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CBN’s N50bn COVID-19 stimulus fund falls short against familiar foes T A

FG lifts interstate travel ban, reopens schools

LOLADE AKINMURELE

well-meaning initiative by Nigeria’s central bank (CBN) to soften the blow of the COVID-19 pandemic on households and small businesses has come up against all too familiar foes in dodgy execution and lack of adequate transparency, with several intended beneficiaries claiming the scheme has eluded them.

The CBN set up a N50 billion Targeted Credit Facility (TCF) in March that was supposed to be a lifeline in form of single-digit interest rate loans to households and small businesses whose Continues on page 29

As less than 3% of SMEs receive loans Stakeholders suggest ways to increase impact of fund

…domestic flights to resume as soon as practicable ...predicts figure may rise to 45,000 by end July Tony Ailemen & Innocent Odoh, Abuja he Federal Government has lifted the ban on movement across state borders effective from July 1, according to new protocols for tackling coronavirus issued on Monday by the Presidential Task Force (PTF) on COVID-19. But the interstate movement has to Continues on page 29

Inside L-R: Dupe Olusola, managing director/CEO, Transcorp Hotels plc; Emmanuel N. Nnorom, chairman; Chike Anikwe, company secretary (Ag.), and Owen Omogiafo, president/CEO, Transcorp plc, at Transcorp Hotels’ Extraordinary General Meeting held in Lagos, yesterday.

COVID-19: Nigeria to see higher testing numbers as Lagos taps 7 private labs P. 2

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Tuesday 30 June 2020

BUSINESS DAY

news MTN mobile money unit registers 1m South African users

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TN, South Africa’s secondlargest mobile operator, says its mobile money platform, MoMo, has registered more than 1-million users since its launch in February.

The company is attempting to tap the unbanked market in SA, which it has estimated at about 11 million. The service allows customers to send, receive and save money, as well as pay for goods and services using their phones.

On Monday, MTN said it had seen an increase in MoMo registrations and usage since the nationwide lockdown began in late March, “specifically in peer-to-peer remittances, with people sending money to family and friends”.

“Demand for value-added functionalities like purchasing prepaid electricity, and renewal of driver’s licence discs, has also picked up considerably,” the company said.

MTN first launched its mobile money platform locally in 2012 before pulling the plug in 2016 because of a lack of commercial viability as threequarters of the population has bank accounts.

Vodacom shut down its M-Pesa mobile money service in SA in the same year, citing similar reasons.

Thistimearoundtheoperator has partnered with financial services firm Ubank on the project.

The agreement allows Ubank to facilitate participation in MoMo, enabling customers and consumers to transact and make payments using the service.

MTN said it has added new features, including rewards for

those referring a friend, MoMo Pay for e-commerce and cashbackonairtimepurchases.Users willalsonowbeabletosendfood vouchers from retailers like Food LoversMarket,Makro,PicknPay and Shoprite/Checkers.

These new features will be available from the first week of July.

In a statement, Felix Kamenga, chief officer of MTN SA’s mobile financial services, said “We’ve facilitated more than 600 car licence renewals since the service reopened under revised lockdown level 3 regulations at the beginning of June, and we expect this to remain a key driver of growth as more people begin driving again and go back to work.

This is a clear indication that SA consumers are ready to embrace the digital world, with SA fast establishing itself as a primary hub for mobile money.

“We have an agreement with major partners to enable over 4,000 e-commerce websites that will accept MoMo as a payment method.”

“We expect the overall list of partners to grow to over 30,000 sites over the next several months,” he said.

MTN grew its fintech revenues by 27% in 2019 to R10.1bn, with 35-million MoMo users in about 16 countries, including Nigeria.

The operator is hoping to achieve some of that revenue growth in the local market, having processed a total of $96.1bn in transactions on the platform in the 12 months to end-December. By the first quarter on 2020, users had grown by 400,000.

COVID-19: Nigeria to see higher testing numbers as Lagos taps 7 private labs MICHAEL ANI

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igeria is expected to record a milestone in its testing capacity for coronavirus as the Lagos State government last week onboarded seven private laboratories to help upscale testing, a key factor in the fight against the novel virus.

Lagos, Nigeria’s commercial city, has been the state with the highest number of confirmed cornavirus cases in the country, with the government fighting tooth and nail to contain the spread of

the virus.

But for the state’s low testing capacity as a percentage of its huge population, not much has been achieved in its fight against the pandemic, with the state still recording daily infection of over 100 cases.

With a population that is over 20 million, the state has managed to achieve a test that is slightly over 35,027.

That’s over eight times less when compared with the over 288,465 total tests conducted by Ghana, a country with roughly similar size as Lagos, data from WorldOmeter show.

After much ado, the state government has finally adhered to recommendations from both health and economic experts who have continued to put the government on its toes on the need to include private sector players to assist in ramping up testing.

For the experts, increasing testing would help the government to quickly identify and isolate those infected with the virus to avoid spread to other members of the community.

On June 26, about four months after the index case of the virus was reported, the state government announced

the inclusion of seven private laboratories to add to its four public laboratories which it has used from the outset to test for the virus.

In a document seen by BusinessDay which originated from the office of the state’s health commissioner, the government named the seven private laboratories as Total Medical Services, Synlab, 54 Gene, Medbury Medical Services, 02 Medical Services, and Clina Lancent Laboratories.

These seven private labs which are expected to com-

Continues on page 29

L-R: Hadi Sirika, minister of aviation; Sani Aliyu, coordinator, Presidential Task Force on COVID-19; Olorunnibe Mamora, minister of state for health, and others, during a dry run simulation exercise at domestic terminals of the Nnamdi Azikiwe International Airport, Abuja.

Bloated personnel cost exposes NNPC’s bleeding refineries

COVID-19 drug, Remdesivir, to cost average loss per employee N1m per treatment, says manufacturer ... Record N94.18m For the year ended Decem- as wage costs are higher than with the highest-paid director

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ays after the world registered 10 million confirmed cases of coronavirus and it emerged that the test positivity rate in the commercial capital of Lagos was a high of 27 percent, the global drug maker, Gilead Sciences, said it would charge the US government and other developed countries $390 per vial for its coronavirus-fighting drug Remdesivir.

At that rate, it will cost about $2,340 or N980,440 for a typical five-day course of treatment.

The company has not yet said how much it would charge governments in less advanced countries like Nigeria for the drug which has won acclaim from health officials but is yet to gain final approval for commercial sale.

Remdesivir is one of the first widely used drugs for COVID-19. It received an emergency use authorisation from US regulators in May, after a trial found the medicine hastened recovery by about four days in hospitalised patients.

It is currently being used on compassionate grounds in the US and some other countries.

The makers say it is capable of reducing hospitalisation by four days but access to it will still be controlled by the US government until supply is less constrained.

Deaths from the virus surpassed 500,000 worldwide and confirmed cases exceeded 10 million as the World Health Organisation reported the most infections for a single day.

In Nigeria, where no more than 130,000 coronavirus tests have been concluded, there are now 24,567 confirmed cases. This indicates a test positivity rate of 19 percent.

But this rate is at 27.1 percent in the epicentre of Lagos.

New clusters around the world indicate that the pandemic is far from over.

The infection is spreading aggressively in Africa’s most populous country and doctors are warning that peak infection could still be four to six weeks away.

www.businessday.ng

BALA AUGIE & DIPO OLADEHINDE

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or most oil-producing countries, the business of refining crude oil is not only a means for reducing capital flight but also for improving economic performance, but in the case of Africa’s largest oil producer, refineries are more of a drainpipe and a means of enriching few individuals at the detriment of over 200 million people.

If Nigeria’s largest refineries were owned by investors or shareholders, they would have been liquated or disposed of as most investors have zero tolerance for gross inefficiency and wastefulness.

They believe every naira spent on a company should generate higher returns in form of bumper dividend and share appreciation.

However, the government is not a good manager as it is spending taxpayers’ money in maintaining and training staff at refineries that are moribund and recording hundreds of billions of losses.

ber 2018, Nigeria’s refineries under the management of the Nigerian National Petroleum Corporation (NNPC) recorded combined losses of N154.64bn despite having staffs under huge salaries and wages.

To assess a company’s efficiency with its employees, most companies use Net Income Per Employee (NIPE) ratio. NIPE is a company’s net income divided by the number of employees. Theoretically, the higher the net income per employee, the better.

For NNPC, rather than having Net Income Per Employee, the state behemoth recorded loss per employee.

Nigeria’s three largest refineries – Port Harcourt Refining Company Limited, Warri Refining and Petrochemical Company Limited, and Kaduna Refining and Petrochemical Limited – recorded average cumulative loss per employee of N94.18 million as at December 2018.

Perhaps more worrisome is that workers at the refineries are surplus to requirements

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revenues, compounding the woes of businesses that have become a wildcat.

The refineries employed 1,639 staff and had a combined total personnel cost of N46.26 billion, leaving their cost per employee at N28.83 million. This means on average a worker earns N28.83 million in refineries that have not produced a drop of refined product in eight months.

They also incurred a total expense of N160.14 billion as at December 2018, which is 110 times revenue.

For proper context, analysis of the financial statement showed that 210 directors at the Kaduna Refinery received over N15 million each as salaries in 2018, which translates to a total of N3 billion, despite the non-functionality of the refinery. It is also an increase from 127 directors that received above N15 million each in 2017.

The report showed that the four directors earned between N10 million and N20 million in both 2017 and 2018, @Businessdayng

earning N33 million in 2018 and N27 million in 2017. The four directors, according to the report, include the managing director, Ladenegan Solomon; executive director (operations), Tsavnande Atghir; executive director (finance & accounts), Chinwe Eunice, and executive director (services), Abdullahi Idris.

The sharp increase puts forward transparency and accountability issues in the recruitment process. The inclusion of 80 highly paid directors to the Kaduna refinery’s account poses a shocker on the fiscal responsibility of the government. In total, N23.3 billion was spent on salaries and wages.

Despite having zero revenue, Kaduna refinery recorded staff training expenses of N447.8 million, local and international travels of N662.2 million, security expenses of N230.5 million, communication expenses of N37.3 million, and consultancy fees of N843 million, according to the audited 2018 account.

Tuesday 30 June 2020

BUSINESS DAY

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news

N-Power’s 1m applications in 48hrs indicate Nigeria’s unaccounted unemployment numbers ENDURANCE OKAFOR

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ore than one million applications were received in less than two days after the online portal for the recruitment of the third batch of N-Power; a youth empowerment programme, was opened June 26, 2020.

W h i l e t h e j o b c re at i o n scheme, which comes with a monthly stipend of N30,000 ($98), will only absorb 400,000 unemployed graduates, the more than 600,000 applicants show the high volume of the country’s unaccounted unemployment numbers.

“Barely 48 hours after it was opened, the online portal for the recruitment of the third batch of N-Power enrollees witnessed over 1,000,000 applications,” Bashir Ahmad, personal assistant on new media to President Muhammadu Buhari, said in a tweet on Monday.

Set up in 2016, the job creation and skills empowerment programme of the Federal Government, N-Power, which the Federal Government says is designed to help young Nigerians acquire and develop life-long skills that will make them practical solution providers in their communities, has weaned off the first batch of 500,000 volunteers and plans to terminate its engagement with the second batch in August 2020.

Meanwhile, Nigeria’s unemployment figures have remained unknown for almost two years as the last labour statistics report was published by the National Bureau of Statistics (NBS) in the third quarter of 2018.

Going by NBS calendar, the state-funded bureau has failed to publish Nigeria’s unemployment data at least three times since the last report of 2018.

A top executive from the statistics office told BusinessDay in March 2020 that the bureau had been unable to publish the data due to lack of funds.

“Not every report we publish requires funds or a lot of funds, so some can be easily published unlike the unemployment data that involve surveys and fieldwork,” the source said.

While NBS is scheduled to release Q1 and Q2 2020 labour statistics on August 31, 2020, the latest report by the bureau shows Nigeria’s jobless rate was at a record-high of 23.1 percent in Q3 2018. The country’s unemployment rate embarked on an upward spiral in 2015 after a decline to 6.4 percent a year earlier.

Labour force statistics are considered by economists as an important economic and social indicator used in the analysis, evaluation, and monitoring of the economy; the labour market, and a wide range of government policies.

Ayorinde Akinloye, an analyst at Lagos-based CSL Stockbrokers, says unemployment and job creation are one of the most important lagging indicators for an economy, as they explain how well hiring and job creation are following an economic downturn or upturn.

“Also, it gives a gauge of how strong the average consumer is.

Not having this data limits such insight on economic activities as well as consumer strength,” Akinloye said.

Arewa24 celebrates sixth anniversary with slate of new shows

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rewa24, a Hausa language entertainment and lifestyle TV channel and production studio in Nigeria and West Africa, announces a major slate of new and exciting shows to coincide with the company’s sixth anniversary.

Since its launch in 2014, AREWA24 has consistently produced high-quality programming that provides an authentic Northern Nigerian voice for its audiences and reflects the region’s pride in local culture, arts and lifestyle for Hausa speaking families everywhere.

AREWA24 will debut a gripping new drama series, “Labarina,” from the well-known and highly respected Hausa director, Aminu Saira, beginning in July. Additionally, viewers will be treated to a new Season-2 of the popular hit comedy series, “Gidan Badamasi.”

The network will also premier all new episodes of the longestrunning drama series in Northern Nigeria, “Dadin Kowa” and AREWA24’s other blockbuster hit drama series, “90 Days.” AREWA24 continues to air the most recent and popular Kannywood movies and has licensed a collection of new movie titles that will be rolled out in the weeks and months ahead.

In the important children’s and youth categories, AREWA24 has teamed up with the iconic children’s show, Sesame Street, to present a Nigerian version of the show, “Dandalin Sesame,” featuring all of the show’s lovable characters, but in a Nigerian cultural context and all in Hausa.

AREWA24 will also debut a new and highly-acclaimed kids’ educational show, “Akili and Me,” from the same producers as the popular youth

show, Ubongo Kids, which currently airs on AREWA24. Rounding out the slate of new youth shows are “My Better World,” an animated series that follows the exciting adventures of six African teens as they navigate the complex challenges of school, family and friendship, and “The 77%”, a gritty, street-relevant youth magazine show about the 77% of Africans who are under the age of 35 and who will be shaping the Continent’s future.

“Sesame Workshop is proud to partner with AREWA24 to deliver Sesame Street programming that was developed locally to meet the specific educational needs of children in Nigeria. We look forward to a successful partnership with AREWA24 and to Dandalin Sesame continuing to bring laughter and learning in the Hausa language for many years to come,” said Danny Labin, Sesame Workshop’s Vice President of International Social Impact.

In the lifestyle category, AREWA24 is also debuting “Jakadan Arewa.”

Jakadan Arewa is a travel, lifestyle and profile show featuring Hausa personalities, musicians and communities in other African countries and beyond.

“There is no better way to celebrate our sixth anniversary than to treat our viewers to a special collection of new Hausa dramas, kids and youth shows and other familyfriendly entertainment programs that anchor our lineup,” says John Ekainu, AREWA24’s Studio General Manager. Ekainu adds that “all of these new shows will be available on the company’s global subscription streaming service, “AREWA24 On Demand,” reaching Hausa speakers around the world.” www.businessday.ng

R-L: Babajide Sanwo-Olu, governor, Lagos State; Olabisi Ariyo, chairman, Teaching Service Commission; Folasade Adefisayo, commissioner for education; Ibijoke Sanwo-Olu, first lady, Lagos State; Oluremi Hamzat, wife of deputy governor, Lagos State; Falilat Obasa, wife of the speaker, Lagos State House of Assembly, with some students, during the presentation of transistor radios, face masks and cash donation to the Ministry of Education by Committee of Wives of Lagos State Officials (COWLSO) held at State House, Marina on Monday, June 29, 2020.

Buhari flags off construction of nation’s most ambitious gas pipeline project Olusola Bello & Adeola Ajakaiye, Kano

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resident Muhammadu Buhari will today flag off the construction of the nation’s most ambitious gas project pipeline in recent time, the Ajaokuta-Kaduna-Kano (AKK) gas pipeline.

The flagging off of the $2.8 billion gas project at Ajaokuta, Kogi State, will be turning to reality some of the nation’s long-term economic aspirations of boosting domestic energy infrastructure, deepening the local gas market, creating industrial corridors with cleaner fuel, and commercialising the country’s abundant gas resources.

According to the Nigerian National Petroleum Corporation (NNPC), the project will significantly curb gas flaring in the Niger Delta and guarantee better air quality in the oil producing region.

The Oilserv and CFHEC consortium is slated to deliver the first 200-kilometre phase of the AKK pipeline, which covers the sec-

tion between Ajaokuta and Abuja, after securing the EPC contract in April 2018.

Emeka Okwuosa, group chairman of Oilserv Limited, says in a statement that the project is not just a significant infrastructure development for the domestic economy but also a powerful spur to local industrial capacity and technical expertise.

Nigeria’s Presidency had confidently asserted that, the AKK “pipeline project is itself a section of an ambitious pipeline project to supply gas to Europe through the proposed Trans Sahara Gas Pipeline (TSGP) and Nigeria Morocco Gas Pipelines.”

Thus, in the short term the AKK will ensure energy sufficiency for domestic commerce and industry, and in the long term, having deepened and satisfied domestic demand, morph into an export pipeline and economic mainstay.

The AKK project, when com-

pleted, offers enormous economic and social benefits to the nation, and will unlock 2.2 billion cubic feet of gas to the domestic market, support the addition of 3,600 megawatts of power to the national grid and revitalise textile industries that alone boasts of over 3 million jobs in parts of the country.

In addition, the AKK project will support the development of petrochemicals, fertilizer, methanol and other gas-based industries that will generate employment and facilitate Balanced Economic Growth.

The project will also facilitate the development of three base Independent Power Plants (IPPs) in Abuja (1350mw), Kaduna (900mw) and Kano (1350mw), and steer the development of gasbased industries along its corridor and beyond.

Other values envisaged from the project include: multiplier effect in the local content circles, cleaner environment for the host communities, accelerated tech-

nical growth, direct citizen utility, industrial convenience, and of course, general broadening of the economy.

The Ajaokuta, Kaduna and Kano gas project is a component of the Nigerian Gas Master Plan (NGMC), a gas infrastructure blueprint, approved by the Federal Executive Council in 2008, but has received serious attention of the Buhari administration. The other major domestic gas transmission systems are: The Western System, that is, the existing 36’ EscravosLagos Pipeline I and II with 2.2 billion cubic feet capacity and the ongoing East-West connection via the Obiafu/Obrikom-Oben Pipeline (OB3) featuring 2.4 billion cubic feet per day capacity.

The 614-kilometre gas pipeline conceived to provide the highly desired stimulus to domestic industrial growth will be delivered by a consortium of indigenous and international engineering firms.

This project will also signal the finest hour so far for the Nigerian Content Policy goals.

Lagos to build Int’l infectious disease research centre at Yaba

FAAN increases passengers service charge by 100%

... gets new 150-bed solation centre

Gift Wada, Abuja

Joshua Bassey & Anthonia Obokoh

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overnor Babajide SanwoOlu of Lagos State has disclosed plans to construct a purposeful built international infectious disease research centre at the existing Mainland Infectious Disease Hospital, Yaba.

The research centre, apart from enhancing the capacity of the infectious disease hospital, will also better position the state to respond to any outbreak of an infectious disease in post Covid-19 era.

The centre, Sanwo-Olu said, would be complemented by doctors’ quarters and permanent isolation wards to ramp up capacity for infectious disease as part of the global master plan for the Mainland Infectious Disease Hospital.

The centre is being planned, as the state has received a newly constructed 150-bed isolation centre to accommodate increasing number of Covid-19 positive

cases in Lagos. The facility has been donated by the Private Sector Coalition Against COVID19 (CACOVID).

“Our infectious disease hospital is seeing a lot of brand new things coming up and we have committed that this hospital post COVID19 would see a purpose built international infectious disease research center; the designs are out already.

“We will also be building a purpose built isolation wards; we will ramp up our infrastructure and capacity and not wait for a pandemic to come on us again. We will be building doctors’ quarters in this facility as part of our global plan for the Yaba Infectious Disease Hospital,” said Sanwo-Olu. While commending CACOVID for donating the 150-bed isolation, Sanwo-Olu noted that the facility would add to the state’s capacity and enable it do a lot more in the battle against Covid-19.

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he Federal Airports Authority of Nigeria (FAAN) has increased the Passenger Service Charge (PSC), payable by air travellers on local and international flights by 100 percent. FAAN said the implementation commences on August 1, 2020.

With the implementation, air travellers on regional routes, long and international routes would pay the sum of $100 as against the previous $50 as PSC, apart from the airfares.

FAAN in a letter signed by Rabiu Yadudu, its managing director, declared that the increment was approved by the Minister of Aviation. The letter, which was sent to the chairman, Airline Operators Committee with the reference number Ref: FAAN/ HQ/MD/1BE/Vl.8672, dated June 22, 2020, stated that the approval was given on August @Businessdayng

3, 2017 and was sought with the intention to improve and upgrade the airports infrastructure among others.

The letter in part reads: “Some of the engagements are as follows: Setting up of an inhouse committee to come up with strategies for the smooth implementation, sensitisation of the general public, engagement of stakeholders airlines and others.

“It is pertinent to mention that the cap on the value of the PSC is simply outdated as the last review of PSC on domestic route from N350 to N1000 and from $35 to $50 on the international route was on May 1, 2011 and 21 March 2011, respectively.

“This does not coincide with the prevailing economic situation and the index to meet the needs of today and future growth in passenger traffic and airport development, most especially for the airport to upgrade to post Covid-19 standards.”

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Tuesday 30 June 2020

BUSINESS DAY

news

ANALYSIS

5 lessons to learn from Malawi’s fresh presidential election Don Deya

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here are many lessons to learn from the recent historic presidential elections in Malawi and the swearing in of the opposition candidate Dr. Lazarus McCarthy Chakwera, the first time an opposition candidate has been sworn in Africa following a court-sanctioned poll.

•THE PEOPLE: Malawians showed tenacity and unwavering commitment to fighting against the stealing of their votes. Their resilience is unmatched. For close to a year, the people fought on the streets to protest protested the theft of their vote, without ever giving up. In Africa, we are not often exposed to that kind of longevity in principled protest, although it is by no means the first or the only example.

