currently obvious, the economic downturn that resulted from the global shutdown occasioned largely by the COVID-19 pandemic has continued to put pressure on revenue generating agencies including the FIRS, thereby straining governments to bridge budget funding gaps.”

Muhammad Nami, the executive chairman of the agency, who personally signed the circular, said the directive is specifically addressed to the operators in select sectors, that, according to him, are experiencing a boom as a result of the effects of the pandemic.

According to him, “we wish to acknowledge

that some sectors such as Telcos, financial institutions, e-commerce, supermarkets, manufacturers/processors of certain products etc are experiencing a boom due to the increased transactions as a result of the lockdown or even despite the pandemic.”

Knowing the way our government and its agencies work, we know that it is just a matter of time before this appeal, according to the circular, becomes a directive, order or an edict that will seek to criminalise and punish any corporate body that fails to comply with it. But before we even get there, let us critically examine this appeal by the FIRS. To begin with, these corporate bodies, as is even acknowledged by the circular, already have their monthly filings that they do to the FIRS, and this is not affected by the COVID-19 pandemic realities. What the agency is saying is that these monthly returns are no longer enough for it and so needs some more. One of the issues with this circular is how can the FIRS enforce this so-called appeal? The law has already stipulated the time that these corporate bodies must do their filings and any effort put at trying to coax these corporates, even if the agency enacts an edict to that end, would surely be resisted by these companies, and I see a long

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tortuous litigation as a result.

Again, the circular displayed some kind of ignorance on the interconnectivity of sectors in an economy. When the economy is booming all sectors experience a boom and when it is at a standstill or semi-standstill, hardly does any sector, formal or informal, get exonerated.

All sectors and players in this economy feel the gloom occasioned by the COVID-19 lockdown so, one may ask, where is the increased earnings that the FIRS is talking about, coming from?

Let us take the financial sector for instance.

The banks may be doing more transactions – ATMs, transfers, POS payments etc – now but to what amount? People, at lockdown, are making more online payments but they are mostly for food, groceries and other essentials, which are mostly minute purchases. Is FIRS telling us that there are people still buying and paying for lands and cars or building houses, or taking chieftaincy titles today?

If you take a look outside your window, you may have noticed an increase in traffic of delivery men on our roads during this lockdown and this may make you think that the e-commerce companies are making a killing this period.

After reading this piece, take another look at the delivery men and you would see that

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we are in the season of corona, in which we have been overtaken by “Coromentality”. Well, the two seasons are the same, in the sense that they demand the same behaviours from us: “be your brothers’ keeper”; and your brother, as in the parable of good Samaritan, means literarily, EVERYBODY. Here are some people doing the right things in this season. Mario Salerno, a New York Landlord, waived of the April Rent for his 200 tenants. He knew that most of them are out of job and are worried about losing their homes among others.

He did not call a press conference; he did not announce in on CNN; he just pasted the notices on their doors: “don’t worry about your rent for April”.

He did this for the sake of humanity, to remove at least one source of worry and as he said: “don’t worry about paying me, worry about your neighbour and worry about your family”. A few weeks ago, I was touched by the gesture of Khouloud Gesumi, a Tunisain biologist turned “Fashionist”, who abandoned her fashion business to mass-produce healthy facemasks for her people. But what I was admiring in Sokoto is within our Shokoto! Benedicta Ejorh, a passionate entrepreneur and CEO of Ebibellas Fashion Academy, PH also converted her academy into a facemask production centre, most of which she donated to UniPort Teaching Hospital and other public hospitals in the neighbourhood. The other day, Allen Onyema( that same Onyema you know), was physically involved in the distribution of food items at Ajegunle and Amukoko ( you can be sure he doesn’t live there) while one of my neighbours just placed a notice on his “dorrmouth” and invited the whole street to come for food and drinks. In my home town, The IgboUkwu Coronavirus Relief Fund Group has been institutionalised and plans to go beyond this season to establish a verifiable social register for sustainable “Conditional Cash Transfer” assistance to our disadvantaged brethren. (This will surely be different from the one used by Ministry of Humanitarian, etc.

Affairs) Let the good deeds continue and let them go beyond this Easter.

Moruff Adenekan

they are mostly delivering food, groceries and other essentials. The fact is that e-commerce is much more than groceries and this category of trade does not make up to five percent of the e-commerce players revenue.

Even the groceries and other essentials are not even exclusive on the e-commerce portals as markets, supermarkets and pharmacies are open in all neighbourhoods and take a substantial part of the food and groceries business.

Suppliers, most of whom do not have exemption letters, find it impossible to move even groceries and food items to the e-commerce warehouses as security agents do not let them move around.

The e-commerce operators and their logistics partners are not even allowed to move around things like electronics, gadgets and other nonessential goods that used to make up the bulk of their earnings.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Moruff is a public relations practitioner based in Lagos

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Thursday 30 April 2020

BUSINESS DAY

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Why power mistreats us in Nigeria

Remi Adekoya

T

here were two things that surprised me in my early days as a political journalist in Poland, my mother’s home nation. The first was how relatively easy it was for me to arrange one-on-one interviews with ministers and other VIPs running the country. The second was how nicely and respectfully they treated me. My Nigerian upbringing hadn’t prepared me for this. These were Big People running things, I was “just” a journalist. How come I didn’t have to jump through countless hoops just to get in the same room with them? How come the interviews felt like a conversation of equals? How come I never felt small in their presence?

The numerous testimonies offered

by Nigerian journalists and public commentators as to what a nice man the late Abba Kyari was, remind me of the feelings I had back then. Feelings of gratitude towards power for being nice to me. Because that was not what I had expected. This is not about Abba Kyari, it is about the fact that one of the biggest obstacles towards developing Nigeria, and indeed Africa as a whole, lies in our attitudes to power. Specifically, in our assumptions about what

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power is entitled to and what we feel entitled to demand of it.

When we complain about Nigeria’s leaders, what we often complain about aside issues of competence is the manner in which they exercise their power.

The way they lord it over us. Though some Nigerian politicians are classic scumbags whose leadership flaws are directly attributable to their character flaws, the bigger problem is that even those who were no worse people than you or me before getting to power tend to look down on us, exploit us and treat us like rubbish once they do. What makes them behave this way and more importantly why do we keep letting them get away with it over and over again?

It is because both we and they have been conditioned to view power in exactly the same way. As something that entitles you to more than the rest of society. More money, more status, more respect.

In the field of cultural studies, the concept of “power distance” is used to assess how people interpret power inequalities in their society. There are power inequalities in every country on earth, but where societies differ significantly is to what extent their members view these power inequalities as “legitimate” and “unavoidable.”

This matter because it determines the degree of domination by the powerful that is considered acceptable by the rest of society.

The Hofstede Power Distance Index which measures attitudes to power based on country surveys conducted, shows Nigerians scoring very high - 80 – in terms of power distance.

This means we accept as pretty much obvious a strongly-hierarchical social order in which the powerful have a more or less natural right to dominate the less powerful as they see fit. We say we want equality, but truth is, we are culturally conditioned to instinc-

tively accept significant inequalities of power as legitimate and unavoidable.

As just the way the world is.

In comparison, Britain, a country originally built around a dominant aristocracy, today scores 35 on the power distance index, meaning British people are radically less accepting of power inequalities in their society than Nigerians. Most successful nations score much lower than Nigeria on the index: Germany 35, Australia 38, Canada 39, America 40, Japan 54.

People in these countries have a much more interrogative attitude towards power than Nigerians.

The only countries that have high power distance scores and can be described as successful today are classic authoritarian states: Singapore (74), China (80), United Arab Emirates (90).

These societies have decided to exploit the deferential attitudes of their citizens towards power by building tightly-controlled top-down systems that offer economic efficiency and high standards of living but limited individual autonomy.

However, since Nigeria is pursuing a democratic pathway to development, we have little choice but to radically modify our attitudes to power to render them more compatible with the kind that make democracies work.

Because at present, our instinctive attitude towards power is the opposite of the kind needed to make a democracy work. Democracy is all about the taming of power. For it to work, power must feel on itself a gaze so unflinchingly questioning that it is constantly unsure of its footing. On the defensive. Trying to please. Not the other way round. This is not about throwing insults at politicians on Twitter, anybody can do that, no, this is about fighting the instinctive fawning in the actual presence of power that comes so quickly to us.

Make no mistake, Nigeria’s power-

‘ However, since Nigeria is pursuing a democratic pathway to development, we have little choice but to radically modify our attitudes to power to render them more compatible with the kind that make democracies work. Because at present, our instinctive attitude towards power is the opposite of the kind needed to make a democracy work

ful are well-aware of our instinctive acceptance of their right to dominate us and they exploit this mercilessly. They know we take delight in the slightest nod of recognition from power. They know a mere phone call acknowledging our existence can make us feel important. Because no matter the number of degrees we have, there is no validation we crave more than the validation of power. Because if we tell our Nigerian neighbour that Minister X or Governor Y called us on the day of our daughter’s wedding, that neighbour will never look at us the same again.

They will look at us with respect. Even envy. Because attention from power means we too are “somebodies.” That is why nothing suspends the criticalreasoning capacity of a Nigerian faster than attention from power.

The Edos have a saying: “If you want to catch a Bini man mugu, show him respect.” As long as we continue to crave validation from power, we will be powerless before it. As long as we continue to believe power is entitled to more, it will continue to enjoy more at our expense. As long as we believe power is the ultimate virtue, it will continue to behave like it is special.

If we truly dream of a successful democratic Nigeria, then I believe it is the duty of those of us privileged enough to write for the public to expend our energies demystifying power rather than deifying it. For our good as well as the good of those in power.

For anyone worshipped long enough will soon start to believe themself a god. And only when power knows it is seen as ordinary does it feel obliged to behave itself. Power is what we make it to be.

Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs, Washington Post and Politico among others. He tweets @ RemiAdekoya1

Foreign debt and accountability in Nigeria

I

n an editorial in July 2018, the BusinessDay editorial board, of which I was part of, warned about an impending debt peonage if the large scale of borrowings, at high interest rates, were not curbed by the government. By the time of writing the editorial, Nigeria’s total debt stood at N22.38 trillion ($73.2 billion) representing 19 percent of GDP. This comprised external debt of about N6.75 trillion (or $22.08 billion) and domestic debt of about N15.629 (or $51.12 billion). This was almost a doubling of the debt in Naira terms from N12.1 trillion in June 2015 (when Buhari effectively took over). Beyond the debt, what was most worrying to us at the time was the issue of debt servicing. Data from the Office of the Accountant General of the Federation and the Budget Office at the time indicated that debt service to revenue ratio worked out at about 70 percent - a figure quite high and unsustainable by global standards.

But in a poor attempt at defending the borrowings of the government, the Debt Management Office (DMO) wrote a rejoinder to our editorial, denying any debt crises and assuring the reading public that regardless of Nigeria’s high debt to service ratio, Nigeria’s borrowing is sustainable (at 19 percent of GDP) and that the “government has also embarked on several revenue boosting initiatives with a view to increasing the size of the revenue available to finance the budget and reduce the debt service to revenue ratio.” For added measure, when we advised the government to instead seek loans from multilateral agencies with very low interest rates instead of approaching shylock

investors and borrowers, the DMO accused us of a poor understanding of the lending policies of multilateral agencies and that Nigeria could not approach these agencies because she has no balance of payment crisis.

Of course, the government kept borrowing and by December 2019, the debt had accumulated to N27.40 trillion with an external debt component of $27.8 billion. A look at the spread of the debt shows that Nigeria does not borrow from global multilateral institutions even though they lend at one percent or less. Rather, we go for commercial loans with interest rates of between 7 to 10 percent and recently from China with equally high interest rates. There are two main reasons for this. First, borrowing from multilateral institutions (IMF and the World Bank) is not a politically popular decision in Nigeria. Nigerians are quite emotive when it comes to IMF loans – especially with the conditionalities that come with them. The debates the Structural Adjustment Programme and IMF proposed loans generated in the 1980s come to mind. Some would argue that the fear of IMF conditionalities have pushed the Nigerian government into the arms of shylock investors who would show no mercy when Nigeria defaults on the loans.

But this argument is neither here nor there.

The two main conditionalities for which Nigerians always resent the IMF for were - ending the fuel subsidy and floating the naira. History and our bitter experience have proven the multilateral agency right. Rather than invest in education, health and human development of its citizens, the Nigerian government has found

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it politically expedient to pour all those monies (scarce forex) into subsidising the consumption of petrol and keeping the value of the naira artificially low to enable elite/middle class consumption. Most Nigerians who were seduced into protesting against their true interest in 2011 have come round to see the foolishness behind the whole fuel subsidy regime that gulps billions of dollars yearly.

The second reason is the question of accountability. If multilateral institutions were to give loans to Nigeria, the government will first have to put together a convincing proposal.

More importantly, the institutions will also put in place a strong monitoring process to ensure that funds are used judiciously and for the approved projects. What is more, the release of the funds are likely to be staggered with release of future funds dependent on how earlier ones were spent. But we know that Nigeria does not have a track record of judicious utilisation of budgeted funds not to talk of external loans.

The accumulated external loans that Obasanjo and Ngozi-Okonjo Iweala succeeded in getting the Paris club and other investors to write off for Nigeria were never spent for the purposes for which they were obtained. The general consensus was that they were mismanaged or outrightly embezzled.

Sadly, the problem of accountability is still with us. Despite Buhari’s claim to integrity, no one can say exactly what the borrowed funds were spent on in the last five years. There is a high probability some of it were used to just service recurrent expenditure.

Clearly then, IMF-type loans would have

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CHRISTOPHER AKOR

been the best choice for Nigeria because the proposals and spending would be closely monitored and supervised to ensure value for money. But the Buhari government and even its predecessors would have none of it. As recent as February this year, the government was planning another round of external borrowing to the tune of $22.7 billion. This was after the previous Senate refused a similar request to borrow $30 billion three years earlier. About $500 million of the loan would have been used to digitalise the Nigerian Television Authority (NTA) – a project many critics have termed ‘useless’.

Well, the petro-dollars that the government has always depended on is no longer forthcoming. The financial situation of the country is now so precarious analysts are predicting that there will not be any significant money to share between the federating units in June because of the combined effects of collapsed oil prices and the lockdown of the country. If by 2018, our revenue to debt service ratio was 70 percent, we can reasonably expect that Nigeria’s current revenue is not sufficient to service its debt and is at the point of default. Of course we know what a default would lead to.

@Businessdayng

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BUSINESS DAY

Thursday 30 April 2020

Editorial Publisher/Editor-in-chief

Frank Aigbogun

Intimations of federalism in COVID-19 lockdown clashes

editor Patrick Atuanya

States should test matters in our courts

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

O

ne of the fallouts of COVID-19 and the associated lockdown in most states is the intimation of federalism. Many states went their independent path on strategy, process and procedure of handling the matter in the face of failure by the federal government to define a path. It resulted in memorable clashes between the federal and state governments that provides the opportunity further to test the extent and limitations of Nigeria’s federalism.

An outstanding case is that of Governor Nyesom Ezenwo Wike versus Aviation Minister Hadi Sirika or the Rivers State Government versus the federal government. The issue seemed straight forward. It turned out otherwise.

Wike in his capacity as Governor shut down the boundaries of Rivers State and facilities within it. They included the sea and airports, as well as entry routes to the state. On April 7, Caverton Helicopters, a logistics services company, flew ten persons into

the Airforce Base in Port Harcourt against the restriction and without clearance from the state government. Wike ordered their arrest and drove down to lock the offices of the service provider at the Airforce Base. The Rivers State Commissioner of Police backed the state governor.

The Rivers State Government charged the pilot of the plane and his passengers to a Magistrate’s Court which remanded the officers in prison until May. Wike then ordered Caverton out of Rivers State.

On April 8, Aviation Minister Hadi Sirika criticised the Rivers State Governor for going outside of his constitutional remit. He asserted that the pilots obtained federal permission to fly into Port Harcourt, the entry port into Nigeria’s oil and gas industry. Sirika affirmed that civil aviation was on the list of items exclusive to the federal government as were the Nigerian Airforce, the Army and the Navy.

Sirika stated, “Civil aviation is item number three on the exclusive list. There is no other person or institution other than the federal government that has the legal right

to legislate on items on the list. So, the air force officer, who jumped over the Commander-in-Chief, the Chief of Defence Staff and the Chief of Air Staff to call a governor to come into the property of the federal government to make an arrest, exhibited dangerous ignorance and gross incompetence.

“The police officer, who followed the governor in there, also exhibited dangerous ignorance from our perspective in civil aviation.”

The minister assured that the federal government would do everything within the law to secure the release of the officers and ten passengers remanded in custody. Part of the terms of the charge included screening for COVID-19.

Aviation, including airports, the safety of aircraft and carriage of passengers and goods by air features indeed in the Exclusive Legislative List under the Second Schedule: Legislative Powers in the 1999 Constitution. Yet state governors have responsibility for the overall management of their states, including the security of lives and properties.

The Rivers State imbroglio exemplifies the challenges of federalism and all its principles in Nigeria.

Those principles include the separation of powers, checks and balances and consent of the governed.

On the surface, the matter was one of failure of communication.

Ordinarily, the Minister of Aviation would in courtesy call or email to the Governor to inform him of the approval to the airline. In a subsequent address, Governor Wike pointed to the political roots of the dispute as he belonged to the opposition PDP to Sirika’s APC. The Rivers State Commissioner of Police fell to the crossfire as the Inspector General of Police redeployed him.

Issues in the case include the management and control of assets and facilities within states, the reporting line and control of state commissioners of police and the matter of security of states. We think that rather than leave resolution at the level of political talk, all parties should test issues at the Supreme Court. Such challenges will strengthen our jurisprudence as well as clarify our federalism.

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu 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

Enquiries NEWS ROOM 08169609331 08116759816 08033160837

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Thursday 30 April 2020

BUSINESS DAY

13

Investor Helping you to build wealth & make wise decisions

Market capitalisation

NSE All Share Index

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

983.01 967.99

275.99

118.96

386.68

209.14

1,606.43

1,010.17

874.27

261.54

120.35

376.46

205.63

1,596.19

1,017.37

871.45

-5.24

1.17

Week open (17-4–20)

22,921.59

N11.946 trillion

1,942.94

929.05

734.99

Week close (24-4–20)

22,599.38

N11.778 trillion

1,942.21

921.16

761.08

Percentage change (WoW) Percentage change (YTD)

-1.41 -15.81

-0.04 -8.22

-0.85 -20.02

0.00 0.00

-1.53 -17.82

-26.71

-4.35

0.71 -36.50

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

-1.68

-0.64

0.71

-0.32

-21.68

-13.00

-5.41

-17.32

Investors in Dangote Cement N100bn bond have option of lodging with either CSCS or FMDQ Depository Iheanyi Nwachukwu

F

Bank, Quantum Zenith Capital, Futureview Financial Services and Vetiva Capital Management acted as Joint Issuing Houses.

The transaction enables the Company to lower its average cost of debt and extend the average maturity of its debt. Dangote Cement intends to use the net proceeds of the offering to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes.

Commenting on the bond issuance, Michel Puchercos, Chief Executive Officer of Dangote Cement, said: “This landmark transaction is the largest ever bond issuance by a corporate issuer in Nigeria. It allows us to further broaden our sources of funding by accessing long-term debt at competitive costs from the capital market and builds further on the success of our domestic commercial paper programme.

The success of this transaction, www.businessday.ng

i n t h e cu r re nt cha l l e ng i ng environment, illustrates investors’ continuous confidence in

‘

Dangote Cement has a long-term credit rating pf AA+ by GCR and Aa2. ng by Moody’s due to its market leading position, significant operational scale and strong financial profile evidenced by the Company’s robust operating and net profit margins relative to regional and global peers, adequate working capital, satisfactory cashflow and low leverage

‘

or the first time in the history of the Nigerian debt capital markets, investors in the Dangote Cement Plc N100billion bond will have the option of lodging securities with either the Central Securities Clearing System (CSCS) or the FMDQ Depository.

The Bonds will be listed on the Nigerian Stock Exchange and the FMDQ Securities Exchange Limited.

Dangote Cement Plc, Africa’s largest cement producer successfully issued N100 billion S er ies 1 Fixed Rate S enior Unsecured Bonds due April 2025 under the Company’s N300 billion Bond Programme.

The transaction represents the largest corporate bond issuance in Nigeria’s debt capital markets, reflecting Dangote Cement’s strong credit quality as well as the resilience of the Nigerian debt capital market despite current global challenges.

Book building with respect to the issuance commenced on April 3, 2020 following approval from the Securities and Exchange Commission (SEC) and closed on April 15, 2020 at a coupon rate of 12.50 percent.

The transaction was 1.5 times oversubscribed and represents Dangote Cement’s debut bond issuance in the debt capital markets. The total order book amounted to N155 billion.

Despite current market headwinds due to the COVID-19 pandemic, the transaction was extremely well received and attracted significant demand from a wide range of high-quality investors including domestic pension funds, asset managers, insurance companies, banks and international fund managers.

Stanbic IBTC Capital acted as the Lead Issuing House for the Series 1 Bonds, and Absa Capital Markets Nigeria, Standard Chartered Capital & Advisor y Nigeria, United Capital, Coronation Merchant Bank, Ecobank Development Corporation Nigeria, FCMB Capital Markets, FBNQuest Merchant Bank, Rand Merchant

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Dangote Cement’s strategy, strong cash generation and solid credit profile.”

Dangote Cement Plc is SubSaharan Africa’s largest cement producer with an installed capacity of 45.6Mta capacity across 10 African countries.

The company operates a fully integrated “quarry-to-customer” business with activities covering manufacturing, sales and distribution of cement. We have a production capacity of 29.3Mta in our home market, Nigeria.

Its Obajana plant in Kogi state, Nigeria, is the largest in Africa with 13.3Mta of capacity across four lines; our Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and our Gboko plant in Benue state has 4Mta. Through its recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and has transformed the nation into an exporter of cement serving neighboring countries.

In addition, it has operations @Businessdayng

in Cameroon (1.5Mta clinker gr inding), Cong o (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta).

Dangote Cement has a longterm credit rating pf AA+ by GCR and Aa2.ng by Moody’s due to its market leading position, significant operational scale and strong financial profile evidenced by the Company’s robust operating and net profit margins relative to regional and global peers, adequate working capital, satisfactory cashflow and low leverage.

Dangote Cement is a subsidiary of Dangote Industries Limited, a diversified and fully integrated conglomerate as well as a leading brand across Africa in businesses such as cement, sugar, salt, pasta, beverages, and real estate, with new multi-billion dollar projects underway in the oil and gas, petrochemical, fertilizer and agricultural sectors.

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Thursday 30 April 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equity market shilly-shallies to Q1-2020 earnings result

I

n the previous week, the equity market returned to its bearish state, reversing some of its recent gains as the NSE All Share Index declined by 1.4 percent week on week (w/w) to 22,599.4points.

Accordingly, year to date (YtD) return deteriorated to -15.8percent. In terms of activity levels, average volumes and value traded declined by 34percent and 22percent w/w to 361.9million units and N3.6billion respectively.

Sectoral performance was mixed as three out of the five sectors we track, closed in the negative region. The Banking sector (-5.2percent) recorded led the losers camp dragged by sell offs in GUARANTY (-7.2percent) and ZENITH (-6.3percent).

Similarly, the Consumer Goods Index (-2.6percent) trended southward as investor booked profit on NESTLE (-5.9percent) and FLOURMILL (-0.9percent) amongst others.

Unsurprisingly, the Oil and Gas Index (-1.7percent) dipped amid price declines in SEPLAT (-0.1percent) and ARDOVA (-5.4percent). Meanwhile, the

PAT declined by 0.5percent to N40.9billion, dragged by 63.8percent jump in OPEX. Meanwhile, NB’s result was unimpressive as Net Revenue decline marginally by 0.1percent to N83.2billion while PAT decline sharply by 31.4percent to N5.5billion.

Looking ahead, we believe the influx of first quarter (Q1) 2020 earnings will continue to shape the interest of investors in the equity market. However, global economic fundamentals and oil market conditions might dissuade interest.

Notably, the equities market resume on a bearish footing as local investors react to the news of a special CRR debit from bank balances.

Money Market : A surprising ending to the week At the start of the previous week up to Thursday, the financial system was largely buoyant. This was on the back of new inflows from OMO maturity (N226.8billion) and Apr-2020 FAAC distributions to state governments and local government councils (estimated at N395billion) which outweighed outflows

Industrial Goods (+1.2percent) and Insurance (+0.7percent) indices trended northwards as BUACEMENT (3.6percent) and AIICO (+3.8percent) gained.

Elsewhere, a few companies published their Q1-2020 earnings during the week.

Specifically, GUARANT Y reported a 2.3percent y/y increase in Gross Earnings to N112.9billion and 1.6percent rise in PAT to N50.1billion.

Impressively, FBNH recorded a 14.5percent increase in Gross Earnings, driven by a strong 88.9percent increase in NonInterest Income, while PAT advance by 59.3percent to N23.1billion.

Also, ACCESS reported a 31percent jump in Gross Earnings to N209.8billion while

in the form of OMO (N112.7billion) and Bond (N156.1billion) sales. Notably, the gross liquidity in the system crossed N1trillion level on Thursday. This spurred average interbank funding rates - open buy back (OBB) and overnight (OVN) rates to its YtD low of 1.94percent on Thursday.

H o w e v e r, o n F r i d a y , commercial banks woke up to the announcement of a specialCRR debit from the CBN, worth N1.47trillion (erasing all the recent liquidity buildup and sending the financial market into a sparsely liquid state). Consequently, average interbank funding rates spiked to 20.7percent at the end of the week.

At the primary market

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segment, the CBN only mopped up 49.7percent (or N112.7billion) of the OMO bill maturity that came in on Thursday. However, total demand at the auction was overwhelming as total bids worth 3.2x the initial offered amount of N100billion turned up at the auction. Surprisingly, the Apex bank opted to sell only N112.7billion vs N100billion put on offer. Also, the CBN only reduced the stop rate for the 364-day OMO bills by 4bps to 12.71percent, leaving the rate on 89-day (11.5percent) and 180day (11.54percent) bills at prior auction levels.

At the secondary treasury bills market, the buoyant level of liquidity in the system triggered a bullish sentiment, driving average treasury bills and OMO yields down 36basis points (bps) and 136bps w/w to 2.7percent and 9.9percent respectively.

This week, we expect some upward repricing in the yield environment at the secondary market, as commercial banks sell down some of their investments to stay liquid. Also, in the absence of any new inflows, we expect marginal uptick at the week’s rollover NTB auction for N131.53billion.

Bond Market: A successful April bond auction At the primary bond market, heavy funds flowed into the Apr-2020 bond auction as local investors with excess funds remained hungry for double-digit yields. While a total of N60.0bn (N20billion apiece) was offered for the 5-year, 15-year and 30-year bonds, which were reopened, total competitive demand was significant at N275.7billion (total bid to cover: 4.6x vs 3.8x at the Mar-2020 auction).

Notably, marginal rates fell to an average of 11.17percent, compared to 11.83percent at the March auction. The DMO allotted a total of N176.1billion (Competitive bidders: N156.1bn and Non-competitive bidders: N20.0bn) to bidders at the auction. Specifically, a total of N40.1bn was sold for the 5-year instrument at 9.0% (previously 10percent), N82.3billion was sold for the 15-year instrument at 12percent (previously 12.5percent), and N53.7billion was sold on the 30year instrument which cleared at 12.50percent (previously 12.98percent).

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Economy and Market

Fixed Income, Currency markets: March turnover of N25.66trn represents 9.33% month-on-month increase ...11.46% decrease year-on-year Iheanyi Nwachukwu

F

M D Q E x c h a n g e ’s analysis of the Fixed Income and Currency (FIC) markets shows turnover for the month ended March 31, 2020 was N25.66trillion.

This represents a monthon-month (MoM) increase of 9.33percent (N2.19trillion) from the turnover recorded in February 2020 (N23.47trillion) and a year-on-year (YoY) decrease of 11.46percent (N3.32trillion) from the turnover recorded in March 2019 (N28.98trillion).

Foreign Exchange (FX) and OMO bills remained the most actively traded products, jointly accounting for 73.45percent of the total FIC market turnover recorded in March 2020.

FX Market Total FX market turnover in March 2020 was $28.92billionn (N10.73trillion), representing a MoM increase of 6.64percent ($1.80billion) from the turnover recorded in February 2020 ($27.12billion).

Analysis of FX market turnover by trade type indicated that the MoM increase in FX turnover was driven by the 39.05percent ($3.11billion) MoM increase in MemberCBN trade type to $11.07billion, offsetting the MoM decreases recorded in Inter-Member and Member Client trade types which recorded 2.43percent ($0.07billion) and 7.65percent ($1.23billion) decreases respectively in March 2020.

Further, analysis of FX market turnover by product type indicated that the MoM increase recorded was driven by the MoM increase of 25.77percent ($3.07billion) in FX Derivatives turnover, despite the 8.34percent ($1.27billion) decrease in FX Spot turnover.

In the OTC FX Futures market, the near month contract (NGUS MAR 25 2020) with a notional amount of $1.28billion matured and was settled, whilst a new far month contract, NGUS MAR 26 2025 was introduced at an initial contract rate of $/N405.16.

The total notional amount of open OTC FX Futures contracts as at March 31,

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2020 stood at c.$14.53billion, representing a $3.66billion increase on the value of open contracts as at February 28, 2020 (c.$10.87billion), while the total notional amount of OTC FX Futures contracts matured and settled to-date stands at $43.36billion.

The CBN adjusted its Official Spot US$/Nexchange rate from $/N306.95 in February 2020 to $/N361.00 in March 20206 representing a depreciation of $/N54.05 (17.61percent).

T h e N i g e r i a n Na i r a depreciated against the US Dollar in both the Investors’ and Exporters’ (I&E) FX Window and parallel market by $/N20.30 and $/N55 to close at $/N385.55 and $/N415.00 respectively in March 2020 (I&E FX Window – $/N365.25; parallel market – $/N360 as at February 28, 2020) due to the plunge in crude oil prices and the impact of the Coronavirus disease (COVID-19) pandemic on global economic output.

Fixed Income Market (T.bills, OMO bills and FGN Bonds) As at March 31, 2020, total T.bills outstanding remained flat at N2.65trillion; OMO bills outstanding decreased to N10.44trillion from N11trillion as at February 28, 2020, while FGN Bonds outstanding increased marginally by 0.85percent (N0.08trillion) to N9.47trillion.

Liquidity in the T.bills market segment declined further in March 2020 as trading intensity fell to 0.08 from 0.13 in February 2020 as investors continue to hold their T.bills investment to maturity and discount rates on new issuances fell further by a range of 41basis points ( bps) – 117bps in March 2020.

Conversely, the trading intensity for OMO bills increased from 0.61 to 0.76 in March 2020 as OMO bills turnover recorded a MoM increase of 14.04percent @Businessdayng

(N1trillion) to N8.12trillion despite the drop in outstanding OMO bills MoM. Trading intensity for FGN Bonds decreased MoM to 0.26 in March 2020 from 0.28 as FGN Bonds turnover decreased MoM by 8.02percent (N0.21trillion). YoY trading intensity for bills (T.bills and OMO bills combined) stood at 1.24 in March 2020, compared to 0.60 recorded in March 2019, whilst FGN Bonds stood at 0.26 in March 2020, compared to 0.18 recorded in March 2019.

In March 2020, Bills within the 6M - 12M maturity bucket remained the most traded across all tenors on the sovereign yield curve, accounting for 62.72percent of the total Fixed Income market turnover. FGN Bonds within the 20Y – 30Y maturity bracket were the most traded among the medium to long-term securities (that is 5Y – 30Y), accounting for 6.34percent of the total Fixed Income market turnover.

Weighted average yields on short-term maturities decreased by 267bps, while weighted average yields on the mediumterm and long-term fixed income maturities increased by 345bps and 107bps respectively in March 2020, driven by the increased demand for shortterm securities by investors in the fixed income market.

Additionally, inflationadjusted yield remained negative across all short-term securities (1M-3Y), whilst medium to long-term securities (that is 5Y-30Y) excluding the 5Y tenor, recorded positive inflation adjusted yields in March 2020.

The average discount rates for T.bills at the primary market declined further in March 2020, as the discount rates on the 91-day, 182-day and 364day T.bills fell to 2.40percent, 3.59percent and 4.95percent respectively, from 3percent, 4percent and 6.12percent recorded in February 2020.

Thursday 30 April 2020

Innovation

BUSINESS DAY

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

15

TECHTALK

Broadband Infrastructure

Bank IT Security

Lessons for Nigeria as India wins in Facebook’s $5.7bn investment in telco FRANK ELEANYA

F

acebook’s $5.7 billion purchase of 9.99 percent of the digital assets of Reliance Jio, making it the largest minority shareholder in the company, is a massive win for India’s telecommunication sector which holds lessons for Nigeria in seizing opportunities.

The investment is supposed to help Facebook leverage the reach of Reliance’s Jio Platforms and WhatsApp’s 400 million local users to connect small businesses and consumers in Asia’s third largest economy.

The announcement comes after many years of unsuccessful efforts by Facebook to tap into India’s internet market, a feat it rather achieved without stress in Nigeria.

Like Nigeria, Facebook had in 2015 approached the Indian government offering to provide internet access starting with a community called Chandauli where a local non-profit (Digital Empowerment Foundation) had helped galvanise a digital transformation through education.

Facebook’s entry strategy was through its newly minted Free Basics. According to the social media giant, Free Basics (also known as internet. org) is a platform that gives developers the opportunity to make their services and websites available free of cost to those who cannot afford internet access. The participating websites are stripped of photos and videos and can be browsed without paying for mobile data.

As part of attempts to promote Free Basics, Zuck-

erberg had flown to India, where he received a warm welcome from the Indian media, politicians, and even audience with the country’s Prime Minister, Narendra Modi. Over the course of 2015, several Facebook and Internet.org executives made several trips to India, meeting with the country’s lawmakers and government regulators.

Actually, Mark Zuckerberg renamed internet.org to Free Basics in September, 2015, just ahead of Prime Minister Narendra Modi’s visit to Facebook’s headquarters at the invitation of the CEO. As much as Zuckerberg tried to sell Free Basics to Indian authorities, the opposition to it kept growing.

A group of activists accused Free Basics of violating net neutrality and put pressure on regulators to ban it.

A Global Voices report in 2017 showed three problems with Free Basics: it could not adequately serve the linguis-

tic needs of local populations; it also featured a glut of third-party services from private companies in the US; and finally, the app was harvesting huge amounts of metadata about users and violating the principles of net neutrality.

Net neutrality upholds the principle of neutrality for all types of data on the network.

In other words, Internet service providers (ISPs) should provide access to all content and applications regardless of the source, and without favoring or blocking specific products or websites, voice or video. In India, for instance, Facebook provided restricted internet access to Reliance Telecom’s subscribers. In Nigeria, the company partnered with Airtel.

Contrary to the neutrality principle and much to the consternation of Indian regulators, the Free Basics enabled Facebook to partner with ISPs to provide preferential and selective pass on the

four questions in the regulator’s consultation paper and also blocking access to the Telecom Regulatory Authority of India’s designated email for feedback on Free Basics.

“Facebook is not introducing people to the open internet where you can learn, create and build things,” said Ellery Biddle, advocacy director of Global Voices. “It’s building this little web that turns the user into a mostly passive consumer of mostly western corporate content.

That’s digital colonialism.”

By rejecting Facebook’s Free Basics overtures, Indian regulators not only entrenched its neutrality stance, it also built the confidence of operators in the telecommunication sector, local business community and consumers that their interest comes first.

Fast forward to April 2020, that decision has paid off in the form of a fat cheque to an India telecom operator from the same company it

denied in 2016. It is Facebook’s biggest investment since WhatsApp. Interestingly, a year after India banned Free Basics, the population of people on the internet in the country grew by 34.4 percent. Today, with over 560 million internet users, India is the second largest online market in the world, ranked only behind China, according to Statista.

By 2021, there will be over 600 million internet users in India.

That $5.7 billion investment in Reliance Telecom may well represent a lost opportunity for Nigerian authorities who were too star-struck when Zuckerberg came calling with Free Basics, to properly analyse and understand the long term impact on Nigeria’s telecommunications sector.

For many Nigerian operators and policy makers, visits by global technology companies is often seen as a validation of the energy and vibrancy of the country’s tech industry, thriving despite infrastructural challenges.

However, short-term wins are not a sure sign of sustainable growth. Almost in every instance, Nigerians do not project enough into the motivations and intentions of foreign players, resulting in a few highly placed persons happily truncating the country’s future growth over pennies. This is arguably a continental challenge.

Due to the speed of adoption in Africa, Zuckerberg told the BBC he would be sticking to Free Basics on the continent. Apart from Nigeria, Eleven other African countries contribute a significant part of the over 40 million people currently

using Free Basics.

Free Basics in Nigeria, unfortunately, has not lived up to the wild dreams it was painted in 2016. On its launch in Nigeria, people could only access the platform if they were Airtel subscribers. In 2017 it tried to enlist Etisalat (9Mobile) but the services were still limited. Today, little is heard about the partnerships with the telcos as Facebook has since moved on to other mostly philanthropiclike projects in Nigeria. But Nigeria deserves more than donations.

Nigeria remains an important market for Facebook at least in Africa. As of 2020, the country accounts for 27.1 million users on Facebook data from internetworldstats. com showed, which makes Nigeria the second largest market in Africa for Facebook. Nigeria also has the largest internet users market in Africa.

In view of Nigeria’s strategic potential for Facebook on the continent some experts say a deal with a local telco is not far away.

“The Facebook move in India means that an Africa telco deal is not far along,” Victor Asemota, founder of SwiftaCorp said. “What if they decide to reduce MTN’s majority stake in Nigeria with a stock swap and end all of MTN’s woes with the government and bring a new dynamic into the payments game locally with WhatsApp?” While a large ticket investment remains in the realm of conjectures, Nigerian regulators can do a better service to the telecom sector by not getting carried away by Zuckerberg’s stardom when he comes calling.

tions in a seamless manner.

“As an IT support company we understand that working remotely can be overwhelming for any management, especially as it relates to monitoring and managing teams. 85 percent of our clients have reached out to us to help them strengthen their remote working operations while away from the office and onsite infrastructure,” she said. “We have had great success using these

solutions and we decided to share with 5 online tools that we use daily and could not do without.”

Remotely will remain free till July 1, 2020 by which time the Coronavirus crisis would have ended.

“Let us help you take your team online. The switch to working remotely has never been easier. Let us show you how Zoho Remotely can make #RemoteWork is like a regular office day,” Melanie said.

Tranter IT rolls out free remote work solution FRANK ELEANYA

I

T solution provider, Tranter IT has rolled out a digital solution that helps companies stay connected while working from their home at no cost.

The solution known as Zoho Remotely enables employees to work remotely by offering a complete suite of web and mobile applications that help them

communicate, collaborate and be productive.

Since the spread of the coronavirus pandemic, businesses have been on a lockdown enforced by different governments around the world. In Nigeria, the President Muhammadu Buhari declared a lockdown in Lagos, Ogun and FCT, while the various state governors also imposed movement restrictions aimed at containing the virus.

Nigeria has seen an in-

crease in cases of the coronavirus. As of Wednesday, it had recorded 782 cases with 197 recovered and 25 deaths so far. With the rise in cases, a possible extension of the lockdown looks very likely.

However, with the Zoho Remotely companies can now work from the comfort of their homes without interruptions in their operations.

“We all know that faceto-face interactions and in-

person collaborations are the best ways to work. The next best option is to work remotely,” Melanie Ayoola, executive director, Tranter IT said in a statement. “With the right set of apps, you can maintain a close-knit and productive working environment, no matter where your team is based,” Zoho Remotely suite of apps enables companies to hold their team meetings, customer support calls, or important sales presenta-

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

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Thursday 30 April 2020

BUSINESS DAY

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Thursday 30 April 2020

BUSINESS DAY

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Thursday 30 April 2020

BUSINESS DAY

Garden City Business Digest How standard facemasks are now made in Port Harcourt - For Port Harcourt, mask is a must because of soot - The power of local production: Foreign $10 or N4000; Nigerian original N400 - Support needed to strengthen local production with guarantee - Nigeria may export masks cheaply to the world Ignatius Chukwu

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ver 86m facemasks were reportedly confiscated in China recently for being below standard. This alone shows that imported facemasks may not be healthy for some nations especially Nigeria and Africa. The same report said some countries now arrest those distributing facemasks privately and mostly to the rich. Why? The authorities want to distribute them and ensure they get to both the rich and the poor.

Facemask has emerged as a sensitive product in the Covid-19 era. It is now regarded as a security asset because the virus is the greatest threat to humanity and to every nation.

If it kills a president, it may alter the security architecture and agenda of such a country.

For this reason, facemasks are now essential items and its production is now of great sensibility and importance to nations. Nigeria is no exception. This must be why the national council of the Manufacturers Association of Nigeria (MAN) took over the

battle and convinced the FG on the need to hand over the production to the Garment Association of Nigeria (GAN) unit of MAN to oversee. One of the principal members is a Port Harcourt-based council member and immediate past national deputy president (south-south-east), Ekama Emilia Akpan, who was twotime chairman of the Rivers/ Bayelsa chapter of MAN. Her industrial garment and apparels making firm, Showers Nigeria Limited, which is strong in manufacture of Personal Protection Equipment (PPE), located in the TransAmadi Industrial Area of Port Harcourt, has made waves in the oil region. Now, it is one of those making waves in the war against covid.

MAN has won the right to produce standard facemasks for Nigeria such that there would be no need to confiscate standard products. BusinessDay visited some factories in Port Harcourt and found how standard facemasks are being made and the care put into the task. Jovitapatricks Nigeria Limited led by Jovita Iroemeh (Ada) who read Sociology of Medicine is one other striking production centre. These

Brain behind Por Harcourt facemask revolution: Ekama Emilia Akpan, CEO of Showers Limited and council member of MAN

factories have received orders from various agencies and corporations to produce scientifically tested facemasks for Nigerians.

Correct masks for Nigerian climate The facemasks that Nigerians can afford should be re-useable, must allow for easy breathing especially for asthma patients, must have filtering abilities (very important

because of soot prevalence in Port Harcourt), and should have colours for fashion and aesthetics, Akpan stated in an interview in her factory.

Important points: Soot in Port Harcourt is an issue and so wearing of masks may become permanent even after the corona virus must have been tackled. For Nigerian use, there is need for it to be 100 per cent cotton material. This is very important so it can be washed and ironed for re-use.

The economics: Disposable ones are about N200, but reuseable ones come between N300 and N500; and thus highly economical. The ideal thing is for a person to pick half a dozen and use and re-use in these seasons, but one can pick less for a start.

This is why the MAN is pushing this matter at the national level and at all levels.

According to Akpan, this is because the common man cannot afford the disposable ones every day which could amount to over N6,000 every month, if he sees it to buy.

The disposable one is to be disposed of each time you use it. So, if you perform three tasks outside the home in one day,

you would need three masks that day. This is not good for the common man and for Nigerians.

The Garments Association of Nigeria in MAN has been saddled with the task of stepping in to close this gap, save foreign exchange, and save lives because importation is closed for now. MAN is making sure that the local group performs this task for Nigeria and to prove to the nation what local power can do if given the responsibility and support.

The Canada price scenario is instructive. Akpan said when she visited Canada recently, facemask was selling for $10 (N4000) per one.

“Nigerians cannot afford this and we cannot allow facemasks to be the exclusive of the rich. It would mean that

fresh air would be only for the rich.”

Cotton is suitable for our environment and agrees with our skin, she added. “That is why standard products from home are the best because they consider local factors and conditions; eliminate foreign exchange requirements, and create values that are retained at home; the least being job creation and supply of raw materials.

Showers Facemask Models: This allows you to breathe comfortably and freshly. Raw cotton is used because it is the best type of cotton. It has holes.

There are ways of testing for holes. Filters are inserted in between to filter the air coming in. The top has a tip to cover the nose and rest on the nose bridge.

Family altar may be your rescue: Take responsibility Port Harcourt

by Boat

IGNATIUS CHUKWU

O

ver 200,000 persons have died so far from the novel corona virus known as COVID-19 and almost three million people have been infected. The virus does not move, it is people that move it.

That is why scientists, health authorities, and the World Health Organisation (WHO) insist on clean hands by washing hands; and that each person must take responsibility.

This decree sounds new but it is not. Keeping one’s hands clean has been the oldest ordinance though it has never been fully obeyed. Taking personal responsibility is what Christ came to die for on the Cross when He made it clear that when the trump shall sound, husband may be separated from wife, brother from sister, etc.

What this means is that it is how clean your hands were that would decide everything.

Salvation may not be awarded on group basis, churches, tribes or centres, but to every individual soul that obeyed; for every soul that sinneth shall die.

That is why this strong woman of God, Lara Joseph, the Area Pastor of Redemption Model Parish of the Redeem Christian Church of God in Elelenwo, Port Harcourt, used every ounce of energy in her sinews last Sunday (April 26, 2020), to drive it into us (less than 50 oh) for us to remember the injunction on need for a the Family Altar. This must be reason for the huge emphasis on House Fellowship centres in that church. The closer the better.

The Family Altar is the spiritual bulwark and pillar of every Christian family. That is where you launch your attack and defence from. Lara Joseph reminded us that the husband is always the priest at the Family Altar. He would have been running this altar even before he married, or start one after wedding. That is where he exercises his spiritual authority and leads his household along the Narrow Way. Taking authority from Genesis (12:7-8) she showed us how altars work in the lives of members of a family, even through generations. Was it not the altar set up by Abraham somewhere between Bethel and Ai that was eventually stumbled upon by his fleeing grandson, Jacob (where he found a stone, placed his head on it and slept, and in the dream saw a ladder to heaven and angels climbing to and fro, and saw God at the end of the ladder)? Was it not a great revelation at such dark moment in humanity that it was revealed to man about the possibility of a link between man and God, between the earth and heaven? Was this not reaffirmed by the Cross or coming and dieing of Jesus on the Cross to reopen that link? Jacob was fleeing to safety just as humanity is in search of safety or

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meaning of his existence this day.

But, what is an altar? Physically, “it is a raised ceremonial religious structure: a raised, typically flat-topped structure or area where religious ceremonies are performed. It is a Communion table: the table or other raised structure in a Christian church on which the bread and wine of Communion are blessed and shared.”

Spiritually, it is the centre of power of a family or group of worshippers.

Lara Joseph painstakingly drilled us through the benefits of having a Family Alter and mentioned the fact that it attracts the presence of God. God smells the aura of pure worship from an Altar including the one from your home; and comes down. This means God comes down to your home. Imagine what that would mean at a time of the corona virus such as this. If you follow the injunction in Chronicles and make joyful noise to heaven, it will sure chase away demons and their viruses.

Your altar will surely promote unity and agreement in your family. Did the prophet Amos not ask if two can walk (and work) together without agreement? There will be an enabling environment so that where one prayer warrior felled 1000 enemies; two of you shall fell 10,000. Is it not assurance of victory in this ugly situation?

The Family Altar provides the chance to daily activate the covenant in your family. It is not enough to establish a covenant with God (at baptism) but there is the need to stoke the fire of the Altar to always activate this covenant.

Remember it is about you doing your part and expect God to do His part. God always does. It keeps us, gives us divine help, prosperity and

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divine favour. Is this not what we need badly in this COVID-19 era? This is the time to cry for divine help.

Open heaven is another reality of a Family Altar, a burning altar, she calls it. It also offers spiritual growth so that as you study the Word, raise praises to heaven, and forgive one another, your command over things around you will stand. You will decree a thing and it shall come to pass. You will experience ‘internet of things’ where you wish and it happens. Ask the Psalmist (114) about the power in the study of the Word.

Remember the Word is God made manifest, she went on.

Threat is here, danger is here, but the Lamb is also available. Let your Family Altar burn, let the priest (husband) take his position, let the assistant (wife) be active by reminding him and gingering him to duty, let the man lead in daily devotion, bless the members of his household, distribute duties during the daily devotion so that some will raise praise and worship, distribute prayer points, then you the priest (husband) will conclude, bless your able wife, your children, household; and share the grace.

The wife should know that the devil prefers to attack the man (head) so that the Altar will crumble; so pray fervently for him. As the Neck, ensure you are strong always to carry the Head well to function effectively. It’s a sacred duty.

Take responsibility in obeying all that the authorities have commanded, take responsibility in stoking the fire of your Family Altar, let your Family Altar burn glowingly; then, be sure that this, too, will pass away.

@Businessdayng

Thursday 30 April 2020

BUSINESS DAY

19

Investing in Rivers State FG is deregulating in the night – Rivers Entrepreneurs and Investors Forum boss, Ibifiri Bobmanuel - We have shouted about diversification and deregulation for eight years - Investors are knocking but over regulation stifles key sectors - Nigeria’s private sector is largest in Africa, respected in the world - Where Lagos got it wrong in COVID-19 fight; early shut down - States should emulate Rivers but Gov Wike should create safe food passage Ignatius Chukwu

T

he Rivers Entrepreneurs and Investors Forum (REIF) formed about eight years ago has been in the forefront of policy articulation and business drive in the Niger Delta and even beyond.

It is famous for organizing the only successful governorship debate for two terms in Rivers State and is highly respected and listened to basically because it accepts no funding from the government.

In this exclusive interview with BusinessDay, the president, Ibifiri Bobmanuel, CEO of a construction company and founder of a tractor manufacturing company, draws urgent attention to what the federal government must do immediately for the economy to bounce back stronger than it was and for Nigeria to take the lead in Africa. The highly researched-based group also pointed to what Lagos did wrong in the fight against COVID-19 and what Rivers must do, now. He also IGNATIUS CHUKWU reports.