• THE MILITARY: The military in Malawi was consistent in demonstrating fidelity to the Constitution of the Republic, above their loyalty to the Commander-in-Chief. They stepped in, way back in 2012, when the outgoing President, Prof. Peter Mutharika and his cabal had tried to subvert the Constitution upon the death of his older brother, President Prof. Bingu wa Mutharika (who, by the way, is believed by some to be the first person to write a doctoral thesis on regional integration in Africa). They have also stepped in, over the last year, to protect the peoples’ right to peaceful protest, when it was under threat by the Police. They were there again ago as they stepped out to guard the President-elect, and to demonstrate that power had shifted, due to the actions of the people of Malawi, despite COVID-19.

•THE COURTS: The justices and other court officials displayed independence and courage that is rare, amongst their peers on the continent.

Picking the baton from their Kenyan counterparts (some would argue their Sierra Leonian counterparts too), the justices in Malawi annulled a flawed election first at the High Court level, and which was later affirmed by the Supreme Court of Appeal. The justices issued two Stay Orders, on a Sunday, within minutes of filing, in Lilongwe and Mzuzu, when the out gone President and his minions purported to send the Chief Justice on terminal leave, on the eve of a fresh presidential election, ostensibly to ‘pack’ the Court with pliant and compliant Judges. Some in Malawi have said that their Nigerian counterparts were neither as fast nor as resolute when government officials in Abuja did the same, on the eve of the February 2019 presidential elections in Africa’s most populous country.

Again, we have to honour the dynamism and alacrity of the Malawian people, especially their human rights lawyers and the Malawi Law Society leader-

ship, in filing the two urgent applications (both drafted in less than 20 hours) that led to the Stay Orders in the first place.

•THE ELECTION MANAGEMENT BODY (EMB): After a dishonourable display under the leadership of my friend, Dr. Jane Mayemu Ansah, a change in leadership late in the day brought about a great leap in integrity in managing elections in the country. The short preparation period, the COVID-19 and other logistical challenges did not deter them from delivering an election with the highest integrity that they could muster, in the circumstances. It shows that leadership and integrity is everything, and ‘logistical challenges’ are over-rated fabrications by those who steal on behalf of those in power, and those who provide the intellectual ‘cover’ for it. It helped that the Malawi Constitution constrains the President on who he or she can appoint to head the election management body; it is not a free-for-all, like we see in some other countries. This mattered a great deal.

•AFRICAN SOLIDARITY: Overtly and covertly, there was a significant amount of solidarity generated for our Malawian colleagues, within a very short time. I was witness to, and small player in, some of the citizen solidarity efforts. And we all witnessed a lot more. Two that stand out for me is how serving and retired African Chief Justices and Judges rallied to practically and prominently support their Malawi counterparts. Also, how young and old, female and male African law professors openly rebuked their former colleague, the former Professor of Law, Arthur Peter Mutharika.

It mattered. It matters. I hope we see more of this, all over Africa, in the near future.

A lot can be said about opposition unity, which reminds me of a halcyon moment in Kenyan politics in 2002, when opposition unity helped to ‘retire’ Mzee Daniel Toroitich Arap Moi, and put paid his plans for his then ‘project.’ I wonder who, between him and the people of Kenya, has had (or will have) the last laugh on that ‘project.’

FINALLY It is not yet Uhuru in Malawi or the rest of Africa. There are still risks. We all witnessed the swearing which passed smoothly and safely despite the fears people had. Now that he has taken power, will Dr. Lazarus McCarthy Chakwera turn into a theocratic demagogue, spewing forth HIS view of what HIS Lord has told him to do with HIS country? Will the military stay in the barracks and stay out of day-to-day politics?

To manage all these, and to protect their democracy, I choose to trust the Malawian people, with whom I started, and with whom I end these preliminary thoughts. Solidarity forever!

Deya is CEO at Pan African Lawyers Union, Tanzania. www.businessday.ng

Businesses, KEDCO set for collision over move to implement new electricity tariff Adeola Ajakaiye, Kano

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usinesses in the commercial city of Kano are set for a showdown with the Kano Electricity Distribution Company (KEDCO) over the new electricity tariff the company is set to commence its implementation on Wednesday.

The main issue fuelling misunderstanding between the two groups is what is seen by most businesses in the state as the general lack of clarity in the process leading to the new tariff regime KEDCO is set to implement.

The management of the distribution company has since begun its readiness to commence the implementation of the revised electricity tariff, assuring that the new initiative will guarantee quality services, improved power supply, availability, and reliability across Kano franchise areas.

According to the company,

the ‘Services - Reflective Tariff’ is based on guaranteed hours of the power supply that will eventually deliver higher hours of quality service delivery, and will ensure that all our customers get maximum satisfaction from KEDCO. The Nigerian Electricity Regulatory Commission (NERC) had earlier approved April this year as the implementation date for the new tariff regime by the 11 electricity distribution companies across the country, but the implementation was later shifted to July as a result of public outcry.

Latest data obtained by BusinessDay indicate that the DisCos have been experiencing tariff shortfall to the tune of about N545 billion since the beginning of the year, a development that is triggering the zeal for the implementation of the new tariff by the companies.

However, most business owners in Kano say they have not been fully consulted about the implementation of the new

tariff by the management of KEDCO, an indication that the implementation of the tariff might not enjoy an easy sail in the state.

Responding to BusinessDay’s inquiry on the preparedness of businesses in the state to for the implementation of the new tariff, Suleiman Umar Tofa, managing director, Tofa Textile, one of the medium-scale textile manufacturing companies, disclosed that most businesses in the state were in the dark about the policy.

Suleiman, who was the immediate past chairman of the Bompai branch of the Manufacturers Association of Nigeria (MAN), noted that industrial consumers of electricity in the state want an explanation on how the DisCos intend to go about it.

“As, I am talking to you now, the management of KEDCO is yet to consult with the industrial consumers, like us, on the issue of the new tariffs. We are only just hearing of the proposed tariff

hike in the news, like any other stakeholder.

“We need to be carry along, so as to assure us on what will happen if the company is unable to deliver on the promise made on performance. Some of the questions agitating our minds are what the company failed to deliver or it is delivering power that is below the quality require to run our plants”, he pointed out.

KEDCO in a document obtained by BusinessDay stated that the Services- Reflective Tariff to be implemented is based on guaranteed hours of power supply that will eventually deliver higher hours of quality service delivery which will ensure that all our customers get maximum satisfaction.

In the document signed by Ibrahim Sani Shawai, head, Corporate Communications of the company said that consumers currently enjoying higher hours of supply are expected to pay more, to commensurate with the hours of supply.

L-R: Othman Sankari, brand director, Domino’s Pizza; Lanre Mojola, director general, Lagos State Safety Commission; Ilyas Kazeem, marketing director, Eat’N’Go Limited, and Elo Okinedo, quality, health, safety and environment manager, during the Verification of safety measures and protocol by LSSC, which took place recently at Domino’s Pizza outlet in Ikoyi, Lagos.

Why Lagos health insurance scheme delays take-off JOSHUA BASSEY & Anthonia Obokoh

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cting general manager of Lagos State Health Management Agency (LSHMA), Emmanuella Zamba, has explained reasons why the Lagos State Health Insurance experienced delayed takeoff after launch in 2018.

Zamba told BusinessDay that the need to capture the bio-data of would-be beneficiaries, generate policy identification for every enrollee, among other factors, combined to slow down the take-off of the scheme, especially for the public sector.

Her explanations came as some teachers in Education District 5, comprising Ojo, Amuwo-Odofin, Ifelodu-Ajeromi and Badagry, in the employ of the state government complain they have been unable to access healthcare services provided via the scheme despite deductions from their salaries.

According to the teachers, the state government commenced deductions from their salaries into the scheme in November 2019.

But till date, they have been unable to access healthcare through the scheme in any registered health

facilities due to the absence of means of identification.

One of them, who teaches at Navy Secondary School, owned by the Lagos State government, on Old Ojo Road, lamented an out-ofpocket expense of N60,000 last week for the treatment of his wife and first son, who became ill at the same time.

But Zamba disputed the teachers’ claims, saying the state government only recently commenced the scheme for civil servants in June 2020, while the premium payment started in May 2020.

She advanced her position with a circular issued on May 15, 2020 and signed by the state Head of Service, Hakeem Muri-Okunola, which read: “Further to the Head of Service Circular Ref. No.: CIR/HOS/’18/ VOL.1/096 of 12th December, 2018 on deduction of premium for the Lagos State Health Scheme (LSHS), it is hereby notified for general information that the monthly instalments of the 25% premium/annum deductible from staff salaries will commence with effect from May, 2020, while public servants and their dependants can access healthcare from their chosen hospitals with effect from 1st June 2020.”

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RMB Nigeria economic and business conference goes digital

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MB Nigeria (RMBN) is taking its flagship Economic and Business Conference online from Tuesday, June 30 to Thursday, July 9, 2020. The ongoing pandemic requires businesses to be innovative, both in response to the challenges posed by COVID19and how to practically do business now and in the future.

Thewebinars will interrogate the realities of the present business and economic challenges, offering a holistic approach to navigating this cycle by promoting innovation and agility.

Business sustainability is to a large extent dependent on flexibility and the ability to adapt quickly to the constant changes in the macro and business environment. As organisations around the world grapple with the effects of COVID-19, RMBN has analysed the economic landscape and created detailed webinars relevant to its clients across different segments.

RMBN will be holding a webinar on each of the following topics: Digital Transformation: Building change into our DNA; @Businessdayng

Turbo charging Beneficiation and Value Addition; Risk Management and Diversification in a VUCA environment. And The West African Investment Landscape Each topic will be discussed by a diverse panel of industry experts over the course of90 minutes. The sessions will give participating investors, corporates and policymakers the opportunity to engage deeply on the subject matter.

The RMBN Economic and Business Conference webinar series will be available on Webex, which is free to use, and registration details are available on their website.

COVID-19 presents challenges, but also opportunities to recalibrate. It is a time to engage dynamically on what’s next and connect broadly on how to forge a path forward.

RMBN looks forward to engaging with attendees on these important issues through the digital sessions.

RMB Nigeria is a subsidiary of FirstRand, one of the largest financial services groups in Africa.

Tuesday 30 June 2020

BUSINESS DAY

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news

Whistle blowering policy: FG only pays for funds recovered - Malami Felix Omohomhion, Abuja

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ffice of the AttorneyGeneral of the Federation and Minister of Justice only pays whistle-blowers after successful recovery of the loot, as mere tracing or exposure of suspected illegitimate funds does not qualify for payment until the said loot is fully recovered.

Umar Jibrilu Gwandu, special assistant on media to the minister of justice, Abubaksr Malami, discloses this in a statement.

This was the minister reaction to a story published in a newspaper on a pretext of a letter allegedly by one Aliyu Lemu, purportedly written on June 22, 2020, on issues surrounding payment of a whistle-blower’s fees.

“The Office of the AttorneyGeneral of the Federation and Minister of Justice wants to make it categorically clear that one does not get payment on account of exposing looted assets, but on successful recovery and lodgment of same into the designated assets recovery account at the Central Bank of Nigeria,” the

statement notes According to the minister, the procedure for engagement of a whistle blower or recovery agent as it relates to the Office of the Attorney-General of the Federation, include submission of proposal to the Office of the Attorney-General of the Federation; a letter of engagement is issued to a whistle-blower of recovery agent where the disclosure is assed to have some prospects of success; and the recovery agent or whistle-blower is expected to notify in writing the acceptance of the engagement.

Other procedures demand that the recovery agent or whistle blower is expected, upon acceptance, to not only trace the assets but recover same and have it re-posited in a designated asset recovery account maintained by the Federal Government of Nigeria in the Central Bank, which is usually provided to the recovery agent in writing.

At the end where these funds are eventually claimed to have been lodged by a whistle-blower or recovery agent, the Central

Bank issues acknowledgement of receipt of the fund to the Office of Attorney-General on demand. It is the satisfaction of the above elements that entitles the whistle-blower or a recovery agent to a claim of success fee and the payment is usually effected by the Federal Ministry of Finance and not the Office of the Attorney-General of the Federation.

The role of the Office of the Attorney-General, according to Malami, is simply that of processing the above listed documents to the Ministry of Finance saddled with the responsibility of effecting payment.

Malami explains further that recovery is not about exposing the existence of certain assets in an account purported to have belonged to an agency of the government, it is about establishing that the funds in the account are looted assets or illegitimately warehoused and following that up with actual recovery and lodgment of the funds in the designated Asset recovery account through judicial and extra-judicial means.

Financial experts call for re-organisation of Nigeria’s market architecture … warn against unregulated financial institutions BUNMI BAILEY

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takeholders in the Nigerian Capital Market, asset management and banking industries have called for a rethink of the nation’s economic philosophy and a reset of the financial market architecture.

This was part of the major takeaways from the virtual event themed “Zimvest Economy Conversations”, a thought-leadership series of d-igital private wealth and investment management firm, Zedcrest Investment Managers – Zimvest, held recently.

Delivering the opening remark, Gbenga Adigun, business head of Zimvest, states that investors are gravely concerned with investment returns in light of the current low yield environment, while financial institutions are thinking of how their product development and service delivery should evolve with the changing needs of investors.

Bola Onadele Koko, CEO of FMDQ Group, while delivering

the keynote speech on the event theme “The Economic Landscape and Investor Preferences in Postpandemic Africa”, talks about the toll the growing pandemic has had on African markets.

He lays emphasis on the slowdown in key segments of the economy, including the financial markets, tourism, remittances and foreign direct investments. He calls for a rethink of Nigeria’s economic philosophy with clarity from the fiscal policymakers, which will be critical for gaining investors’ confidence.

According to Koko, “Now is the time to develop new and ingenious ways to develop and drive the Nigerian financial market and in the continent at large. Private capital will especially be more essential as recent shocks have shown the limits of Governments’ abilities particularly in developing countries.”

The capital market leader also state that FX reforms will be critical for the Nigerian economy at this point, noting that trading activity in the Nigerian Fixed-Income and Interbank Currencies market is down

by 55% due to economic slowdown linked to the Covid-19 pandemic.

All panellists in this first episode of the thought-leadership series point out that most investors were affected by the pandemic and are looking for further ways to diversify their portfolios that may end the year on a negative real return.

Speaking during the panel session, Abiola Adekoya, wealth expert and ex-CEO at RMB Securities, states that one of the key things that investors are concerned about in this era is the need for diversification, more liquidity and higher investment returns.

In her words: “A lot of investors have been focused on one product and this pandemic has shown that that is not enough. The nascent interest in alternative assets have shown that there is strong liquidity in the overlooked retail space and Investment managers should pay keen attention and develop alternative assets products, and reduce the reliance on the traditional Fixed income, Money markets and Equities offerings.”

Why FG opted for electricity tariff review Olusola Bello

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ederal Government resolve that it would not make available the entire N800 billion representing the shortfall in the payment the Discos are supposed to pay for the services of generation and transmission companies for 2020 and 2021, has forced it to agree for a tariff review that will be implemented this Wednesday, industry sources say.

Even though the actual allowable revenue for the entire value chain was not made available, the N800 billion, BusinessDay learns, was arrived on as the shortfall from the total allowable revenue needed by the power industry by the stakeholders.

Having presented the figure to government by stakeholders, the government is said to have pointedly told Nigeria Electricity Regulatory Commission (NERC), which oversees the industry, that the amount was too high and it can only make

available about N340 billion, and insisted that the market must make up for the balance of N440 billion for the fiscal year 2020 and 2021.

According to sources close to the government, most often the government subsidises electricity consumed by Nigerians through interventions that balance up the financial shortfall of the Discos as regard their commitment to generation companies and Transmission Company of Nigeria (TCN) through the Nigerian Electricity Bulk Trader.

It was as a result of these interventions that the government had been reluctant all this while to allow for tariff review, because it fears there could be a backlash.

Initially, the shortfall of the amount due to generation and transmission companies was N214 billion in 2015. There was another N701 billion in 2018.

This was followed by another N600 billion from the Central Bank of Nigeria in 2019.

L-R: Oyesola Oworu, CEO/lead consultant, AFRITEX; Sonny Echono, permanent secretary, ministry of education, and Adoki Miebaka, chairman, Nara Net Technologies, during the Edtech summit online and Telecast in Abuja.

Pic TUNDE ADENIYI

Parents, students’ online tuition experiences point to growing learning losses

result in loss of 0.6 years of schooling – World Bank BEDC begins service reflective tariff in July …COVID-19 couldweek lockdown in Lagos State, the lecturers were not ready as of Lagos, states that the website

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eninElectricityDistribution Company(BEDC)Electricity plc has said it will commence a new service reflective tariffstructureeffectivefromJuly1, 2020, as part of an effort to ensure improved service to customers.

The introduction of the new tariff is based on the feedback from customer consultations conducted earlier in the year on proposed tariff review, BEDC said in a statement by the managementattheweekendinBenin,the Edo State capital.

The BEDC management, in the statement, assured customers of appropriate rates for services rendered in a service reflective tariff regime that will guarantee power availability to end-users for a stated minimum of hours.

“Under this new tariff structure, customers are to be disaggregated into various tariff bands

based on this guaranteed hours of service with those with more power paying more than those with less power. The new tariff regime also provides that customers can move to upper bands of more power availability as their quality of service improves,” the statement added.

“To operationalise the new service dispensation, and subject to the finalisation of the process with the regulators, customers will be separated into various clusters using number of hours of daily availability as a measure to determine the tariff rates.

“The existing operating method of Load Management Schedule shall be rearranged to take cognizance of this new Service Based Tariff structure as we seek to match service delivery with appropriate tariff and payment of bills,” BEDC management said.

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STEPHEN ONYEKWELU & BUNMI BAILEY

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hree months after the Federal Government of Nigeria shut down schools and some schools took to online tuition, some parents and students are saying the experience has been fraught with hitches leading to learning losses.

On March 19, 2020, the Federal Ministry of Education approved school closures as a response to the pandemic.

States in the federation contextualised this. Lagos, Ogun and Edo states Ministry of Education released a schedule of radio and TV lessons for students in public schools.

For families that earn below $1 per day and faced harsh economic realities due to the four-

for example, the purchase of radios or TV might be a tradeoff that they cannot afford. A suggestion to this problem was the provision of portable solar radios to help bridge the digital divide.

Otto Orandam, founder, Slum2school, a non-governmental organisation, says over 30 percent of learners from low-income families will not resume when the schools resume after COVID-19 lockdown is lifted, as, “Young girls are getting pregnant as a result.”

Middle-class families who can afford the devices needed for online classes have a different set of challenges. At the University of Lagos, the school has developed technical capacity for online classes but

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they were on strike before the lockdown.

“We decided to start with foundation students some weeks ago but had to suspend it because students did not log in for classes,” notes Ola Gbeleyi, an administrator in the Department of Zoology, Faculty of Sciences, University of Lagos.

Gbeleyi illustrates his point with the attendance of foundation students of biology at the university. There are about 1,000 biology students but only 40 were attending classes online, “And when they were given assignments online, only 40 submitted out of the total number.”

However, Felicia Bakare, a foundation student at the Faculty of Science, University @Businessdayng

crashed many times when they were given quizzes because many people logged in at the same time and the website could not process them.

“Nothing is really good on the foundation online portal.

They just send slides, but it seems like they have stopped them,” she says.

Some parents who spoke with BusinessDay say the cost of purchasing data and the frequency of these purchases are putting pressure on their wallets.

Oscar Chukwu, a businessman and parent, wants normal brick and mortar classrooms to re-open, saying, “The children cannot concentrate to follow online lessons. My daughter is in the early primary and my son in nursery school.”

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Cost optimisation strategy as a panacea for the oil & gas industry – A supply chain perspective

Emeka Eboagwu

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ypical of every shock interject in an ecosystem, COVID-19 has spurred our thinking to re-evaluate how we work, live and interact with each other. It bears similarity to how geological dykes can sometimes affect an entire body of sedimentary strata, subsequently allowing for systemic metamorphism. The sharp intrusion of the molten magma creates a metamorphic reaction, thus changing the chemical component of the intruded rock and forming the inevitable - a dyke.

The oil industry has perhaps, among all industries, taken the greatest hit as a result of this “biological dyke” called COVID-19; reflected by a period of low Energy pricing, low Energy demand, deferred projects and low revenue generation, and as such has altered the most fundamental reasoning of how oil is produced.

This systemic metamorphism as a result of COVID-19 means that the oil and gas industry needs to start thinking of innovative ways of staying afloat, reinvent and sustain itself against both natural and unnatural existential and sudden threats. For Nigeria, the critical path to managing this metamorphism is delineated in three strata: Project prioritisation – Project economics, Cost structure and contracting process and Supply chain optimisation and Fiscal reform.

Regarding project economics and management and Fiscal reforms, it’s imperative that the industry players and its bloc assess what projects to bring on stream, and what to defer to a time of boom. Issues revolving around cash flow management and risk management of assets must be thoroughly assessed. The Nigeria Petroleum Industry Bill being the critical element needed for fiscal reforms and investment development industry should be passed. A phased reformation approach should be adopted.

With deference to Cost structure and Supply chain, the systemic metamorphism due to COVID-19 has opened our eyes as to the intrinsic cost of the “oil per barrel”. In 2016, the Wall Street Journal reported that the United Kingdom, Brazil, Nigeria, Venezuela, and Canada had recorded the costliest production while Saudi Arabia, Iran, and Iraq were attributed with the cheapest production costs. Nigeria’s projection as at 2016 was circa $29 per barrel while countries like Saudi and Iran estimated costs that hovered around $10 per barrel. From all indications, it seems the cost price projection by the Group Managing Director may have been driven primarily by the cost structure implemented in Saudi Arabia, the Republic of Iran and Iraq. Nonetheless, I rather would recommend a cost optimisation strategy rather than a cost reduction strategy for one crucial reasoning. In optimising cost, you are perceived to be more agile and progressive rather than reactive and offensive.

While many clamours that some of the biggest estimations of the cost per barrel of crude oil are largely driven

by Human resources, analysis have shown that the actual supply chain cost per barrel for Nigerian Brent crude accounts for over 70 percent of the total cost, which is inclusive of capital cost, production cost and administrative

cost. It’s now pertinent that to effectively impact the cost price we need to optimise what drives the cost. Thus, a spend analysis by category management needs to be assessed by all.

To address this, we need to know the elements of the cost structure; such as the exploration cost, drilling cost, production cost, Transportation and other ancillary services attached to the aforementioned categories. Today, drilling costs seem to account for the largest portion of the cost per barrel, and as such, this is one major area of the total spend that needs thorough addressing. Currently, the Nigeria Rig count as at March 2020 reveals one (1) Drill-ship, several Jack-up rigs and Land Barges/Rig. Are we getting the best competitive international pricing for our rigs? Are there alternate investment models for the Drilling business worth the time and attention of the NNPC? Can we set up a JV structure that the NNPC or its Upstream Subsidiary and International drilling Rigs Company can syndicate with a view for a long term strategic alliance. Such alliance will ensure joint interest for a long term acquisition of a new Asset (Jack -up or Drillship alike) that could be translated to a model similar to BOT, but with some tweak that allows the technical partner to continue to operate whilst ownership is transferred to NNPC after payback period of initial investment.

As at 2019, the cost of a new build Jack-up was circa $150 million, and it’s worth noting that a 49 percent interest in such an investment would amount to a circa four-year day rate of today’s Jack-up drilling rate. It typically means that for circa ten years, the total cost of the rig would have been fully paid, and it can thus become not only a moneyspinner for the government but translate into a rig supply security for the country.

Imagine what Nigeria would gain if we invest in three units of such assets from three different international partners just

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we must recognise that cost reduction isn’t a sustainable approach as it’s largely influenced by the oil price.

The era of a cyclical cost nature must be considered obsolete and intentionally eradicated. Cost optimisation, however, perhaps is a rather slow process

for risk management.

This is just one of the many optimisation strategies which the NNPC can review for its cost optimisation. To take this conversation further, I have coined what I called the 3C’s on cost optimisation that works and could be used by the NNPC in sustainably reducing the cost per barrel. They are Coordination, Cooperation, and Collaboration.

While the first C largely reflects supply chain internalisation and optimisation, the other two C’s tend to extend to Suppliers, development partners and other stakeholders at large. The three C’s encapsulate most of the elements of a sustainable supply chain practice which has become the going trend.

I believe that the first form of cost optimisation should start from the local E&P companies within the NNPC portfolio. Supply chain coordination means that NNPC can strategically and effectively understand and know the cost of each activity in its supply chain, hence extract the optimisation value therein. For example, aside from drilling costs, what other cost category accounts for the top 20 spend in the NNPC operations. What quickly comes to mind are Catering, Logistics (Yard and Transportation), OCTG, and HSE spend, and that’s all great. However, are there other subtle spends but that are likewise salient by implication such as Fuel Cost and multiple offices – therefore, a complete spend analysis review needs to be urgently done to take account of every variable and effectively manage the process.

Note: the rest of this article continues in the online edition of Business Day @ https://businessday.ng Eboagwu is a Supply Chain Consultant for the Oil & Gas Industry and writes from Lagos and could be reached via Twitter @mekzyking01, email: eeeboagwu@gmail.com

Rape and the provisions of the law in Nigeria

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here has been an alarming increase in reports of rape cases across the country.

We have read of some horrific accounts of this heinous crime through various media channels in recent times. A lot of times victims of this heinous crime don’t even report the incident to the appropriate authorities so their stories do not even make it to the newsroom. Many victims of rape for fear of stigmatisation and being blamed for their ordeal bear the pain of the crime committed against them, thereby leaving their assailants roaming free to perpetrate more crimes. It is indeed quite unfortunate that victims are sometimes blamed for being raped.

This article will attempt to highlight the legislations on rape in Nigeria, how effective they have been and suggest areas of improvements.

The legislations on rape are as follows; The Criminal Code Act The Criminal Code Act (Criminal Code) is applicable in the southern states of the country.

Each of the said states has its criminal. Section 357 of the Criminal Code defines rape this way: Any person who has unlawful carnal knowledge of a woman or girl, without her consent or with her consent, if the consent is obtained by force or by means of threats or intimidation of any kind, or by fear of harm, or by means of false and fraudulent representation as to the nature of the act or in the case of a married woman, by personating her husband, is guilty of an offence which is called rape.

An attempt to commit rape is also an offence under the Criminal Code and it is a felony, punishable with imprisonment for fourteen years, with or without caning. -Section 359 of the Criminal Code.

Section 358 of the Criminal Code provides imprisonment for life, with or without caning as punishment for rape. It is worthy to note that from the definition of rape in section 357 of the Criminal Code does not recognise men or boys as victims of rape. The Criminal Code doesn’t also recognise marital rape. The provisions of the Criminal Code indicate that rape can only be committed by persons of the male gender.

The Penal Code Act The Penal Code Act (Penal Code) is applicable in the Northern states of Nigeria. Section 282 of the Penal Code provides that Rape is said to occur where a man has sexual intercourse with a woman in any of the following circumstances: (a) against her will (b) without her consent (c) With her consent, when her consent has been obtained by putting her in fear of death or hurt. (d) With her consent when the man knows that he is not her husband and that her consent is given because she believes that he is another man to whom she is or believes herself to be lawfully married. (e) With or without her consent, when she is under fourteen years of age or of unsound mind.

The punishment for rape is fourteen years.

The Penal Code doesn’t recognise men or boys as victims of rape. It also doesn’t recognise marital rape where the woman has attained the age of puberty and it is specifically stated in Section 282 (2). The provisions of the Penal Code indicate that rape can only be committed by persons of the male gender.

Section 283 of the Penal Code provides imprisonment for life or for any less term and or a

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fine punishment for rape.

Child Rights Act 2003 The Child Rights Act (CRA) is a Federal Law which was enacted to protect the rights of children. It has been domesticated in a number of states in Nigeria. Section 31 (1) & (2) of the CRA provides that any person who shall have sexual intercourse with a child commits an offence of rape and is liable on conviction to imprisonment for life. The CRA provides that it is immaterial that- (a) the offender believed the person to be of or above the age of eighteen years; or (b) the sexual intercourse was with the consent of the child. The CRA does not restrict victims of rape to the female gender. It also recognises that the offence of rape could be committed either by a man or woman.

Violence against Persons (Prohibition) Act, 2015 The Violence Against Persons (Prohibition Act) 2015 (VAPP) prohibits all forms of violence against people in private and public life. It is applicable in the Federal Capital Territory (FCT).

Section 1 (1) of the VAPP provides that a person commits the offence of rape if; (a) He or she intentionally penetrates the vagina, anus, or mouth of another person with any other part of his body or anything else; (b) The other person does not consent to the penetration; or (c) The consent is obtained by force or means of threat or intimidation of any kind or by fear of harm or by means of false or fraudulent representation as to the nature of the act or the use of any substance or additive capable of taking away the will of such person or in the case of a married person by impersonating his or her spouse.

Section 1(2) provides life imprisonment as

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ULOAKU EKWEGH punishment for the offence. Where the offender is less than 14 years, the punishment is a maximum term of 14 years imprisonment. In other cases, a minimum of 12 years imprisonment is provided by the Act and for gang rape, the offenders are liable jointly to a minimum term of 20 years without an option of fine. The Act also recommends the award of appropriate compensation to the victim by the court.

Section 1(4) VAPP mandates that a register of sexual offenders should be maintained and accessible to the Public.

The provisions of VAPP with regards to rape are quite wide as it did not like other laws restrict its definition of rape to protect only females in relation to vaginal penetration. VAPP doesn’t restrict victims of rape to the female gender. The VAPP recognises that sex goes beyond the use of the primary sexual organs and extends the scope to anus and mouth.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Ekwegh is a private legal practitioner with over 15 years legal experience in law firms and as in-house counsel. She is also a fellow of the Institute of Management Consultants. Email: uloekwegh@yahoo.com

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The highest duty of citizens (2)

Civilised and prosperous societies are governed by rule of law, not rule by law STRATEGY & POLICY

MA JOHNSON

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s the World Health Organisation predicts that the case of those infected with COVID-19 will rise to 10 million in a week’s time, it is cheering to know that trial tests are ongoing in many countries in order to have a vaccine to combat the dreaded virus. The number of those infected and victims is increasing because most people did not stay at home during lockdown.

Life goes on. Although Nigeria is not looking for saints in the society, all we ask is that decent men and women who will respect the rule of law must be in the majority. “Naira Marley is unfazed by criticisms coming after a show in Abuja…. Amid criticism, the singer has remained fearless, taking to social media to speak about the effect of his song.” Hear him: “I can drop a new song now and scatter everywhere.” Scatter everywhere? One can see youthful exuberance arrogantly displayed by the young musician. He cannot “scatter” everywhere as Nigeria will not validate his rascality.

It is politics that is scattering everywhere at this moment. What is disturbing as usual is the conduct of some politicians and their followers.

Powerful politicians have warmed up the polity because there is going to be gubernatorial elections in Ondo and Edo States. The atmosphere is charged with accusations and counter accusations between political contestants who go to any length to occupy public office.

As predicted, the battle for political power in Edo State is fierce. Drawing inspiration from Albert Einstein, politics in Nigeria can be likened to compound interest which is the eighth wonder of the world. He who understands it, earns it…he who doesn’t pays it.

With politics in Nigeria, anything can happen.

Politics in Edo State is laughable.

Oshiomhole’s “removal vehicle” was in full throttle as he drove Edo State Governor, Godwin Obaseki out of the All Progressives Party (APC) in the State.

Before the party primaries, the adamant rival gubernatorial candidate of the People’s Democratic Party (PDP)in Edo State, Kenneth Imasuagbon swore that he would not forfeit his 16 years of waiting in patience, anxiety, hope and prayers just like that, in favour of a novel contestant. The novel contestant referred to is incumbent Governor of Edo State, Godwin Obaseki.

Old habits die hard. Imasuagbon spoke passionately as he declared: “I am ready to die. Let them kill me if they want to kill me. I will not step down.”

In addition to expressing his readiness to die, Imasuagbon declared: “The rumour is from fake politicians, fake news media. I remain in the race. I am not going to step down and I am going to win tomorrow by God’s grace.”

Every man has his price. Party bigwigs who know the price of Kenneth Imasuagbon negotiated with him behind closed doors. So, Kenneth Imasuagbon has confirmed his decision to step down for Governor Godwin Obaseki in Edo State PDP Primary Race.

Often, violation of party rules and regulation is very rampant in our country. Most of our politicians are not used to obeying their party’s constitution as they are laws unto themselves. These politicians behave in an independent manner, ignoring their political party constitutions, Electoral (Amended) Act, 2010 and the 1999 Constitution (Amended). Additionally, they ignore conventional ways of resolving party issues because of their quest for power.

Political godfathers want to bend the law at all costs. Most politicians with their godfathers have constituted themselves into law. This has led a rise in the spate of litigation because some party members still believe in the rule of law. The Independent National Electoral Commission (INEC) has expressed concern over the spate of litigations in the country.

Some political affairs analysts say that the race for the year 2023 has started. Politicians have started strategising. Ondo State deputy Governor, Agboola Ajayi has left the APC for the PDP. Instead of party supremacy, it is the supremacy of personal interests.

Political godfathers set their own rules and they want these binding on all members of their political parties.

Since some APC members cannot control themselves in an orderly fashion, President Buhari has dissolved the National Working Committee (NWC) of the APC. Police had to seal the APC Secretariat amid fierce battle for the soul of the party. So, everywhere will not scatter! But the NWC of the APC has threatened to take President Buhari to court over its dissolution. Who says they should not go? The courtrooms are open for litigations. But whether politicians will always obey court injunctions is another matter entirely.

Rivers State was not left out of the political drama. Suddenly, a faction of All Progressives Congress (APC) loyal to the Minister of Transport, Rotimi Amaechi in a video that went viral, threatens to burn down River State.

Burn down River State? Maybe these men do not know that they simply displayed their intention to commit a crime. What has been done by the security agencies on this matter? We need to know what security agencies have done because the threat by these “supporters” will compromise the peace and order of River State if it is not nipped in the bud.

In a counterattack, one Chibuike Ikenga and members of his group rejected the threat of violence by those claiming to be loyal to Rotimi Amaechi.

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Political godfathers want to bend the law at all costs. Most politicians with their godfathers have constituted themselves into law. This has led a rise in the spate of litigation because some party members still believe in the rule of law

(To Continue) Johnson is an author and a retired naval engineer who has passion for African development and good governance

The competitive advantage of intellectual property rights to start-ups and SMEs in Nigeria

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ntellectual property rights are similar to many other rights; however, the peculiarity of intellectual property rights comes in the fact that they are not naturally engrossed, they have to be acquired. It has become not only advisable but commercially expedient that founders who have exerted their intellects and creative efforts in coming up with inventions to protect their intellectual property rights as these rights reward creativity and human endeavour and this also serves as a commensurable incentive to continue to drive the progress of the humankind.

Intellectual property protection by Start-Ups and SMEs has become important for several compelling reasons as the advancement and good fortune of founders and entrepreneurs in Nigeria rest heavily on their ability to create and invent works in the new areas of technology and business development. Also, by acquiring intellectual property protection, the commitment of further monetary incentives and a continuous chain of value are guaranteed.

Trends in developed economies as obtainable in America, Europe and Asia have shown overwhelmingly that the awareness, promotion and protection of intellectual property rights encourage economic growth, creation of new jobs and viable industries and also enhances the quality and standard of living. Protection of Intellectual

property rights can also help founders and indeed other entrepreneurs to realise their potentials in which creativity and invention can flourish.

The commonest form of Intellectual property protection in Nigeria is Copyright. The copyright law in Nigeria grants creators, authors and their rights holder’s legal protection for their literary and artistic creations. By doing this, creatives will not only protect their work but they are also able to commercialise and benefit financially from their intellectual property.

Similarly, patent rights which is an exclusive right granted for an invention which constitutes a product or process that provides a novel or new way of doing something or that provides a technical solution to a problem also provides a viable means of commercialisation of inventions by founders. A founder who patents an invention may permit to, or license other persons to use their inventions on mutually agreed terms.

Founders can also explore Trademarks protection which ensures that owners of marks have exclusive rights to use them to identify their goods or services or to further authorise others to use them in return for monetary or other corresponding valuable things. Trademarks may be one or a combination of words, letters and numerals. Through trademarks protection, founders, entrepreneurs and founders are rewarded with recognition and financial profit. Also, trademark protection www.businessday.ng

protects creatives from unfair competitors such as counterfeiters, from using similar distinctive marks to market inferior products and services.

Beyond protecting Intellectual property rights, founders must commercialise their rights to create maximum viable value from them. Commercialisation activities should be geared towards bringing their Intellectual property to the market given future profits and business growth. Concerning this, founders and entrepreneurs can explore the following in their commercialisation process: IP assignment: An IP assignment to a transfer of ownership of intellectual property rights such as trademark, industrial design or patent from a person (the assignor) to another (the assignee).

IP assignments provide a viable means of commercialisation for IP owners as it provides an immediate cash flow from an IP asset which may be otherwise not exploited.

IP licensing: This involves a contract under which the owner of the Intellectual property (the licensor) grants permission for the use of his intellectual property to another person (the licensee). IP licensing also provides a viable way for Intellectual property owners to commercialise their IP assets and also provides the licensor with an opportunity to reach new markets with their existing products while also retaining the ownership of the IP asset.

Franchising: IP owners can also commer-

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But Rotimi Amaechi was widely reported to have cautioned his supporters and River State people to steer clear of violence as that is not the best way to resolve any issue.

Rotimi Amaechi cautioned his supporters that, “first, if you say you’re my supporter, you will know that I don’t just respect the law, I fear the law. Breaking the law can put you in jail. Because of the kind of words used in that video, I may have to address it.”

“I believe that no matter how angry you are, no matter how institutions are manipulated, a judge once said, ‘I’m allowed to be wrong, that’s why you have the court of appeal, that’s why you have the Supreme Court.’ So, if you think that the state judiciary is doing what is wrong, then you go to the court of appeal, you go to the Supreme Court and ensure you exhaust the due process. No matter your frustration, you don’t have the right to take the law into your hands.”

Some Nigerian men in Jakarta, Indonesia took laws into their hands-on June 25,2020 when they forcefully entered the Nigerian Embassy, removed the national flag, and exhibited disgraceful criminal behaviour. What a pity?

Violence is not the solution to whatever grievances they have with the Embassy.

Why pull down the flag of our country?

The nation’s flag was almost set ablaze but for divine intervention. We must be law abiding citizens at home and abroad.

It must be the rule of law. To survive the new normal, Nigerians at home and abroad must be law abiding citizens.

No nation can develop politically and economically by allowing its people to repeatedly exhibit acts of barbarism or disregard for the rule of law. Regrettably, most of our elites and governments have perfected the act of disobeying Supreme Court orders. Where do we go from here?

Solomon Ogunbodede cialise their intellectual property through franchising. Franchising is another form of licensing which allows the replication of the IP owner’s (Franchisor) business concept in a different location by providing continuous support to the recipient (Franchisee). IP owners’ profit from this arrangement through the franchise fees paid by the Franchisee before such concession is granted.

Conclusively, it is clear that when a company, SMEs or entrepreneur rely solely on its intellectual property for its survival, the need for a lawyer with a speciality in Intellectual property cannot be overemphasised. Creatives, founders and entrepreneurs should engage the service of well-versed Intellectual property lawyers at the very early stage of developing a novel process or idea pitching with potential investors to avoid possible intellectual property infringement.

Also, the various commercialisation processes may present complex tasks, IP owners should leverage the expertise of Intellectual property lawyers as the success of the commercialisation process depends on several internal and external factors.

Ogunbodede wrote in from Lagos and can be reached on solomon@oyewoleadesina.com or solomongunbodede19@gmail.com

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In conversation – Constantinos Kypreos, Senior VP, financial institutions at Moody’s

Rafiq Raji

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n behalf of African Banker magazine in January 2020, I sought the views of Constantinos Kypreos, senior vice-president for financial institutions at Moody’s, on the 2020 outlook for African banks. Though pre-COVID, Moody’s Kypreos’ views remain insightful. As the pandemic clouds almost everything, it is easy to miss the distinctive characteristics of the various African economies and their banks. I dare say that if one focuses objectively on the fundamentals, one could easily find good opportunities now that valuations are relatively cheap; ahead of an inevitable recovery in the hopefully not too distant future.

At the very least, it enables a comparison of what once was only months ago with current realities.

Please elaborate on your recent change in outlook to negative from stable for African banks.

Changing our outlook from stable to negative reflects the weakening operating environment for African banks, and the negative outlook on the sovereign ratings of large African economies like Nigeria and South Africa.

The global economy remains sluggish with negative business sentiment and trade uncertainty clouding growth prospects. African governments, in particular have high debts and their GDP growth (forecast for 2020: 4.1%) will remain insufficient to boost per capita income levels or increase economic resilience. Weakening operating conditions, pressuring governments’ credit

quality, are set to have a knock-on effect on banks through reduced business generation, slower credit growth and rising asset risk.

Also, banks benefiting from government support uplift, and those with ratings capped at the sovereign level because of heavy exposure to government debt face pressure too. Asset risk is also high as a result of rising government arrears, high loan concentrations, borrower friendly legal frameworks, and still evolving risk management and supervision capabilities.

On the flip side, most of the rated African banks maintain high capital levels, with solid funding and liquidity in local currency remain in many countries. Improved dollar access and stricter prudential requirements will also help resist foreign-currency liquidity pressures.

How do the regions compare in your assessment? Why do you reckon banks in South Africa, Nigeria, Tunisia & Angola would face challenges, for instance? And what underpins the resilience you see for banks in Egypt, Morocco, Mauritius & Kenya?

Africa is a diverse banking region, with banks in South Africa, Nigeria, Tunisia and Angola facing the greatest challenges: The challenges for South African and Nigerian banks are macro-driven and relate to subdued growth. In South Africa specifically, the inability to address fiscal pressures and weaknesses at State-owned Enterprises is also affecting investor sentiment.

In Tunisia and Angola, challenges are structural in nature and relate to the banking sector. Tunisian banks are still challenged by weaker state-owned banks, tight liquidity and relatively high NPLs. In Angola, banks are faced with very high non-performing loans and its central bank has asked the large public banks to recapitalise.

In contrast, Egyptian banks will be more resilient, supported by more robust growth following the successful completion of an IMF programme, and the implementation of structural

reforms that led to lower inflation and a decline in interest rates that will support both the business community and consumers.

In Mauritius, a stable economy, high bank liquidity levels and strong capital buffers moderate asset risk. Similarly, in Kenya while the economy is facing more challenges, its banks’ high liquidity levels, strong profitability and capital levels shield them from high asset risks.

In Morocco, gradual economic diversification, solid profitability, stable deposit funding and ample liquidity will help balance the risk from high lending concentrations, growing SubSaharan African operations and modest capitalisation.

How do you see the West African currency ECO affecting banks in that region?

We expect the credit profiles of WAEMU-based banks to be unaffected by the recent changes to the monetary cooperation agreement between WAEMU countries and France, reflecting the WAEMU authorities’ decision to maintain both the exchange rate peg to the euro and France’s guarantee of unlimited convertibility of the region’s currency.

How much of a difference would the recent repeal of the interest rate cap law in Kenya make?

We do not expect lending rates or profitability to return to early-2016 levels given the authorities’ and banks’ focus on maintaining a low cost of credit, but there could be an increase over the next 12-18 months.

Removing the rate cap no longer constrains lending as banks are able to better price their risks without a rate cap. This will mean increased lending to segments of the economy that have had subdued growth and access to credit, primarily small and midsize enterprises.

Kenyan banks’ profitability will benefit slightly from loan and business growth, but also higher lending rates will increase net interest income, reversing the recent years’ trend of declining income and margins. However, profitability will remain below pre-lending

‘

African banks also face longstanding loan book weaknesses due to the limited diversification of their loan books, weak risk management practices in the past, and scant financial data and creditor information that make it difficult for banks to assess borrower creditworthiness

An edited version was published in the Q1 2020 issue of African Banker magazine “Dr Raji is chief economist at Macroafricaintel.