What would you say about the free fall of oil?

We started talking about oil about eight years ago. From all the indications then, oil as a commodity is expendable (exhaustible) because you drill a well and after some years, you find out they are all empty. Oloibiri, where well was drilled, is empty now.

It should tell anybody what can happen in an oil economy. We began to bring the attention of the government to real diversification. Nobody has really given serious thought to this matter because of the steady flow of income from oil.

Oil investors are paying buyers to take it away due to storage troubles Today, oil has crashed. The US oil is selling below one dollar. This means that the oil investors are actually drilling and paying people money to come and take it. This is because their storage capacity is overfilled. The oil drillers cannot accommodate what they have. Tankers are used to ship out oil from base.

Now, they are all full and some have tried to sell on the spot market but no buyers.

The way the tanker business works is that the owners of oil pay the tankers per day and the tanker owners have no business if you are selling your oil or not. Theirs is to haul the oil from the plant to the buyer. So, instead of the oil owners to be paying for the oil in the tanks per day, they now dash it out to whoever that cares.

That is how the notion came that they are paying to give the oil away. Its hauling, and holding the oil till buyers come that caused it. It’s now a cost on oil owners. It’s a tricky situation.

Nigeria has not invested in storage capacity, else, government would be

Ibifiri Bobmanuel (Reif president)

storing its oil and shore up internal reserves and wait for the scarce day when Nigeria would not be able to meet their drilling quota and use the stored oil to meet up and sell.

FG is deregulating in the night We are at Cache 22 situation. We must begin to take diversification very seriously. The petroleum downstream divestment, deregulation, etc. is urgent. It took us to this crisis to smell the coffee and deregulate.

Now, they are deregulating in the night and expect dividend in the day.

It does not work that way. People still have to take the crude out and bring it back to sell. The FG needs to roll out laws to back up the deregulation for investors to put in more. The backend needs to be tidied up.

Electricity: The FG must deregulate completely. What we have now is partial deregulation. The government must get out of tariffs and generation. In doing this, room is created for the private sector to fill the space. They will now attract direct foreign investments (DFI) into the space. There will be funds, technology and serious managerial skills to solve problems far above what the public sector is doing at the moment.

By the present posture, no serious investor will move in. When foreign investors come in, they would want to play in every (I mean, every) item in the space. You have problem of metering now, but when these people come in, it will disappear. Meters will be everywhere. What the FG will do is just to regulate how the players play their game. There will be more confidence, investors will take the breath and bite the bullet to pump in more funds because there will be profit. The FG should not bother itself about how much profit each player is making. It is not theirs concern because the investment there will www.businessday.ng

be 100 per cent private sector. They should rather bother with managing the excesses of the investors. When direct foreign investors (DFIs) stream in, the market always has its own way of regulating itself. It happened in the telecom sector, it will happen in the power space, the downstream, etc.

The freed funds by government would be diverted to other sectors such as agriculture, health and education. That is the bigger picture. We cannot think myopically while we claim to play in the global game. It’s about the private sector, not government.

Nigeria’s private sector is respected worldwide The private sector in Nigeria is the largest in Africa and one of the largest in the world. The world takes Nigeria very serious. See the banking sector, telecom, etc; we have very commendable business sector. The indices about the growth of Nigeria and prosperity are not about the public sector but the private sector. The space being played by both the local and international players in the Nigerian economy is huge.

It is due to their understanding of international business and network of growing businesses. In freeing up these spaces, you give the international investors an opportunity to peep in.

FG has no business building all the roads. Most of the airports being built in Nigeria are from investments in Nigeria. The railroads we are proud of are mostly funded from China. So, why would the government want to drive the process when they have no understanding of the nitty-gritty in that space? Free that space up for the private sector to play. You find out the huge growth around that space would immediately skyrocket.

The good thing running for Nigeria is that we have many growth spik-

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ers with multi-billion dollar spaces.

If these spaces could be looped together and freed properly, Nigeria would bounce back very strongly and fast.

If the FG continues to play in those spaces, when the shocks come, it would spread to all other sectors and it would be the FG’s fault and choice. Allow the private sector to take the risks and the FG could motivate other sectors such as ICT, etc. Come up with proper policy to stimulate local entrepreneurs.

Telecom is no different and the same success can be translated in all other sectors with some modification. Telecom plays a lot of role in the calculation of Nigeria’s GDP. Look at the seaports. They are few but the load is 100 times bigger.

The FG can give out more licenses to build and operate ports. The market is truly there. If you take the indices to any international financiers, they will definitely fund such projects, but we need to get the FG to spur more private sectors, just like what some of us (here in the Niger Delta) are doing with the deep sea port and dry dock projects. They are huge but when we get to the main road where you begin to see the work being done under the bridge, you marvel.

The FG can take some key sectors and free them up and we will fly.

Do you think Rivers is still doing well with six positive cases in corona virus pandemic?

Not at all! Rivers is not in the double digit and it means there is something the state is doing right. I will use this opportunity to commend the governor because he has taken this COVID-19 issue very personal.

He has used the opportunity to step on some toes for trying to protect the citizens. I think we as a people should point him out and bring him out for commendation and support.

It is only in time of crisis that the leadership stuff in a leader would emerge. Under this circumstance, Gov Nyesom Wike has shown us the mantle he is made of, whether you like him or not. He has a capacity that is rare in this part of the world.

Lagos, Rivers, Kano, and Abuja are gateways states to the world by sea and air and should have more exposure to COVID-19. These states have similarities. Lagos and Rivers are even more exposed to the pandemic. They have similarities that Abuja and Kano do not share.

This makes them take inventory of travellers around the world, and COVID-19 had been running riot around the world. So, these four locations should be first hit and redistribute to other states.

So, for Rivers State to have been able to reduce its own exposure to such low numbers is great. Now, Lagos and Rivers have seaports; and most of the seafarers usually affect such cities. So, Rivers should have @Businessdayng

been next most hit. It happened in other cities with seaports in Italy, Spain, etc. I will therefore commend the Rivers State government.

What Lagos should have done Some of us felt Lagos State should have shut down the airports far earlier, liaising with the federal authorities to come up with measures such as quarantining visitors. This was not done. The spike took place in Lagos, over 380 (now 764).

Abuja takes it next. Lagos takes in more international flights and more cargo vessels and this is why Lagos has more spike. On that same trajectory, Lagos and Port Harcourt do have international airports and two seaports each. Port Harcourt had two cases and just now has three more to make it six over all with two exits, two deaths and two still in treatment stage (as at April 28, 2020).

We find out that Port Harcourt shut down the borders far early and has been very serious about it. Remember the incidents of Carveton Helicopters and ExxonMobil (the governor arrested them and later released them when they pledged better behaviour). That was indication of art of leadership but some people would see it from other perspectives; either thinking the governor went too far. What is overriding is life of humans. Life was threatened and the governor’s decision was indeed spot-on. Laws are made to protect life; if you take out that element, then laws are useless. So, the influence of a piece of law is its ability to gain respect because of its ability to protect lives. So, we keep commending the Rivers State government.

Kano and Abuja do not have seaports, but if you look at their cases against what is in Rivers State, you find that leadership came to the party. The two states are getting to 100 plus with frightening revelations of deaths in Kano.

Rivers business community We the business community strongly feel that further thoughts should be put into this process. States should take a leaf from what Rivers State is doing. We can mitigate and stop the spread in Rivers State and in Nigeria.

What to do: There are loopholes at the land borders perpetuated by miscreants and law enforcement agencies that ought to do better. If they can get the agencies to take more stringent measures, it would help. The decision in Rivers State to put task force men to provide a second layer at the borders is very good. Allow people in the state without the virus to be freer, then life would be good.

Some of our business partners in Europe are still baffled how we have low numbers in Rivers State and even Nigeria. For Rivers, the early lockdown helped a lot. Government has to work on the borders and no new cases would spring up.

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There’s no reason why blockchain technology should not be used to automate permit applications, approvals or consent grants - Uhuangho In this chat with BusinessDay Law Editor, THEODORA KIO-LAWSON, Finance Monthly “2019 Project Finance Lawyer” and Managing Partner, BTO Partners, Osahon Uhuangho speaks about the impact of COVID-19 on businesses; Nigeria’s Emergency Economic Stimulus Bill, 2020 and the possibility of blockchain technology being adopted by government parastatals in Nigeria to fully automate services such as permit applications, approvals or authorization, consent and grants, providing swift and decisive Government services to ease business processes. EXCERPTS…

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e’re facing a global pandemic at this time, known as the coronavirus or if you may, COVID-19.

From a legal practitioner’s perspective, how do you think this pandemic would ultimately impact the “ease of doing business” in Nigeria?

The world as we know it has been dramatically impacted by COVID-19 pandemic, with the global economy negatively impacted in many sectors.

That notwithstanding, the pandemic has also resulted in having been a boost to some sectors, ie the virtual technology sector.

Businesses around the world have embraced the use of technology in coordinating their affairs such as team meetings, inventory management, remote human resource management and even remote factory operations.

This pandemic in many ways is a wakeup call for countries like Nigeria that are not fully in pair with the rest of the world in adopting the use of technology to further the ease of doing business within her business community, ultimately I anticipate that Nigeria would speedily develop local capacity annexing the use of technology for ease of doing business.

It is my hope that regulators would adopt technology to ease regulatory processes as well. Frankly, I see no reason why blockchain technology cannot be adopted by all Government parastatals in Nigeria to fully automate services such as permit applications, approvals or authorization, consent and grants, providing swift and decisive Government services to ease business processes.

Perhaps post COVID-19 if my anticipation that Government processes one day become fully automated, it would allow legal practitioners focus more in developing the much-needed capacity in terms of understanding regulatory policies and best advice their clients on actual legal issues as opposed to chasing permits and approval that are often seen as success in today’s legal climate.

“I see no reason why blockchain technology cannot be adopted by all Government parastatals in Nigeria to fully automate services such as permit applications, approvals or authorization, consent and grants, providing swift and decisive Government services to ease business processes. ”A practical example is Expatriate Quota Approval (“EQA”) are typically considered legal work by lawyers in Nigeria, imagine such regulatory process are automated, that frees up time for lawyers to advice businesses they support on actual legal issues making it easy for them to do business within a properly guarded legal framework

of implementing it?

In my views, proposed Bill if and when passed into law may suffer the same faith as some federal funding, persons put in charge may highly misappropriate it, for example, the 24.8 billion Naira Education Tax Fund (ETF) in 2001 distributed to Governors for bosting the education sector, sadly we saw very little or no effect of funds capable of revamping the entire sector across the country. The sector has been so neglected to the extent that most parents cannot send their children to schools they attended for fear of not getting the education they require to be properly position.

I am of the view that we should think outside what is usual if we are to annexe the befits from palliatives provided for in the Bill, one way in my view is to take advantage of the biometric verification number (BVN) system to identify business owners that are to apply for such financial incentives.

So that at a glance we can see what was given to whom and when, rather than situations in the past where such funds become “political settlement funds” ultimately shifting from whatever good relief it is to provider for our business community and the overall economy. as opposed to a rushed through one.

What is your new normal, not just as a lawyer but as a business owner in the COVID-19 era?

Apart from the usual general health and safety issues of keeping good hygiene, the new normal for me as a lawyer and business owner is to embrace the use of technology across board for the delivery of services, from remote team meetings to electronically signed contracts and visual meetings with clients.

I have also seen the need to invest in modern technology in our meeting rooms so we can meet with clients remotely rather than the usual physical office meetings.

In response to the outbreak of COVID-19 disease, Nigeria’s Emergency Economic Stimulus Bill, 2020 seeks to provide temporary relief on corporate tax liability among other fiscal and monetary palliatives to alleviate the sufferings of citizens in the wake of an economic crisis.

However, some business analysts and legal experts seem to think that there are quite a few grey areas with the Bill. What are your thoughts?

Nigeria’s Emergency Economic Stimulus Bill, 2020 is a very welcome development, particularly as it seeks to eradicate the unwitty process for the

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importation of medical devices during this pandemic.

However, it appears to have totally excluded a large sector of the Nigeria economy, and that is the informal sector, take for example Alaba International Market in Lagos, a multi-billion Naira market, I dare say that majority of traders at Alaba International are not registered under the Companies and Allied Matters Act (CAMA) a criteria to be included in the palliative provided under the Bill.

There are so as many similar markets across the Nation operating in the informal market making up the whole economy, I am afraid if they are all excluded from the palliative provided under the Bill I very much doubt the Nation would feel the impact from an economic standpoint of the Bill.

I feel we are missing out on an opportunity to stretch or bring down the walls of the formal sector to include more from the informal sector and by effect expanding the tax bracket, not only would that reduce the dependence of the nation on dwindling oil revenue, it would give us a better understanding of our economy. I would have preferer to see this Bill give unregistered businesses an opportunity to register their businesses so as to take advantage of palliatives the Bill seeks to provide.

Given our history as a nation, how viable is this emergency law and what are the intricacies

Nigeria: A Lesson on Disclosing Conflicts of Interest in Arbitration Learned from Global Gas and Refinery Ltd v SPDC

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The United States’ Senate recently passed a $2 trillion economic stimulus plan and various other countries have done same. Are the monetary and fiscal palliatives offered in Nigeria’s Economic stimulus quantifiable? If so, can you attempt an estimate?

Countries like the United States can pass through their legislative stimulus plans to help stimulate their economy because they have specific sectorbased economic data. Hence they can decisively have an appropriate financial plan to boost their economy.

They are no uncertainty that Nigeria like many nations need fiscal palliatives to help sustain our economy through this pandemic, the question whether monetary and fiscal palliatives offered in Nigeria’s Economic stimulus is quantifiable is in my view “the million dollars” question and I very much struggle in attempting to provide an answer because to know what is quantifiable, we must first understand what is required, and in the absence of actual data that captures the reality of the real market, one can be lost.

In the absence of such actual data, providing an answer to the million dollars question can at best be presumptive and far from reality.

For example data available from our National Bureau of Statistics does not depict the reality of the nations real estate sector, this sector is highly

COVID-19 has exposed the fragility of public health systems globally 23

under reported in my opinion, this is because many of the transactions in that sector are not reported, so any palliative for that sector in reliance of the data available may not do justice to the need of that sector, hence we are unable to measure the quantifiability of same.

1. In line with current realities, the Attorney General and Minister for Justice recently rolled out plans for how the justice sector should function post covid-19. He proposed the use of digital platforms such as skype, zoom and having courts that are fully ICT-compliant, particularly with facilities to fast-track the process of taking evidence from witnesses.

Do you think this will hasten the long-awaited reform the judiciary needs to get to the next level?

At this time in our Nations life, a fully ICT-compliant court system for the dispensation of justice will in no small measure improve Nigerian Justice system. In my view and as rightly expressed, this would hasten the long-awaited judiciary reform, so it is a very welcome development, I only hope it is expanded to takes into account legal education in this country which in my views is long overdue for a complete overhaul, we should not have trained lawyers in this era that becomes conversant with basic computer programs like Microsoft Word on their first job when their international counterpart is already dealing with more complex programs.

2. Would you be kind enough to share with us, your ‘Top Five’ daily business habits in this time of the pandemic?

Frankly due to the nature of our practice, over 80% of our transactions are on a standstill or inactive mood, because we mainly interface on behalf of clients with government agencies and they are mostly closed due to COVID-19, hence I have not developed a lot of “business habits” during this pandemic, but I can say that I have been; 1. Exploring electronic resources 2. The realization that people are your utmost resources 3. Understanding the significance of mental health and how it impacts businesses 4. Showing apparition to members of staff 5. Allowing members of staff to tackle task on their terms rather than a systematic approach.

Osahon Uhuangho is a partner at BTO Partners

A – Z of corporate reorganisations in Nigeria 24

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Leading your firm through disruption Excerpts from a presentation by the NBA-SBL Chairman, SENI ADIO, SAN at the recent Strategic Growth Online Conference for African law firms.

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y way of background and to put things in perspective and based on currently available data, the pandemic is estimated to have or to have had the following effects: • Nigeria (FGN) - 25% decline in revenues from CIT, Customs & VAT (in addition to falling IGRs). FGN not likely to see benefits of Finance Act 2020 for a while.

• FGN - GDP to decline by -3%, could be higher (Report of NEC AdHoc Committee on COVID-19, March 25, 2020).

• Africa – Hitherto GDP growth rate of circa 4%, now best case 0.4%; and likely -4% (McKinsey, Tackling COVID-19 in Africa).

• Globally, JP Morgan declared a 70% decline in revenue for Q1 (2020) • France estimates that its economy will contract by -8% (up from an initial estimate of -6% -- 2020) Positioning African law firms for prosperity post covid-19 requires the following: Accessibility, Accessibility and Accessibility – the three [3] As. And to assure accessibility, law firms need to have in place, robust, Business Continuity Plans (“BCP”).

I liken the 3 As to the oft-quoted saying in the real estate business, which is “Location, Location, Location.” At the end of the day, perhaps the single MOST IMPORTANT attribute that clients require is the ability to READILY reach their legal counsel. I say this because, certain other important criteria are presumed as already being in place. These include:

little usage (basically “sweating” these technologies/assets).

They include: Webex (Cisco); Zoom; Google Duo; Teams (Microsoft); GoToMeeting; and Skype (which has been around for what appears to be eternity).

I think Another conversation that we should be having now is that none of the platforms i just identified were developed in africa. Why have we not done that? If we have, what are the names of the apps? How come we don’t know about them?

1. Competence (Generally) 2. Expertise (subject matter) 3. Affordability (professional fees) 4. No Conflict of Interest 5. No legal or other impediment (language; jurisdiction) COVID-19 – catastrophic now and tranformative forever This may sound crazy or “Au Contraire”. But it’s not! COVID-19 has brought a lot of anguish, particularly with respect to the loss of lives and economic devastation. However, what may be transformative about it include, but are not limited to the following: It has caused us globally to have the kinds of conversations that we should have been having anyway, particularly in Africa, with respect to connectivity in a global economy.

The impending implementation of the AfCFTA also makes connectivity and the use of online platforms imperative. Utilizing technologies that had been available for years with very

Access Access Access For law firms to have access to their clients and their clients to have access to them, one of the most logical investments law firms can make now is in technology. Put another way, for business continuity, law firms must invest in technology.

Law firms that are serious about their clients and providing prompt and efficiently delivered services to them are bound by the business case to invest in robust technology that will assure accessibility and the integrity of information provided by clients and to clients.

Innovation + Intelligence = Prosperity BEYOND RUDIMENTARY Now, the required BCP, must go beyond what, frankly, has become rudimentary. That is the use of laptops and access to internet. These anticipate disruptions, such as inaccessibility to business premises or

systems and equipment on business premises (caused by fire, flood, earthquake, etc.).

A rudimentary BCP anticipates that employees or, at least, some of them would be able to have access to the business premises within a short period. However, that will not always be the case.

INTELLIGENT BCP: With the advent of COVID-19, it has become evident that physical access to offices and staff [2 KEY ELEMENTS TO BUSINESS RECOVERY] may be disrupted for extended periods of time. Therefore, law firms should provide appropriate work tools/conditions to lawyers, as well as support staff, such as, Remote and secure access to a central server and Flexy Hours (particularly for valued staff).

In tandem with the foregoing, law firms need to ensure that they install very robust cyber security mechanisms to defend against cyber attacks and phishing scams INCOME AND REMUNERATION: Post COVID-19, law firms would be well advised to embrace various forms of alternative billings in order to show empathy to their clients and share risks and rewards. These could include: Project billing, Discounted hourly rates, Fixed fees, Combination of hourly rates and a fixed fee, and Contingent fees.

In the same vein, law firms should review their compensation methods in line with the “new normal”. These

could include: Reduced “draws” for Partners, Revised criteria for eligibility for bonuses, Freezing of Pay Increases, Right-sizing, reduction in salaries (perhaps temporarily), etc.

Conclusion “THE NEW NORM” Law firms need to recognize and accept the fact that many of the changes caused by COVID-19 will be irreversible.

Plan for Uncertainties. Pandemics or other catastrophes may become more common place – E.G., INSURANCE (for Pandemic and other Business Disruption Coverage).

The All England Lawn Tennis Club (AELTC), the organizer of the Wimbledon Tennis Tournament planned for COVID-19, following the SARS epidemic in 2003. Estimated payout is £114 Million. Cf. Annual Premium of circa £1.5 Million; and cumulative cost of £25.5. Law firms should seek advice of sophisticated insurance brokers to ensure coverage, not subject to exclusions intended to be covered, such as a premium “any cause” cover.

Diversify Client Base. Develop clients that are resilient to pandemics and other societal plagues such as, technology companies, pharmaceutical companies, logistics and healthcare equipment manufacturers.

SENI ADIO, SAN, Chairman, Nigerian Bar Association Section on Business Law (NBA-SBL) and Managing Partner, COPLEY Partners.

ARBITRATION Nigeria: A Lesson on Disclosing Conflicts of Interest in Arbitration Learned from Global Gas and Refinery Ltd v SPDC MARILYN S. ONUKWUGHA

nized nor enforced. At the High Court, Global Gas implicated Professor Nsugbe, QC, SAN and Mrs. Doyin Rhodes-Vivour, SAN in the case as the two arbitrators who misconducted themselves.

The trial judge considered the following salient legal issues: Whether the two arbitrators’ non-disclosure amounted to misconduct; and Whether the award should be set aside.

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mong the duties arbitrators are obligated to uphold is the duty to disclose conflicts of interest. However, issues sometimes arise where arbitrators fail to disclose a potential conflict of interest. Imagine, for instance, disputing parties have selected three arbitrators to form the arbitral panel. Somewhere in the middle of the arbitral process, Party A discovers that the president of the arbitral tribunal has a material holding in Party B’s sister company. Party A also finds that an arbitrator on the panel serves on the same committee of the Bar Association on which Party B’s barrister serves. Though Party A attempts to challenge the two arbitrators, the arbitral proceeding carries on and results in an award that favours Party B. Indeed, an arbitrator’s failure to disclose his or her conflict of interest or withdraw from the proceeding when challenged could seriously disadvantage the opposing party. If the hypothetical scenario above sounds familiar, that is because it is not an unusual occurrence. Many arbitrators have concealed their interests or adjudicated with bias, some delib-

erately and dishonestly, some successfully. The topic of disclosure of interest in arbitration was the theme of the recent case heard in the Lagos High Court: Global Gas and Refinery Limited v Shell Petroleum Development Company, Suit No. LD/1910GCM/2017. The ruling was delivered on February 25, 2020.

THE FACTS OF THE CASE The dispute between Global Gas and Refinery Ltd. (Global Gas) and Shell Petroleum Development Company (SPDC) arose after Global Gas alleged that SPDC had breached their gas sales and purchase agreement. Global Gas commenced the parties’ arbitral proceeding through the Interwww.businessday.ng

national Chamber of Commerce (ICC) in ICC case number 20331/ TO. In the course of the proceeding, Global Gas challenged the appointment of Professor Oba Nsugbe, QC, SAN, the President of the arbitral tribunal, on the ground that he failed to disclose potential conflicts of interest that may have compromised his independence and impartiality. The ICC Court of Arbitration reviewed and dismissed the challenge. Hence the proceeding continued and the resulting award dismissing Global Gas’ claims delivered on May 30, 2017.

Still, Global Gas took the award to the Lagos High Court to request for an order to set it aside so that the award could neither be recog-

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THE JUDGMENT Regarding the first issue, the counsel to Global Gas argued that the president of the arbitral tribunal failed to disclose that he had given an expert opinion as a barrister in a case against SPDC and the Bodo Community in Ogoni, River State in the past. However, SPDC’s counsel countered that the expert opinion was given not to it but to its parent company.

Moreover, Global Gas alleged that both Professor Nsugbe, QC, SAN and Mrs. Rhodes-Vivour, SAN were both members of the Board of Governors of the arbitration institution that SPDC’s counsel chaired; and further that this Board was established while the arbitral proceeding was pending without notice to any of the parties. According to Global Gas, its challenge of the appointment @Businessdayng

of the aforementioned arbitrators who form the majority of the arbitral panel before the ICC Court was based on these nondisclosures. Essentially, Global Gas believed that the arbitrators’ failure to disclose amounted to misconduct.

Justice Taofiquat Oyekan-Abdullahi, the presiding judge, took the position that an arbitrator who has been challenged ought to resign from the proceeding instead of resisting the challenge, whether or not the information in fact did not amount to a conflict of interest. The Court ruled that the arbitrators must exercise a duty of care in all cases heard before them so as to dispel any doubt as to the impartiality and independence of the arbitrators and to uphold the parties’ confidence in the arbitral process. Further, Justice OyekanAbdullahi iterated that the standard of care all arbitrators must maintain requires abstinence from raising a defence whether legitimate or not, and instead removing themselves from the particular proceeding altogether.

Thus, the Court ruled that the arbitrators’ non-disclosure amounted to misconduct and that, on this basis, the award would be set aside.

To be continued next Week

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COVID-19 has exposed the fragility of public health systems globally …Calls on the Nigerian govt to think globally and act locally THEODORA KIO-LAWSON

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ormer president of the Nigerian Bar Association (NBA), Dr. Olisa Agbakoba SAN has said that the Coronavirus disease, also known as COVID-19 has exposed the fragility of the public health system across the world.

The bar leader and development expert who made this observation in a piece addressing issues surrounding the pandemic, stated that the global pandemic has precipitated fundamental disruptions that will change the ways things are done in the world forever, while adding that Nigeria was not left out.

“For Nigeria to handle COVID-19 successfully, especially in view of Nigeria`s weak public health system and paucity of funds, I need to make two overriding points: the need to depart from international strategy by developing a Nigerian Strategy

Olisa-Agbakoba

in managing COVID-19 and the diversification of the economy in view of dwindling oil revenue,” Agbakoba said.

On the need for a Nigerian strategy on COVID-19, the bar leader called on the federal government to interrogate available quinine medications and to engage Nigerian virologists & infectious diseases specialists, public

health professionals and Traditional & Herbal medicine Institutions with a view to exploring local Nigerian solutions to COVID-19.

According to him, this approach will also help to enhance the capacity of Nigerian Specialists. This is in line with the policy of promoting and utilizing local content.

He said, “I also call on the Federal government to develop a

decentralized strategy for COVID-19 by delegating and assigning some responsibility to State governments. It is gratifying to note that the federal government has already initiated some measures including a lockdown policy. While commending the federal government for the COVID-19 measures taken so far, I am concerned with the sustainability of the lockdown policy in view of lack of social welfare system and scarce financial resources.”

The former president said this while urging the government to allow the flexibility of movement, so as to enable citizens carry on with some level of work and economic activities within certain parameters.

He further Proposed a strategy for diversifying the economy, which according to him has been a very urgent and important part of the post COVID-19 economic strategy; disclosing that there was need to strengthen the agricultural and manufacturing sectors. “The National Trade and Transportation

policies need to be adopted, and so is the need for the enactment of trade remedy legislation,” he said.

Agbakoba urged the government to take issues relating to digital economy seriously, stating that a well-developed digital economy will not only create millions of jobs, improve citizens` taxable income, and generate revenue for government, which directly increases government spending power.

“The federal government must ensure the implementation of the National Digital Economy Policy and Strategy Document 2020-2030.

What we need is home-grown Nigerian solution independent of the efforts being made in developed countries. While the West has the resources for a total lockdown we must adopt our Nigerian COVID-19 Strategy to suit local and Nigerian situation,” the former NBA president said.

In conclusion, he called on the federal government of Nigeria to adopt the policy of thinking globally and acting locally in solving the COVID-19 problem.

NJC faces backlash over latest appointment of judges …As children of former CJN, Supreme Court Justices and Judges, populate NJC list eventually harm the nation as a whole.

LB EDITOR

“ The list is another reminder of everything that is wrong with Nigeria today. ”

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arlier this week, the National Judicial Council (NJC) released a shortlist of officers approved for appointment as judges for the Federal Capital Territory (FCT) High Court and other Courts.

Since the list was made public on Monday, several lawyers have cried out in condemnation against what is perceived as injustice and a skewed selection process.

LEGALBUSINESS spoke to some of these lawyers to hear their views. EXCERPTS… Former publicity secretary of the Nigerian Bar Association (NBA), Abuja branch, Silas Joseph Onu, Esq summarising his thoughts described the list as another reminder of everything that is wrong with Nigeria today. He made the following points with focus on the judiciary and the legal profession.

“In recent past, I have called for a reform of the NJC through a Constitutional amendment that will remove all serving and retired judges from the council as the presence have only ensured that they have now privatised the judiciary by making it a family institution. It is far easier to be a judge without a day’s experience in legal practice if your father or mother was or is a superior Court judge. If you do not have that qualifying privilege, you may be the best practicing lawyer with the passion of being a judge and still remain an applicant until you are frustrated out of that bid. The room for the rest of Nigerians in the appointment of judges is usually very small - just to make it look like a fair game.

“The same tactic of privatising the judiciary is currently happening in the legal practice where it has been shown, repeatedly, that it is easier for a lawyer without a track record of exceptional practice to be

rewarded with the rank of Senior Advocate of Nigeria upon meeting the basic requirement of age, if his father or mother is or was a Senior Advocate or a Superior Court judge.

The rank is shared by a few in a effort to place their children above their peers undeservedly. That has seen the emergence of SANs who still hide under the shadow of their parents to proof their capacity for the rank.

“These being said, take a cursory look at the list of judges released by the NJC: i) Muhammad Mustapha Adamu ii) Madugu Mohammed Alhaji iii) Josephine Obanor Enobie iv) Kayode Agunloye v) Enenche Eleojo vi) Nwabulu Ngozika Chineze vii) Abubakar Babashani viii) Aminu Muhammad Abdullahi ix) Nwecheonwu Chinyere Elewe x) Ibrahim Mohammed xi) Sadia Mu’azu Mayana xii) Mimi Anne Katsina Alu-Apena xiii) Kanyip Rosemary Indinya xiv) Aliyu Yunusa Shafa xv) Mohammed Zubairu xvi) Binta Dogonyaro xvii) Christopher Opeyemi Oba xviii) Adeyemi Ajayi Jadesola xix) Abubakar Husseini Musa xx) Adelaja Oluyemisi Ikeolupo www.businessday.ng

xxi) Mohammed Idris Sani xxii) Frances Erhuvwu Messiri xxiii) Fatima Abubakar Aliyu xxiv) Jude Ogor Onwuegbuzie xxv) Hamza Mu’azu xxvi) Edward Ajenu E. Okpe xxvii) Agashieze Cyprian Odinaka xxviii) Fashola Akeem Adebowale xxix) Aliyu Halilu Ahmed xxx) Hassan Maryam Aliyu xxxi) Hafsat Lawan Abba-Aliyu xxxii) Olufola Olufolashade Oshin xxxiii) Njideka K. Nwosu-Iheme “Apart from not meeting the minimum expectation of the Federal Character principle, it is replete with the names of the children of serving and retired Supreme Court Justices, one was even a Chief Justice.

“The Child of retired FCT Chief Judge and other cronies. Some of these privileged children are magistrates with questionable qualities for the job, yet they got elevated ahead of known magistrates who have served for a longer period with years of experience and dedication to duty. These experienced magistrates will be frustrated out of the job over time as their parents were never superior Court judges. How can a nation progress with such an attitude?” Onu queried.

According to him, the silence of Nigerians, for the fears of losing patronage over these atrocities, will

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“Everyone knows these things to be wrong, but they’ll rather praise the CJN for these corrupt appointments than condemn it. Soon, crazy judgments will be dished out from our Courts and we will begin to complain as we didn’t know the origin of the problem. Why make the office of a judge just another job only to earn salary, without the requisite passion for justice?” he queried.

In closing, Onu said. “The consequences of these indiscretions of the NJC will live with us and eventually choke the justice sector in Nigeria. I condemn these appointments that favours family members of serving and retired judges. There can be no justification for it - no explanation will do. God save Nigeria.”

“ The consequences of these indiscretions of the NJC will live with us and eventually choke the justice sector in Nigeria. ”

LEGAL BUSINESS also got similar reactions from various other lawyers on the issue. See below:

“On this list is a Magistrate who argued that Press Council ACT is not a public document and sat on a recovery debt matter for six (6) years, due to her inability to sit regularly and a petition @Businessdayng

was written against her as a result of this. Rather than send her back to ‘Year four (4)’ in the University, she has been erroneously shortlisted for the appointment as a Judge of a superior court. Imagine such an erroneous promotion to the higher bench. Very unfortunate. The futuristic greater problems of the Judiciary are piling up. May God save this Noble Profession.”

- MAXWELL OPARA Cronyism and self-preservation by way of perpetuating family dominance of the Nigerian Judiciary. Is the job of a judge hereditary? Does the ability flow in the blood of only certain families? Isn’t there an urgent need to reform the NJC by removing serving & retired judges therefrom?“ -SJO “The final burial of the judiciary is here. So shameful.”

- OX “That is the sad tradition on ground in FCT , son/daughter of nobody cannot enter that circle. It will change one day.”

-C.A EICHIE It’s high time we (lawyers, Practicing or not) stopped the silence and speak out. The NJC pretends to advocate for justice but at the same time, abhors same... This is Shameful” - FASHE OLANKUNLE “The truth is the judiciary is in coma for over 5years now and we have been keeping quiet. If u complain they will say are those people not Nigerian and qualified to be appointed. But u and I know that attainment by age is far from knowledge and experience. I will suggest a well worded petition to the NJC against any of the proposed appointees pointing out their flaws if any.“ - NICK IYKE

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Thursday 30 April 2020

BUSINESS DAY

MERGERS &ACQUSITIONS

BD

LegalBusiness

A – Z of corporate reorganisations in Nigeria OLAYEMI ANYANECHI

W

ith businesses around the world severely impacted by the Covid-19 pandemic, many may require some form of restructuring in the near future. Even before the pandemic, several sectors in the Nigerian economy were primed for reorganisation, either to meet regulatory requirements, maximise performance or stay afloat, increase economies of scale, increase market share or diversify the company’s business.

While mergers and acquisitions remain the most popular form of corporate restructuring, there are other methods of corporate reorganisations.

Corporate re-organisations Corporate reorganisation can be defined as a change in the structure or ownership of an organisation through merger, combination, acquisition, divestment, etc, to increase its longterm profitability.

In the context of business combinations, a merger is the coming together of two or more enterprises for the mutual sharing of the risks and rewards of the combined enterprise. An acquisition on the other hand requires the taking possession of substantial number of shares by an acquirer in another company (target), while the acquirer and the target remain separate entities. A divestment is the mirror imagine of an acquisition, viewed from the lens of the target of an acquisition. Other types of corporate re-organisations which will be discussed later in this Series revolve around these two main structures and are variants of one or the other.

The Federal Competition and Consumer Protection Act (FCCPA) which is the principal law regulating corporate reorganisations in Nigeria provides that a merger occurs “when one or more undertakings directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another undertaking.”

While the term “merger” under the FCCPA is admittedly quite wide, it must lead to the direct or indirect acquisition or

control over another undertaking for it to come under the purview of the FCCPA. Under the FCCPA, control of by undertaking over the business of another (target) involves (amongst others) the direct or indirect: a. ownership of more than 50% of the issued share capital or assets of the target; b. entitlement to cast or control a majority of the votes at a general meeting of the target; c. ability to appoint or to veto the appointment of a majority of the directors of the target; d. ability to materially influence the policy of the target.

Thus, an unincorporated joint venture where parties work together to do a business or manage an asset without controlling one or the other would not fall within the context of “mergers” under the FCCPA. That having been said, in this

article, the term “reorganisation” or “merger” will be used interchangeably to describe all types of corporate restructuring, business combinations, no matter how achieved, depending on the context.

Legal framework for reorganisations in Nigeria Prior to the FCCPA, reorganisations were regulated by the Investments and Securities Act, 2007 (ISA) and the Securities and Exchange Rules and Regulations 2013, made pursuant to the ISA, as amended and updated from time to time (SEC Rules). The ISA and SEC Rules continue to be relevant to reorganisations involving public companies. The Companies and Allied Matters Act (CAMA), being the principal law governing the establishment and maintenance of companies in Nigeria, also impacts notably

on reorganisations. The Company Proceeding Rules expands on the CAMA and provides for certain procedures for merger implementation. The Nigerian Stock Exchange (NSE) comes in on reorganisations involving publicly quoted companies. In addition to the above, there are sector-specific laws which govern reorganisations of regulated companies.

It is instructive to note that the FCCPA now regulates foreign-to foreign mergers with Nigerian component. A foreign-to foreign merger with Nigerian component is the acquisition by one person of shares or other assets outside Nigeria which results in the change of control of a business, part of a business or any asset of a business, in Nigeria.

No merger or acquisition should be undertaken by a company without obtaining prior direction as to the manner of assessment of its taxable income from the Federal Inland Revenue Service (FIRS). Accordingly, the Companies Income Tax Act, the Petroleum Profits Tax Act and the Capital Gains Tax Act may be significant considerations in merger implementation. The tax considerations will depend on the manner in which the proposed reorganisation is structured, and the amendments made to the Finance Act 2019, may significantly impact on structuring of reorganisations, going forward. Lastly, all documents executed in Nigeria or concerning a matter or thing to be done in Nigeria must be stamped pursuant to the Stamp Duties Act, and stamp duties costs must be factored into the structuring of the reorganisation.

Depending on the transaction structure, the Federal High Court may be required to give orders convening court-ordered meetings and sanction reorganisations, for completion.

Thresholds for mergers For a merger to be subject to merger control, it must fall within the threshold for mergers. At the moment, the thresholds for mergers continues to be that prescribed under existing SEC Rules as follows: • Small merger – where the combination of assets or turnovers of the merging companies is below One Billion Naira.

• Intermediate merger – where the combination of assets or turnovers of the merging companies is between One Billion Naira and Five Billion Naira.

• Large reorganisations – where the combination of assets or turnovers of the merging companies is above Five Billion Naira.

The threshold for foreign-toforeign mergers are provided under the FCCPC Foreign-to-Foreign Guidelines and mirrors the threshold for domestic mergers.

It is noteworthy that the FCCPA categorises mergers only as either small or large. While large mergers are required to notify and obtain approval from the FCCPC, small mergers do not require such notification unless the FCCPC determines, within six months of consummation of that merger, that it will hamper competition.

Under the FCCPA, a merger may be achieved in any manner, including through the purchase or lease of the shares, an interest or assets of the other undertaking, the amalgamation or other combination with the other undertaking, or a joint venture. Accordingly, the next article in the Series will focus on types of corporate reorganisation, including arrangements and compromise, take-overs, reduction of capital and demergers.

At the end of the Series, readers should have an understanding of what reorganisations entail, gain insight about the legal framework, transaction structures, issues and how they may be addressed, and an overall broad view of the mechanics of reorganisations in Nigeria.

Olayemi Anyanechi is the Managing Partner, Sefton Fross The information and opinions in this publication are provided for general information only. They are not intended to constitute legal or other professional advice. If you would like additional information, please contact the writer at o.anyanechi@seftonfross. com. © 2020 Sefton Fross is a leading full-service law firm in Nigeria internationally recognised for its expertise in corporate, commercial and mergers and acquisitions.

AGF makes post COVID-19 plans for justice sector Conntinued from last week

Reactions…

Reacting to the minister’s comments, Prof. Chidi Odinkalu said, “Abubakar Malami is AttorneyGeneral, not (yet) Chief Justice.

What happens in the courts is outside his brief. That is the business of the Chief Justice, NJC and the Chiefs of the respective court systems. He is in egregious error at best when he says “the judiciary should support the Presidential Task Force….” It is not the business of the judiciary

to “support” anyone or task force.

The judiciary holds the balance even in these times.

“The examples globally should make that clear. In Malawi, the courts quarantined a lockdown without palliatives. In Zimbabwe, the courts forced govt to guarantee water in the major municipalities as a pre-condition for lockdown and to refrain from harassing journalists covering the lockdown. In Germany, the Constitutional Court has upheld the right to protest even amidst a pandemic. In Wisconsin, the Supreme Court refused to defer www.businessday.ng

an election. In Kenya, the Court compelled the govt to recognise lawyers as essential workers.

“All these countries have measures against the pandemic. The courts were not supporting them.

Rather, they were running interference, holding the balance on behalf of constitutional govt. That is how it has to be. I just don’t get what it is about these folks that makes them feel the need to have every institution – including those that they may need one day – suborned. It’s unfortunate that our systems are under the control of people who can’t be bothered

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about what they exist for. Malami just doesn’t seem to get it or doesn’t care.” Prof. Odinkalu said.

Commending the AGF’s novel solutions, immediate past Chairman of the Nigerian Bar Association Section on Business Law (NBA-SBL) and Templars’ partner, Olumide Akpata said, “I welcome the innovative ideas recently shared by the Honourable Attorney General and Minister of Justice of the Federation regarding the need for the adjustment of the judicial process in Nigeria to ensure continued access to justice by all Nigerians, in light of the con@Businessdayng

tinued disruptions occasioned by the COVID-19 pandemic.

Indeed, the need for the justice delivery system in Nigeria to leverage on technology to facilitate speedy dispensation of justice is long overdue. It is in this regard that the Hon AGF’s idea must be applauded.

“However, for such measures to work seamlessly and achieve the noble aim behind same, I advocate a collaboration between all relevant stakeholders especially the Chief Justice of Nigeria, the National Judicial Council, the Nigerian Bar Association and a host of other stakeholder,” he said.

Thursday 30 April 2020

BUSINESS DAY

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@Businessdayng

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Thursday 30 April 2020

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Why Covid 19 is more about Rebirth than the Deaths ONUWA LUCKY JOSEPH

S

o, the details are not fully out there as at this time of this writing, but nice to know that the Federal Government decided to do the sensible thing by adopting a new regime of phased (gentle) relaxation of the lockdown. Hopefully, it won’t be long before we get back in the rhythm and flow of the workplace even if won’t be full throttle in the beginning.

It’s hurrah nationwide. And all over the world, humans are itching to be set free by their governments. Clearly evident now is that humans detest cages in quite the same way that we like caging other species for our entertainment and nutrition. Maybe there’ll be a revision of our position hereafter. But we revel in our position as the alpha dogs on the food chain. And seeing as no other species can cage us, nature does so from time to time.

While this is not the place for Malthusian or conspiracy theories, when occurrences like Covid 19 show up from seemingly out of nowhere, it is clear that something is at work which though bad in the short term, might end up conducing to the health of our beloved earth in the long run.

Don’t you just see how nature is rejuvenating without the adverse input of uncaged man? Videos online show that in every place where the lockdown is in full force, animals are coming out from their hideouts to city centres and residential areas to explore possibilities of food and play.

The rivers and lakes, long used to being muddy, are becoming clear again, and the fishes can be seeing joyfully darting here and there, and this not in their usually futile effort to escape the hooks and nets. And would you believe it, smog is down in India, in China, in the world. We literally can see clearer and farther. That’s a clear wow!

And that’s the whole point of seeing opportunities for mankind in every tragedy.

There’s usually something rejuvenating, something inexplicably creative that succeeds tragedy. Sure, the world will most likely get down full blast to pollution again after Covid 19 recedes, but in due course, for right thinking mankind, tragedy serves as time to re-

calibrate. Not merely for sober reflections as we are wont to say in these parts. Sober reflections that don’t birth new decisive actions are only going to birth more pangs and for as long as society fails to change course, worse will it get.

What has Covid 19 taught us or at least reminded us in Nigeria? A major one is that the mass of Nigerians across the length and breadth of the country are not underpinned in any way by any kind of supportive policy from government. That is tragic for a country that has made hundreds of billions of dollars in oil and other revenues.

Tragic for a country that has the elevated human resource so highly sought for in every other country. Tragic considering all the efforts and moneys expended in creating databases in Nigeria – form the vehicle licence database to the national identity card, to the national census to BVN, etc. Our hypocrisy is hitting us square in the eyes. But are we blinking or just taking it full in the face, knowing it will pass and we can get right back to the business of shameless pillaging? www.businessday.ng

So what should we do now as a people desirous of something different? A credible database that captures the who-is-where-in-Nigeria is of critical essence. This is for so that government can extend, not largesse, but obligatory support to citizens. The thinking that only citizens owe the government is fallacious. Government owes its citizens big time. It owes them infrastructure. It owes them an enabling environment where they can pursue their legitimate ambitions. It owes them security.

It’s a social contract like John Locke famously put it. I do for you, you do for me. When all the giving comes from the people, there’s a breakdown in trust.

The business of government is not and never has been taxation. That’s what you do with conquered and vassal territories. Like the Americans famously ranted in the 1700s, ‘no taxation without representation’ is how the real world works.

We can paraphrase that by saying a taxation regime that takes no cognizance of our deprivations despite our contributions will not be

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countenanced. While there might be no mass protests or movements to press home this point, citizens have ways of showing their disapproval.

The one that should worry any government worth its name is citizens’ indifference and lack of buy in to the ideal of a shared country or federation.

The same can be said of our churches that take and never stop taking. This particular mindset has enabled even the vilest amongst us to take potshots at the church and its members (on account of the accusations being true) are too tongue tied to come to its defense. Thankfully, Covid 19 is forcing some churches to give back to the same people who had always given to them (and not always cheerfully, mind you). Ought not sacrificial giving beget sacrificial give back? Covid 19 should hereinafter rouse the churches to their real duties as shepherds who do not allow their sheep go hungry, especially in times of drought.

And for corporate organisations the lessons are not any different; at least for the big corporates. Quarterly and yearly announcements of humongous profits in good times ought to translate to nimble management of such resources so that staff are not laid off at the first hint of a downturn. It’s classic capitalism to play it that way. The ones who risked their money in the venture also insist on being the ones reaping all the dividends as they accrue. But there’s a thinking that’s not exactly new; just newly rediscovered. Business, for far too long, has been about initiators and early joiners rather than about other enablers.

We posit, as others have, that everyone involved with the business is a stakeholder and should be participatory in the payouts though not to the same degree.

That’s what sustainable business ought to be about.

That the interest of the stakeholder is protected same way as that of the shareholder since one cannot operate efficiently without the other.

Stakeholder capitalism, it’s now called, rather than the shareholder capitalism that corporates favoured. A strong component of stakeholder @Businessdayng

capitalism is that staff are next on the rung after shareholders. Beyond the loud CSR that proclaims corporate intervention in the community is the quiet one that emphasizes staff welfare and wellbeing at work as well as outside of work. Safety is paramount.

Healthcare is paramount. No staff of a big corporate, for example, should be without health insurance. Smaller organisations should also be able to tap into the national health insurance scheme.

And organisations acting as a coalition should be able to compel HMOs to do their job rather than routine treatment of only basic ailments.

Unfortunately, though, as we know, the ones who own the businesses also own the HMOs. And it’s a long sigh from then on….

With the right carry-along initiatives, shareholders and staff can be prevailed upon to treat some investible funds as legitimate investment in its people. In fact, special dividends arising from spectacular showings can be penciled down as ‘rainy days fund’ for those times when takings are not as forthcoming therefore requiring a dipping into the saved pool for business continuity. The business community cannot afford the Nigerian state model of ‘chop everything in sight’ and then go asking for loans after which the next request is for bailouts. The Chinese are not unhappy about this model and we might be hearing from them soon now that our oil price has fallen into disreputable territory.

I am one of those very happy that we can go back to work again. There’s no better feeling in the world than rousing yourself every morning to make something better of yourself, your country and your world. This one month under lockdown has not been funny for personal and national economies. It will take a while to fully recover. And you know we are talking about economies that were already reeling before Covid 19 dealt its own knockdown blow. The hope is that we have learnt some things and will apply those things, as individuals, as corporates and as a nation. We certainly can’t afford to continue in the same wrong direction.

Thursday 30 April 2020

BUSINESS DAY

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Corporate Social Impact

What Better Time than Now to show your Humanitarian Bona Fides?

ONUWA LUCKY JOSEPH

E

veryone is crying. But some more than others.

Everyone talks about reaching out, to indigent folks and those currently not as fortunate as they ought to be. It’s a sentiment expressed everywhere and by everyone. And the theme of many a hit song: Diana Ross: “Reach out and touch somebody’s hands, make this world a better place if you can”.

Bill Withers: “Lean on me, when you’re not strong, I’ll help you carry on, for it won’t be long till I’m gonna need somebody to lean on” USA FOR Africa: “We are the world, we are the children, we are the ones to make a brighter day, just you and me”.

And many more such songs abound. One of these days on, on these pages, we’ll do a compilation of such inspirational ditties that call us to be there for one another.

There’s a feeling in us all that desires help for when we’re down.

And there’s a sickening feeling that wells up when help is all we need but all we find are people, some of them supposedly friends, who would not be bothered. And before you get all self righteous and think of these as other people’s issues, the truth is, we’ve all been at places where others considered us unfeeling. We didn’t intuit their problems and even after they voiced them, we couldn’t or wouldn’t help.

From doing CSR and Philanthropy consultancy, I have come across many who desire to be seen as generous but who are anything but that. They discern that being referred to as a philanthropist

Ooni’s remarkable donation of modular fumigators to Oyo

O adds some sheen to their image.

With a camera in view, they are quick to quip about sacrifice and doing good for those who can’t pay you. On their Facebook, WhatsApp and other social media, they are always exhorting others to give and to never stop giving. But up close, they are as tight fisted as any world class boxer in the ring. They deal, not succour, but anguish.