He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Leveraging the capital market & private sector to bridge Nigeria’s infrastructure gap

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nfrastructure development is undoubtedly critical for a country’s long-term economic growth and competitiveness as it impacts economic activities by increasing productivity, facilitating trade, and promoting innovation. In Nigeria, the huge infrastructural deficit which has been a recurrent conversation remains a major impediment to economic growth and the ease of doing business in the country.

According to the International Monetary Fund in its “Technical Assistance Report -Additional Spending toward Sustainable Development Goals” completed in April 2020, Nigeria must invest at least 18.1 percent of GDP in infrastructural development by 2030 to raise living standards.

Meanwhile, the Minister of Finance, Budget, and National Planning, Zainab Ahmed, said the federal government will require about $100 billion annually for the next 30 years to effectively tackle Nigeria’s infrastructure challenges. The minister further explained that with a total federal budget of less than $30 billion for 2019 and the dependency of Nigeria’s income on oil revenue with unpredictable global price fluctuation, Nigeria no doubt lacks the fiscal space to self-finance the required infrastructure investment. Minister Ahmed said the time had come for the government to start looking for alternative sources of financing infrastructure as budgetary funding alone could not address the deficit. Capital expenditure in 2018 stood

at N1.03 trillion (according to the Central Bank of Nigeria), below the budgeted sum of N2.87 trillion.

Having said that, the question that is yet to be answered is how the infrastructure deficit will be funded. Although there have been different suggestions, the most feasible are leveraging the capital market and the private sector. Infrastructure financing is long-term financing and requires huge capital, as such, sophisticated investors are required to achieve such financing and this includes investors in the capital market as well as private investors. The capital market is critical to financing infrastructure due to its ease to access capital. When individual investors are involved, the instruments to achieve adequate financing have to be complex enough to meet the needs of the infrastructure project.

Going through the capital market would mean that the government should consider resorting to bonds rather than loans, as structuring all transactions in a local currency, rather than dollars, would help to drive infrastructural development at a greater speed. The capital market could go a long way in driving this development as investors are ready and willing to put money into instruments that ensure that the transactions are bankable, and the costs reflect reality. This is where the importance of infrastructure bond market development comes to the fore as bonds are the go-to investment option for financing infrastructure projects in

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the capital market.

The government could give a sovereign guarantee to make the bond sustainable or have a development finance institution to encourage participation and enhance investor confidence.

Deepening the capital markets or creating additional liquidity by increasing equity and debt capital market thresholds for pension funds is also important as Pension Fund Administrators have huge monies sitting in banks or other fixed income investments.

Funding infrastructure through the private sector is also a great option as investors in that space are more likely to execute projects successfully as they have more to lose. Private sector participation ensures professionalism and accountability, which enhances investor confidence. Creating a strong framework for private sector investments through publicprivate partnership remains the most costeffective means of bridging the infrastructure deficit in the country. A proper public-private partnership arrangement would also save the government the huge borrowing costs and stave off further pressure on the already high debt servicing ratio.

Having said that, to drive infrastructural development in Nigeria, the government would start by creating an enabling environment and improved business climate e.g. For the power sector - deregulation on transmission, for roads, bridges - reintroduce tolling and make the bid-

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rate cap levels. Banks’ return on assets declined to 3.4 percent in 2018 from 3.6 percent in 2017 and 4.0 percent in 2016.

On the one hand, you say asset risk remains high & yet you also acknowledge most rated African banks maintain high capital levels....”. please explain?

High asset risks speak to the risks of banks’ loan and investment portfolios.

Such risks remain high because of the subdued operating conditions and high government arrears that hurt the loan repayment capacity of contractors and sub-contractors of government projects.

African banks also face long-standing loan book weaknesses due to the limited diversification of their loan books, weak risk management practices in the past, and scant financial data and creditor information that make it difficult for banks to assess borrower creditworthiness.

But we do note that African banks have a number of defences against these risks, including still robust earnings generating capacity (that is, they are typically more profitable than banks in developed markets) and maintaining higher capital buffers.

Based on your current view, how likely is Moody’s to change its outlook for African banks to stable this year?

Our outlook could stabilise if structural reforms and a more businessfriendly environment with stronger institutions emerge to support higher economic growth, improvements in risk management, supervisory and legal reform take place to reduce problem loan levels, and current capital buffers and liquidity are maintained. The banks’ outlook could also stabilise if the related sovereign ratings become stable.

Edidiong Inwang

ding process open and competitive. Fiscal and monetary policies must align with and support the investment horizon of projects. For instance, if the Federal Government is embarking on expansionary fiscal policies to stimulate growth, the Central Bank of Nigeria should be doing the same, both need to work in tandem. The Apex Bank and Regulators also need to do a lot more for financial inclusion as this would make more financial instruments available, thus expanding the capital market to reach investors both on the local and external front.

As a country, we need to start looking inwards for financing, we should build capacity in the country to be able to fund themselves rather than depending on foreign investors.

With a well-developed infrastructure, Nigeria would experience a boost in financial inclusion, improvement in the balance of trade, greater production competitiveness, enhanced housing, and robust pensions among other benefits.

However, leveraging the capital market and private sector to bridge the infrastructure gap in Nigeria should be done simultaneously and not one after the other.

Inwang is a business Producer/Presenter at Channels Television.

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Tuesday 30 June 2020

BUSINESS DAY

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun

Lagos flooding and the 21st century economy dream A 21st century economy should be flood-free

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

Bashir Ibrahim Hassan

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

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agos, Nigeria’s economic capital and West Africa’s commercial hub, is an interesting geographical expression—a sprawling city that comes off easily as an amalgam of compelling opportunities and consuming challenges.

Arguably, Lagos is a peculiar city-state in terms of land mass. It is the smallest state in Nigeria with a land area of 3,577 square kilometres (sqkm), about 0.4 percent of Nigeria’s land area of 923,768sqkm. Within the bowel of this small enclave exists an estimated population of 20 million which is projected to hit 30 million in the next decade.

Interestingly, Lagos is not limited by its small land area. It is, indeed, the most successful economy among the 36 states of the federation. Available record shows that the state is Africa’s fifth largest economy. As at 2017, when Akinwunmi Ambode was its governor, Lagos GDP was $136 billion.

It accounts for over 90 percent of Nigeria’s foreign trade flow, contributes 30 percent to the country’s GDP and also accounts for 65 percent of its manufacturing activity just as it houses the headquarters of

most conglomerates and commercial banks in Nigeria.

All these, coupled with its largesize market provided by the large population, make Lagos a preferred destination for investment in smalland large-scale industries, employment of all configurations, trade and commerce of all description and specifications, etc.

But the challenges are there in diverse and amorphous proportions.

Unequivocally, Lagos is a very difficult environment either for living or working or both. And this is where we find the dream of successive governments in the state to turn the state to a smart city, a resilient city or a 21st Century Economy as mere wishful thinking.

We have no qualms, however, with any entity that has vision or dream. As a matter of course, we encourage such acts. But we believe that there are grand norms on which visions and dreams are based and through which they are realised. Such norms, in our view, are never wished away, but worked upon.

Besides a persisting and choking (traffic) gridlock, Lagos is terribly challenged by seasonal flooding that brings the entire city on its knees whenever it occurs as it frequently does once there is a downpour.

In Lagos, flooding means paralysis of all social and economic activities. It also means all movements grinding to a halt as all vehicles will be at standstill. Flooding here also means hunger and family dislocation as homes and whole communities are often submerged. Indeed, flooding in Lagos means loss of properties and, in extreme cases, loss of lives.

Early this year the Nigerian Meteorological Agency (NiMET), in its 2020 Seasonal Rainfall Prediction (SRP), revealed that Lagos was going to experience 240-270 days of rainfall with a maximum annual rainfall estimated at 1,750mm, Tunji Bello, the state’s Commissioner for the Environment and Water Resources, assured that “Lagos is ready, no cause for alarm.”

“I want to assure you that our state will continue to reap the gains of planning, as our flood control measures are being stepped up to contain any unforeseen weather condition,” he added.

But the early morning heavy downpour of Thursday, June 18 and subsequent ones have punctured these assurances as the downpour swept across the entire city, submerging roads, homes and communities, collapsing buildings and, reportedly, claiming lives. That incident meant

that either the planning is faulty or what has been done is not enough.

The present administration in the state is very passionate about growing the state to a 21st Century Economy.

We share in this dream. But we believe there is much work to be done to make that dream a reality. Finding a lasting solution to this perennial flooding, in our opinion, is one aspect of that work.

It should be clear to the state and its managers by now, based on the Thursday, June 18 incident, that their best so far in trying to control nature in its fury is not good enough. The impact of that day’s downpour said it all that the state has more to fear than it knows. For us, it is not enough to tell people living in flood-prone, lowlying areas to relocate. How often do they have to do that?

Whether the argument is about building a smart city, where technology replaces much of human effort, or growing a 21st century economy where residents and government function seamless, working for shared prosperity, our advice is that Lagos should be fluid. It must not be clogged and slowed down. To allow this to happen is to slow economic growth and delay the dream.

In our candid opinion, a 21st century economy should be flood-free.

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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Tuesday 30 June 2020

BUSINESS DAY

COMPANIES&MARKETS BANKING

Nigeria’s Banking sector is “systematically fragile”-Fitch OLUFIKAYO OWOEYE

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lobal Rating agency, Fitch has described the Nigerian banking sector as one of the “most systematically fragile” out of 121 banking sectors sampled in its latest report.

According to Fitch Solutions in its report titled “Nigeria: Banking & Financial Services Report Q3 2020” rated Nigeria’s Banking Industry Risk Indicator (BIRI) at 12.14 out of 100, an indication of high risk due to weak economic growth dating back to the 2016 recession; declining oil revenue; an unfavourable regulatory environment, and a generally poor standard of living of most Nigerians.

“Nigeria’s BIRI scores show that its banking sector remains one of the most systematically fragile of the 121 banking sectors that we assess as part of our BIRI universe, posing significant risks to macro-financial stability in the country.

The structural backdrop of the banking sector has improved somewhat, with the BIRI having risen from 0.00 in Q417 to

12.14 in Q120. However, the latest score remains below the historical average of 21.72.

Nigeria currently sits at 117th place out of the 121 countries that are captured in our rankings,” the report said.

The report however predicted a total banking asset growth of 5.3% to N41.9 trillion in 2020, in the medium term, Fitch Solutions forecasts a 10.9% growth to N56.9 trillion, signalling a bright future

Shell’s 20km gas pipeline connects industrial zones in Aba

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hell Nigeria Gas (SNG) has completed the final phase of its 20km domestic gas pipeline expansion project in Abia State, connecting Agbor Hill, Osisioma and Araria industrial zones.

The project has also enabled the supply of pipeline gas to Ariaria Market Energy Solutions Limited, the Independent Power Project (IPP) consortium that provides electricity to the popular Ariaria market in Abia State. Ariaria International Market is one of the largest leather shoe-making and open stall markets in West Africa, with over 37,000 shops and an estimated one million traders.

Ed Ubong, managing director SNG, said, “We are proud of this domestic gas infrastructure investment which allows the industries in Abia to have more reliable and cleaner source of energy. SNG is committed to supporting Nigeria’s industrialisation provided there is a stable regulatory environment in the domestic gas sector that allows investors recover their investment .”

Also, Christopher Eze, managing director, NICEN Industries Limited, a paint and plastics manufacturer connected to the pipeline gas, said, “SNG has

loans since 2016, the systemically important top five banks, which together account for more than half of total banking sector assets, are financially sound, and we expect a broad continuation of sector rebalancing in line with the economic recovery, provided the economy begins to recover in Q420, in line with our central forecast,” the report said.

“Consolidation through mergers is working to create

the potential for financially stronger banks that can meet stricter capital adequacy requirements. On the downside, high inflation, lower oil prices and the expected economic contraction due to the effects of Covid-19 at a time when trade relations between the US and China continue to deteriorate sharply, will be a headwind to Nigerian banking and financial services sector development in the near term.”

L-R: Olakunle Lasisi, secretary, Nigerian Red Cross Society (Lagos Branch); Adebola Kolawole, chairman, Nigerian Red Cross Society (Lagos Branch); Oyinkansola Olude, assistant manager, legal, Chi Limited, and Caroline Olalu, matron, Nigerian Red Cross Society (Lagos Branch), during the CHI Limited’s donation of cartons of Hollandia Evap Milk to the Nigerian Red Cross Society (Lagos Branch) as part of the company’s continued support towards COVID-19 relief efforts.

OIL & GAS

OLUSOLA BELLO

ahead for the Nigerian Banking industry.

“Our outlook for the growth of the Nigerian banking and financial services sector over the coming years – aside from a temporary slowdown in 2020 – is brightening as strengthening financial services sector regulations and softening liquidity constraints ensure that the sector as a whole remains stable. Despite significant pressure from non-performing

put life back into our industries in Aba through the provision of this natural gas line. This milestone will open up the state for an influx of investors thereby creating an enabling environment that will generate job opportunities for the youths of the State. I am sure that many industries in Aba will quickly take advantage of this great opportunity. Our company sincerely appreciates SNG for this great feat”.

In his speech, on the the completion of the expansion project, Mansur Ahmed, President of the Manufacturers Association of Nigeria (MAN), he said, “MAN is proud of the role that Shell is playing in driving industrialisation in Nigeria through domestic gas supply.

Industries and manufacturing plants play a key role in transforming the Nigerian economy and this project will connect many manufacturers in Abia State, one of the nation’s major industrial hubs, to pipeline gas, which is a cheaper, cleaner and more reliable source of energy.

According to Ahmed, the gas supply to the Ariaria Market IPP would strengthen micro, small and medium enterprises in the Abia State and enhance the operating environment for manufacturing to thrive.

The report also conducted a SWOT analysis of the nation’s financial sector revealed that Nigerian banks, insurance firms, and other financial services providers have the potential for long-term growth in Nigeria which is undoubtedly Africa’s most populous country.

“There is an immense opportunity for growth in the Nigerian insurance sub-sector, especially as it pertains to life insurance. Early this year, German-owned InsuResillience Investment Fund completed a 39.25percent equity acquisition of Royal Exchange General Insurance Limited, a subsidiary of Royal Exchange Plc. The report noted that COVID-19 pandemic is top on the list of factors weakening the Nigerian financial sector.

Other weaknesses include continued lack of major multinational competitors in the wider banking and financial services sector; limited capacity of a broad section of Nigerians to spend on traditional insurance products due to poverty; prevalence of fraud is another problem, especially so in the motor insurance sector.

Stanbic IBTC Insurance Brokers offers to help individuals, Honeywell Group, LSETF graduate first pandemic cohort of talent development programme businesses, boost resilience in Covid-19 “As Nigeria’s leading insur-

T

MODESTUS ANAESORONYE

he first cohort of 18 students that participated in the Lagos Innovates Talent Development Programme, an initiative by Honeywell Group and the Lagos State Employment Trust Fund (LSETF), recently had a virtual graduation ceremony to celebrate the completion of the program which began in October, 2019 and ended in February 2020.

The talent development programme aims to ensure that Nigeria keeps apace with changes in technologies and competencies that will define the 21st century and beyond.

Hence, Honeywell Group Limited partnered LSETF to help youth in Lagos State acquire relevant skills required to compete in today’s global market.

Addressing the graduating class, Tomi Otudeko, the chairman of the programme steering committee and head, innovation and sustainability, Honeywell Group, said; “We are proud of you and we thank you for your commitment, you should be proud that you started this programme and you ended it. It’s a testament to your resolve and dedication.”

“I am proud that Honeywell Group Limited partnered with LSETF to make this a reality. This graduation is happening via a

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technology platform that did not exist few years ago. Technology is growing at an exponential rate, with new technology springing up at every corner of the world; we want Lagos to also be that corner of the world.

We want Lagos to be the place where we are building the platforms of tomorrow,” she added.

Speaking further, Otudeko said it is an interesting time to change careers, a time to innovate and do things in a new way, think of new solutions for the companies you will be working with, live a life of innovation.

Continue to build on your technique and the skills you have learnt; you have platforms and access to train yourselves, strive for excellence and be good ambassadors of this programme.

The training partners engaged for the first batch of students were Univelcity and Nesa by Makers. The courses offered were Full Stack Development with JavaScript (React JS, NodeJs, Express and Mongo DB + API Development), Full Stack Development for Mobile Applications (React Native, API Development), Python Programming for Web and Data Science. (PYTHON OOP, DJANGO & Data Science, and Frontend Design & Engineering: (UI/UX, HTML, CSS, ES6 & React JS).

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anagement of Stanbic IBTC Insurance Brokers, member of the over 156-yearold Standard Bank Group to which Stanbic IBTC Holdings Plc belongs said it will seek for opportunities to boost resilience of individuals, businesses, and government during this period of Covid-19 pandemic.

Anselem Igbo, chief executive, Stanbic IBTC Insurance Brokers Limited made the disclosure during the Company’s virtual media interaction as part of activities to mark this year’s ‘World Insurance Awareness Day’, which holds every 28th of June each year.

Igbo joined by other management staff, said the Company’s solutions serve individuals and corporate entities, as well as existing customers and non-customers of the Stanbic IBTC Group.

“As insurance professionals with a vast knowledge of the workings of the insurance market, we can arrange the most suitable policies for our individual and corporate clients.”

According to him, there are various personalised insurance products and services which serve all classes of the society from individuals to groups, associations and large corporates. @Businessdayng

ance brokerage company, Stanbic IBTC Insurance Brokers offers life, hope and support particularly in the wake of the current global pandemic.”

While promising that the Company will remain keen on providing seamless solutions that suit diverse needs, Igbo urges Nigerians to take a step in the right direction by investing in insurance coverage to protect their assets and valuables.

“With much excitement, I can tell you that our anticipated plans to improve our clients’ experience are gradually coming to fruition, and you will be seeing some of these in the public space very soon, the CE said.

Igbo further noted that insurance penetration in the country is at an all-time low and this isn’t favourable for the wellbeing of individuals, businesses and the economy in general.

“The insurance business is a unique one which enables clients effectively manage their risks, and such risks may include theft, accident, robbery, injury, man-made and natural disasters, and even death.”

Ibiyemi Mezu, head, Business Development Division responding to questions from the participants said as a brokers, its role is to represent clients in arranging quality coverage and affordable cost, as well as ensure that claims are paid without hassles.

Tuesday 30 June 2020

BUSINESS DAY

15

property&lifestyle

How an affordable housing scheme is changing Lagos rental market story CHUKA UROKO

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report by Pison Housing Company on ‘The State of Lagos Housing Market’ classifies Lagos, Nigeria’s commercial nerve centre, as an active rental market where about 60 percent of the state’s 20 million residents live in rented accommodation.

This means that demand for houses for rent in the state, which the report says has housing deficit estimated at 3million units, must be high.

By simple economics, price (rents) in this market must also be high. The report adds that the residents spend about 50 percent of their income on house rents.

Lagos is such that whether the story is about house prices or about rents, what is on offer in the city compares favourably with what obtains in the most expensive housing markets globally. Lagos is where, even in its slum areas, residents struggle to pay for small-size family apartments such as 1 and 2-bedroom apartments.

In the highbrow areas of the state, rents for 1 and 2-bedroom apartments range

from N2.5 million to N4 million per annum. At the suburbs, these go for between N200,000 and N400,000 and the prospective tenant is required to pay upfront, mostly for two years.

These reasons explain, in part, why the state government came up with a housing scheme which is not only affordable, but also convenient and progressive as it gradually leads a subscriber eventually to homeownership.

Known as Rent-to-Own, the housing scheme, which is anoff-shootoftheLagosHome Ownership Mortgage Scheme (LagosHOMS),requires a subscriber to pay just 5 percent of the value of any house he wants to rent-to-own as his equity contribution and the balance spread over 10 years.

This way, gradually but steadily, the state government is changing the home-ownership story of the residents. The scheme, which was launched in 2016 with special focus on first time home buyers, entered the housing market with 4,355 housing units it inherited from the mortgage scheme.

These houses came from 12 housing estates including Sir Michael Otedola Estate,

Odoragunsen, Epe, Odo Onasa, Agbowa, Igbogbo Housing Estate, Ikorodu, Egan -Igando Housing estate, Alimosho, Lateef Jakande Gardens, Igando also in Alimosho. Other estates for the scheme are CHOIS City, Agbowa, Olaitan Mustapha Housing Estate, Ojokoro, Iponri Estate, Surulere, Sangotedo Estate, EtiOsa and Ajara Estate, Badagry.

The last one year of the Governor Babajide SanwoOlu administration in the state has not only strengthened the scheme, but also given it greater impetus in terms of project delivery.

“In the last one year, this administration has strength-

PFAs expect framework, efficiency, safety for N2trn pension-driven housing fund … as FG plans to develop 300,000 homes in 12 months ENDURANCE OKAFOR

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or Nigeria to successfully build its way out of economic downturn through mass housing and road construction using funds from the pension industry, it would have to set up a private sector-driven structure that would guarantee a return on investment for pension contributors, players in the pension industry have said.

For the pension industry to channel its funds to government projects like roads and mass housing, the The players expect that planned project should be the type that meets some of their investment standards and would have a structure that makes the funds safe.

“We want efficiency, safety and the right pricing so that pension contributions that would be invested in the housing project will come back with interest,” Oguche Agudah, Chief Executive Officer, Pension Fund Operators Association of Nigeria (PENOP), said, adding that there has been an on-going discussion on the pensionenabled housing development.

According to him, “we are okay with the fact that government wants to provide homes for Nigerians,” but if the initiative is going to be successful, the private sector is the best option.”

As a way to avert the postCOVID-19 recession awaiting Nigeria’s oil-dependent economy, the Economic Sustainability Committee (ESC), chaired by Vice President Yemi Osinbajo, recommended a mass housing programme expected to deliver up to 300,000 homes annually.

The housing project alongside an extensive public works and road construction programme that will be focusing on both major and rural roads are expected to shield the already troubled Africa’s largest economy from taking more hit from the pandemic.