They try and fail to put a nice ring to it when they say it’s really about delayed gratification. Tight wads have a way with words, you know. But the only time they splurge it’s on themselves. When you blow resources on yourself just because ‘you don blow’, isn’t that a crying shame? Might not we describe that as sheer waste? Covid leaves us an opportunity to be

true to the sentiments we express in order to leave others impressed.

There are too many things to do even if what you have isn’t much.

With a little research you can find individuals and organisations that are braving the virus and going out there to physically hand out food and other basics to those who need them. Send airtime so folks can connect with those their loved ones. Do some good.

Impress yourself is all we’re talking about. Not so that others know, but for so that at the end of the day, you can feel good about yourself for extending that hand to that man, boy, girl, wife, father, mother, whoever in your line of help. It’s good to sing it, but it’s better to do it. Like Nike would say, Just Do It!

ne reason it’s important to laud the Ooni of Ife, Oba Adeyeye Enitan Ogunwusi Ojaja II, for donating two locallyfabricated modular fumigators and drones to the Oyo State government to assist in its effort to contain the spread of the novel Coronavirus, is that it is an original endeavour in intent and execution.

Not only was he helping fight the scourge but he was showing the world the workability of equipment fabricated by his inventive subjects. What the FG needs to do after witnessing the demonstration and confirming its efficacy is to do an order for more such to be produced for use in Nigerian cities and villages.

Thumbs up to His Imperial Majesty for being a true original.

CBN says CaCovid Relief Fund now N27.2bn

Rihanna’s foundation donates $5 million to help fight coronavirus ALAA ELASSAR

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ihanna’s foundation has donated $5 million to various organizations assisting with coronavirus relief efforts.

The Clara Lionel Foundation announced the donation in a statement on Saturday.

“When we first began this year, never could we have imagined how (the coronavirus) would so dramatically alter our lives,” the foundation said.

“It doesn’t matter who you are or where you’re from, this pandemic will affect us all. And for the world’s most vulnerable, the worst may be yet to come.”

The foundation donated the money to Direct Relief, Feeding America, Partners in Health, The World Health Organization’s COVID-19 Solidarity Response Fund and the International Rescue Committee, among others.

The foundation said its goal is “to immediately mobilize a broad

I response working with on-theground partners.”

The funds will go towards local food banks, accelerating testing in countries like Haiti and Malawi, and protective equipment for frontline health workers.

The donation will also help protect Native communities by providing them with resources to fight the virus.

Rihanna started the Clara Lionel www.businessday.ng

Foundation in 2012. The nonprofit organization, named in honor of her grandparents, funds education and emergency response programs around the world.

Other celebrities -- including Justin Timberlake, Donatella Versace and many NBA players -- have also donated funds to help schools, hospitals and food banks overwhelmed by the pandemic.

(Culled from CNN)

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n its last publication of the list of contributors to Nigeria Private Sector Coalition Against COVID-19 (CACOVID), the Central Bank of Nigeria says the figure has hit N27.2 billion, as at April 23, 2020.

CBN Director of Corporate Communications, Isaac Okorafor, says 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 @Businessdayng

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,” he said.

(Kindly send feedback to 08023314782 / csrmomentum@gmail.com)

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Thursday 30 April 2020

BUSINESS DAY

insight

Smallholder farmers and food security - a critical consideration in our covid-19 reality Ndidi Nwuneli

T

he outbreak of coronavirus has had far-reaching consequences across the globe. For Nigeria, which experienced a delayed onset of the virus, the implications have been multi-faceted.

For millions of MSMEs, business has been brought to a standstill, as a result of government-led efforts to curb the spread of the virus, through multi-city lockdown initiatives. Millions of low-income citizens, living on daily streams of income have now been relegated to their homes, struggling to survive.

Overall, economic indices look bleak, and Nigeria’s economic rating has recently been downgraded to a B, due to the negative outlook.

As countries across the world shut their borders in an effort to limit the spread of the virus, supply chains have been disrupted significantly, bringing imports to a halt, and research suggests that this disruption could continue long into the aftermath of the pandemic. Never has it been more critical to review one of our most critical sources of sustenance as a nation - food.

This pandemic, and the increased self-dependence of nations, while borders remain closed, has brought to the fore a need to revisit the sustainability and strength of our local food production.

Food security in Nigeria The question of Nigeria’s food security has become increasingly pertinent and has resulted in a significant amount of investment into the agricultural sector in recent years. And while the industry takes the lead in local production, we still lack the necessary food security that a nation with Nigeria’s agricultural potential should have.

Agriculture accounts for over 20% of Nigeria’s real GDP, valued at approximately $48.5bn (N17.5trn).

Yet, 2018 reports estimated that about 3.7 million people, across over a dozen Nigeria states, are food insecure. Some of this, particularly in the North, is triggered by crisis and insurgency; however, a significant amount is driven by rising costs, poverty and population growth, among other factors.

The importance of food security cannot be overstated - a nation that is able to feed itself and support the well-being of its citizens is a nation that is one step closer to sustainability. And who can say that that isn’t a win for the economy?

Nearly all food production in Nigeria rests on the smallholder farmer - output from smallholder farmers is estimated to account for 80% of Nigeria’s agricultural output. Ultimately, our nation’s food security boils down to the smallholder farmer’s capacity to produce and supply on par with demand. Thus, if the country were

to make any substantial efforts towards achieving this, efforts must be centred on up-scaling the smallholder farmer.

Through the looking glass: Nigeria’s smallholder farmers At Sahel Consulting, we have worked with thousands of farmers who have relied on the output of the same single 1-hectare plot of land for sustenance for decades; despite growing families, and despite increased demand from a growing population. Yet, the average smallholder farmer, despite a desire to grow and increase his or her output, lacks the financial and technical resources needed to take advantage of the economies of scale. Access to the necessary finances to achieve this has consistently been proffered as one of the most important means through which the smallholder farmer can achieve scale - however, the big credit players (banks and other financial institutions) are averse to lending to them due to the high risks involved. The typical rural farmer lacks the digital footprints or financial history that provides indicators of credibility, which these institutions require. Risks are further heightened by the sector’s vulnerability to external shocks such as unfavourable weather, security attacks or pests and disease infestation. Thus, the smallholder farmer remains financially-excluded.

Their limited resources limit their ability to invest in critical inputs like the machinery required for landscape feasibility studies, mass crop production, amongst other things; increased farm inputs, fertilisers, pesticides, and the necessary tools for protecting their output; the logistics infrastructure they need for storage and transportation; or even updated technical know-how and skill. This lack creates a cycle that keeps farmers at low productivity levels. It limits their access to high-quality inputs, thus reducing their chances of harvesting good yield at the end of the season. Meanwhile, demand grows, and as a result of the limited supply, we find that individuals and organisations resort to foreign importation. Well, taking our current situation into account, this reality is extremely unlikely. So, the question that remains is: how can we provide www.businessday.ng

the necessary support to enable our smallholder farmers to scale?

The role of financial inclusion in up-scaling the smallholder farmer Financial Inclusion goes far beyond providing access to financial resources and tools, and must take into account the base level empowerment requirement across educational and capacity indices which enable this newfound ‘finclusivity’ to be leveraged effectively.

To a large extent, the smallholder farmer has managed to get by through their own unorthodox means. The average smallholder dairy household has about 80 to 100 cows, and the truth is, if it were monetised, these families would not be considered poor, however, for them, these cows serve their pastoral livelihood, while a small portion are kept as a financial security option, in the event that they need to sell one in a crisis situation, or even for a family celebration. A study conducted on cocoa farmers in Cote D’Ivoire found that many farmers have developed a good savings habit - despite the fact that their income is barely sufficient; only 11% of funds used by the sector are from financial institutions, while savings and loans from friends account for 15% and 54% respectively. These savings are then invested into production in the next season and can keep the business running for a few more months but are very rarely suf-

‘‘

At Sahel Consulting, we have worked with thousands of farmers who have relied on the output of the same single 1-hectare plot of land for sustenance for decades

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ficient enough to expand or scale any of their businesses.

Access to digital and mobile financial services such as mobile money serves as a solid entry point, and provides them with a cushion - reports from the Global Index Insurance Review revealed that, in Tanzania, farmers who accessed digital financial services such as microinsurance through mobile money earned 16% more than their uninsured counterparts, as they were able to invest a greater amount into their farms.

Commercial bank lending to the sector has increased albeit slowly. It accounted for 0.5% of total loans in 2009 and has since grown to 4.2% in 2019. This annual growth of 0.35% is much too slow to move the needle considerably in the long term. To compare, oil & gas accounted for 27.99% of loans, while manufacturing accounted for 15.79%. The CBN encourages banks to give single-digit interest rates to agricultural players, this makes the sector a less profitable outlet for banks, which may be looking to maximize profits.

In the absence of adequate provisions as it relates to access to finance for smallholder farmers, social enterprises, such as Thrive Agric, AFEX and Babangona, have become the compulsory middlemen that connect farmers to capital, and prospective buyers. This capital, however, is often dispensed to the farmer as direct farm input, as opposed to cash, thus enabling improved financial management support and reducing the associated risk. More importantly, the direct interaction that these organisations have with farmers has provided an opportunity for such companies to gather verified information on small scale farmers (e.g. prices, yield, rate of default, amongst other indices); these can be used to build credit profiles, useful for investors or corporate lenders. Over time, these efforts have enhanced financial institutions’ understanding and perception of the smallholder farmers.

The service provider approach is even more effective for the empowerment of farmers - they are @Businessdayng

equipped with knowledge, insights, and updates as it relates to weather, land viability, input, and other necessary factors. These organisations also provide much-needed logistics support and market linkages.

The Way Forward For many, the image of the smallholder farmer - completely marginalised; an individual struggling to make ends meet, who depends on the forces of nature for his livelihood - is a long-standing one. And the negative perception creates a stigma that I’ve seen this even among those studying to work in the agricultural sector. Last year, the Sahel Scholars Program - an annual program we introduced to educate and empower Nigerian agriculture students in higher institutions - took us to Obafemi Awolowo University; during the introductory exercise, I asked the students how many of their parents were farmers, and no one raised their hand. It seemed rather unlikely. Later on, after our guest speaker told his story of having grown from subsistence farming to become a successful commercial farmer, we asked the question again - this time, most of the class raised their hand. Having gotten a glimpse into the possibilities, they were no longer ashamed to be associated with a farming family or legacy. It’s high time we began to make those possibilities a reality for our Nigerian farmers.

After so many decades of our nation’s continued development, the agricultural sector and these farmers - its primary facilitators - must begin to reflect, and in turn, contribute to the nation’s broad ongoing development. An increased flow of non-monetary credit, combined with skills training, will significantly boost their output; this will not only improve the livelihood of the farmer, and their capacity to keep investing in their farms, but more so, it will help to close the gap between national food production and demand.

The coronavirus pandemic has placed an increased emphasis on the critical role that farmers play; with closed borders and airspaces, limited entry, and a slowdown on imports across board, our self-sufficiency as a nation rests in the hands of the smallholder farmer. We need to adopt an increased urgency in empowering them, by putting the necessary pillars in place, not only to increase production in the medium-term, and insulate us from food insecurity from food insecurity in the long term, but also, to ensure that our realised potential plays a significant role in feeding the entire world.

Nwuneli is founder of LEAP Africa and Nourish Africa; CoFounder of AACE Foods; and CoFounder and Managing Partner of Sahel Consulting.

Thursday 30 April 2020

BUSINESS DAY

news

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Why high yield-seeking investors are dumping money market for fixed income funds … money market funds shed N49bn in March ENDURANCE OKAFOR

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L-R: Patrick Okundia, Edo State commissioner for health; Evbareke Jenkins Osunde, chairman, Oredo Local Government Area; Philip Shaibu, Edo State deputy governor and chairman, Edo State Response Committee on COVID-19, and Faith Ireye, World Health Organisation (WHO) coordinator in Edo State, during a press briefing at the Government House in Benin City.

Cost to rise, volume to drop over N35 raise on exchange rate for cargo clearing AMAKA ANAGOR-EWUZIE

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he recent increase in the exchange rate for payment of Customs duty by N35 from N326/$ to N361/$ would lead to increase in the general cost of doing business and decline in volume of cargo imported into Nigeria, shippers have said.

To them, increasing exchange rate for cargo clearing twice in six months does not only violates economic decency but shows that government has started to panic due to looming global economic downturn caused by the outbreak of Coronavirus (COVID-19) pandemic.

“The increase will induce shortage of cargo at ports as time goes on, which has started reflecting. Industries,

importers, shippers and exporters would have to source for additional funds to clear their cargo trapped in the ports due to the Coronavirus pandemic that resulted to over one month stay-at-home order of the Federal Government,” Jonathan Nicol, president, Shippers Association of Lagos State (SALS), states.

Nicol notes that clearing all the goods in the port would now attract the new exchange rate.

“The new rate should not reflect on all the Form M already approved by the Central Bank because it is the approved rate on the Form M that was used to procure foreign exchange for each shipment. This means that the development would affect fund transfers to suppliers when the excess fund being raised through Customs have no bearing on economic de-

velopment,” he says.

He states that the increment would induce reduction of staff across board in different sectors of economy owing to the fact that the development would increase running cost for industries, which would subsequently eat into their bottom-line.

“All the goods now in the port should be exempted in this current exchange rate increase. This includes goods that are in the high seas with approved Form M based that was based on the old exchange rate. We should avoid a major industrial unrest in Nigerian economy,” he warns.

He however states that government is increasing cost of doing business and negating the Ease of Doing business in Nigeria by increasing exchange rate for cargo clearing to N361 few months after the

Total Health Trust raises N100m to defray hospitals’ PPE cost amid shortages Temitayo Ayetoto

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otal Health Trust (THT), a health management organisation, has raised a N100 million intervention fund to cover the cost of personal protective equipment (PPE) for hospitals under its network. This is coming as concerns mount over the dangerous level of PPE shortages increasingly facing hospitals amid the ongoing fight against the coronavirus disease.

The health management organisation targets over 3,000 healthcare providers scrambling to stay afloat under the surge in operational costs and adverse impact of restrictions imposed to break the cycle of COVID-19 transmission across the country.

High cost of kitting doctors and nurses daily is already grinding some hospitals to a halt, depriving Nigerians presenting non-coronavirus cases of es-

sential services.

About 15 hospitals across Calabar, Lagos, Ogun, Abia, and Bayelsa States have benefitted from the repository fund designed to span through the COVID-19 crisis.

Apart from relieving these hospitals of the burdening cost of protective tools, the intervention equally covers the provision of technical support for exposure to COVID-19-related cases, such that specialised doctors are mobilised to hospitals suffering a deficit.

Kieran Godden, THT’s chief officer, in a statement made available to BusinessDay appreciated the sacrifices of healthcare professionals to contain the spread of the deadly virus and raised concern about the risks they face to ensure a healthier Nigeria.

These concerns about health workers managing their own exposure to suspected COVID-19 www.businessday.ng

cases while providing medical care to citizens informed the organisation’s drive to focus efforts on providing the necessary protection, according to the CEO. “Our commitment to delivering the highest level of support to our network of healthcare providers continues, especially at a time when their operations and needs are quickly changing,” Godden stated.

“We at Total Health Trust, and indeed the whole country, remain very thankful to our health professionals, the National Centre for Disease Control (NCDC) and the state ministries of health for the immense and coordinated role they continue to play in ensuring that the country records success,” he said.

Godden urged other corporate organisations and sector leaders to play their part in the chorus of actions required to overcome COVID-19 as a nation.

Value Added Tax (VAT) was raised from 5 percent to 7.5 percent.

He calls on the Federal Government to support entrepreneurs through flexible bank loans with low interest rates bearing in mind that maritime sector is the only viable means of generating revenue at the moment of global health crisis, which comes with comes with huge economic shock.

Kayode Farinto, vice president, Association of Nigeria Licensed Customs Agents (ANLCA), states that agents have been finding it difficult to make declarations since the exchange rate was increased.

He calls on operators in the maritime industry to prevail on the Federal Government to revoke the increment, which he says may discourage importers from bring in imports.

he value of asset managed by money market funds, an asset class of mutual fund that invests in debt instruments like treasury bills, dropped by N49.04 billion in March as investors seeking high-yielding securities switched to fixed income funds for fat returns.

The net asset value (NAV) of Nigeria’s money market funds at N830.15 billion as at March 6, 2020 declined by 2.29 percent to N781.1 billion as at April 9, 2020, data sourced from the Securities and Exchange Commission (SEC) show.

“Yields from money market have plunged over the past six months. This has led to declining investments on these funds,” Ayorinde Akinloye, research analyst at CSL Stockbrokers, said.

According to the analyst, money market funds are built on treasury-bills investments and as a result, low yields from T/Bills fuelled the massive withdrawals from money market mutual funds.

Meanwhile, more than N65.79 billion worth of unsuccessful transactions was recorded at the Nigerian treasury-bills auction conducted on April 1, 2020 by the Central Bank of Nigeria (CBN) on behalf of the Federal Government of Nigeria (FGN) due to the excess liquidity in search for investment options.

Investors seeking high-yielding securities were disappointed as attempts to buy the Federal Government short-term debt instruments at attractive rates were denied thanks to the current economic crisis which presented fewer investment opportunities.

The T/bill rates offered by the CBN were at a record low of 2.2 percent and 3.2 percent on the 91-day and 182-day maturities, respectively. This was a drop from the 2.6 percent and 3.4 percent recorded in the previous auction.

Analysis of the data by SEC revealed that fixed income funds, the mutual fund asset class that invests in bonds, grew its net asset value by N6.16 billion in the space of one month.

The asset managed by the fixed income funds appreciated by 3.03 percent from N201.2 billion

as of March 6 to N207.3 billion as of April 6.

Meanwhile, the Federal Government’s bonds for the month of April worth N60bn offered on Wednesday were oversubscribed

by N215.67 billion, the Debt Management Office disclosed on its website.

The total subscription received from investors for the bonds was N275.67 billion, out of which N49.7 billion was for 12.75 percent FGN April 2023 bonds; N107.47 billion for 12.5 percent FGN March 2035 bonds; and N118.5 billion for 12.98 percent FGN March 2050 bonds.

Further analysis of the SEC data revealed that the net asset value of the real-estate funds also appreciated in the period under review. This made the asset class the only one that grew its NAV after fixed income funds.

The fund that is focused on investing in the property industry added N887.37 million to its NAV to post N45.02 billion as at April 9 from the N44.13 billion it reported on March 6, 2020.

Apart from the fixed income funds which lost the highest value of its market share, other top losers in the review period were bond funds, mixed funds and equity funds.

With the least asset depreciation, ethical funds shed N338.87 million in the month under review.

Bond funds, mixed funds and equity funds had a NAV depreciation of N6.59 billion, N1.7 billion and N1.26 billion, respectively.

The drop in the net asset value of the six mutual funds asset classes dragged the value of the asset under management (AUM) of the Nigerian mutual fund industry.

The country’s mutual fund AUM at a record high of N1.22 trillion as at March 6 declined to N1.167 trillion as at April 9 2020, a depreciation of N52 billion.

Mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities such as stocks, bonds and short-term debt. The primary advantages are that they provide economies of scale, a higher level of diversification, and liquidity, but investors are required to pay various fees and expenses to manage the fund.

UBA assures of huge returns on investment

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nited Bank for Africa (UBA) plc held its first ever virtual annual general meeting (AGM) by proxy since it began operations 71 years ago, on Wednesday.

The meeting, which had in attendance shareholders, management and staff members and representatives of key regulatory bodies, was held virtually via an Online Meetings Platform in line with guidelines issued by the Corporate Affairs Commission (CAC).

Shareholders at the meeting commended the Board of Directors and management for the proactive role the bank had been playing in helping to lessen the negative effects of the Coronavirus pandemic across the African continent.

UBA Shareholder and President of Association for the Advancement of the Rights of Nigeria Shareholders, Umar Farouk, who spoke at the meeting, applauded the bank for the contribution of N5 billion ($14m) to the fight against Covid-19, adding that the move

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… shareholders ratify N1 total dividend was unprecedented and will certainly go a long way to support governments as they work hard to tame the scourge. He also hailed the 20% increase in dividends that the Bank proposed to pay to shareholders.

He said, “I am also happy that you fulfilled the promise you made at the AGM last year to pay dividends in Naira and not kobo, by paying N1 per 50 kobo shares to shareholders in this difficult economy. We have seen the first quarter results, and we are happy about the performance of our subsidiaries across Africa.”

Also speaking, president of Pacesetters Shareholders Association of Nigeria, Alex Adio, stated how impressed he was at how the Bank’s indices were looking up, despite challenging times. “This shows that we are making good use of the technology we have invested in, over the years. UBA has done very well and we commend the management and staff and @Businessdayng

hope that you will keep the flag flying,” he said.

On his part, the National Coordinator Emeritus, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, who lauded the initiative of the Bank to conduct the meeting virtually, advised the Bank on steps to ensure that more activities are carried out by customers without the need to visit the banking halls.

“I know UBA is a bank that is interested in the welfare of both its staff and customers, which is why I would like to be assured that measures towards improving electronic banking are fully activated, so that customers who will not want to come out to banking halls, can make use of ATMs and PoS, without issues. Also, we want to be assured on the level of our exposures to the oil and gas sectors especially in view of the challenges that the oil sector is faced with” Nwosu said.

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Thursday 30 April 2020

BUSINESS DAY

news Dollar scarcity to ease as CBN resumes FX sales for SMEs, school fees ... plans to resume sales to BDCs Hope Moses-Ashike

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he Central Bank of Nigeria (CBN) on Wednesday resumed dollar sales for school fees and Small and Medium Enterprises (SMEs), which should go a long way to ease dollar scarcity and reduce the gap between the parallel and investors and exporters (I & E) window exchange rates.

“The Central Bank of Nigeria (CBN) has resumed provision of foreign exchange to all commercial banks for onward sales to parents wishing to pay schools fees and SMEs wishing to make essential imports needed to revamp economic activities across the country. In particular, the CBN is resuming the provision of over $100 million per week for both categories,” a statement signed by Isaac Okorafor, director, corporate communications department of the CBN, said.

“With these actions, the CBN wishes to reiterate that it is adequately meeting the needs of all legitimate users, and our continued capacity to do so should not be in doubt.

There is therefore no need for panic by any end-user that

could necessitate recourse to illegitimate sources and spike in foreign exchange rates.”

The naira had weakened to as low as $1/N450 in the parallel market on Monday, while it exchanged at $/N389.35 at the I & E window yesterday.

Even as CBN dollar reserves have fallen to about $33 billion, it will be buoyed by the expected inflows of $3.4 billion from the International Monetary Fund (IMF), giving it some extra firepower in its fight to maintain monetary stability.

The CBN has also made arrangements to resume foreign exchange sales to the bureau du change (BDC) segment of the market for business travels, personal travels, and other designated retail uses, as soon as international flights resume.

This is in view of the gradual easing of the COVID-19 lockdown both globally and in Nigeria.

Given this, the Bank said it has ramped up its surveillance of the foreign exchange markets for speculators, smugglers and other illegal users, and will take decisive actions against anyone/institutions involved in such nefarious activities.

Wapic Insurance leads in easing COVID-19 pains for customers BALA AUGIE

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o cushion the blow of the deadly coronavirus pandemic on its teeming customers, Wapic Insurance plc, one of Nigeria’s leading underwriters, has become the first underwriter in the country to initiate palliative measures.

The insurer is giving back to the community in which it operates as it is refunding motor vehicle insurance premium to customers, since a lot of people cannot drive their cars due to the lockdown policy imposed by government to contain the spread of the virus.

This act of magnanimity shows the company puts customers first while it continues to deliver a unique customer experience.

Wapic said beyond finan-

cial and other contributions it is making to fight the COVID-19 pandemic, it considers it necessary to support its customers, “particularly the most vulnerable during this difficult time”.

“Wapic is a corporate citizen and we continue to pursue several sustainability initiatives. We pride ourselves in giving back to the communities in which we serve and continue to look for ways to contribute,” said Adeyinka Adekoya, its managing director.

“Up to this point our contributions have taken the form of cash donation to NAICOM which was applied as a pool to fund the free life insurance cover for health workers,” said Adekoya.

The coronavirus pandemic has ravaged economies across the world as oil price has lost more than 70 percent since January alone, due to

weak demand and dispute between Saudi Arabia and Russia. Economic activities have also slowed down due to the lockdown.

West Texas Intermediate, the US crude benchmark, settled at $16.40 after hitting a negative territory last week.

Brent crude oil, the international benchmark that has also been pummelled in recent weeks, was up 5 percent at $21 a barrel.

The Nigerian economy isn’t spared the pang of the crisis as the country is expected to slip into its second recession in five years without enough stimulus package.

According to the International Monetary Fund (IMF), Nigeria’s economy will contract by 3.4 percent in 2020, but rebound with 2.4 percent growth in 2021.

A sharp drop in the price of oil due to lower demand

Godwin Obaseki (r), Edo State governor, presenting relief package to a parent, Amaka Ubah, at the official launch of EDOBEST@ Home, at Government House, Benin City.