To fund the project that will close 1.5 percent of Nigeria’s housing deficit of more than 20 million units, the Federal Government plans to raise about N2 trillion long term capital from the pension industry.

Explaining how pension fund can be accessed, Peter Aghahowa, Head of Corporate Communications Departwww.businessday.ng

ment at National Pension Commission (PenCom) said “if government is coming out with an instrument and the PFAs sees it as a good investment, then they should be able to put in their funds as long as “it meets the investment guidelines set up by the regulator.”

According to Aghahowa, the pension industry is one that is highly regulated and, as such, “the investment has to be allowable and should be able to offer good returns.”

Meanwhile, industry statistics estimate, in monetary terms, that Nigeria’s property industry with one of the lowest homeownership rates in Africa requires between N170trillon to N200trillion to bridge the conservative 17million housing demand-supply gap if each housing unit is to cost N10million.

Before the early effect of COVID-19 slowed Nigeria’s housing industry, its lowest level in two years at -4.57 percent as of March 31, 2020, access to affordable housing in Nigeria was crippled by lack of non-functioning mortgage system, high cost of property development buoyed by the country’s archaic Land Use Act, among other factors.

ened its policy of delivering homes to Lagosians through a convenient mortgage system tagged Rent-to-Own,” Moruf Akinderu-Fatai, the state’s Commissioner for Housing, said at a ministerial briefing to mark Governor Babajide Sanwo-Olu’s one year in office.

He disclosed that besides the 600 beneficiaries recorded for the state’s mortgage schemes, Rent-to-Own scheme has also recorded 1,230 beneficiaries, giving over 9,000 Lagos residents that have benefitted from the two schemes.

It was an emotion-laden event in February this year

when Sanwo-Olu handed over keys to 492 families who were beneficiaries of the scheme at Lateef Jakande Garden Estate in Igando as certified by the State Mortgage Board.

One of the beneficiaries, a 56-year old widow, Fatimat Kosoko, could not hold back her emotion when her name was announced as a beneficiary of the scheme.

Kosoko, a mother of four and staff of the state Ministry of Education, said the scheme had brought relief to her family, eight years after she had been struggling to provide decent accommodation for her children, following her

husband’s death.

Akinderu-Fatai noted that this scheme has helped to reduce housing deficit in the state; promote mortgage culture; keep default rate to the barest minimum, and ensure that the existing schemes are in clean and habitable condition.

Apart from the Rent-toOwn scheme, Lagos is also delivering housing for other residents of the state some of whom already have their second or third feet on the property ladder. These include middle and upper class members of the society.

The Sanwo-Olu administration in the last 12 months completed and delivered some of these schemes.

Among them were the Courtland Luxury Villas, Igbokushu in Lekki and Lekki Apartments located at Freedom Way Junction, Lekki Phase1.

A Joint Venture project between Lagos State Development and Property Corporation (LSDPC) and Messrs Le Grande Property Development Company, the Luxury Villas which sits on 28,321 square metres of land comprises 120 units of 4-bedroom maisonettes and a boy’s quarter.

Time for low income earners to own homes as Switchlanes offers opportunity CHUKA UROKO

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or low income earners, time is here and now for them to buy their homes as Switchlanes Investment has put on the market products that are not only pocket-friendly but also accessible with convenient payment plan that suits their income flow.

Consistent with their mission to ensure that no matter how small one’s income is, he should be able to afford a house, the young real estate development company has put out a number of products targeted at various income classes in the society.

One of such products is

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Yorkville Estate Phase 2. Others are Swanpark Estate, Greenfield Court, Greenfield Estate Phase 2, and Norrisgreen Court, all being developed across three main locations in Abijo, Epe and Ibeju Lekki which is adjudged as the fastest developing area in Lagos.

Ibeju Lekki is home to the expansive Lekki Free Trade Zone (LFTZ) where massive developments are taking place including the over 600 barrels per day Dangote Oil Refinery that promises to employ over 10,000 staff who will be needing real estate assets and products for living, working and leisure. LFTZ is also where the ambitious 200-hectare Alaro City is fast

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evolving.

This means that any property bought within that axis has great potential for rapid value appreciation and a promise for good return on investment. This, therefore, makes the SwtichLanes products a good buy for either residential or commercial purposes.

“All our products are so affordable that even the masses can buy and we don’t waste time with allocation of plots,” Babatunde Ogunsanwo, the company’s Operational Manager, assured at an interactive session with select property editors in Lagos.

According to him, the Swanpark Estate located in Ashagun village in Ibeju Lekki was selling for 650,000naira per plot, adding that, for flexibility of payment, buyers could pay by installment for 3months after the initial deposit of N250,000. Also the Greenfield Estate is selling for 650,000 with installment payment option.

“But our Yorkville Estate also in Ibeju Lekki goes for N1.5million and this is because it has been approved by the Lagos State government.

Greenfield Phase 2 is selling for N2.5million. Here, we have done allocation for people that have paid all their charges.

Some have even started building on their plots,” he said.

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Tuesday 30 June 2020

BUSINESS DAY

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BUSINESS DAY

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18

Tuesday 30 June 2020

BUSINESS DAY

Markets + Finance

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Dangote Cement Plc: Resilient Q1 2020 results amid early impacts of COVID-19 BALA AUGIE

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hile manufacturers have seen earnings go up in flames due to the devastating impact of coronavirus pandemic shocks, Dangote Cement is thriving as the largest maker of the building material has the financial strength to fend off macroeconomic headwinds.

Dangote Cement has added another superlative to its title, as it emerged as the most profitable manufacturer in Nigeria, thanks to cost control, and aggressive expansion plan across Africa.

Over the past few years, the company had been taking advantage of the country huge infrastructure deficit and rising middle class across the continent to add impetus to earnings.

For the first three months through March 2020, Dangote Cement posted a profit after tax of N60.59 billion, which is three times BUA Cement’s N19.75 billion net income; Nestle Nigeria, (N11.19 billion); Lafarge Africa (N8.06 billion); Flour Mills, (N5.89 billion); Dangote Sugar, (N6.72 billion), and Nigeria Breweries (N5.50 billion).

Dangote Cement’s revenue surged by 3.75 percent to N249.18 billion March 2020 from N240.15 billion the previous year, supported by higher volumes and realized prices in Nigeria.

The company’s Pan African operations are a major drive of Group margins even

despite the early effect of global macroeconomic shocks.

Pan Africa’s earnings before interest taxation depreciation and amortization (EBITDA) surged by 23.40 percent to N14.62 billion s at March 2020, supported by strong performance in Ethiopia and Senegal.EBITDA margin increased to 20.90 percent in the period under review from

16.90 percent as at March 2019.

The cement giant said that while its plant continued to operate during this period, it witnessed a reduction in sales.

“The temporary restrictions deployed in Nigeria continued subsequent to 31March 2020, with some amendments.

Nigeria sales volumes and values in April 2020 were trending lower than the volumes and

values realized during the same period last year,” said the company.

Dangote Cement recorded the highest first quarter (Q1) volume in the last four years of 4.0 million metric tonnes (MT), despite the absence of land exports.

With net cash generated from operating activities to the tune of N125.12 billion as at March 2020, the company has the financial strength to pay dividend, settle its debt and fund future expansion plans.

The company can honour its debt convent without putting pressure on cash flow, and its earnings can cover interest expense, which means it is not exposed to financial risk or beleaguered by debt.

Times interest coverage ratio is 10.54 times operating profit, while finance cost reduced by 23 percent to N9.01 billion as at March 2020.

Dangote Cement has a strong capital structure and robust balance sheet as debt to equity ratio fell to 31.42

percent in the period under review as against 39.13 percent the previous year. Total debt (short and long term) fell to N298.53 billion in the period under review from N351.43 billion.

The interest coverage ratio measures how many times a company can cover its current interest payment with its available earnings. The lower the ratio, the more the company is burdened by debt expense.

When a company’s interest coverage ratio is only 1.5 or lower, its ability to meet interest expenses may be questionable.

Despite the uncertainty caused by COVID-19 pandemic that paralyzed business activities across the country, Dangote cement successfully issued its N100 billion Series 1 Fixed Rate Senior Unsecured Bonds.

The proceeds of the N100 billion Series 1 Fixed Rate Senior Unsecured bonds due in April 2025-which was oversubscribed by investors- will be used to facilitate some cement expansion projects, support working capital and to finance company general project.

Including the bond issuance, DCPs debt to equity ratio is 42 percent (from 31 percent in Q1 2020), strengthening its capital structure.

The company received positive ratings on its debt from global ratings agencies.

On 23 January 2020, Global Credit Ratings affirmed the long term and short-term national scale issuer ratings of AA+(NG) and A1+(NG) respectively, assigned to DCP, with the outlook accorded as stable.

On March 24 2020, Moody’s assigned a (P)B2 local currency rating and Aa3.ng national scale rating (NSR) to the NGN300 billion domestic medium-term note program issued by DCP. There are tough times ahead for cement makers as Federal Government has reduced the amount budgeted for capital expenditure by 20 percent in the 2020 budget due to coronavirus pandemic shocks on revenue and crude oil price.

Constructions activities have been suspended across the country due to lockdown

BD MARKETS + FINANCE Analyst: BALA AUGIE www.businessday.ng

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measures impose by government to curb the spread of the virus.

The International Monetary Fund says Nigeria’s economy is expected to shrink by 3.4 percent this year and Africa’s largest economy could face a recession lasting until 2021.

Insidious virus has shattered Nigeria’s economy as Brent crude oil fell from $70 per barrel at the dawn of 2020 to $20 per barrel as of April 22, 2020.

The Nigerian economy has been growing sluggishly since the country existed a recession 2016, and the renewed clashes between farmers and herdersmen (that has claimed thousands of lives contributed) undermined Agriculture GDP. As a result of a border closure imposed by Federal Government in order to curb smuggling of rice and other products, headline inflation rate spiked as price of food skyrocketed.

Investors’ apathy towards the equity market continues to gathered momentum in 2019 as they dumped shares due to lack of transformation policy on the part of government and poor corporate results.

Investors are still dumping shares and investing in more attractive emerging market countries with benign macroeconomic environment and stable foreign exchange policy.

Since the start of last year, yields began a precipitous drop, and the dip gathered steam in the last quarter of the year when the central barred individuals and local corporates from investing in Open Market Operations (OMO) auctions.

According to the Q1-2020 GDP report published by the National Bureau of Statistics (NBS) on 24 May 2020, economic growth slowed to a nine-quarter low of 1.87 percent yoy from 2.55 percent yoy in Q4-2019 and 2.12 percent yoy in Q2-2019.

Additionally, the statistics body added that capital importation for the first quarter (Q1) 2020-the total amount of foreign investment inflows into the Nigerian economydeclined by 31 percent year on year (y/y) to $5.85 billion in the first (Q1) 2020 from $8.51 billion in Q1 2019.

Tuesday 23 June 2020

BUSINESS DAY

Investments

19

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Explainer: How foreign exchange may affect service reflective tariffs implementation STEPHEN ONYEKWELU

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f all goes according to plan, tomorrow, the new service reflective tariffs will take effect, a review that is many years overdue but the Central Bank of Nigeria’s foreign exchange rate management may throw spanners in the works.

The ultimate goal of electricity tariff review is to develop a credible market where value creators across the chain, such as gas, generation, transmission and distribution companies, can recoup operational costs in addition to some reasonable profit for services provided. The value chain is so interwoven that any weak link disrupts value creation and the reward for value created in the form of tariffs.

Since the power sector privatisation in 2013, the Nigerian Electricity Regulatory Commission (NERC) has failed to review electricity pricing at least six times under the Multi-Year Tariff Order (MYTO) it instituted to price electricity, a failure that has discouraged new capital injection into the sector and caused shortfalls of nearly N1.40 trillion.

A tariff order dated March 31st and published on the Commission’s web-

site had booked April 1, 2020, for the takeoff of the new electricity tariff by electricity Distribution Companies (DisCos). This was later postponed and July 1 is now the new date.

The recent commitment of the NERC to push through with the tariff review is connected with the $3.40 billion emergency financial assistance that Nigeria received from the International Monetary Fund (IMF). The Bretton Woods institution demanded that the fund be judiciously used and that both oil and electricity subsidies need to be removed.

One factor which may constitute a major setback to this is another form of subsidy, this time on foreign exchange. There is huge foreign exchange exposure that the gas sector is exposed to. The gas

sector is also exposed to the power sector.

The gas sector is generally a dollar investment sector and takes hundreds of millions of dollars and in some cases billions of dollars invested in a gas production system and when it is time to sell, the gas is paid for in naira.

“You are not paid in naira at the market rate; you are paid at the CBN rate. Generally, most people lose 20 to 30 percent of their invoice value on forex exposure,” Dada Thomas, chief executive officer of Frontier Oil Limited said. “This is not an incentive for investing in gas in Nigeria and the power sector is the biggest off-taker of gas, accounting for up to 80 percent.”

Although Godwin Emefiele, governor of the Central Bank, has said that the CBN will continue to

pursue unification around its Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) rate. The CBN has a long history of defending the naira and has been slow to let the currency float, in its effort to manage price stability.

Three months ago, Emefiele stated that the adjustment of the naira from N307/$1 to N360/$1 at the official window was not devaluation. Whatever this is called it shows the naira has lost significant value against the greenback. But the naira sells at N460/$1 at the parallel market. This creates arbitrage opportunities and discourages foreign investors from bringing in fresh investments.

The gas to power sector is an interwoven and intrinsically dependent chain, if there is a weak link in that chain, then the entire system collapses.

There is no problem for anyone investing in gas export (Liquefied Natural Gas), the reason is simple. The investments are done in dollars, the LNG is sold in dollars to credible, bankable off-takers who will pay invoices as when due. Service reflective tariff review that ignores the impact of foreign exchange on gas investments and gas pricing misses an important part of the power jigsaw puzzle.

Lumos Nigeria Lauds Presidency’s Plan to Provide 5 Million Solar Home Systems to Bridge Energy Deficit

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f f- g r i d e n e rg y firm, Lumos Nigeria, has commended the Nigerian Presidency on its plan to install five (5) million Solar Home System to serve 25 million households currently unconnected to the National Grid across the country.

The report by the Economic Sustainability Committee (ESC), chaired by Vice Presid e nt Ye m i O s i n b aj o which was presented to President Muhammadu Buhari in Abuja has projected that unemployment rate which was 23.1percent (or 20.9m people) at the end of 2018 is expected to rise to 33.6perent (or 39.4 million people) at the end of 2020, if urgent steps are not taken.

In response to this, Adepeju Adebajo, CEO, Lumos Nigeria said, “the government’s plan to invest in 5 million solar home systems across Nigeria, is an important development. Energy is a core pillar of economic growth and will be a strong catalyst to sustainable economic recovery, post-COVID-19.

Lumos is the market leader in affordable solar

home systems, providing access to power to homes, micro and small businesses nationwide, and we understand the impact of power on the quality of life and livelihoods. We applaud this important initiative and will work with the Nigerian government to make it a reality.”

Nigeria, plagued by a large energy supply deficit with only 33% of households and 30percent of businesses having stunted access to grid electricity, needed to leverage her abundant renewable solar energy source to accelerate plugging the enormous gap.

Deploying solar home systems for emergency national energy provision is not new to Lumos Nigeria. Backed by a grant from All On, an organisation established to increase access to energy for under-served and unserved consumers by the SHELL Company , Lumos recently installed solar-powered systems to power primary health center’s and emergency response centers across Nigeria in response to the COVID-19 outbreak in the country.

EXPLAINER

Is Nigeria’s AKK pipeline project economically viable or bridge to nowhere?

DIPO OLADEHINDE

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uccessive Nigerian governments have talked about better utilising the country’s vast gas reserves to drive economic growth with little to show for it, however, President Muhammadu Buhari’s administration look set to get the sector moving with the kick start of the $2.8 billion AjaokutaKaduna-Kano (AKK) gas pipeline construction on Tuesday, June 30.

The project is a 614kmlong natural gas pipeline currently being developed by the Nigerian National Petroleum Corporation (NNPC) is Phase One of the Trans-Nigeria Gas Pipeline (TNGP) project, to be done

on a build-and-transfer Public-Private Partnership (PPP) basis.

It will transport 3,500 million metric standard cubic feet per day of dehydrated gas from several gas gathering projects located in southern Nigeria.

The project which will be in three phases includes the 200 kilometres long and is between Ajaokuta and Abuja, at a projected cost of $855 million while the second phase is 193 kilometres long, between Abuja and Kaduna at an estimated cost of $835 million.

The third phase is 221 kilometres-long, between Kaduna and Kano, at a projected cost of $1.2 billion.

Project financing The Ajaokuta–Kaduna– www.businessday.ng

Kano (AKK) gas pipeline project is planned to be financed through 85percent debt and 15percent equity.

The loan facility is being provided by the China Export & Credit Insurance Corporation (Sinosure) at London Interbank Offered Rate (LIBOR) interest rate plus 3.7percent with a 12-year repayment period while NNPC will cover the remaining 15percent of the project’s cost.

“We have done an extensive review of this project and we are satisfied that the cash flows from the Ajaokuta-KadunaKano gas pipeline will be sufficient to repay the facility,” Nigeria’s finance minister Zainab Ahmed told Reuters in March.

Benefits of AKK pipeline The project will result in the establishment of a connecting pipeline network between the eastern, western and northern regions of Nigeria.

It also aims to create a steady and guaranteed gas supply network between the northern and southern parts of Nigeria by utilising the country’s widely available gas resources.

The project is also expected to increase the local usage of domestic gas at the same time increase the country’s revenue generation through the export of natural gas.

Challenges Despite the numerous opportunities attached to

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the $2.8 billion AjaokutaKaduna-Kano gas line project, some stakeholders have raised doubt about the economic viability of the project.

They predict that the project might face the same challenges the Kaduna refinery is currently facing. Unlike the Warri and Port Harcourt refinery which was built within the vicinity of crude oil exploration, Kaduna Refinery was built almost 700 kilometres away from crude oil.

“The CAPEX for the crude pipeline to Kaduna, and that of the construction of the refinery could not be recovered, not to talk of profit,” says Lagosbased Alao Abiodun, head @Businessdayng

of energy research at New Nigeria Foundation.

Some have also argued about the availability of gas in the southern region as some of the power plants in the region have always complained about inadequate gas supply.

For example, the two power plants in Ajaokuta (Geregu 1 and 2), where the line will take off from, are not getting enough gas to operate at full capacity while Dangote cement plant in Obajana does not get enough gas, so it has to substitute that plant with coal.

But NNPC has always insisted that the project is economical and timely, stressing that its Public, Private Partnership funding makes it viable.

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Tuesday 30 June 2020

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Lagos state Govt approves N500m scholarship grants to state indigenes - Tokunbo Wahab • says substantive rector for LASPOTECH will resume September, 2020 •As tertiary institutions rolled out their road map for resumption He is passionate about his job as he reels out measures the state government is putting in place to improve the standard of Education sector and ensure qualitative and affordable education for all. Talking to Businessday in his office, he exhumes simplicity and down to heart as the energetic Special Adviser on Education to Governor Babajide Sanwo-Olu, in this interview with MARK MAYAH, takes you down the lane on the onerous task before his office as well as the reforms Governor Sanwo-Olu have been pushing in the past 12 months. The zeal to ensure the right thing is done in the formal and informal education sector is indeed the driving force for Tokunbo Wahab. Excerpts:

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Tokunbo Wahab, Special Adviser on Education to Governor Sanwo-Olu

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The college is the sole institution providing nurses for the entire state. We had approved the admission of 75 student- nurse for next academic session from the armies of applicants

‘

e is passionate about his job as he reels out measures the state government is putting in place to improve the standard of Education sector and ensure qualitative and affordable education for all. Talking to Businessday in his office, he exhumes simplicity and down to heart as the energetic Special Adviser on Education to Governor Babajide Sanwo-Olu, in this interview with MARK MAYAH, takes you down the lane on the onerous task before his office as well as the reforms Governor Sanwo-Olu have been pushing in the past 12 months. The zeal to ensure the right thing is done in the formal and informal education sector is indeed the driving force for Tokunbo Wahab. Excerpts: How has it been in the past 12 months in the states’ tertiary institutions under your watchdog?

A very worthwhile judgement at the beginning of the present administration and ultimately peaceful in our tertiary institutions in the past one year. At the inception, His Excellency Governor Babajide Sanwo-Olu inherited pockets of restlessness in two of our campuses, particularly Lagos state polytechnic, Ikorodu which led to the setting up of a Visitation Panel of enquiry to unravel and recommend best positive practice ways in moving the institution forward.

I assure you that the report is ready and submitted for onward transmission to Mr Governor for action and implementation. Good to note also that next 24 months, a befitting administrative bluilding shall be handed over to LASPOTECH authority, as contractor awarded the contract had gotten mobilization fees and already at the site. The administrative building had been a promissory note for years. We also have cause to appoint a provost in one of the oldest colleges of education, Adeniran Ogunsanya college of education, Ijanikin. The process was transparent and merit driven. At the state university, towards consolidating the institutions’ developmental strides, the governor had on December 28, 2019 signed an agreement for a Public Private partnership model, first in Africa - to provide 56, 876 bed- spaces for the students. We did not commit a kobo into the project. It was structured in a way that LASU becomes the owner of the campuses from the private developers at the end of transactions.

Other tertiary institutions will follow suite. Aside, we had completed infrastructures such as: lecture theatres,

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Research Laboratories, hostels and ICT facilities at the state College of Nursing and Midwifery as to enable the college admit more students and have accreditation from the Council of Nursing and Midwifery of Nigeria.

At the moment, the college is the sole institution providing nurses for the entire state. We had approved the admission of 75 student- nurse for next academic session from the armies of applicants.

How soon is your office expected to conclude the process for the appointment of a substantive rector in the state polytechnic?

No thanks to COVID-19 pandemic that erupted globally, which hindrance the early process. At the moment, upon the constituting of a screening panel, we had sent out invitation letters to the 17 qualified candidates for screening. A candidate must meet with criteria set up by the law estsblishing the polytechnic, which includes: indigeneship, excellent resume and moral behavioural attitude etc. Thereafter, successful candidates selected from the 17 aspirants will in turn meet the main interview committee that is responsible for the emergence of a substantive rector in September, 2020. We are going to take the best among equals.

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They all have good resumes but one out of the armies of applicants Will emerged. We hope that the lockdown law would be reviewed so as to enable candidates outside Lagos travel down. A substantive rector for the polytechnic will resume in August, after all the processes are completed

by July ending. The acting period ends in August, 2020.

Your stake on FG/ASUU faceoff?

If you could observe, LASU is not taking part in the ongoing nationwide strike. Our lectures are ongoing online at the institution.

This is made possible because we were able to manage the issue internally. The fact also is that the state is not owing her lecturers. We are ahead of our peers as a state, Lagos stands shoulders above all other states in the federation.

Am not saying all these because am in government, but because I understand that in all the existing tertiary institutions in the state, we understand their needs and we are providing them accordingly as at when due since assumption of office of Governor Babajide Sanwo- Olu in 2019. Tertiary institutions are where you expect a superior argument and respect it, @Businessdayng

if you want them to grow. It’s when you allow teachers to grow, the students and the larger public the beneficiaries. We take care of our lecturers, non academic staff and students at meeting the set goals.

We need to take responsibility beyond the government.

What are measures putting in place towards early resumption of students in the state tertiary institutions?

There was a meeting between Mr Governor and Heads of tertiary institutions last week Tuesday at Alausa.

The institutions rolled out their road map to the government on how they would open the schools. They are expected to scale down the opening of schools beginning with those in their terminal year, starting from 400 level students, 300 level students and verse versa. Pragmatically, we will open the schools in such a way that the COVID-19 pandemic will not spread in the schools’ community.

You have raised a very germaine question. What is expected of us the moment directiveis given for reopening is that, since JAMB admission is based on school criteria in bringing a student into campus, we will admit and each institution will also determine when a particular level of students are to resume. Students will resume in sequence beginning with those in 400 level, closely follow with those in 300 level, then 200 level students and finally freshers. The old students are presently receiving lectures online as we speaks, in all our campuses including the college of nursing and midwifery. So by the time you open the four walls of the campuses, we then ask the students to come in, do revision then examination and we ask them to go home.

We lost nothing in Lagos so far.

With the present high cost of education in our tertiary institutions, how do you supplement your indigene students?

Please to note that a sum of #500 million has been approved for payment for qualified state indigenes in tertiary institutions across the country. The largese will go the way of no fewer than 350 students for the 2019/2020 academic sesdion.

The interview already conducted by the state scholarship Board, to ascertained true identity of all the qualified candidates.that had sought for the grants. Hopefully after lifting the inter- state movement lockdown, the concern students will have their cheques pay to them. The cheques are ready for collection.

Tuesday 30 June 2020

BUSINESS DAY

21

Is the coronavirus crisis taking women back to the 1950s?

Decades of advances under threat as women juggle work and childcare, while some employers target them for redundancy EMMA JACOBS AND LAURA NOONAN

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few months into juggling work and caring for two school-age children, a female finance executive based in Dublin narrowed her ambitions down to a single bullet point: “Just survival”.

“This has been the hardest time as a working mother,” she writes, responding to an FT callout asking women to share experiences of how pandemic life is affecting their career progress.

The pull in two directions between work and home is exacerbated by the lack of childminders and a cleaner. She describes feeling unsupported by senior colleagues who have a stay-athome partner. “The word ‘understanding’ is not part of finance,” she says, adding that while “the policies are all there, beautifully written” the reality is “the work has to get done and to the same standard — period”.

Her husband has some of the same pressures, but when he brings their children on to a video call, it is deemed adorable.

There is no chance she would do the same. “Career suicide.” When we catch up a few weeks later, she says things have “calmed down” — but she still feels at a disadvantage.

Her experience, echoed by other women who contacted the FT, falls far short of the inclusive workplace that many employers say they aspire to become. Before the pandemic, women had benefited from longstanding efforts to increase their representation at mid and senior levels.

Statistics and empirical research already suggest that women are being disproportionately hurt by the pandemic’s economic fallout. Sectors employing high numbers of women have been badly affected, notably hospitality and leisure, which accounted for 7.7m of the 20.5m jobs lost in the US in April, when the pandemic took its heaviest toll on employment, according to data from the US Bureau of Labor Statistics.

Allyson Zimmermann, executive director at Catalyst Europe, a non-profit that advocates for women at work, says the pandemic is “amplifying inequality”.

Catalyst research in the US found that one in three jobs held by women is considered essential, a higher proportion than for men, and that women of colour are the most likely group to hold an essential job. These jobs are often low-paid and without sick pay.

One woman working in finance

confesses to feeling indulgent for fretting about her career when she is taking food to parents in her son’s class who have lost their jobs. But her fears, and those of others, are acute as they contemplate a future where ambition and career plans become a fantasy.

Or, as another financial services worker puts it, might post-Covid be a world “where we go back to the 1950s with a primary caregiver and a wage earner?”

Many fear new effects as the crisis drags on. Despite the impact of Black Lives Matter protests, and companies’ statements of support for diversity and inclusion, financial pressures could lead to these programmes being sidelined. And as teams are redeployed to deal with market changes, temporary jobs are filled without transparency. One man observes “a cultural bias towards seeing leadership in a crisis as requiring male attributes.

Nonsense, of course, but there is a bias at work which feeds this perception.”

Now that some workers are returning to offices, there are fears of a two-tier workforce as those with domestic duties are likely to remain very much “out of sight, out of mind”.

Deutsche Bank US chief executive Christiana Riley, who found herself alone with two schoolaged children outside New York while her husband waited out the pandemic in Germany, admits it’s a concern.

“We’re going to be very clear throughout this period of phased return that there is no distinction between someone who’s in the office or out of the office — they’re equally able to do their job and be part of the team,” she says, adding that she has been impressing a “family first” mantra across her senior management as staff cope with a “very unusual and potentially very stressful situation”.

The optimists see this period as encouraging men to take on a www.businessday.ng

greater share of domestic tasks and demanding enlightened work policies. A survey this month by Quantum Metrics, a behavioural analytics company, found that 60 per cent of men strongly agree that working remotely will improve women’s ability to advance to higher levels of business in the future.

This sunny view is not shared by activists who have seen how the pandemic is playing out in workplaces. Joeli Brearly, of Pregnant Then Screwed, a campaign group, says pregnant women are worried about their safety at work. “They know they have legal rights but they are too scared to use those rights as the labour market is so tricky.”

She adds that women’s enhanced protection from redundancy on maternity leave does not extend to the period when they are pregnant, or when they return from maternity leave. Campaigners fear pregnant women and new mothers will be first in line for job losses.

One mother of two who works in the energy sector in London, is concerned that “against the backdrop of headcount freezes and having to re-justify each role, women take a backward step. I will have to lobby and fight to get cover for [women on maternity leave] to the point that makes me reluctant to want to hire more women at the child-bearing age — that is painful to say out loud.”

One mother of two who works in cyber security was made redundant while male peers were retained. “My job search now focuses on opportunities that are more remote, less travel, and sacrificing job responsibilities; lower expectations [but] hoping to move up the ladder again,” she says.

The effect of long-term school closures School closures, which according to Unesco have affected 1.5bn children across the world, have

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created sharp divisions within the workforce. The Institute for Fiscal Studies found that UK mothers are combining “paid work with other activities — almost always childcare — in 47 per cent of their work hours, compared with 30 per cent of fathers’ work hours”.

Or, as one London-based selfemployed woman puts it: “When we are both working the onus is usually on me when it comes to home schooling which I am managing alongside my work.”

Lorelei, a New York-based financial services worker with a three-year-old and six-year-old, says that in normal times she and her partner maintained a “delicate balance of full-time childcare, after school programmes, sitters and shared parenting”.

Now, they juggle 12 hours a day of work meetings, calls, first-grade assignments, arts and crafts, virtual play dates and tantrums.

“It’s completely unmanageable to deliver even a fraction of the work product I’m used to. I can’t spend any time reading, thinking or planning. It’s making me question my skills, relationships and role on the team. I’m anxious and overwhelmed, frazzled and disjointed.”

Another woman says several of her friends have decided that dual income New York City lifestyles are not sustainable. When the pandemic is over, they are moving to their home states, where one (probably the man) will work and the other can be on hand for family duties.

Non-traditional family units feel the burden more acutely. “The conversation around working parents during lockdown as typically focused on ‘the gender split’ in the home — which is challenging in itself for both solo parents and same sex couples alike,” says Sera Holland, co-founder of the Fawnbrake Collective, a strategy and innovation consultancy.

Arlie Hochschild, author of The @Businessdayng

Second Shift, the groundbreaking 1989 book that shone a light on working women’s domestic load, says “while a lot more married men are sharing the second shift now than did in 1989, a lot more men aren’t living with the mothers of their children — that is we have a rise in single moms on whom the full burden of kids in shutdown schools now lands.”

Lorelei says most colleagues cannot empathise with a parent looking after small children while working full-time. “The divide that already existed and had affected my experience in the workplace is now [widening].” She worries that this will count against her in career appraisals. “I need to take this time off, completely, and in a more just world, it would be offered to me and my role would be readjusted when the danger subsides. I already feel penalised and invisible when my colleagues complain about boredom and claim business as usual — just remote.”

Elise Neel, vice-president of new business incubation at Verizon, says companies must discuss in advance “how we adjust midyear reviews to take into consideration disrupted productivity due to parenting responsibilities”.

And the US academic Joan Williams, founding director at the Center for WorkLife Law at UC Hastings, says if workplaces call people back before childcare is ready “it will be a tremendous engine of increased gender inequality. This could have a negative impact on women’s employment prospects”.

One solution is a uniform workfrom-home policy such as that announced at Twitter, which is going to allow permanent homeworking, and Google, which is allowing staff to stay at home until the end of the year, so that women do not have to make a case to stay away from the office.

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Tuesday 30 June 2020

BUSINESS DAY

Coronavirus pandemic: Where can you travel this summer?

Countries where the virus appears to have eased are gradually opening up their borders, but restrictions and inconsistencies remain MICHAEL PEEL

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ou nt r i e s w h e re the coronavirus pandemic appears to have eased are gradually opening up their borders — but the picture remains inconsistent and subject to change.

The EU is still wrangling over how much to ease a ban on travel from outside the bloc from July 1, with the likelihood that only a small number of countries where the disease is well under control will be given the green light.

Here, the Financial Times breaks down who can travel where as the northern hemisphere summer and European holiday season approach their peaks. The situation is changing all the time, so it is recommended to check an official source for the latest information before making travel plans.

The EU EU ambassadors reached a provisional deal late on Friday to exempt 15 countries from the existing blanket entry ban on residents of countries that are not in the bloc or Europe’s passport-free Schengen common travel area. The favoured states have been picked because of their apparent relative success in managing coronavirus.

Fourteen of the nations — subject to EU member-state confirmation by 18.00 Brussels time on Saturday — are Algeria, Australia, Canada, Georgia, Japan, Montenegro, Morocco, New Zealand, Rwanda, Serbia, South Korea, Thailand, Tunisia and Uruguay. The 15th, China, would be covered only if it agrees a reciprocal arrangement with EU countries. The list — which is due to become active on July 1 — also includes four European microstates.

The UK has not been subject to any EU entry ban even though it quit the bloc in January, because it is still covered

by EU free-movement rules until the end of the Brexit transition period in December.

EU member states haggled over both the names on the list of countries and the criteria being used to evaluate who will be let in, diplomats said. Officials pointed to uncertainties

around infection rates, including over whether nations are doing enough testing or being sufficiently honest about the prevalence of the virus to reveal the full picture.

Further complicating matters, the list will be a recommendation to member states rather than a hard rule. Countries will retain the right to continue to exclude nations on the list — or even to take a less stringent approach, if they are prepared to risk political criticism and a potential legal rebuke.

EU and Schengen states have opened up many of their borders with their neighbours in the past weeks — and the commission has called for the restoration of full free movement by the end of June. The official list of remaining restrictions can be found here.

The UK and Ireland The UK’s most contentious decision is the requirement, introduced this month, for all foreign arrivals to spend two weeks in self-isolation, even though many visitors will be arriving from places with lower infection rates.

London has been trying to create “air bridges” between countries that are popular holiday destinations to waive www.businessday.ng

the quarantine requirement in both directions.

The UK government on Friday said it would publish a list next week of “low-risk countries” whose citizens would be able to enter Britain without being required to self-isolate.

London added that it was likely to discuss these plans with countries including France, Greece and Spain “over the coming days”.

UK border control decisions have had a knock-on impact on Ireland, which remains an EU member, because of the bilateral Common Travel Area agreements for a light-touch border between the two countries.

Some countries, such as Spain, have agreed to let Britons visit without a quarantine requirement, although a potential deterrent to such holidaymakers is that they would then have to isolate for two weeks on their return home.

Turkey Turkey, which resumed international flights this month, is desperate to lure back tourists who are vital to its $750bn economy. It has yet to strike agreements for “travel corridors” that would allow visitors from key countries such as Germany and the UK to avoid

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a quarantine period when arriving in Turkey and returning home.

Asia Japan has barred travel from more than 100 nations, including many in Europe. It also prohibits foreign residents of Japan from re-entering if they have visited any of the countries on the list during their travels, although nationals are allowed to come back and observe quarantine.

Popular tourist destinations in Asia that appear to have controlled coronavirus relatively well have retained tough restrictions. Thailand has maintained a ban on all but a handful of inbound international flights. Vietnam still prohibits the entry of almost all foreign nationals.

China’s ban on overseas national arrivals remains in place, although the government has recently begun to allow foreign residents to return on a discretionary basis subject to a twoweek government quarantine on arrival in most cases.

It has also signed “green lane” agreements with South Korea and Singapore, allowing business travellers from those countries to enter a selected number of Chinese cities without lengthy quarantines. @Businessdayng

India still prohibits the entry of all foreigners and incoming passenger flights, which has left many of its own citizens stranded abroad for months though they are now slowly being allowed back in. A few exceptions are allowed for business travel or for overseas nationals who are of ethnic Indian origin or have family ties in the country.

The US Washington has banned most travel from the 26 countries in the European Schengen area, the UK and Ireland, as well as Brazil, China and Iran.

But in many of those nations the virus appears to be spreading less ferociously than in the US itself.

Latin America Brazil and Mexico have been hit hard by the virus and have border restrictions in place.

Argentina and Colombia have closed airports to all normal passenger traffic, while Lima airport in Peru is shut to all passengers.

The countries which have had most success controlling the virus so far are Uruguay, Cuba and Costa Rica. The Americas Society-Council of the Americas has a detailed summary of country-by-country restrictions here.

Tuesday 30 June 2020

BUSINESS DAY

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FEATURE How flagging off Nigeria’s most ambitious gas project will affect economy The flagging off of the country’s most ambitious gas project today by President Muhammadu Buhari will have tremendous economic impacts on the citizenry. In this write-up, Olusola Bello examines the benefits that come with such a project.

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The starting point of AKK gas pipeline.

however, the nation’s domestic gas utilisation is low, with data revealing that, of the Liquefied Natural Gas and Gas to Liquid (GTL) produced in Nigeria, only 47 percent is consumed in-country, 44 percent exported, with 9 percent flared. The low per capita domestic gas consumption is attributed largely to infrastructural deficiencies.

The Administration of President Muhammadu Buhari since assumption of office has reinforced investments in gas infrastructure which, sooner than expected, would boost domestic utilisation of natural gas. One of such is the proposed Ajaokuta-Abuja–Kaduna–Kano Gas Pipeline which is a section of the Trans-Nigeria Gas Pipeline (“TNGP”) with a capacity to transport about 2.2billion cubic feet of gas per day.

The Pipeline will originate from Ajaokuta, in Kogi State and would traverse Abuja (FCT), Niger, Kaduna and terminates at Kano. It is expected to be fed from the existing domestic Infrastructure with a capacity of over 1.5 Bcf/d and is being expanded by EscravosLagos Pipeline System II (ELPS II) and Obiafu-Obrikom 3 (OB3) gas pipeline (under construction) that will double the capacity to over 3billion cubic gas per day The right of way for the proposed AKK gas pipeline is planned to run parallel to the existing Nigerian Pipelines and Storage Company’s 16 inch-crude oil and 12 inch- product pipelines wherever possible.

The Engineering Procurement and Construction Contract (EPC) www.businessday.ng

of the project which was awarded by the Federal Executive Council in 2017 has a completion period of 24months and defect liability period of 12months.

The AKK Project, when completed, offers enormous economic and social benefits to the nation. It would unlock 2.2billion cubic feet of gas to the domestic market, support the addition of 3,600mega watts of power to the national grid and revitalise textile

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In spite of the huge natural gas resources of the country, however, the nation’s domestic gas utilisation is low, with data revealing that, of the Liquefied Natural Gas and Gas to Liquid (GTL) produced in Nigeria, only 47 percent is consumed incountry, 44 percent exported, with 9 percent flared

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istory is being made today, Tuesday 30th June 2020, in the annals of gas utilisation in Nigeria as the Presidential Flag-off of the Construction Phase of the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project takes place in Ajaokuta ,Kogi State and Rigachikun, Kaduna State.

The project is expected to boost domestic gas consumption, power generation, and industrialisation.

Today’s exercise has brought to reality the long term dream of the Nigerian government of building the nation’s biggest domestic gas transmission infrastructure.

By flagging of this project at Ajaokuta, Kogi State, the president would be turning to reality some of the nation’s long term economic aspirations of boosting domestic energy infrastructure, deepening the local gas market, creating industrial corridors with cleaner fuel, and commercialising the country’s abundant gas resources.

According to the Nigerian National Petroleum Corporation (NNPC), the project will significantly curb gas flaring in the Niger Delta and guarantee better air quality in the oil producing region.

Furthermore, the pipeline which was conceived to connect demand from the northern part of the country with supply from the south would be the biggest infrastructure development in the country’s recent history. It will also mark a significant shift in the nation’s energy policy; from revenue targeted export programmes to development focused domestic supply programmes.

Significantly, the $2.8 billion project is coming up after seven years of rigorous processes that morphed from policy conception through implementation strategy designs, master-plans and solid implementation programmes.

Despite the generally wellknown fact that Nigeria is an oil producing country, Petroleum Industry experts often describe the country as a gas province with little oil. As at last count, Nigeria is said to boast of 203trillion cubic feet (tcf ) of proven gas reserves, ranking 9th in the natural resource in the world. Indeed, United States Geological Survey estimates that Nigeria’s gas reserves potentials could be as high as 600trillion cubit feet. Experts are of the opinion that not until very recently, there had not been a deliberate search for gas in Nigeria.

In spite of the huge natural gas resources of the country,

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industries which alone boast of over three million jobs in parts of the country.

In addition, the AKK project will support the development of Petrochemicals, fertilizer, methanol and other gas-based industries that will generate employment and facilitate Balanced Economic Growth.

The AKK gas project is a component of the Nigerian Gas Master Plan (NGMC), a gas infrastructure blueprint, which was approved by the Federal Executive Council in 2008, but which has received serious attention of the Buhari Administration. The other major domestic gas transmission systems are: The Western System, that is, the existing 36” Escravos-Lagos Pipeline I and II with 2.2billion cubic feet capacity and the On-going East-West connection via the Obiafu/Obrikom-Oben Pipeline (OB3) featuring 2.4billion cubic feet per day capacity.

Arriving at today’s presidential flag-off of the construction phase of Ajaokuta-Kaduna-Kano pipeline did not happen overnight.

Lots of players, at government, technocratic and at other leadership levels had worked committedly, culminating into the event of today. The glory and euphoria of the day belong to all who have contributed, in one way or another, to the gas development efforts of the Country.

The Project will also facilitate the development of three (3) base Independent Power Plants (IPPs) in Abuja (1350MW), Kaduna (900MW) and Kano (1350MW) and steer the development of gas based industries along its corridor @Businessdayng

and beyond.

Other values envisaged from the project include: multiplier effect in the local content circles, Cleaner environment for the host communities, accelerated technical growth, direct citizen utility, Industrial convenience, and of course, general broadening of the economy.

Federal Executive Council awarded the Engineering Procurement and Construction Contract (EPC) in favour of the following companies on build-and-transferbasis (BT) with a completion period of 24months and defect liability period of 12months.

The Scope of Work includes Engineering, Procurement, Construction, Installation, Testing and Commissioning of a 40” x 614km class 600# pipeline system from Ajaokuta to Kano with associated intermediate and terminal facilities to supply natural gas to off-takers at Abuja, Kaduna, Kano and Zaria environs and along the environs of the pipeline route.

The scope of work for the EPC for the AKK Gas pipeline segment is as delineated here: Segment 1; Engineering, Procurement, and Construction of 40” X303.4 Km linear pipeline system from Ajaokuta to Kaduna; (Kp 0 to Kp 303.4), Ajaokuta MS/TGS, Abuja IPS and all sectionalising BVS, inclusive of BVS 12 @ Kp 303.4, with a 20” x 15km spur line While the second segment follows this pattern; Engineering, Procurement and Construction of 40” X310.6 Km linear pipeline system from Niger State (Kp 303.4 to Kp 614), Kaduna TGS, Kano TGS and all sectionalizing BVS, exclusive of BVS 12 @ Kp 303.4, with a 24” x 15km spur line.

The 614 kilometer gas pipeline conceived to provide the highly desired stimulus to domestic industrial growth will be delivered by a consortium of indigenous and international engineering firms.

This project will also signal the finest hour so far for the Nigerian Content Policy goals.

Oilserv Limited and CFHEC consortium will handle phase1 of the construction while Brentex Petroleum Services and China Pipeline Bureau (Brentex-CPP) will handle the second segment.

The Buhari Administration will ever be remembered for taking the practical step to ensuring energy security for the country by consolidating Nigeria’s aspiration to have a national energy mix that works for the country and the entire citizenry.

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Tuesday 30 June 2020

BUSINESS DAY

Media business Challenging times: AAAN needs firm leaders, as members go the polls Daniel Obi

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hursday, this week, the Association of Advertising Agencies of Nigeria, AAAN members will go the polls to elect new members who will pilot the affairs of the creative agency for the next two years.

This follows the end of the tenure of Ikechi Odibo-led executive who took over from Kayode Oluwasona who governed the body as president for two years ending 2018.