Analysis

Does $3.4bn IMF loan solve Nigeria’s problems?

LOLADE AKINMURELE

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igeria has tapped the International Monetary Fund (IMF) for a loan for the first time in its history, showing the severity of the damage inflicted by the COVID-19-induced slump in crude oil prices on Africa’s largest economy.

The IMF approved Nigeria’s request for emergency financial assistance of US$3.4 billion to meet the urgent balance of payment needs of the country stemming not only from the crash in crude oil prices but also the outbreak of the COVID-19 pandemic.

Economists are having their say on the extent to which the $3.4bn IMF loan eases Nigeria’s economic pain.

Theloanisclassifiedunderthe IMF’sRapidFinancialInstrument (RFI), which is given to member countries without the strings and conditionalitiesattachedtoatypical IMF formal programme.

It’s therefore different from a full-fledged IMF programme or Extended Fund Facility (EFF) which Egypt, for instance, took in 2016 to solve its macroeconomic challenges.

Nigeria has never borrowed from the IMF, be it in form of RFI or EFF. Nigeria has

consistently turned down IMF bailouts of any kind until now.

Nigeria’s current President Muhammadu Buhari was the same one in charge in 1983 when the IMF first offered financial assistance to the country.

A mountain of unpaid debts to service and repay following the oil price decline made the IMF’s offer difficult to resist but Buhari rejected the Fund’s prescriptions which included reducing the role of the state in the economy, cutting trade protectionism and devaluing the naira which was then pegged at N1: US$1.

The economy continued to deteriorate and by 1985, Buhari was ousted by Ibrahim Babangida, who quickly re-opened talks with the IMF and World Bank.

Babangidawouldeventually turn down the option of an IMF loan even though he did implement some of the Fund’s conditionalities under the Structural Adjustment Programme (SAP), from devaluing the currency to loosening import bans.

To fund and supervise the SAP, Babangida tapped the WorldBank,whoseintrusiveness and oversight of government finances, the area most in need of reform, was less severe and conditional than that of the IMF. www.businessday.ng

on the back of COVID-19 and dispute between Saudi Arabia and Russia forced the central bank to weaken the currency to N360/$ from 306/$.

The Federal Government had reduced its oil projections to 1.7 million barrels and has slashed a record budget of $35 billion it had approved in December by 15 percent.

Insurers are also groaning under the crisis as volumes of transactions have reduced, which could impact negatively on premium income.

The insurance industry is reeling from apathy to insurance.

Nigeria, with a population of 200 million and a GDP of $444 billion, has an insurance penetration of 0.31 percent, even compared with countries with similar GDP per capita, for example, India with insurance penetration at 3.69 percent.

MTN Nigeria sees 59% surge in Q1 data revenue on COVID-19 impact, improved 4G coverage SEGUN ADAMS

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TN Nigeria, the country’s biggest mobile phone service provider, recorded a double-digit surge in data revenue in the first quarter of 2020, the onset of the COVID-19 pandemic that saw businesses adopt remote working and individuals stay at home in key states.

Data revenue which makes up 22.6 percent of service revenue (N328.5bn) grew 59.2 percent year-on-year in the quarter and 12.3 percent from Q4 2019. The growth in data traffic (+130.4 percent y/y)

was supported by the addition of 1.7 million active data users and increased 4G population coverage in the period.

Some 4.2 million new subscribers were added to MTN network of now 68.5 million users, driving voice revenue up by 7.4 percent.

Ferdi Moolman, MTN Nigeria’s CEO, said the telco’s performance was despite several developments in the quarter including the increase in VAT from 5 percent to 7.5 percent which adversely affected both revenue and costs.

Moolman also noted increase in cost arising from exchange rate adjustment and

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significant operational challenges and supply chain disruptions due to the lockdown.

While MTN Nigeria noted a rise in different categories of expenses, digital revenue rose 63.7 percent and Fintech revenue, from services like Mobile Money (MoMo), jumped 36.1 percent with the MoMo agent network expanding by 70,000 agents to a total of 178,000-agents strength nationwide in the quarter.

Fintech revenue was up 36.1 percent year-on-year due to increasedadoptionofMTNXtratime, an airtime lending service.

MoMoagentsprocessedover 5.6milliontransactions(volume) @Businessdayng

of which 80 percent were airtime vending. Notably, transaction fees for all money transfers using MoMo agent network were suspended for an initial one-month period from March 23 as part of the Y’ello Hope Package.

EBITDA grew 15.3 percent to N173.5bn with EBITDA margin moderating by 0.6 percent points to 52.7 percent.

Profit before tax rose 8.9 percent to N76.3 billion and profit for the period increased by 5.6 percent to N51.146bn.

Nigeria recorded its first case of COVID-19 in late February and put key states – Lagos, Ogun, and Abuja – under lockdown after a month.

Thursday 30 April 2020

BUSINESS DAY

31

news COVID-19 unravels Nigeria’s failing...

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industrial and commercial

L-R: Bamidele Faparusi, Ekiti State commissioner for public utilities; Kunbi Labiyi, chief state head, Ekiti State, BEDC Electricity plc (BEDC), and Margret Faboyo, member, COVID-19 Committee, Ekiti State, during the presentation of COVID-19 donations

by BEDC management to Ekiti State government in Ado-Ekiti.

FG rolls out preparatory rules to ...

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preparatory steps, including fumigation and decontamination and as well make arrangements for physical distancing as they resume operations.

Other new rules, according to Mustapha, include provision of hand sanitizers and hand washing facilities, as well as ensure mandatory use of face masks.

The introduced guidelines come ahead of the gradual relaxation of lockdown measures in Lagos, Ogun and the Federal capital Territory FCT, and two weeks lockdown in Kano state to contain coronavirus spread, and according to the SGF, the gradual reopening of the economy will span a total of 6 weeks broken into 3 tranches of 2 weeks each” Speaking during the daily briefing of the Task force, Mustapha also directed that such offices and businesses must provide thermometers for temperaturechecks;makeadequate provisions for persons living with disabilities while making all these arrangements; put measures in place to increase communication with staff on COVID-19 and measures put in place; and other measure that maybepeculiarfortheorganisations and/or sector.

The SGF also re-emphasised that “mass gathering of more than 20 people outside of a workplace is strictly prohibited; controlled access to neighborhood markets and locations of economic activities will be enforced; mandatory temperature checks will be conducted in public places; social distancing of 2 metres to be maintained between people in workplaces and other public places.

Meanwhile, all passenger flights remain under ban while government continues to enforce mandatory supervised isolation of persons ar-

riving from outside the country for at least 14 days.

Mustapha reiterated that the overnight curfew would be applicable nationwide from 8.00pm to 06.00am daily, effective Monday, 4th of May, 2020, adding, “ Inter-State travels are banned except for the movement of goods, agro-products, petroleum products, essential services as directed by President Buhari.

According to him, “This phased strategy is designed to reduce the pains of socioeconomic disruptions while strengthening our public health response, which would ultimately reduce the recovery of our economy and provide succourtothepoorandvulnerable” He therefore, urged SubNational levels of Government, to provide leadership in engaging relevant associations responsible for various sectors, including market associations and transport unions for orderly and effective implementation.

The SGF also called security agencies to strictly enforce these new measures that have been put in place.

Reiterating the need for increase in local research, Mustapha said local scientists must deepen its capacity and be encouraged considering the huge role all relevant research institutes need to play at this time.

“The Federal Ministry of Health is coordinating the process in conjunction with the National Institute for Medical Research and the Nigerian Institute for Pharmaceutical Research and Development.

“We have received information on domestic and international claims about emerging inventions on COVID-19. These are most welcome but scientific validation process and protocols will have to be followed. We are open to all options for the www.businessday.ng

good of humanity.

At the briefing, Chikwe Ihekweazu, Director General of the Nigeria Centre for Disease Control (NCDC) said there was no end in sight yet to the Covid-19 pandemic in the country, as he saluted all health workers and every Nigerians playing a role in response to the pandemic for their hardwork and sacrifices they are making.

The DG regretted that even some member of his team have contracted the virus. He however urged them and indeed all Nigerians to persevere with the assurance that government is working to get the country back on track again.

“Many people are away from their families for sixweeks to two months, they work very hard with no end in sight at the moment, yet they have no option every morning they have to wake up and continue pushing.

“A number of people in my own team that have sadly become infected themselves as part of the response in the line of duty, I spoke to them and they ended up encouraging me and the PTF to keep pushing for the future of the country.

“So, today I want to thank all of them, whether you are working clinically, a public health, surveillance officer, a driver, or any part you play in this response not to give up, we need all if you to keep pushing.

“So wherever you are in Nigeria responding to this outbreak, I ask you to persevere, we will see the light at the end of the tunnel.

The Minister of Health, Osagie Ehanire requested Members of the National Assembly and State Houses of Assemblies to get involved in the Covid-19 disease surveillance and notification efforts in their constituencies and to actively support the drive to rapidly increase bed spaces for Isolation and treatment in their States.

Ehanire also called on all States and Federal Capital Ter-

ritory (FCT) to give first line attention to the provision of Isolation Centres and more bed spaces so as not to be taken by surprise, especially as the lock is being relaxed from Monday.

He explained that the increasing figure of confirmed cases underscores the ongoing community transmission, which is a major challenge that necessitated more calls on all citizens not to take this Covid-19 lightly.

The Minister advised Nigerians to take ownership of the initiatives for non-pharmaceutical interventions with strict adherence to public health advisories such as to social distance, practise hand and respiratory hygiene, avoid crowded places and wear mask or a face covering when going, failure which will throw up negative effects.

He strongly urged those who test positive for Covid-19 to cooperate with the directives of authorities, on Isolation, so as not to constitute a risk and a cause for public concern.

The Minister also said the Federal Ministry of Health has completed plans to start training and capacity building of much needed Intensive Care workforce for various parts of the country.

Meanwhile the Governor of Lagos State is to inaugurate an enlarged committee comprising government and private sector players to work out gradual easing of the Covid-19 lockdown.

Members of the committee to be inaugurated on Thursday, April 30, will be drawn from Nigeria Employers’ Consultation Association (NECA), Manufacturer Association of Nigeria (MAN), Road Transport Owners Association of Nigeria (RTEAN), National Union of Road Transport Workers (NURTW), state ministries of finance, budget and economic planning, commerce and industry among others.

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customers have been hard hit leading to fall in demand,” Osibodu said.

Nigeria’s electricity market is grossly illiquid. The 11 DisCos recorded cumulative losses of N787 billion in their 2018 financials, a 10 percent increase from the previous year.

But the DisCos have managed to keep the lights on – however abysmally – because the Federal Government is picking the tabs, having been forced to pay over N2 trillion in the form of various interventions to assuage a lack of market price for electricity and inefficiency of operators.

This has led to a situation where the power sector is privately owned but nationally financed. With COVID-19 and its implications, this system is no longer sustainable.

“You cannot use financial engineering to solve an economicproblem,”saidClarksaid.

The regulator has rejected counsel to raise tariff, enforce market rules and run an efficient market capable of attracting investment. Now, it is running out of options.

“With the fall of oil prices, the government has lost over 60 percent of its revenue, so it has no money to continue to fund interventions,” said Eyo Ekpo, director, New Frontiers Limited and a former commissioner, Nigerian Electricity Regulatory Commission (NERC).

The fall in crude oil prices and the subsequent supply cap

on production by oil producers mean that less gas would be produced as Nigeria’s gas is associated, that is, produced why searching for oil.

“We probably need to start looking for gas storage,” said George Oluwande, managing partner at Abisol Consultants, at the webinar.

Gas producers who generate the critical feedstock required to produce over 75 percent of Nigeria’s electricity are being owed billions of naira by GenCos. GenCos in turn only get a quarter of their invoices settled by the Nigerian Bulk Electricity Trading Company.

DisCos collect only about 60 percent of the value of the electricity generated and sent to them. They sometimes keep more than a quarter of this amount and NBET worsens the situation, some operators say, by prioritising payment to the Transmission Company of Nigeria (TCN) and Market Operator (MO) who get sometimes the full value of their invoice.

Ekpo said it is time for the regulator to redesign the electricity market so that the energy sector can become an enabler for the economy. This can be done by recapitalising the DisCos to allow the involvement of GenCos, state governments and banks in the ownership of DisCos. There is also need to fix governance at the public and private aspects of the power sector and the regulator needs to be proactive in fixing the market, Ekpo said.

Poultry farmers hurting as lockdown...

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in the country. Other states

ofthefederationhavealsoimplementedoneformofrestrictionor the other to contain the spread.

Thishastakenatolloneconomic activities in the country.

“The lockdown has forced businesses such as hotels, restaurants, and eateries that are major buyers of eggs and birds to shut down or operate skeletal services,” he said.

Ibrahim said the situation has forced poultry farmers to sell their products below their production costs owing to the short-shelf life of eggs.

He urged the government to include eggs in the palliatives beingsharedtopoorandvulnerableNigerians,emphasisingthat eggscontainadequatenutrients necessary to boost human body cells and immune system.

Nigeria is the largest producer of eggs in Africa with 10.3 billion eggs annually, data from the Poultry Association of Nigeria show.

“I have over 3,000 unsold crates of eggs on my farm because of the lockdown.

Nobody is placing orders and I have resorted to personally taking my eggs to buyers to persuade them to buy at lower prices,” Dayo Gawati, chief executive, Fdot Farms, said. @Businessdayng

“During Muslim Ramadan, we normally experience high demand because people break their fast with noodles and eggs, especially in the north, but this year it is the opposite we are experiencing because of the coronavirus,” he said.

Gawati said that a big size crate of eggs that was sold for N900 at farmgate before the pandemic now sells for N650, while a medium-size crate of eggs sold for N700 before the outbreak now sells N500.

He also attributed the low demand to the obstruction in the supply chain, saying that poultry farmers have difficulties in moving eggs and birds produced to major cities where they are needed.

Since the coronavirus lockdown started in Lagos, Abuja and Ogun State late March, the farming supply chain has been obstructed as trucks conveying agricultural products cannot easily move from the farms to markets.

Agharese Osifo, Edo Statebasedpoultryfarmerandconsultant in agricultural finance, said that farmers in the state cannot easily move their eggs to markets in Delta and Lagos owing to the lockdown and restriction of movement. Delta and Lagos States account for 90 percent of his monthly sales, he said.

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Thursday 30 April 2020

BUSINESS DAY

FT

FINANCIAL TIMES

World Business Newspaper

US GDP falls 4.8% in worst economic decline since 2008

Contraction exceeds economists’ forecasts for a 4% decline in output MAMTA BADKAR AND DEMETRI SEVASTOPULO

T

he US economy shrank in the first quarter by its fastest rate since the 2008 financial crisis, ending the longest expansion on record as lockdowns aimed at curbing the coronavirus pandemic choked off economic activity.

Gross domestic product, or the value of all goods and services produced by the economy, shrank at an 4.8 per cent annualised rate in the first three months of the year, according to the preliminary estimate from the Bureau of Economic Analysis published on Wednesday. That marked the steepest drop since the 8.4 per cent contraction at the end of 2008 and compared with economists’ forecasts for a narrower 4 per cent decline in output.

In a rare statement the BEA identified the economic damage from “stay-at-home” orders issued in March, which it said “led to rapid changes in demand, as businesses and schools switched to remote work or cancelled operations, and consumers cancelled, restricted, or redirected their spending”.

The blow to the American consumer powering the economy was evident in a 7.6 per cent drop in personal consumption data, which marked the biggest decline

‘Stay-at-home’ orders have ‘led to rapid changes in demand’, says the Bureau of Economic Analysis © John Minchillo/AP

since 1980.

“Consumers adjusted very rapidly as the lockdowns were put in place,” Michelle Meyer, the head of US economics research at Bank of America, said, noting the sharp declines in spending on restaurants and travel. “Following this Covid shock, the tendency will be to build up savings and there will also be a change in how people spend and how people live.”

Counter intuitively, healthcare was among sectors that suffered the most, as hospitals stopped performing lucrative elective procedures as the focus shifted to tackling the pandemic. Paul Ashworth, economist at Capital

Economics, noted it accounted for 40 per cent of the overall decline in consumption. Transportation, recreation, and food services & accommodations all experienced sharp declines as well.

Business investment, already depressed by the US-China trade war last year, fell further for the fourth consecutive quarter, recording the most precipitous decline in 11 years.

While the March quarter GDP figure was buttressed by the strong economy in place before the widespread outbreak of Covid-19, the extent of the collapse caused by the pandemic will become apparent when second quarter data

is released, as lockdowns only began in earnest in mid-March.

Some economists forecast that the economy could shrink between 30 to 40 per cent in the current quarter.

Kevin Hassett, a top White House economic adviser, on Tuesday said GDP in the second quarter would be a “big negative number”. The former chair of the White House council of economic advisers, who has been called back to help deal with the response to the pandemic, told CNN he believed unemployment would rise to as much as 20 per cent by June — a number that he stressed had not been seen since the Great

Depression in the 1930s.

The extent of the economic catastrophe was reinforced last week when the US labour department said 26m Americans had filed jobless claims over the previous five weeks.

Congress has approved roughly $3tn in stimulus spending over the past two months to tackle the economic impact of the pandemic — with measures that range from “economic impact” payments to individuals, to $659bn for small business loans.

Democrats and Republicans have also started informal negotiations on the contours of another big stimulus package to follow on from the record $2.2tn Cares Act that was passed at the end of March.

Mr Hassett on Tuesday said the White House was debating whether to provide another round of stimulus payments to individuals beyond the means-tested $1,200 per person that was included in the initial package. Some Democrats want to go much further by providing monthly payments to Americans for the duration of the crisis.

Nancy Pelosi, the Democratic House speaker, on Monday suggested she might support a “universal basic income”, in a recognition of the dramatic and sustained impact that the crisis is having on Americans.

Coronavirus stalks world’s refugees as shutdowns disrupt aid Plea for increased humanitarian help has gone unanswered and funding is set to be cut further NEIL MUNSHI AND CHLOE CORNISH

M

alice knows how to protect his family against coronavirus. As often as he can afford it, the 68-year-old buys a single bar of soap for his two wives and dozen children.

It is usually finished within two days, and then he must scrounge the money — the equivalent of 16 US cents — for another. And that is if the family has enough water left over from their daily allocation to wash.

“Imagine people who don’t even have enough water to drink,” he said from a crowded camp in central Mali, west Africa, where armed extremist groups and local conflicts have forced thousands to flee their homes. “How can they wash their hands several times a day? With what water? How can they buy soap, masks?”

Malice is among tens of millions of people around the world displaced by conflict, violence and natural disasters, whose already fraught existence is threatened further by coronavirus. Crammed into camps where social distancing is impossible, hygiene is poor and medical care rudimentary, the

world’s most vulnerable people are at the greatest risk, amid a global shutdown that is making humanitarian support more difficult.

“We fear the virus would be next to impossible to stop in places where people live side-byside with inadequate sanitation and shelter,” said Patrick Youssef, Africa director for the International Committee of the Red Cross.

“Our best line of defence today for communities where physical distancing is impossible is to make sure people have accurate information . . . and to make sure people have access to water, soap and basic hygiene.”

“We are in a race against time,” he added.

Africa is the region least affected by the virus, with about 33,000 confirmed cases and 1,500 deaths as of Tuesday, but it seems to be roughly tracking Europe’s trajectory.

In Syria, where 6.1m people have been displaced during a nine-year civil war, the official number of cases and deaths is also low but climbing. In Bangladesh, where more than 850,000 Rohingya live in camps along the Myanmar border, aid workers www.businessday.ng

have called Covid-19 “a ticking time bomb”.

Though there is hope that social and environmental factors could spare some of the most vulnerable places from the worst of the outbreak, other forecasts are more alarming. The International Rescue Committee warned on Tuesday that up to 1bn people could become infected with Covid-19 and 3.2m people could die in just 34 conflict-affected and fragile countries, if more preventive measures are not taken.

Groups such as the IRC, Médecins Sans Frontières and the Nor wegian Refugee Council are doing what they can. At the Doucoumbo camp in Mali where Malice lives, NRC, which relayed Malice’s responses to the FT’s questions, is educating residents, digging wells to boost water access and providing hygiene products.

But calls for increased humanitarian funding have gone unanswered. Financing is expected to be cut further as recession bites, even as the number displaced within their own countries has spiked to a record 45.7m, according to data published this week by the NRC’s

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Internal Displacement Monitoring Centre.

With almost 26m refugees living in other countries, according to the UNHCR, the UN’s Refugee Agency, more than 70m people are displaced around the world.

“We are in a humanitarian crisis already . . . and now we are close to a humanitarian catastrophe,” said Xavier Creach, regional co-ordinator for the Sahel at UNHCR. Most IDPs do not live in formal camps but with host communities who share meagre supplies with their displaced guests.

And those groups will find their resources reduced further by the disruption of coronavirus restrictions, Mr Creach said.

In total, 19.1m people in the Sahel will fall into food insecurity this year between harvests, compared with 10.8m last year, the World Food Programme said this month, citing the impact of lockdowns on humanitarian supply chains.

WFP has said it is scrambling to replace manufacturers in France and India that produce much of the food it distributes. Both countries have shut or severely curtailed manufacturing. @Businessdayng

In Syria, where 1.8m people were displaced by fighting in 2019 alone — the highest number in the world — food prices have more than doubled within a year, according to the UN’s food aid agency.

In the north-west, where jihadist opposition groups still control territory, a survey “found there were [on average] nine people living in a tent”, according to Misty Buswell, policy and advocacy director for IRC in the Middle East.

In rural, north-east Nigeria, which has wrestled with its own Islamist insurgency for a decade, the situation is similarly dire.

Aba Goni lives in Borno state’s Dalori camp with 22,000 other displaced people. He said that, so far, the residents of the camp are doing their best to wash their hands frequently and maintain social distance. But Borno announced a lockdown last week after recording its first death from Covid-19 — an MSF medic. Fear is spreading.

“Initially when we get our small money we go out to buy our onions, condiments and food items to bring into the camp,” he said, via audio clips sent by the ICRC. “Now the state is locking down, and it will affect us seriously.”

Thursday 30 April 2020

BUSINESS DAY

33

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

European economies show early signs of post-lockdown rise in activity High-frequency data such as electricity use and travel suggest tentative revival VALENTINA ROMEI

E

u ro p e a n c o u n t r i e s which have begun to ease their coronavirus lockdowns are experiencing a tentative uptick in some forms of economic activity, early data suggest, although the movement of people and goods across the continent remains largely depressed.

Germany, Italy and Spain have all loosened movement restrictions in various ways in the past couple of weeks, allowing some shops and workplaces to re-open, while France announced on Tuesday that it would gradually relax its lockdown from May 11.

Although it is too soon for the changes to be reflected in official economic statistics, some highfrequency alternative measures of activity, such as electricity consumption and travel, are already displaying signs of a revival.

“There are some tentative signs of improvement in economic activity in the high-frequency data such as increased electricity consumption in Italy and Spain and slightly less depressed footfall in German cities over the past week,” said Jessica Hinds, Europe economist at Capital Economics.

Yet she warned that it was still “very early days” and that other indicators “have yet to show much, if any, progress”.

In Italy and Spain, electricity consumption has been rising since mid-April — in contrast to France, where it is still at very low levels in comparison with historic norms.

The increase in energy use

People wearing face masks leave a supermarket in Bad Honnef near Bonn, Germany. The country has relaxed some shop opening rules © Wolfgang Rattay/Reuters

in the two countries partially reverses the sharp slowdown at the start of the lockdown and narrows the gap with last year’s levels, according to hourly data by ENTSO-E, the European Network of Transmission System Operators for Electricity.

Meanwhile, data on mileage clocked up by German trucks has begun to show a mild uptick after a plunge that is set to leave April’s data as the largest contraction since records began in 2005.

The index, which tracks the distance travelled by large trucks on the country’s highways, is produced daily by the German statistics office.

There is also some evidence that German and Spanish workers are getting back to their jobs.

Google’s mobility to workplaces index — which tracks people’s movements to factories and offices — showed a turn in the trend over the past week, albeit still at very low levels.

Across Europe, mobility remains around half of pre-coronavirus levels; trips to work are 43 per cent down compared with a typical pre-coronavirus week in Germany, and have fallen between 63 and 68 per cent in Italy, Spain, France and the UK. Felix Huefner, European economist at UBS, pointed out that the

retail, transport, entertainment, accommodation and food sectors had suffered the most with the virus and “every measure that helps the services sector get back to speed is important” for economic recovery.

“Germany has now moved to be one of the least restrictive large economies in the eurozone,” he said.

However, there are no significant signs of an uptick in travel for leisure in Google’s mobility data.

There is no sudden return to pre-Covid-19 daily life Bert Colijn, ING The fall has been smaller in countries with no formal lockdown, such as Sweden, or with

less stringent measures, such as the Netherlands, but in countries which have experienced stricter controls, movement to retail and recreation centres remains around record lows.

In France, Italy and Spain, movement of people to services involving groups of people, such as retail and recreation, has fallen by more than 80 per cent.

The variation in the severity of the drop “suggests that the direct economic impact [of coronavirus] is likely [to be] larger in the southern eurozone economies and France than in the northern countries where the lockdown has been lighter”, said Bert Colijn, senior economist at ING, the Dutch bank.

The lack of recovery showed that “there is no sudden return to pre-Covid-19 daily life”, he added.

Olivier Vigna, economist at HSBC, said that “a key question is whether consumers will feel confident to spend, once lockdown measures are relaxed”.

Even though Europe is heading for a more significant reopening of activity next month and further restrictions are expected to be lifted by June provided there is no second spike in infections, analysts say the early indications are that economic activity will take a long time to recover.

Angel Talavera, economist at Oxford Economics, said: “It looks likely the process [of lifting restrictions] will take months, which means that economic activity will likely remain below its precoronavirus levels during the rest of the year.”

Global job losses rise sharply as coronavirus lockdowns are extended UN agency estimates lost working hours are now equivalent to more than 300m full-time jobs DELPHINE STRAUSS

G

lobal job losses caused by the coronavirus outbreak will be far worse than expected just two weeks ago because many countries have since decided on longer or stricter lockdowns, says the International Labour Organization.

The UN agency now estimates that global working hours in the second quarter of 2020 will be 10.5 per cent lower than their pre-crisis level in the last quarter of 2019 — equivalent to the loss of 305m full-time jobs. Earlier this month, it had forecast a second quarter fall in working hours equivalent to 195m full-time job losses.

The ILO said on Wednesday that the “significant deterioration” was driven largely by the extension of containment measures, although it also now has more information to guide its forecasts, including official data for the first quarter and more timely mobility

Labourers queue for free food during Ramadan in Rawalpindi, Pakistan. The ILO said the crisis would have a “massive poverty impact” among the 1.6bn people working in the informal economy worldwide © AFP via Getty Images

data collected by Google.

“We all have to think of the human suffering, the human need that stands behind that extraordinary figure,” said Guy Ryder, the ILO’s director-general, adding that the crisis would have a “massive poverty impact” among the 1.6bn people working in the informal www.businessday.ng

economy worldwide who were significantly affected by lockdown measures.

Although China was now beginning to lift some of its containment measures, 64 more countries had adopted recommended or required workplace closures since April 1, said the ILO.

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It now expects the biggest drop in working hours — estimated at about 12 per cent — to be in the Americas, Europe and Central Asia; but even in Africa, the least affected region, it forecasts a fall in working hours of close to 10 per cent.

However, the biggest hit to household incomes will be in countries where a large proportion of the workforce is in the informal economy.

The ILO said that of 2bn people working informally around the world, about 1.6bn had suffered “massive damage to their capacity to earn a living” because they were either directly affected by workplace closures or were in sectors hard hit by social distancing measures.

It estimated that in the first month of the crisis, the income of informal workers fell 60 per cent globally, with a drop of more than 80 per cent in Africa and Latin America.

This would lead to a steep rise @Businessdayng

in the rate of relative poverty — the proportion of workers with monthly earnings of less than half the national median — which the ILO estimated could rise to more than 80 per cent in high income countries, as well as in Africa and the Americas.

“We do need to concentrate on the most vulnerable. We need to act fast, we need to act at scale and . . . we need to focus on providing the basics of social protection to those who otherwise would not have it,” said Mr Ryder.

The ILO’s forecasts are an attempt to quantify the immediate impact of lockdowns. It has not given any forecast for job losses over the year as a whole, but warned that even once containment measures were lifted, there would be continuing disruption to global supply chains, while restarting businesses with new safety measures in place would require “significant adjustments with cost implications”.

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Thursday 30 April 2020

BUSINESS DAY

ANALYSIS FT Apollo: how a private equity giant is navigating the crisis

The investment firm sought a voice in Washington when coronavirus hit its credit operation MARK VANDEVELDE AND SUJEET INDAP

L

eon Black had hardly chosen the easiest moment in American history to try to start a bank. It was 2010, the year when more financial institutions failed than at any time since the US savings and loans crisis of the 1990s. Yet amid the upheaval, it dawned on the billionaire founder of Apollo Global Management that he had a chance to transform his private equity firm into a pervasive financial force.

No longer would Apollo confine itself to buying companies and loading them with debt. The firm could instead become part of the basic plumbing of the financial system, lending money in its own right and allowing borrowers to bypass the battered banks that had just received a $500bn bailout.

A decade after Mr Black’s epiphany, he still has not set up a bank — but what he did not create, he has instead transcended.

Hiring former top executives from Countrywide Financial, American International Group and other perceived corporate culprits of the financial crisis, Apollo built a credit division that has taken over the role that traditional financial institutions once played as lenders to millions of ordinary American households and businesses.

Emulated by peers including Blackstone and KKR, Apollo’s $200bn credit portfolio is among the slickest operators in America’s “shadow banking” industry, churning out everything from residential mortgages to aircraft leases and commercial real estate loans.

It has become a vital source of funding for heartland businesses that many banks now consider too difficult, or too risky, to touch.

The new lending operation prospered mightily until the coronavirus pandemic sent American credit markets into a tailspin in March, with even the US Treasury bond market — the linchpin of the global financial system — creaking under the strain. As the coronavirus crisis closed in, the firm’s co-founder Marc Rowan sought a hearing with the Trump administration for his ideas about how the US authorities should respond.

With jobs evaporating and businesses forced to close their doors, the US Federal Reserve intervened decisively in early April, backstopping corporate and municipal bonds as well as various asset-backed securities.

The Fed’s actions have stabilised financial markets after brutal sell-offs and disruptions last month, offering some breathing room to the battered American economy. But one of the consequences of the flood of freshly

© FT montage; Bloomberg; Getty Images | Under Marc Rowan and Leon Black, Apollo has become a lender to numerous sectors from fast food, hospitals and aircraft leasing to mortgages

minted dollars has been to buoy prices of credit-related securities similar to those held or managed

by Apollo and its peers.

That has left Apollo and its $200bn credit portfolio exposed to a potentially divisive debate about the implications of the Fed’s approach.

Many in finance believe that Mr Black’s credit operation is a vital part of the economy, supporting jobs, reducing mortgage costs and freeing large banks to focus on utility-like activities such as running the payments system and lending to Fortune 500 companies.

But the decision to set up credit facilities overseen by the Fed was also swiftly denounced

by Democratic Senator Elizabeth Warren, who said it had “failed to even put in place basic protections” to make sure the money reached workers rather than wealthy executives. Ms Warren had already put forward a bill to stop Wall Street “looting” and fundamentally reform private equity, ideas that may gain momentum once the immediate crisis has passed.

Meanwhile, the Fed’s intervention has even unnerved some of those who might expect to benefit from it. “Who’ll do the buying for the government and make sure the purchase prices aren’t too high and defaulting issuers are avoided?” asked Howard Marks, the billionaire co-founder of Oaktree Capital, in a letter to clients this month. “Or doesn’t anyone care?”

Whether it resuscitates the Main Street economy, or merely stanches losses at some of Wall Street’s biggest institutions, the Fed’s move demonstrates that private capital managers have transformed American finance in more profound ways than many of them care to admit.

More than 10 years after a banking bailout that angered taxwww.businessday.ng

payers and curtailed lending, the “alternative” investment industry is no longer a niche outgrowth of the mergers and acquisitions business. Lightly regulated and operating largely outside public view, firms like Apollo have become a central part of the US credit system — one whose complexity and financial health has policymakers worried about a new form of contagion.

For Mr Black, launching a bank in the middle of a financial crisis was not a fanciful ambition. Since starting out at Drexel Burnham Lambert under “junk bond king” Michael Milken, the former investment banker had become one of Wall Street’s inveterate winners.

When Drexel collapsed, Mr Black had somehow come out on top, buying beaten-down junk bonds from the bank’s former clients and turning huge profits as the market recovered.

As the leveraged buyout game became crowded, Mr Black wanted to play a different game. So he set about hiring talented individuals who knew how to raise money at low interest rates and deftly lend it out for more, even if the companies they had helped run were not always entirely unblemished.

One early find was James Furash, a veteran of Countrywide Financial. While his former boss, chief executive Angelo Mozilo, chased new loans that ultimately killed the company he had founded, Mr Furash had run Countrywide’s banking arm. This was a “separate, independently regulated entity from the mortgage origination business at Countrywide,” he says, “and never purchased subprime loans of any kind”.

Another recruit was James Belardi, a former swimming champion who had made his first fortune as an investment wizard at SunAmerica before it was acquired

by AIG, only to end up losing a

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chunk of his personal wealth when America’s biggest insurer fell victim to the mortgage crisis. Others came from struggling or defunct investment banks such as Merrill Lynch or Bear Stearns.

“Historically, your career options were to work for a European bank, a Japanese bank or US bank, and that was it,” explained Mr Rowan, the key architect of the shadow banking expansion, at an investor day last year. “All of a sudden, you and your 20-person team can come to Apollo . . . Being in a business that is focused on taking these things out of banks, I believe, to be a very, very good strategy.”

Apollo’s team ran into opposition. No sooner had their life insurance venture, Athene Holding, got off the ground than Mr Belardi began confronting questions from New York regulators about whether he and his team were taking too much risk. Still, at least they were in business — unlike the plan to launch a bank, which was dead before it started.

One reason may have lain in Washington, where officials were stung by popular discontent over financial industry bailouts. “For two years, we tried to create a bank,” says one person who was closely involved with the effort.

“We gave up. The regulations were so onerous that if [Apollo] controlled the bank, the whole private equity fund could be on the hook.” (Apollo says a fund it managed once considered buying a bank, but abandoned the idea for economic reasons.)

With Athene raking in billions of dollars of annuity premiums, however, Apollo realised it did not need savings and checking accounts to fund its ambitions in the credit markets.

Stripped back to its essentials, the banking sector exists to borrow money and to lend it, two functions that sustain more or @Businessdayng

less the entire system of economic exchange.

The bank’s borrowings, or “liabilities”, take the form of deposits, which offer savers a minuscule interest rate but guarantee that their money will be available when they want it. Its assets, meanwhile, are generated by lending money to people or businesses, for periods ranging from weeks or months to an entire adult lifetime, against security that could be a house, a jet plane or nothing at all.

Apollo’s shadow banking operation serves the same basic functions but it performs them selectively, in a manner calculated to generate the highest possible returns. Its lending businesses focus on specialist forms of financing that command higher interest rates because they do not trade on liquid markets and require expertise to underwrite.

“Our strategy is to be the GE Capital of the future,” Mr Rowan told investors last year, referring to the industrial conglomerate’s once-envied position as senior lender to salt-of-the earth businesses. “If you think about what [GE] lent against, they lent against planes, trains, automobiles, medical equipment, dealer floor plan [used car inventories], franchises, and so on.”

To generate those assets, Apollo executives ventured far from their offices on the high floors of a skyscraper overlooking Manhattan’s Central Park. Decamping to drab office parks in American suburbia, they built banal-sounding companies and recruited an army of low-ranking loan officers and risk managers, who spent the past decade quietly inserting themselves into the finances of thousands of families and businesses.

In the Washington DC suburb of Bethesda is the headquarters of Midcap Financial, which takes money from Apollo clients and lends it to nursing homes, grocery stores and other midsized businesses. In Thousand Oaks — a neighbourhood that looks practically the same, though it is thousands of miles away, in California — is Amerihome, a company started by Mr Furash, which has used Apollo’s firepower to become the sixth-largest provider of mortgages to American homeowners.

Other affiliates specialise in jet leases, franchise loans and other attractive niches.

And if Apollo is picky about the assets it accumulates, it has been positively inventive about how to pay for them, eschewing deposit funding in favour of the annuity premiums raked in by Athene. Like savings accounts, these typically pay 2 or 3 per cent a year on the amount invested, but they have one big advantage: customers typically cannot demand quick access to their money.

Thursday 30 April 2020

BUSINESS DAY

BUSINESS TRAVEL

COVID-19 puts over half of 2020 passenger revenues at risk – IATA Stories by IFEOMA OKEKE

T

he International Air Transport Association (IATA) released updated analysis showing that the COVID-19 crisis will see airline passenger revenues drop by $314 billion in 2020, a 55 percent decline compared to 2019.

On 24 March IATA estimated $252 billion in lost revenues (-44 percent vs.

2019) in a scenario with severe travel restrictions lasting three months.

The updated figures reflect a significant deepening of the crisis since then, and reflect severe domestic restrictions lasting three months, some restrictions on international travel extending beyond the initial three months and worldwide severe impact, including Africa and Latin America (which had a small presence of the disease and were expected to be less impacted in the March analysis).

Full-year passenger demand (domestic and international) is expected to be down 48 percent compared to 2019.

The two main elements driving this are: Overall economic developments: The world is heading for recession. The economic shock of the COVID-19 crisis is expected to be at its most severe in Q2 when GDP is expected to shrink by six percent (by comparison, GDP shrank by two percent at the height of the Global Financial Crisis).

Passenger demand closely follows GDP progression. The impact of reduced economic activity in Q2 alone would result in an eight percent fall

35

in passenger demand in the third quarter.

Travel Restrictions: Travel restrictions will deepen the impact of recession on demand for travel. The most severe impact is expected to be in Q2. As of early April, the number of flights globally was down 80 percent compared to 2019 in large part owing to severe travel restrictions imposed by governments to fight the spread of the virus.

Domestic markets could still see the start of an upturn in demand beginning in the third quarter in a first stage of lifting travel restrictions. International markets, however, will be slower to resume as it appears likely that governments will retain these travel restrictions longer.

“The industry’s outlook grows darker by the day. The scale of the crisis makes a sharp V-shaped recovery unlikely. Realistically, it will be a U-shaped recovery with domestic travel coming back faster than the international market. We could see more than half of passenger revenues disappear.

“That would be a $314 bil-

lion hit. Several governments have stepped up with new or expanded financial relief measures but the situation remains critical. Airlines could burn through $61 billion of cash reserves in the second quarter alone. That puts at risk 25 million jobs dependent on aviation. And without urgent relief, many airlines will not survive to lead the economic recovery,” Alexandre de Juniac, IATA’s Director General and CEO said.

Financial relief Governments must include aviation in stabilization packages. Airlines are at the core of a value chain that supports some 65.5 million jobs worldwide. Each of the 2.7 million airline jobs supports 24 more jobs in the economy.

“Financial relief for airlines today should be a critical policy measure for governments. Supporting airlines will keep vital supply chains working through the crisis.

“Every airline job saved will keep 24 more people employed. And it will give airlines a fighting chance of being viable businesses that are ready to lead the recovery

by connecting economies when the pandemic is contained. If airlines are not ready, the economic pain of COVID-19 will be unnecessarily prolonged,”de Juniac said.

IATA proposes a number of relief options for governments to consider: Direct financial support to passenger and cargo carriers to compensate for reduced revenues and liquidity attributable to travel restrictions imposed as a result of COVID-19.

Loans, loan guarantees and support for the corporate bond market by governments or central banks. The corporate bond market is a vital source of finance for airlines, but the eligibility of corporate bonds for central bank support needs to be extended and guaranteed by governments to provide access for a wider range of companies.

Tax relief: Rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020, along with a temporary waiver of ticket taxes and other government-imposed levies.

Sebastian Mikosz to join IATA as senior VP

T

he International Air Transport Association (IATA) announced that Sebastian Mikosz will join IATA as the Association’s Senior Vice President for Member and External Relations, effective 1 June 2020.

Most recently, Mikosz was group managing director and CEO of Kenya Airways (2017-2019), during which time he served on the IATA Board of Governors.

This was prior to that he was the CEO of LOT Polish Airlines (2009-2011 and 2013-2015) and the CEO of Poland’s largest online travel agency, the eSKY Group (2015-2017).

At IATA, Mikosz will lead the organization’s global advocacy activities and aero-political policy development, along with managing the association’s strategic relationships.

This includes IATA’s 290 member airlines as well as governments, international organizations and stakeholders in both the private and public sectors. Mikosz will report to the Director General and CEO and join the Association’s Strategic Leadership Team.

He replaces Paul Steele, who retired from IATA in October 2019. Brian Pearce, IATA’s Chief Economist has been handling the duties of this post on an ad interim basis since then.

“Sebastian brings with him a wealth of experience in the public and private sectors that will be critical in advancing the global aviation industry’s advocacy agenda.

“At this time of unprecedented crisis, the airline in-

Sebastian Mikosz

dustry needs a strong voice.

We must restore the confidence of governments and travellers so that aviation can re-start, lead an economic recovery, and connect the world. Sebastian’s experience in launching and turning-around companies will be invaluable in helping IATA meet the expectations of our members, governments and stakeholders,” Alexandre de Juniac, IATA’s Director General and CEO said.

“I can’t wait to get started at IATA. Aviation is in crisis and all industry and government stakeholders have high expectations for IATA to play a critical role in driving the recovery.

“From my experience as an airline CEO and as a member of the IATA Board of Governors, I know how important IATA is to the global connectivity that we usually take for granted.

Today’s challenges could not be greater. And, in joining IATA, I am determined to contribute to the efficient restoration of the links between people, nations and economies that only aviation can provide,”Mikosz said.

Expert prescribes recovery pills for Nigerian carriers after COVID -19

A

United States Federal Aviation Administration (FAA) and Nigerian Civil Aviation Authority (NCAA) Licensed Flight Dispatcher and Ground Instructor, Victoria Jumoke Adegbe has prescribed recovery for indigenous carriers as global aviation navigates it way out of COVID -19.

Specifically, she canvassed conversion of passenger aircraft into cargo operations.

Such aircraft, she said could optimize opportunities available for freight of medical supplies, agricultural supplies and other essential cargo.

The Chief Executive Offi-

cer of Insel Networks Limited, an aviation consulting firm urged government to consider direct financial support to indigenous carriers to compensate for reduced revenues and liquidity attributable to travel restrictions imposed as a result of COVID-19.

She said while many do-

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mestic carriers were hanging be the thread prior to COVID -19 with large percentage of their earnings gulped by expenditure on aviation fuel, aircraft maintenance, aircraft lease payments ,aeronautical charges , personnel emoluments and sundry charges , continued lock down occa-

sioned by Corona Virus has exacerbated the woes of indigenous airlines.

Adegbe said many Nigerian carriers were showing suicidal symptoms as some of them could barely meet their obligation amid declaration by a particular carriers that it would not pay its workers salaries during the period of the lockdown.

Citing reports from International Air Transport Association (IATA), she said Nigerian carriers have so far lost over $760 million warranting calls for direct financial support to passenger and cargo carriers to compensate for re-

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duced revenues and liquidity attributable to travel restrictions imposed as a result of covid-19.

She said:” “Loan guarantees and support for the corporate bond market by governments or central bank could come in handy at this challenging time.

“Also rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020, along with a temporary waiver of ticket taxes and other Governmentimposed levies. So here are my suggestions to help you stay afloat as an airline op@Businessdayng

erator.

“Convert some of your passenger aircraft for cargo operations. You could transport medical supplies, agricultural products and other forms of freight. The cost of freight forwarding has more than tripled since covid so you might want to take advantage of that.

“A number of international airlines such as American Airlines, Korean Air and Cathay Pacific has already started using some of their passenger aircraft for cargo. More than ever before, your flight dispatchers can actually come to your rescue.

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Thursday 30 April 2020

BUSINESS DAY

news

National grid collapses, as generation plunges to 2,983mw HARRISON EDEH, Abuja

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L-R: Oladimeji Oyekan, FMN regional sales manager, North East B2B; Muhammad Bashir Umar, permanent secretary, general service, Kaduna State government, and Abdullahi Muktar, director, admin and finance, office of the secretary, Kaduna State government, at the official handover of food products donated by Flour Mills of Nigeria (FMN) to Kaduna State as part of FMN’s commitment to alleviate the impact of the Coronavirus pandemic across Nigeria in Kaduna.

Poor budget transparency sees Nigeria losing seven places on OBS ranking BUNMI BAILEY

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igeria has over the years showed little commitment to transparency, timely release and contents of budget documents, and has dropped seven places to 97th position out of 117, according to 2019 Open Budget Survey (OBS) findings.

The new survey released by International Budget Partnership (IBP) Wednesday, shows that Nigeria has a transparency score of 21 (out of 100), near its score of 17 in 2017. And a transparency score of 61 or above indicates a country is likely publishing enough material to support informed public debate on the budget The OBS is the world’s only independent, comparative and fact-based research instrument that uses internationally accepted criteria to assess public access to central government budget

information; formal opportunities for the public to participate in the national budget process, and the role of budget oversight institutions such as the legislature and auditor in the budget process.

According to the survey, Nigeria has increased the availability of budget information by publishing the Citizens Budget online and increasing the information provided in the Enacted Budget.

“However, Nigeria has decreased the availability of budget information by failing to publish the Audit Report online in a timely manner,” the survey report states.

The seventh edition of the survey helps local civil society assess and confer with their government on the reporting and use of public funds.

Since inception of the survey in 2006, Nigeria’s ranking has been dropping. It dropped to its present position of 97th in 2019 from 27th in 2006.

“Our budget cycle is still not

stable making a lot of things to be untraceable and untrack able. We cannot trace implementation and audit reports. The only people that are sort of preparing in that concept are state governments, but we cannot judge the performance of the federal government by the states alone,” Ayomide Faleye, a senior analyst at BudgIT, says.

Faleye further notes, “Right now, we don’t have audit report for 2018 and 2019, how do we know how we fared. And this information that we don’t have, have sort of affected the entire process of measurement because it is about openness, accountability and transparency.”

The 2019 OBS uses 109 questions to measure the extent to which each country makes eight key budget documents available to the public on the relevant government website in a timely manner as well as the comprehensiveness of the budget information provided in these publicly available

documents.

And based on the simple average of the numerical value of the responses to these 109 questions, each country receives a budget transparency score from 0 to 100.

On the global scene, the average transparency score is 45 out of 100. Only 31 of the 117 surveyed countries have sufficient levels of budget transparency. This means that three-quarters of surveyed countries do not.

The top five best performing countries are New Zealand, South Africa, Sweden, Mexico and Georgia scoring 87, 87, 86, 82 and 81 respectively. While least performing were Yemen, Venezuela, Comoros, Qatar and Sudan scoring 0, 0, 0, 1 and 2 respectively.

The IBP recommends that Nigeria should prioritise the following actions to improve budget transparency by publishing the Pre-Budget Statement, In-Year Reports, Mid-Year Review, and Audit Report online in a timely manner.

FRC targets those preparing financial statements 9Mobile subscribers get free access to health, educational websites in new Covid-19 impact guidance Hope Moses-Ashike

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he Financial Reporting Council of Nigeria (FRCN) has released guidance on the impact of COVID-19 on financial reporting.

This is the second of such guidance to be released by the Council in just over two weeks. While the first guidance targets auditors of financial statements in Nigeria, the latest guidance targets those preparing financial statements during COVID-19 period.

According to the regulator, their statutory responsibilities include ensuring accuracy and reliability of financial reports and corporate disclosures; maintaining a register of professional accountants and other professionals engaged in the financial reporting process; and advising the Federal Government on matters relating to accounting and financial reporting standards in Nigeria.

In a statement published on its website, the purpose of the guidance is for directors of reporting entities and those charged with governance to assess the risk of COVID-19 at an early stage of the financial reporting and audit

process.

The guidance therefore serves to draw preparers attention to the possible impacts of COVID-19 on their businesses with the consequent financial reporting implications, which they are expected to give particular attention to, all within the framework of existing body of standards, i.e., International Financial Reporting Standards (IFRS).

Some of the specific issues addressed in the guidance include “events after the reporting period, going concern, effects on interim financial reporting, changes in expected credit losses for loans and other financial assets, net realizable of inventories, group reporting, effects of government and regulatory relief programmes on entities and their customers and transparency and disclosures”.

The guidance stresses “the importance of providing all relevant disclosures related to actual and potential impacts of COVID-19 by preparers of financial statements in order to comply with the requirements of IFRS.” The Council also reminds preparers that they are expected to disclose the principal risks and uncertainties that they face because of COVID-19 outbreak in their interim reports.” www.businessday.ng

FRANK ELEANYA

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ubscribers of 9Mobile, the fourth largest telecom service provider in Nigeria, can now access health and educational websites for free.

In a statement released on Tuesday, the telco said the service was to mitigate the impact of the one-month lockdown in three states and restricted movements in others as a result of the COVID-19 pandemic. The access enables customers to get new information they need that could help save their lives at no cost to their pockets.

They could also learn new skills while sitting at home.

The pre-selected websites on the service include Schoolgate; MobileClassroom; National Open University (a partnership with Federal Ministry of Education); KhanAcademy and Seesaw.