There is no doubt the creative body must be deep and profound in determining who takes over the helm of affairs of the 47 years old body considering the deepening dynamics in the environment which have affected the industry.

In all ramifications, the present dynamic environment demands that credible, youthful-thinking, tech-savvy and active leaders are elected at either federal, state or association levels to take such institutions to the next level.

Situations confronting the world and businesses, presently defined by technology and now Covid-19 make it more imperative for countries, companies and associations

to de-emphasis emotions in selection of leaders to pilot their affairs.

For the creative agency, it is facing daunting tasks and it needs forward-looking, and focused leaders to tackle them.

First, Nigeria’s Integrated Marketing Communication industry is relying on the Association to lead the industry in negotiating and convincing Buhari administration to reconstitute the board of Advertising Practitioners Council of Nigeria, APCON. The absence of the APCON board in the last five years has not allowed the advertising apex body to function at full capacity and this has cold implications for the advertising industry valued at about N150 billion.

Statutorily, AAAN has the largest number of 10 members in the 21 board membership of APCON. Though, out of the 10, it has ceded one each to OAAN and MIPAN respectively.

The present economic situation occasioned by the pandemic is also not favourable to many sectors including marketing communication industry. This is in addition to the heavy burden placed on the industry by the difficult operating environment occasioned by slow economic growth at 2.27%, marketing communi-

cation budget cut, multiple taxation, delayed payment by clients and competition.

Therefore, foremost association like AAAN needs leaders who can create strategies to galvanise its members and clients on how to cushion the effects of the economic challenges.

Fortunately one of the vibrant personalities in the industry, Steve Babaeko, CEO of X3M Ideas is stepping forward to lead the association as he promised to create vibrancy in the industry.

Steve who is the vice president to Ikechi Odibo is promising to ensure the association is more visible to the government and in the lives of its fellow practitioners, especially when it comes to protecting the members common interests.

Steve who has led his agency to top heights since its creation about 9 years ago is also promising to foster unity and healthy competition between all agencies in marketing communications.

“Taking into consideration his level of expertise in the Advertising industry, we’re expecting nothing short of a brilliant run, if he does become the president of the association”, a source said.

Steve Babaeko, who has served as the Publicity Sec-

retary has given 25 years to the Advertising game and his meteoric rise to the top of the industry proves his efficiency.

His vast experience, both as an advertising man and as a leader at the forefront of the sector will prove to be very valuable to the AAAN. Steve’s campaign slogan “Advancing Together”, fully encapsulates his Manifesto.

His plan of action ranges from making reforms to empower women and providing equal opportunities for members of the Marketing Communications industry, to establishing a standard advertising academy for fostering the growth of talent available in the country. A more inclusive approach to Leadership is, quite frankly, long overdue and his agenda will be well received.

Outgoing President of the Association of Advertising Agencies of Nigeria (AAAN), Ikechi Odibo, had acknowledged that advertising practice needs to undergo a change to cope with the demands of post-digital age.

According to the AAAN President, practitioners need to acquire new business mindsets and approaches, which he said are crucial to the business in a rapidly evolving business landscape.

PZ Cussons Foundation extends support to Lagos State in the fight against COVID-19

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he PZ Cussons Foundation, in keeping up with its promise to extend its support for the fight against the COVID-19 pandemic in Nigeria by encouraging hand washing, recently donated soaps to the Lagos State Ministry of Health towards controlling the spread of COVID-19 in Lagos State.

The donation was received in Lagos by the Permanent Secretary, Lagos State Ministry of Health, Olusegun Ogboye.

The PZ Cussons Foundation had previously donated soaps to over 40,000 people in six major cities across Nigeria in collaboration with the Foundation for Refugee Economic Empowerment (FREE), a UK and Nigerian Charity that aims to provide high quality, timely, accountable, and inclusive humanitarian assistance to displaced persons towards enabling them to return to normal and sustainable productive lives. The Foundation made a promise to extend this gesture to other areas of the country affected by the pandemic, one which it has now fulfilled.

Speaking on the donation in Lagos, the Chairman, Board of Trustees of the Foundation,

Eyitayo Lambo, in a statement said “After learning that one of the simplest ways to stay protected against the coronavirus is by consistent hand washing with soap, we made a commitment to support the effort of Government in its fight against the spread of the virus.

We started with the North as there were quite a number of vulnerable persons there. We have now extended similar

support to Lagos seeing how we have recently experienced a surge in the number of cases in the state.”

According to him, the goal is to support the tremendous efforts of the Lagos State Government, as well as encourage Lagosians to stay protected by washing their hands regularly.

While receiving the donation from the PZ Cussons Foundation, The Permanent

Secretary, Lagos State Ministry of Health, Olusegun Ogboye, said “This is quite a laudable gesture from the PZ Cussons Foundation and it would definitely go a long away in supporting our efforts in preventing the further spread of the coronavirus in Lagos state.

Proper sanitation and hand washing with soap remains an easy, effective, and affordable way to prevent diseases.

L-R Charity-Ilevbare-Adeniji, Head of personal Care, PZ Cussons; Olusegun Ogboye, Permanent Secretary Lagos State Ministry of Health, at the presentation of products by PZ Cussons Foundation to Lagos state in support of the fight against the spread of COVID-19 in Lagos recently. www.businessday.ng

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FoodCo donates PPE to Oyo State Covid-19 task force

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oodCo Foundation, the Corporate Social Responsibility arm of FoodCo Nigeria Limited, has announced the donation of Personal Protection Equipment to the Oyo State Covid 19 Taskforce.

Speaking on the gesture, Ade Sun-Basorun, member of FoodCo Foundation board, stated in a statement that the donation was in line with the company’s resolve to continually support government, frontline workers and other vulnerable groups in the fight to defeat the COVID-19 disease.

Sun-Basorun, who expressed optimism that Nigeria will surmount the challenges arising from the pandemic, praised health

workers at the frontlines for their efforts in managing the disease. He also called on private sector stakeholders to collaborate with government institutions to stem the negative effects arising thereof.

He said: “On behalf of FoodCo Foundation and FoodCo Nigeria Limited, I would like to appreciate the good work that government institutions both at the Federal, State and Local Government levels are putting in to combat the COVID 19 challenge. We are confident that the efforts, complemented by private sector intervention, will lead us on the path to emerging from the present circumstances as a stronger and better country”.

Brandlife Limited unveils Brandlife Digital to enhance Online experience

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randlife Limited, a foremost marketing service agency with presence in Kenya, Uganda, Tanzania, Ethiopia, Angola, Ghana and Nigeria has announced the launch of its digital marketing subsidiary, Brandlife Digital.

According to a statement, this was prompted by the desire to provide digital marketing services and utilise the online platform to increase brand visibility, product awareness as well as build an online community for brands.

The Group MD, Brandlife Limited Julius Agenmonmen, was quoted in the statement as stating that the aim was to provide support and resources to brands that are quickly embracing the use of digital marketing techniques to connect with their target audience.

He said: “With our digital services, we would endeavor to provide impressive content and communication strategies that are best suited to brands and their message. This is a clarion call to companies, both big and small to embrace digital marketing and other online channels. This no doubt @Businessdayng

will help build the right level of awareness for their brands with measurable results.

“The marketing industry is growing tremendously and over the last decade a lot of progress has been recorded in the Nigerian online market space, which has also become a great avenue for brands to relate directly with their target consumers, receive feedbacks and build captivating brand experiences,” he said.

He further stated that the emergence of social media sites such as Facebook and Instagram provides a platform to reach out to customers and retain them with unique stories both in pictures and videos, adding that many companies may find it challenging to utilize the platform directly.

To this end, Agenmonmen pointed out that Brandlife Digital was founded to provide such companies with strategic approach that is peculiar to their businesses and help them succeed in this digital space. “Our edge lies in a unique combination of worldclass digital marketing service and a good understanding of the online space”.

Tuesday 30 June 2020

BUSINESS DAY

BDTECH

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In association with

E-mail: jumoke.akiyode@businessdayonline.com

Pantami assures Nigerians of digital economy with NCC’s 2020-2024 strategic management plan Jumoke Akiyode Lawanson

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sa Ali Ibrahim Pantami, Nigeria’s minister of communication and digital economy has said that the newly unveiled Strategic Management Plan (SMP) 2020-2024 by the Nigerian Communications Commission (NCC) will be a pedestal to drive the implementation of the Federal Government’s digital economy vision.

Speaking during the virtual launch of the NCC’s five-year strategy plan in Abuja which was attended by few invited officials from the federal ministry of communication and digital economy, the NCC, other sister parastatals under the ministry, as well as critical stakeholders in the telecoms sector, Pantami said that the launch of the SMP demonstrated that the NCC has seriously improved in performance matrix and its efforts in accelerating the implementation of the National Digital Economy Policy and Strategy (NDEPS) and the National Broadband Plan (NBP) 2020 - 2025 of the Federal Government.

“I feel very excited for the fact that there is a serious improvement in the performance of the Nigerian Communications Commission (NCC). The launch of this SMP 2020 - 2024 is a clear indication of that.

When a parastatal is performing, it will create an innovative idea on

Umar Garba Danbatta; executive vice chairman/CEO, Nigerian Communication Commission (NCC), Obinna J. Ogba; chairman senate committee on sports and youths, representing Oluremi Tinubu; chairman, senate committee on communications, Isa Ali Ibrahim Pantami; minister of communications and digital economy, Adewolu Akande; chairman, NCC, Helen Obi; head, corporate planning, strategy and risk management department, NCC, during the virtual launch of the SMP 2020- 2024 at the NCC headquarters, Abuja.

how to be more successful. When a parastatal is not performing, you will not hear anything on how to implement policies and come up with different strategies and plans,” he said.

The minister stated that despite the enhanced performance of NCC, there is need for the Commission to redouble its efforts. “We need to challenge and ridicule our previous

successes by setting new records through the implementation of this SMP 2020 - 2024. The NCC management must ensure effective implementation of this SMP,” he added.

Umar Garba Danbatta, the executive vice chairman of NCC, said the SMP is the fulcrum that will aid the NCC in driving its telecom regulatory mandate in the fast evolving telecoms industry, in the next five years.

He said it will serve as a roadmap for the future of the Nigerian telecoms sector, taking into consideration the current and emerging trends in the industry and the numerous expectations of the diverse stakeholders.

“The federal government’s economic diversification plans are focused on a robust digital economy, which will improve employment generation, as well as encourage innovation. This was prime in our minds during the formulation of the SMP. We have invested great time and effort in ensuring that this document is pragmatic, and I am very confident and excited in its completeness to successfully guide the commission in achieving the set objectives. We are committed to the implementation of this SMP,” Danbatta said.

Oluremi Tinubu, the chairman senate committee on communications, who was represented by senator Obinna Agbo, praised the commission for its exemplary performance and averred that the new SMP 2020 - 2024 would ensure the commission is on course to deliver on the mandate of the federal government for a digital economy. Tinubu wished the commission success in implementing the plan.

Speaking in the same vein, Helen Obi, deputy director, corporate planning, strategy and risk management, NCC, said the development of the new SMP for the next five years was initiated with the lapse of the

previous one and it would help the commission to effectively harness its internal resources to deliver on expectations of its external stakeholders and the industry as whole.

“Our primary goal in organising the launch, therefore, is to present the finished work to our esteemed stakeholders and solicit your buyin and support in ensuring that our shared vision and mission of providing best-in-class regulatory services towards achieving a digitised economy is sustainably accomplished,” she said.

In goodwill messages to the commission, Gbenga Adebayo, the chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Olusola Teniola, president, Association of Telecoms Companies of Nigeria (ATCON), and Deolu Ogunbanjo, president, National Association of Telecoms Subscribers (NATCOMS), who joined the launch virtually, congratulated the NCC and expressed their view that the SMP 2020 - 2024 will add the needed impetus to the implementation of national digital economy policy of the government.

Over 700 estimated guests, including representatives of ministries, departments and agencies (MDAs), chief executives of telecoms companies, the media, among others, joined the launch online. At the same time, over 2,400 viewers watched the Facebook live video during the SMP launch.

How Covid-19 downtime affects telecom services in Nigeria Jumoke Akiyode Lawanson

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he increase in demand for mobile and data services became inevitable during the lockdown period, as the need for efficient internet service became prevalent with virtual meetings, work from home, video conferences, e-commerce and online religious activities.

It therefore came as no surprise when mobile network service providers started to struggle to cater to the sudden surge in numbers of data subscribers and daily users, resulting

in widespread complaints of poor network quality.

The need for individuals to have a reliable cellular network and internet connection has become even more necessary now and this new reality has indeed affected the way service providers will operate now and in future.

In a recent interview, Mohammed Rufai, chief technical officer, MTN Nigeria, exposed some of the challenges telcos are facing across the country.

According to him, there are three reasons mobile network subscribers should be more patient with network

www.businessday.ng

service providers: 1. The COVID-19 pandemic affects everyone In many ways that the pandemic has affected us personally, it has also affected these businesses. They were bound by the same travel and movement restrictions and social distancing measures.

In the interview, Mohammed Rufai said ‘Fortunately, we have multiple layers of redundancy built into our networks and some headroom.

It is however a concern, not knowing the extent or duration of the restrictions we currently face. If the situa-

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tion persists, it might lead to resource constraints because it might affect our ability to import equipment as and when due.

2. Telcos have more responsibilities at this time Amidst the pandemic, one of the challenges the telcos face is catering to customers’ needs while supporting the government financially and technologically with their expertise.

Buttressing this point, Mohammed Rufai said “With the Y’ello Hope Initiative, we have been able provide communication equipment for the Nigeria Centre for Disease Control

@Businessdayng

(NCDC) to aid contact tracing, partnered with other private sector organisations in the Coalition Against COVID-19 (CaCOVID), and provide free SMS to customers monthly, which to date has been in excess of N8 billion, if costed for.”

3. People make up a business As individuals, sometimes we forget that businesses are run by people and with people.

Yes, there should be systems in place by businesses to provide the best possible customer experience but even these systems are handled by people.

26

Tuesday 30 June 2020

BUSINESS DAY

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Tuesday 30 June 2020

BUSINESS DAY

27

Live @ The Exchanges Market Statistics as at Monday 29 June, 2020

Top Gainers/Losers as at Monday 29 June, 2020 LOSERS

GAINERS Company

Company

Opening

Closing

Change

N1200

N1256.8

56.8

UNILEVER

NESTLE

Opening

Closing

Change

N17

N15.3

-1.7

N64

N70.4

6.4

ARDOVA

N13.05

N11.75

-1.3

UACN

N7.45

N8

0.55

NASCON

N11.6

N10.7

-0.9

PZ

N3.85

N4.2

0.35

GUARANTY

N22.7

N22.35

-0.35

FIDSON

N2.98

N3.2

0.22

GLAXOSMITH

N5.85

N5.5

-0.35

OKOMUOIL

ASI (Points) DEALS (Numbers) VOLUME (Numbers)

24,858.89 3,940.00 158,719,415.00

VALUE (N billion) MARKET CAP (N Trn)

1.635

…as Nestle, Okomu, UACN, others gain Iheanyi Nwachukwu

N

2020.

Nestle led the gainers table after its share price increased from N1200 to N1256.8, adding N56.8 or 4.73percent; followed

by Okomu Oil Palm Plc which increased from N64 to N70.4, adding N6.4 or 10percent; and UACN Plc

which rallied from N7.45 to N8, adding 55kobo or 7.38percent.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.12 percent to 24,858.89 while the value of listed stocks rose to N 12.967trillion as against preceding day’s low

of 24,828.96 points and N12.952trillion respectively.

The market’s negative return year-to-date (ytd) stood at -7.39percent on Monday June 29, 2020. In 3,940 deals, investors exchanged 158,719,415 units valued at N1.635billion.

Transcorp Hotels gets shareholders’ approval to raise N10bn through Rights Issue Iheanyi Nwachukwu

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hareholders of Transcorp Hotels Plc, owners of the iconic Transcorp Hilton Abuja and Transcorp Hotels Calabar, have unanimously authorised the Board of Directors to raise N10 billion in its proposed Rights Issue to fortify its balance sheet.

The approval given at the Extraordinary General Meeting of the Company, which took place on Monday, 29th June 2020, in Lagos was to issue 2,659,574,468 Ordinary Shares of 50 kobo each by way of a Rights Issue to the Shareholders based on 7 new Ordinary Shares for every 20 Ordinary Shares of 50 kobo each held at a price of N3.76 per share.

The shares will be issued from the authorised share capital of the Company which is currently at N7,500,000,000 comprising of 15,000,000,000 Ordinary Shares of N0.50 each, and the resultant issued and fully paid-up share capital will

be N5,129.989.184 consisting of 10,259,978,368 Ordinary Shares of N0.50 each.

Transcorp Hotels Plc is the hospitality subsidiary of Transnational Corporation of Nigeria Plc. The Company owns and operates Transcorp Hilton Abuja, which provides luxury accommodation, excellent cuisine, conferencing and leisure facilities to business travellers and tourists from all over the world. The Company also holds 100 percent interest in Transcorp Hotels Calabar Limited, which

owns and operates the Transcorp Hotels in Calabar.

The Chairman of Transcorp Hotels Plc, Emmanuel N. Nnorom noted that ‘”This approval and endorsement of shareholders empowers the Board and management to look to the future with confidence despite the current harsh operating environment.”

Speaking at the meeting, Dupe Olusola, Managing Director/CEO of Transcorp Hotels Plc also welcomed this approval adding that “our track record of excellent ser-

vice delivery has positioned us as the first choice for international and local guests alike noting, we are not resting on our oars but working round the clock to innovate new products and services to further delight our guests, notable of such is the launch of asset-light strategies to deepen our hospitality footprints across Africa.”

She further added that the world has been greatly impacted by the COVID-19 pandemic, with the hospitality industry being one of the hardest hit.

L-R: Dupe Olusola, managing director/CEO of Transcorp Hotels Plc; Emmanuel N. Nnorom, chairman; Owen Omogiafo, company secretary (Ag.) and President/CEO of Transcorp Plc, at Transcorp Hotels’ Extraordinary General Meeting held in Lagos.. www.businessday.ng

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FTSE 100 Index 6,225.77GBP +66.47+1.08%

Nikkei 225 21,995.04JPY -517.04-2.30%

S&P 500 Index 3,038.43USD +29.38+0.98%

Deutsche Boerse AG German Stock Index DAX 12,232.12EUR +142.73+1.18%

Generic 1st ‘DM’ Future 25,283.00USD +333.00+1.33%

Shanghai Stock Exchange Composite Index 2,961.52CNY -18.04-0.61%

12.967

Stock market opens week on a positive note igeria’s stock m a r k e t opened this week on a positive note, gaining N15billion at the close of trading session on Monday June 29, 2020.

As portfolio/fund managers rebalance their equity portfolio ahead of the second-half (H2), many of them preferred to remain on the buy side of the remote trading session.

The market’s positive performance confirms our earlier position on seeing increased bargains ahead of first-half (H1) close.

Amid the impressive outing, there is a possibility of a repeat positive on Tuesday, June 30 being the last trading session of this first-half (H1)

Global market indicators

SEC disclaims activities of iBSmartify Nigeria

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he Securities and Exchange Commission (SEC) has disclaimed the activities of iBSmartify Nigeria saying neither the entity nor the illegal products they offer are registered or regulated by the Commission.

In view of the above, the Commission therefore warns the general public that any person dealing with the said entity and others in the same business in any manner whatsoever, does so at his/her own risk.The SEC recently raised the alarm over the proliferation of the operation of unlawful/unlicensed investment schemes, with promises of huge, but unjustifiable returns on investment and has warned Nigerians against patronising them.

According to the SEC, “The attention of the Commission has been drawn to the activities of iBSmartify Nigeria the promoters of a Blockchain known as iBledger (iBcashcryptocurrency) and InksNation.

“The general public is hereby advised that neither the promoters of iBSmartify Nige-

ria nor the illegal products they offer are registered or regulated by the Commission.

According to the SEC, “These activities are perpetrated by suspected promoters of Ponzi and other fraudulent schemes under the following identities: Loom Nigeria Money, Box Value Trading Company Ltd, Now-Now Alert, Flip Cash Investment, Result Investment Nigeria Limited, Helping Hand and Investment and No Failure Development and Empowerment Nig. Ltd. Others are “MBA Forex and Investment Ltd, Federate Investors Trading Company, Jamalife Helpers Global Ltd, Flexus Global Solutions and Investment Ltd, United Capital Investment Company Limited”.

Members of the public are to note that by virtue of the provisions of Section 38(1) of the Investments and Securities Act (ISA) 2007, only persons registered with the Commission can engage in capital market activities, thus making the actions of these entities listed above unlawful.

Sigma Pensions sees N5trn T-bills, Bonds maturing in H2 boosts industry returns Modestus Anaesoronye

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ith over N5trillion worth of maturities expected in the Treasury Bills (TBills) and Bond Market in the second half (H2) of 2020, pension experts are positive that this will drive liquidity and boost the economy for the rest of the year.

As investors seek instruments to put funds into, Pabina Yinkere, chief investment officer(CIO) Sigma Pensions, who disclosed this during Webinar organized by the Pension Fund Administrator(PFA) spoke extensively on the investment climate in Nigeria, Impact of Covid-19 on Pensions returns and the way forward.

Yinkere told the Company’s staff who participated at the virtual event to allay the fears of customers and assure them that Sigma Pensions investment management arm is working tirelessly to ensure they get the best returns available at these times.

He said: “If we look at treasury bills and bonds that are going to mature over now to December period is over N5trillion worth of maturities which are things that we have invested @Businessdayng

in and would be paid back to us in cash. So, to keep the investments going, we have to re-invest this into the market.

And if we look at the federal government borrowing for this year, they plan to borrow N2trillion in total. So, with N5trillion against N trillion, you can see that there would be a lot of money left for investment or if invested at all, the demand for investment would become very high and it would then affect returns going forward.”

Speaking further on the effect it would have on the stock market, he said: “If we then look at the stock market, the Nigerian stock market is highly correlated to oil prices.

As we have seen decline in the oil price over this year following the advent of COVID-19, you would see that the market hasn’t done very well.”