The pre-selected health websites include Mobihealth; World Health Organisation

(WHO); Nigeria Health Watch; Health; HealthLine; Nigeria Centre for Disease Control (NCDC); among others.

Abdulrahman Ado, executive director, Regulatory and Corporate Affairs at 9Mobile, said health and education were the two pillars of the company’s corporate social responsibility (CSR) programmes.

“As a responsible organisation, we felt the need to support the increasing recourse to online learning by a growing number of academic institutions during this period of lockdown.” Ado said.

Mobihealth International, one of the websites pre-selected by the telco, recently received support from 9Mobile to launch a free COVID-19 online screening and teleconsultation service for all Nigerians.

Mobihealth also provides free information on the virus on its network and has presented over 600 lines and free data access to the Nigerian Centre for Disease Control (NCDC).

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he national electricity grid system suffered collapse early Wednesday, but was restored shortly by the Transmission Company of Nigeria (TCN), leaving power generation at 2,983 megawatts afterwards.

The TCN disclosed this development in a statement Wednesday in Abuja, informing that the incident occurred at 1am, but could not immediately confirm the cause of the power loss.

Ndidi Mbah, general manager, public affairs at TCN, explained that the National Control Centre (NCC) of TCN in Osogbo commenced immediate restoration of the grid, which has been completed nationwide except for that

of the Eastern axis that was to be completed shortly as at when TCN announced the system collapse.

According to Mbah, “TCN would commence investigations into the cause of the supply loss as soon as full recovery is achieved.

We are committed to ensuring grid stability and consistent bulk power supply, especially at this time of the pandemic.”

Analysis of the power loss following the latest system collapse shows that 1,658mw has already been lost to the system disturbance.

The power grid is however expected to ramp up once TCN restores major transmission lines in the East; peak energy generation may return to the 4,000mw threshold.

FCMB rolls out support for Nigerians, customers amid COVID-19 pandemic SEGUN ADAMS

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CMB has undertaken several initiatives to assist Nigerians and support the government in tackling the spread of the coronavirus as well as managing the economic spillover of the pandemic.

The lender has announced payment moratoria during the pandemic period to its borrowing customers as one measure to ensure they can survive and continue to pay their workers, FCMB said in a note informing clients about the loan payment holiday on Wednesday.

“We are not only concerned about how the pandemic affects the Nigerian economy as a whole, but also its impact on you as an individual,” said the FCMB to its customers. “This is why we are doing all we can to support our customers, employees and communities at this time.”

FCMB joined the intervention initiative set up by the Central Bank of Nigeria (CBN), in partnership with the private sector, to assist the Federal Government to respond effectively to COVID-19, known as the Private Sector Coalition Against COVID-19 (CACOVID).

“The funds garnered will support households and businesses to mitigate the impact of the virus, through the building of isolation and treatment centres, providing personal protective equipment and distributing food to over 10 million of the most economically vulnerable Nigerians,” said FCMB.

The lender is also working with various charities and state governments to provide relief materials including Personal Protective Equipment for health workers and food items to sustain a large section of the population whose means of livelihoodhavebeenaffectedbyCOVID-19andtheprevalentlockdown.

FCMB is in partnership with the Ogun State Ministry of Health and 54gene, complementing the state’s effort to determine and mitigate the extent of the spread of the pandemic.

The bank has joined a coalition of partners led by Babban Gona to create Givefood.ng, an emergency food relief platform that is capable of getting over 1 million meals, donated by caring people, just like you, to those in need every week.

To help customers make productive use of their time under lockdown and empower them with the knowledge to deal with the challenges brought by the pandemic. The sessions it has organised include: Turning Covid-19 Challenges Into Opportunities; Economy Downturn Response and Surviving Today To Thrive Tomorrow, in collaboration with the International Finance Corporation (IFC).

FCMB has ensured customers are able to enjoy seamless banking services through all its ATMs and electronic banking channels (FCMB New Mobile, *329#, FCMB Online, Temi) and 24/7 Contact Centre, which is fully functional during the pandemic.

Rivers rounds up 150 for evacuation to Niger Republic, others Ignatius Chukwu

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ivers State government has made good its threat to expel homeless persons in the state regarded as vagrants by gathering 150 of such for onward movement to their home states.

The state government is carrying out the action through the Ministry of Social Welfare, who on Tuesday profiled and evacuated 150 homeless persons. Some of them come from Rivers State, too, but have no homes in the state capital.

Rivers State commissioner for social welfare, Inime Aguma, led other officials of the Ministry to profile all the vagrants before they were evacuated to their states and local government areas of origin.

The evacuation exercise is non-discriminatory programme @Businessdayng

aimed at protecting Rivers people, Aguma said, saying the exercise is not targeted at any ethnic group, but aimed at removing vagrants who may circulate coronavirus from the streets.

She noted that the right arrangements had been put in place to ensure that the vagrants were transported to their respective locations in dignity.

On Monday during a state broadcast, Governor Wike directed the commissioner to round up and deport all vagrants to their states of origin.

He had said: “We have also directed the Commissioner of Social Welfare to round-up and deport all vagrants, including the almajiris, to their states of origin to protect our people from the threat they present to the transmission of this pandemic”.

Thursday 30 April 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 29 April 2020

Top Gainers/Losers as at Wednesday 29 April 2020 LOSERS

GAINERS Company MTNN

ARDOVA UACN

Opening

Closing

Change

N104.9

N107.4

2.5

N9.55

N10.5

0.95

N6.2

N6.8

0.6

VITAFOAM

N4.51

N4.96

0.45

WAPCO

N11.2

N11.5

0.3

Company

Opening

Closing

Change

N2.39

N2.16

-0.23

N14.85

N14.7

-0.15

UPL

N1.05

N0.97

-0.08

CAVERTON

N2.35

N2.3

-0.05

N0.59

N0.55

-0.04

ETERNA ZENITHBANK

CORNERST

ASI (Points) DEALS (Numbers) VOLUME (Numbers)

22,868.40 4,464.00 277,429,181.00

VALUE (N billion)

2.548

MARKET CAP (N Trn)

11.91

Global market indicators FTSE 100 Index 6,115.25GBP +156.75+2.63%

Nikkei 225 19,771.19JPY -12.03-0.06%

S&P 500 Index 2,936.66USD +73.27+2.56%

Deutsche Boerse AG German Stock Index DAX 11,107.74EUR +312.11+2.89%

Generic 1st ‘DM’ Future 24,543.00USD +498.00+2.07%

Seplat reports N34.3bn pretax loss in Q1’20 ...says significant cash resources, others provide strong resilience to oil volatility Stories by Iheanyi Nwachukwu

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eplat Petroleum Development Company Plc, a leading Nigerian independent oil and gas company listed on both the Nigerian Stock Exchange (NSE) and the London Stock Exchange (LSE), has assured that its increasing revenue from gas, low oil price hedging and good cash standing, provide strong resilience to the current oil price volatility.

The first quarter financials show revenue of $130.5million in Q1’20 as against $159.5million same period in 2019, representing 18.2percent decline. In naira terms it is N42.4billion in Q1’20 against N48.9billion in Q1’19.

Gross profit was $33.1million in Q1’20 down from $81.4 million in Q1’19, representing 59.3percent decline. In naira terms it is N10.8billion in Q1’20 against N24.9billion in Q1’19.

The company reported operating loss of $77million in Q1’20 against operating profit of $32.5million in Q1’19, which implies 336.9percent decline.

In naira terms it’s operating loss was N25billion in Q1’20 against operating profit of N9.9billion in Q1’19. Seplat Q1’20 loss before deferred tax stood at $105.8million against profit before deferred tax of $35.8million in Q1’19, representing decline of 395.5percent.

In naira terms it the loss before deferred tax stood high at N34.3billion in Q1’20 as against profit before deferred tax of N10.9billion in Q1’19.

Austin Avuru, Chief Executive Officer, SEPLAT, was quoted in the release as saying that: “The business is hedged against low oil prices and a significant

proportion of our revenues now come from gas, which offers further protection from oil price volatility. The Company has low production costs and can remain profitable even at lower oil prices.

“We have significant cash resources available and will continue to manage our finances prudently in 2020, expecting now to invest US$120 million of capital expenditure across the year, including two new gas wells and associated infrastructure.”

The company’s cash at bank stood $336 million, net debt of $458 million; revenue of $130 million; non-current asset impair-

ment provision of $146 million in line with IAS 36 COVID-19 impact assessment; impairment provision reduces non-current assets from $2.34 billion to $2.20 billion and total capital expenditure of $46 million.

Seplat cash flow from operations stood at $65 million in Q1 2020.

On its outlook, Seplat expects production of 47-57 kboepd (including Eland 6-10kbopd) for full year, subject to market conditions; 1.5MMbbls/quarter hedged at $45/bbl from Q1 to Q3 2020; significant cash balance available; low cost of production enables profitability at levels below

current oil price; 2020 capex revised upwards to $120 million from $100 million, with two additional gas wells and related infrastructure.

The emergence of the COVID-19 pandemic in the first quarter of 2020, as well as pressure on oil prices in March, have placed a premium on solid financial management that focuses upon low-cost production, robust cash management, a strong balance sheet and focused investment in high-return projects for sustainable future growth.

At present the company is targeting 2020 production of between 47-57 kboepd, including Eland production of 6-10 kbopd, subject to continuous evacuation being possible.

This position is contained in the company’s unaudited results for the three months ended March 31, 2020 released to the NSE and LSE on Wednesday.

Avuru added: “Against the twin crises of significantly reduced oil demand and the price war, Seplat continues to demonstrate its resilience because of its ongoing philosophy of prudent financial management, the careful mitigation of risk and a keen focus on managing factors of the business that are within our control.

Market hits new high on investors interest in mid/large cap stocks

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igeria’s equities market continued on Wednesday April 29 to enjoy positive sentiment as buying interest in mid-to-large cap stocks pushed the market to new highs.

Topmost amongst the stocks that continued to attract buy sentiment is MTNN Plc. It increased most from N104.9 to N107.4, adding N2.5 or 2.38percent.

Analysts said the NSE sees renewed interest in recent sessions because investors are

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cherry picking on attractive fundamentally sound stocks with cheap valuations.

The market increased by 0.62 percent or N73billion at the close of remote trading session on the Nigerian Stock Exchange (NSE).

The market’s negative return year to date has moderated to -14.80 percent, aided by 7.36percent gain this month of April and 1.77 percent gain week-to-date. The NSE All Share Index (ASI) increased to 22,868.40 points from 22, www.businessday.ng

727.87 points recorded the preceding trading day. The value of listed stocks increased by N73

billion to N11.917trillion from N11.844trillion.

In 4,464 deals, investors

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exchanged 277,429,181 units valued at N2.548billion.

Eternal Plc recorded the highest decline after its share price moved from day open high of N2.39 to N2.16, losing 23kobo or 9.62percent. Amid this record positive, market watchers do not expect a different pattern on Thursday April 30 because a number of counters are still trading at discounts. Though, as Thursday is the last trading session of the month, the possibility of profit taking on gains made recently can not be ignored. @Businessdayng

Shanghai Stock Exchange Composite Index 2,822.44CNY +12.42+0.44%

Chi Limited provides support for COVID-19 relief efforts

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n line with its commitment to support the Federal and State Government’s response to the COVID-19 pandemic in Nigeria, Chi Limited has donated some of its products to the COVID-19 Presidential Taskforce and to several Isolation and Treatment Centers across States of the Federation.

The donation, which included 15,000 packs of Hollandia Evap Milk, will provide significant and much needed support in the fight against the virus. Hollandia Evap Milk provides the nourishment the body needs and is an essential requirement for both healthcare workers who are at the frontline tackling the pandemic, and patients undergoing treatment at this time.

Chi Limited expressed appreciation to healthcare professionals and other frontline workers for their tireless and unrelenting efforts in the fight against the COVID-19 pandemic.

As a responsible corporate citizen, the company is committed to providing healthy nourishment for frontline medical personnel as they work to make a difference in the lives of the Nigerian population.

Hollandia Evap Milk is fortified with nutrients such as Calcium and Vitamins D, B1, B6, and B12 which can help to boost the body’s immune system.

Also contained in the product are body building Proteins, Fats, and Carbohydrates. As medical experts have confirmed, having a healthy immune system is especially important to defend the body against viruses, bacteria and other illnesses.

Managing Director of Chi Limited, Deepanjan Roy, commended the Government, Health professionals, and other key stakeholders who have been at the forefront of combating the COVID-19 pandemic.

He noted that, “In the midst of this crisis, our frontline healthcare workers are being tasked like never before.

We commend and thank them for their dedication, commitment and relentless efforts at this trying time.”

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Thursday 30 April 2020

BUSINESS DAY

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Thursday 30 April 2020

BUSINESS DAY

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Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 29 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. 225,712.18 6.35 1.60 237 13,776,954 205,196.53 6.00 1.69 198 52,768,847 UNITED BANK FOR AFRICA PLC ZENITH BANK PLC 461,528.46 14.70 -1.01 468 21,721,284 903 88,267,085 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 165,118.35 4.60 3.37 399 56,621,529 399 56,621,529 1,302 144,888,614 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,186,074.70 107.40 2.38 156 2,429,478 156 2,429,478 156 2,429,478 BUILDING MATERIALS DANGOTE CEMENT PLC 2,215,265.96 130.00 - 249 2,878,553 LAFARGE AFRICA PLC. 185,239.65 11.50 2.68 227 9,377,009 476 12,255,562 476 12,255,562 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 290,926.99 494.40 - 5 365 5 365 5 365 1,939 159,574,019 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 - 0 0 0 0 0 0 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 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 52,512.75 55.05 - 21 237,830 OKOMU OIL PALM PLC. PRESCO PLC 36,450.00 36.45 - 11 104,510 32 342,340 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 - 4 166,500 4 166,500 36 508,840 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 198.47 0.51 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 27,234.15 0.67 -1.47 79 14,318,890 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 19,592.82 6.80 9.68 52 905,642 131 15,224,532 131 15,224,532 BUILDING CONSTRUCTION ARBICO PLC. 381.65 2.57 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 34,056.00 25.80 - 176 1,765,395 ROADS NIG PLC. 165.00 6.60 - 0 0 176 1,765,395 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,000.76 0.77 4.05 4 320,000 4 320,000 180 2,085,395 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 - 12 1,200 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 40,522.08 18.50 - 100 714,443 INTERNATIONAL BREWERIES PLC. 128,937.93 4.80 4.35 64 1,731,939 NIGERIAN BREW. PLC. 248,303.81 31.05 - 55 530,237 231 2,977,819 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 149,400.00 12.45 - 68 1,010,094 FLOUR MILLS NIG. PLC. 86,107.97 21.00 - 44 581,878 HONEYWELL FLOUR MILL PLC 7,930.20 1.00 - 2 1,215 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 3 NASCON ALLIED INDUSTRIES PLC 26,626.86 10.05 - 36 201,434 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 151 1,794,624 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 14,086.52 7.50 - 52 814,280 NESTLE NIGERIA PLC. 729,402.28 920.20 - 76 64,600 128 878,880 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 6,204.19 4.96 9.98 47 919,329 47 919,329 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 16,874.53 4.25 - 26 216,083 UNILEVER NIGERIA PLC. 60,322.56 10.50 - 39 192,401 65 408,484 622 6,979,136 BANKING ECOBANK TRANSNATIONAL INCORPORATED 82,572.98 4.50 - 51 4,155,313 FIDELITY BANK PLC 52,734.13 1.82 -1.10 86 8,057,084 GUARANTY TRUST BANK PLC. 620,997.88 21.10 0.48 540 22,325,792 JAIZ BANK PLC 16,205.34 0.55 - 6 205,018 STERLING BANK PLC. 36,851.74 1.28 -1.54 22 1,039,594 UNION BANK NIG.PLC. 196,565.08 6.75 - 7 33,343 UNITY BANK PLC 5,143.31 0.44 -2.22 29 1,968,245 WEMA BANK PLC. 23,144.68 0.60 -1.64 35 773,111 776 38,557,500 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 9,630.67 0.85 6.25 14 370,342 AXAMANSARD INSURANCE PLC 16,590.00 1.58 - 0 0 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 1 17,500 CORNERSTONE INSURANCE PLC 8,101.23 0.55 -6.78 12 388,870 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. 1,904.09 0.26 -7.14 33 23,946,743 LAW UNION AND ROCK INS. PLC. 4,296.33 1.00 - 4 142,500 LINKAGE ASSURANCE PLC 4,240.00 0.53 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 44,545 NEM INSURANCE PLC 11,617.11 2.20 - 9 235,500 NIGER INSURANCE PLC 1,547.90 0.20 - 1 90 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 2 1,000,000 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 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 2 24,654 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 - 6 40,244 85 26,210,988 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,858.30 1.25 - 1 36,000 1 36,000

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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 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,100.00 3.55 2.01 53 1,486,826 CUSTODIAN INVESTMENT PLC 33,820.72 5.75 - 5 300,040 DEAP CAPITAL MANAGEMENT & TRUST PLC 495.00 0.33 - 0 0 FCMB GROUP PLC. 33,664.61 1.70 -5.29 99 6,987,895 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 0 0 STANBIC IBTC HOLDINGS PLC 299,391.57 28.50 - 44 489,944 UNITED CAPITAL PLC 14,340.00 2.39 -0.42 83 4,084,425 284 13,349,130 1,146 78,153,618 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,030.41 0.29 - 0 0 0 0 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 - 2 12,000 GLAXO SMITHKLINE CONSUMER NIG. PLC. 6,397.94 5.35 - 42 616,502 MAY & BAKER NIGERIA PLC. 4,658.13 2.70 - 14 123,052 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,139.49 0.60 - 7 135,005 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 65 886,559 65 886,559 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 10.00 13 2,908,617 13 2,908,617 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 911.95 0.31 - 1 2,000,000 1 2,000,000 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 0 0 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 1,033.13 0.22 -4.35 17 566,995 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 17 566,995 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 1 5 1 5 32 5,475,617 BUILDING MATERIALS BERGER PAINTS PLC 1,941.82 6.70 - 21 156,022 BUA CEMENT PLC 1,117,523.68 33.00 - 62 633,399 CAP PLC 14,630.00 20.90 - 13 52,897 MEYER PLC. 265.62 0.50 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 96 842,318 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,113.59 1.20 - 5 53,443 5 53,443 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 1 157 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 157 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 102 895,918 CHEMICALS B.O.C. GASES PLC. 1,519.29 3.65 - 4 10,320 4 10,320 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 4 10,320 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 1 10,000 1 10,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 29,213.82 2.35 4.26 75 3,323,892 75 3,323,892 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 58,019.78 160.90 - 13 29,621 ARDOVA PLC 13,676.05 10.50 9.95 13 309,623 CONOIL PLC 12,074.77 17.40 - 11 13,420 ETERNA PLC. 2,816.95 2.16 -9.62 7 436,257 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 1 58 TOTAL NIGERIA PLC. 32,695.95 96.30 - 26 21,727 71 810,706 147 4,144,598 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 - 6 54,000 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 6 54,000 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 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 0 0 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 1 416 1 416 PRINTING/PUBLISHING ACADEMY PRESS PLC. 187.49 0.31 - 2 1,443,864 LEARN AFRICA PLC 794.59 1.03 - 0 0 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 418.47 0.97 -7.62 8 558,257 10 2,002,121 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 580.20 0.35 - 2 16,000 2 16,000 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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BUSINESS DAY Thursday 30 April 2020 www.businessday.ng

Changing Nigeria’s approach to industrialisation (1) Odinaka Anudu

I

n the last three to four decades, policy makers have adopted different approaches aimed at making Nigeria’s industrial sector competitive. But all of those approaches have either led to deindustrialisation or catapulted the economy into industrial backwardness. Perhaps, the very key question is, what is wrong with these policies?

This series will attempt to answer this question based on well-rounded researches, enlightened views of development experts and what works for a developing economy like Nigeria.

The first approach that Nigerian policy makers have adopted over the years is the use of bailouts and money to support companies. Struggling firms world over often need funding to remain afloat. The United States of America bailed out General Motors and several auto makers after the global financial crisis of 2008. General Motors and Chrysler were said to have got $9.4 billion and $4 billion respectively under the Emergency Economic Stabilisation Act of 2008. With the current coronavirus crippling economies and businesses, many firms are already being bailed out by governments around the world. This is, however, an emergency situation. Even in normal times, certain industries request bailouts and funds from the government to restructure or remain in the market. China is supporting a lot of companies in that category and is also funding firms wishing to invest in Africa.

The country has, for some time now, been spending 3.45 billion Yuan ($487.48 million) in 3,000 firms, mostly start-ups in emerging industries. Certain industries might require intervention due to issues relating to size of the firms, external shocks or some other reasons. No country in the world leaves its industries empty handed without some form of support. Germany has remained a European manufacturing giant because it set up a financial and institutional structure after World War II. This has supported many firms, enabling them to compete better in the global market.

But why is Nigeria’s case different? Answering this question requires examining industries that have so far been flooded with funds and the outcomes that have been recorded. And the textile industry comes to mind. During the military era, the country established the N100 Billion Cotton, Textile and Garment (CTG) to support textiles firms and save them from going into extinction. As of 2013, the Bank of Industry (BOI), which

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The understanding of experts is that when you provide money but fail to make the environment conducive for businesses, you are merely giving a Greek gift. Companies and farms get the money but die while paying back manages the fund, said that 60 percent of the fund had been disbursed. Olusegun Aganga, the then minister of industry, trade and investment, announced in early 2013 that 38 firms had benefitted from the fund.

The irony, however, is that as more money was being disbursed, more of the textile firms were shutting down. Grace Adereti, former president of the Nigerian Textile Manufacturers Association(NTMAN), said at an event in Lagos in 2018 that the country could only boast of two full-fledged textile firms.

Most of the firms that are called textile firms today are ginneries or companies producing caps, towels, sweaters and now face masks. But real producers of fabrics are lacking. The Federal Government is still approving money for many more firms today, but has that solved any problem?

It is worthy of note that Nigeria had over 180 textile mills in 1980s, which employed more than one million citizens. Some of the mills included: United Nigerian Textile Limited (UNTL), Aswani Textile, Afprint, Asaba Textile Mills, and Edo Textile Mills. But these firms are no more, despite billions pumped into the industry.

The federal government, through the Central Bank of Nigeria, is still supporting many firms and even recently set up an additional N50 billion intervention fund to facilitate the takeover of existing debt and offer additional long-term loans and working capital to existing

companies in the cotton, textile and garment sector.

As of 2016, N3.4 billion had been disbursed to local firms.

However, analysts have always pointed out that what the country has so far done is throwing money at a problem.

Is money or funding the biggest hiccup to the textile industry?

Is funding the reason why the big companies of the 1980s shut down?

Hamma Kwajaffa, directorgeneral of Nigeria Textile, Garment and Tailoring Employers Association (NTGTEA), once told BusinessDay that money was not the problem of the sector.

For him, the problem was smuggling/ unbridled importation of textiles into Nigeria.

The World Bank estimates that textiles valued at over $10 million are smuggled into Nigeria through Benin Republic annually.

Government has taken steps to checkmate smuggling in recent times, but the measure will not bring back more than 170 companies that have gone under.

However, smuggling or importation is not the biggest challenge of the textile industry. The elephant in the room is that the industry was never competitive.

Cost of production in Nigeria

has always been prohibitive.

Issues around high energy cost, multiple taxation, poorly skilled manpower and policy flip-flops have always been with Nigeria after the oil boom. Some of the companies survived due to government intervention, but went under when competition became tougher.

“The textile industry has been a beneficiary of several fiscal incentives and protectionist measures over the years, yet it has remained in stagnation,” Muda Yusuf, director-general of the Lagos Chamber of Commerce and Industry (LCCI), told BusinessDay in 2019.

“Some of them have even gone into receivership as they could not repay their loans. The lesson is that we should deal with the fundamental issues of production competitiveness in our economy. The textile industry needs to be saved from the excruciating burden of high operating and production cost,” he explained.

This sums up the major challenge facing the industry and many others, which are not being addressed holistically.

Also, policies were made in the textile industry without considering the competitiveness of the entire value chain—from the cotton farmer to the fabrics manufacturer. A former president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), who is now a governor of one of the northern states, once pointed out that the cottons supplied to ginneries were not supporting the textile industries.

According to him, lack of research and development in that area stalled production of many textile firms in the good old days.

Today, this situation continues to hurt the entire manufacturing sector. Policy makers are either focusing on end manufacturers or just farmers/ those at the other end. The thinking is to provide more money to farmers or give manufacturers more interventions without removing obstacles to competitiveness.

The understanding of experts is that when you provide money but fail to make the environment conducive for businesses, you are merely giving a Greek gift. Companies and farms get the money but die while paying back.

Nigeria can pick one or two lessons from Bangladesh. The once very poor country now earns over $30 billion annually from export of ready-made wears because of what experts call ‘convivial business environment’ with minimal government influence and low taxes, which helped to attract Chinese and Vietnamese firms to the once poor country.

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.