“However, because of the share size of liquidity, there is a scope that this market would probably not decline as much as one would have expected but then what it still means is that because companies are going to be facing challenges and having troubles with growing revenue and making profit, equity investment may not be very attractive long-term opportunities at this time.”

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Tuesday 30 June 2020

BUSINESS DAY

POLITICS & POLICY INEC and the burden of credible gubernatorial elections in Edo, Ondo ZEBULON AGOMUO

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s the gubernatorial elections in Edo and Ondo states draw nearer, one of the major concerns of watchers of political events in Nigeria has been on the possibility of the Independent National Electoral Commission (INEC) organising and supervising credible polls.

The apprehension stemmed from past experiences, where despite ample time for preparation and assurances by the Commission to deliver, outcomes were not salutary enough. INEC has continued to have problems delivering credible elections.

With a lot of interest being shown in the forth-coming elections in the two states, particularly Edo, pundits say INEC has a serious burden to prove its independence.

Tom Onos, a Lagos-based ICT specialist, said that INEC had the opportunity to rewrite its history and to clean up its image that had been soiled in its handling of recent elections.

“If you look at what is already playing out in Edo and Ondo states, the elections in the two states will be fierce. In Edo particularly, with what we have seen, it is going to be a battle ground. Some aggrieved politicians would want to show their power and flex their muscles. INEC must be transparent and seen to be so. It must display that independent character. For me, I have since lost confidence in the INEC; I am expecting them to prove me wrong,” Onos said.

In Edo State, the two major political parties have already elected their gubernatorial candidates. Whereas the incumbent Governor Godwin Obaseki is flying the People’s Democratic Party (PDP) flag to which he recently defected, Osagie Ize-Iyamu

Mahmood Yakubu

is the standard bearer of the All Progressives Congress (APC).

Recall that the refusal of the national leadership of the APC to clear Obaseki for the primary election forced him out of the party.

In Ondo State, Governor Rotimi Akeredolu of the APC is also in attrition war to get the ticket of his party.

Akeredolu recently visited President Muhammadu Buhari; a move that was interpreted as targeted at lobbying for second term ticket ahead of the October 10, 2020 governorship election in the state.

With the armada of opposition swelling around him from within the party trying to send him out of Alagbaka Government House in Akure, nothing is sacrosanct for him.

But despite the internal wrangling, pundits say that “everything rises and falls” at the foot of the Independent National Electoral Commission (INEC).

Since the return of Nigeria to civil rule in 1999, elections have moved from bad to worse. It was so bad in 2007 that Human Rights Watch in

its report on the election observed violence and intimidation in Gombe and Katsina states in an electoral process that denied large numbers of voters the opportunity to cast their votes.

According to the report, where voting did occur, it was marred by the late opening of polls, a severe shortage of ballot papers, the widespread intimidation of voters, the seizure of ballot boxes by gangs of thugs, vote buying and other irregularities.

“Instead of guaranteeing citizens’ basic right to vote freely, Nigerian government and electoral officials actively colluded in the fraud and violence that marred the presidential polls in some areas,” said Peter Takirambudde, Africa director at Human Rights Watch. “In other areas, officials closed their eyes to human rights abuses committed by supporters of the ruling party and others.”

Observers say that the situation has since degenerated. The INEC has always been verbally insulted and assaulted by aggrieved par-

ties, politicians and supporters whenever things do not go in their (such stakeholders) favour during elections.

Instances abound where some politicians, who, at the commencement of an election, tongue-lashed INEC officials, accusing them of carrying out some sinister motives, eventually turned round to heap encomium on the Commission for a job well done, after they, the politicians, eventually emerged victorious in the same election.

The Commission has continued to lose people’s confidence. The conduct and outcome of some of the recent elections have eroded the confidence of many in the Commission.

For instance, INEC’s rating, observers say, has been on free fall since the off-season gubernatorial election in Osun State in September 2018. It was believed by analysts that the election was not as transparent as it should be.

The situation worsened in the 2019 general election, which has severally been adjudged by various organisations, as the worst in the history of Nigeria.

INEC watched helplessly as all manner of electoral malfeasance took place under its nose. Some officials of the Commission were accused of colluding with politicians to perpetrate fraud. Voters were chased away from polling units by armed thugs in army and police uniform; ballot boxes burnt or carted away, many voters injured and a few were killed.

There were many problems with the 2019 general election as the reports of local and international election observers reveal. In summary, there were logistical problems. INEC could not efficiently distribute election materials across the country resulting in the postponement of the elections from February 16th to February 23rd, 2019.

Even after the postponement, INEC did not get election materials to some polling booths in the country until midday of the election.

The card reader machines used to authenticate registered voters failed to work in many parts of the country disenfranchising thousands of eligible voters. The voting and collation procedure for the general elections was slow and cumbersome.

INEC did not collate and announce election results in real time.

This created tension and a lot of anxiety. The 91 registered political parties did not show any remarkable improvement in electoral penetration.

In the Kogi and Bayelsa gubernatorial elections on November 16, last year, the situation got worse. Against the call for cancellation of the charade that took place in some parts of the state, INEC pointedly told one of the contestants, the governorship candidate of the Social Democratic Party (SDP) in Kogi State, Natasha Akpoti, that “it was too late to cancel Kogi election.”

Nigerians have continued to watch helplessly as unpopular candidates emerge victorious by sheer brute force as voters are chased away from polling centres.

Refuting the allegation that INEC has always danced to the tune of some pay masters, Festus Okoye, national commissioner and chairman, information and voter education, INEC, said it was not true.

“We are not pandering to anybody; we are doing our work to the best of our knowledge and in the interest of our people and our country, Nigeria. The only thing we are interested in doing is to conduct free, fair and transparent elections.

But we will insist that political parties that are registered in Nigeria must obey the constitution and also the law. If you fall outside the radar, we will apply the law the way we understand it,” Okoye said.

APC: Giadom hands over to Buni as Caretaker holds inaugural meeting ...Buni calls on leaders, members to put past behind James Kwen, Abuja

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he immediate past Acting National Chairman of the All Progressives Congress (APC), Victor Giadom has formally handed-over to the Chairman of the Caretaker/Extra-Ordinary National Convention Planning Committee, Mai-Mala Buni.

The hand-over ceremony was held Monday behind closed doors in the National Working Committee (NWC) Conference Room at the APC National Secretariat, Abuja shortly after inaugural meeting of the Caretaker Committee.

Addressing journalists, Giadom said all the immediate past NWC members, including himself should learn from their mistakes and join hands with the Caretaker Committee

to strengthen the party.

He thanked God, President Muhammadu Buhari and APC leaders for rescuing the party from what would have befallen the party and assured the Committee of his readiness to partner with them to achieve the party goals and objectives towards a successful National Convention.

“Today, our party has been repositioned to greater heights and I can assure you with the calibre of people so selected by NEC to pilot the leadership of this party into the National Convention, I feel indeed grateful and reassure that our party will remain strong and stronger and come out from the crisis which we were all in the past few months better than before. I’m more grateful to the members of our party and decision of NEC. “APC is a larger family and in www.businessday.ng

every family, there is bound to be disagreement and what is important is ability of the family to come to agreement. Today, with the formation of Caretaker Committee, we are close to agreement and I’m sure this Committee will do the needful and our party will become stronger”.

In his address at the inaugural meeting, the Caretaker Chairman, Buni called on leaders and members of the party to put the past behind them and strengthen themselves for all current and future challenges.

He urged all APC members to heed to the appeal by the leader of the party, President Muhammadu Buhari to all aggrieved members who have instituted various cases in the courts and withdraw such cases in the interest of party.

“I am delighted to address you today on this very historic occasion

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in the life of our great party. It was six years ago when the All Progressives Congress came on board. What separates us from other political parties and endeared us to Nigerians, are the sincerity of purpose, our principles of internal democracy and the unblemished integrity of the founders of our party.

“Nigerians have trusted and still have the trust in us that the party will create a country of our dream with a prosperous future.

“As the party trusted by Nigerians, and voted massively for two times in a row, we must shun away from any attempt to distract us from delivering the dividends of democracy to Nigerians.

“What happened to us as a Party in the last few months is not totally strange in a big political Party such as the All Progressives Congress @Businessdayng

(APC), internal disagreements are common in all Political Parties, so ours is not an exception. “lt is time for this Committee therefore, to commence the process of true reconciliation among leaders and members of the Party at all levels. It is our belief that the decision

by NEC to constitute this committee will mark the beginning of a new chapter in our great Party.

“Change is inevitable and disagreement on issues and concepts are an integral part of human and institutional relationship. As a political Party built on strong ideology and, parading men and women of enduring principle and integrity, we must prepare for real and anticipated changes and their consequences. The outcomes of changes that evolves in our party politics must be decided by us.”

Tuesday 30 June 2020

BUSINESS DAY

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news FG lifts interstate travel ban, reopens...

Continued from page 1

be only outside the curfew

hours of 10pm-4am, the PTF said.

The government also said schools could reopen to allow graduating students to resume classes in preparation for their examinations, and also announced “safe reopening of domestic aviation services as soon as practicable”.

It reemphasised that schools, including primary and secondary, would remain closed except for the final year class, adding that Nigerians are still endangered by the ravaging pandemic.

Under the new guidelines, the government said it would maintain the current phase of the national response for another four weeks with some modifications.

“The current curfew will remain and we will maintain restrictions on mass gathering and sporting activities.

Domestic aviation activities will commence as soon as practicable, while movement across state boundaries will be allowed but only outside curfew hours. Students in graduating classes, Primary Six, JSS 3 and SS 3, will be allowed to resume in preparations for examinations,” Sani Aliyu, national coordinator of the PTF, said at the daily briefing on Monday.

“Federal and state government offices will maintain their current timing with only essential staff allowed at the same level of grade level 14 and above to resume work,” he said.

Aliyu said the use of facemasks remains mandatory

and that “we will be enforcing this at all levels including linking up with state governments”.

“Access to government and commercial premises will be not allowed if you are not wearing a facemask. In other words, no masks, no entry; no services will be provided at government premises and commercial premises for you without facemasks,”hesaid.“Fortheaviation industry, the aviation is allowed toresumedomesticoperationas soon as practicable in line with the existing international and local guidelines.”

For interstate travel, Aliyu said movement across boundaries would be allowed only outside the curfew time effective from July 1.

“We expect the transport industry to adhere to the Federal Ministry of Transportation safety protocols and guidelines that will be released specifically in relation to parks and terminals,” he said.

He, however, said commissioners of transport in states should undertake a tour of facilities and inform as a precondition for the resumption of interstate travels, adding that noncompliance with the guidelines would result in the withdrawal of licence for interstate mass transit.

“The PTF expects a strict compliance with the directives at the state level,” he said.

“For intra-state level, we will maintain the occupancy for buses for 50 percent and two persons for taxis but we will restrict movements in high burden local government areas to essential travels only.

This will be part of the strategy that will be introduced.”

COVID-19: Nigeria to see higher testing...

Continued from page 2

mence testing immediately would complement the staterun Lagos University Teaching Hospital (LUTH, CHAZVY), Lagos State Biobank (LBS), Nigerian Institute of Medical Research (NIRM), and the Central Public Health Laboratories (CPHL), all testing centres used by the state.

According to the Lagos State government, the decision to include the private sector to ramp up testing follows the continuous attempts to open up various aspects of its economy, which makes it imperative that COVID-19testsarewidelyavailableto membersofthepublic.However, it noted that its COVID-19 response would remain a centrally managed emergency response by the state government.

“Including the private sector will definitely be a game changer for Nigeria as the capacity to test will increase significantly as well as also setting the benchmark for the commercialisation of the testing process,” said Debo Odulana, a health management consultant and founder/CEO, Doctoora E-Health Ltd.

Odulana said the state having the private sector come on board, serves as a good case study even for the rest of the country.

“If people are able to pay for testing, especially corporates, it will increase the revenue capacity coming from the process which will in turn guarantee sustainability of the system,” he said.

Despite commendations on the inclusion of private players to assist in the ramping up of testing, health and economic experts still have cause for concern, especially after documents from the state’s health commissioner, Akin Abayomi, showed some frightening statistics in the state’s fight against the virus.

The first was that one in every four persons living in Lagos may have already been infected with the virus.

At 27 percent, the state’s infection rate is higher than the 14 percent in Texas, where the government had placed the state on national alert.

Second was the fact that there has been a massive uptick in infection rate following the ease of lockdown. www.businessday.ng

L-R: Mai Mala Buni, governor, Yobe State/chairman, APC Caretaker/Extra-Ordinary Convention Committee; Abubakar Sani, governor, Niger State, and Isiaka Oyetola, governor, Osun State, during the inauguration of the committee by the chairman at the party’s national secretariat in Abuja, yesterday.

NAN

CBN’s N50bn COVID-19 stimulus fund falls...

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livelihoods and operations

had been upended by the pandemic.

The initial optimism which greeted the facility has, however, fizzled out in a flash as it has been marred by several complaints from people who are yet to receive the loans.

This is despite the CBN saying 98 percent of the loans has been disbursed.

Degun Agboade, president and chairman of council at the Nigerian Association of Small and Medium Enterprises (NASME), was one of those who had high expectations of the facility when it was set up but has since been frustrated by the process.

Agboade, who presides over perhaps the biggest cluster of small businesses in the country, said the initiative has not been effective as most of his members who applied were yet to draw down from the fund.

“Three hundred members of our association applied nationwide, but less than 10 of them have been credited,” Agboade told BusinessDay. That’s about 3 percent of the total number of applicants.

Agboade said while one or two of their members in Sokoto, Bauchi, Kaduna and Akwa-Ibom were among the successful applicants, none of the Association’s members from Lagos had received anything.

He fears the initiative, like several ones in the past targeted at small businesses, is being bogged down by familiar challenges around lack of proper execution and monitoring which have muted their intended impacts.

BusinessDay’s survey on 100 SMEs on social media platform, Twitter, showed that only two small business owners had received funding with 98 still pending.

Yusuf Yila, a director at the development finance department of the CBN, said last Friday through his Twitter handle that NIRSAL Micro-

finance Bank, the institution responsible for the disbursement of the fund, was “working round the clock to make sure the loans are disbursed to every person approved by the CBN” and urged patience from those yet to be credited.

“So many individuals had been paid and the funds were tied up in the NIRSAL bank, but it will be paid out soon,” Yila said.

A few hours later, Yila took to his Twitter handle again to say that “the CBN is investigating and trying to get the reason why a larger number of people have not been paid”, following numerous complaints by people who claimed they were yet to receive funds even after their applications were approved.

For the majority still expecting money from the fund, it may never happen, after the CBN said last week that N49 billion had already been disbursed. The CBN’s director of communications, Isaac Okorafor, said this in an interview on television station, Channels.

“If the giver claims to have given and the receivers claim otherwise, then the CBN should publish the names and locations of the people who have benefitted from the fund and set up a committee to look into the process of disbursement and why majority are yet to receive anything,” Agboade said. “Without this, the initiative may just be another ploy to merely hype us up for nothing.”

The supposed failure of the fund to get into the hands of majority has three implications. It could force the closure of many small businesses, lead to job losses feeding into a higher unemployment and poverty rate, and increase the risk of a deeper economic recession in a country tipped by the International Monetary Fund (IMF) to contract by 3.4 percent in 2020, the biggest contraction in four decades.

Beyond dodgy implementation, the fund was always going to be inadequate to go round in a country with over

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40 million small businesses, according to some bankers.

“That meant that for every deserving household or SME that was paid, 100 deserving others were denied due to the small size of the fund,” a senior banker told BusinessDay. A recent survey by the Lagos Chamber of Commerce and Industry (LCCI) showed that 81 percent of small businesses operating in sectors from hospitality to airline service providers were severely affected by the pandemic, which arguably puts them in the pool of intended beneficiaries of the CBN fund.

Eighty-one percent would equate to 32 million SMEs. It is unlikely that every affected SME applied, but if every affected SME did share the N50bn fund, excluding households –which are also entitled to apply – each would get a paltry N1,562.

Assuming the money was shared among only 2 million SMEs, it would translate to N25,000 each, which is still quite little.

The CBN may already be overstretched in terms of providing more loans. There’s a N1 trillion facility for manufacturers which is separate from the N50bn fund.

This is why the CBN must find creative ways to grow the size of the fund, analysts say.

One way is to release some of the N10.3 trillion of non-interest-yielding banks’ money sitting idle with the CBN as Cash Reserve Requirement.

“The CBN could allow banks draw down on some of the enormous cash sitting in its coffers as CRR so that the banks have more liquidity and can support more businesses at this crucial time,” said a development economist at a multilateral agency who did not receive immediate authorisation by his employer to speak publicly on the matter.

“I’m sure the banks will be happy to get 5 percent rather than nothing on all that cash, so it’s a win-win for all parties,” the economist said.

More financial institutions should also be allowed to disburse the money so that the @Businessdayng

workload is not solely on NIRSAL, according to Oyin Ramon, a small business owner who applied to the fund in April but is yet to receive anything.

“The funds are meant to be given out at NIRSAL Microfinance Bank but in reality, applications also have to go to the development finance department of the CBN and from there on to the office of the CBN; that’s perhaps why the process of disbursement is so slow and people are complaining,” Ramon said.

“It’s like putting water meant to serve a multitude of people through one funnel.”

While there might be challenges on the supply-side, Muda Yusuf, director-general of the LCCI, however, highlighted demand-side challenges caused by businesses that may not have applied properly and with the required documentation.

“These are loans and not free money, so when a business fails to apply with satisfactory documentation, then they are likely to be turned down. My experience is that some of the businesses yet to receive funds did not apply properly,” Yusuf told BusinessDay. He said 99.8 percent of the 41.5 million SMEs are micro enterprises many of whom are not structured enough to be able to access such a facility.

“It may be more, but only three of our members confirmed to me that they have obtained money from the Fund, but I don’t have the exact number of those that have not received anything,” Yusuf, whose LCCI draws membership from over 2,000 businesses in the country’s commercial capital of Lagos, said.

To help SMEs that fall short of the requirements of the loans, Nigeria can adopt the Credit Guarantee Scheme adopted by many other countries to boost credit to MSMEs, analysts say.

Credit Guarantee Schemes (CGS) provide guarantees to small businesses that do not have access to credit by covering a share of the default risk of the loan.

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Tuesday 30 June 2020

BUSINESS DAY

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FINANCIAL TIMES

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Former French PM sentenced to jail for embezzlement François Fillon found guilty over wife’s fake job as parliamentary aide VICTOR MALLET AND DAVID KEOHANE

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ra n ç o i s Fi l l o n , t h e former French prime minister, has been sentenced to jail for embezzlement after paying his wife more than €1m of state funds for work she never did, in a scandal that derailed the centre-right campaign in the 2017 presidential election and enabled Emmanuel Macron’s victory.

Mr Fillon, who had been the leading candidate for the presidency before the scandal broke, was found guilty on Monday by a French court and sentenced to five years in prison, with three years suspended, barred from political office for 10 years and fined €375,000.

Prosecutors said on Monday that Mr Fillon had developed a habit of “grabbing public money by breaking the rules” and harboured “a profound feeling of impunity, the certainty that his status would dissuade anyone from suing him”.

His British wife Penelope and his associate Marc Joulaud were also found guilty and were each handed three-year suspended jail sentences after misusing state funds for the fictitious employment of Mrs Fillon as a parliamentary and administrative aide between 1981 and 2013. Mrs Fillon was fined €375,000 and Mr Joulaud €20,000. The defendants must also pay back more than €1m to the French parliament.

Antonin Lévy, Mr Fillon’s de-

François Fillon was the leading candidate for the French presidency in 2017 before scandal derailed his campaign © Thomas Samson/AFP/Getty

fence lawyer, said: “This unjust decision will be appealed. There will be a new trial.”

The verdict adds Mr Fillon to a growing list of French postwar politicians found guilty of corruption or caught up in financial scandals. Jacques Chirac, France’s former president, and his prime minister Alain Juppé, were handed separate suspended prison sentences for political corruption in a sprawling case that saw Mr Chirac sentenced in 2011.

Another former PM, Édouard Balladur, faces trial over allegations that cash was funneled from arms sales to his 1995 presidential campaign. While former president Nicolas Sarkozy is also facing trial,

probably this year, in a campaign finance case for allegedly overspending by more than €20m in his 2012 run for the presidency. Mr Sarkozy also faces a separate trial in October for influence-peddling after allegedly attempting to bribe a judge in a different investigation.

The scandal has also raised questions in recent weeks about the independence of the judiciary, with some commentators calling for the abolition of the Parquet National Financier, a special financial prosecution office set up in 2014, under Socialist president François Hollande.

Eliane Houlette, the former head of the PNF, testified to a parliamentary committee this month that she had been pressured by

her superiors over the investigation into what became known as “Penelope-gate”.

Although she later insisted she was talking about bureaucratic rather than political pressure, Mr Fillon’s colleagues in the centreright Les Républicains (LR) said her comments showed that the former prime minister was the target of a witch hunt initiated by the Socialist government of the day.

Eric Ciotti, a prominent member of parliament for the LR party, was quoted in French daily Le Monde as saying: “What would we have said if Putin had done the same thing?”

The Fillons’ lawyers failed in an attempt last week to reopen

the trial following Ms Houlette’s testimony, and Mr Macron called for the judicial authorities to look into the matter. “It is essential to eliminate any doubt over the independence and impartiality of the justice system in this affair,” said the Elysée Palace.

The head of the judiciary’s trade union, Katia Dubreuil, said citizens were asking “whether the justice system had done its work independently”.

Jean-Claude Magendie, a former head of the Paris appeal court, said that even if Ms Houlette had not been put under political pressure, the speed at which Mr Fillon’s case was investigated before the election was remarkable.

“You don’t need to be a big expert on the justice system to see that justice moved incredibly quickly. It was a hare where normally it is a tortoise,” said Mr Magendie.

The 2017 election ended up as a face-off between Mr Macron and the far-right Marine Le Pen, after Mr Fillon — the LR candidate — failed to make the second round of voting in the wake of accusations which surfaced just three months before the poll.

Mr Fillon had acknowledged that his wife never worked at the National Assembly in Paris but insisted that she worked for him full-time in his constituency in Sarthe in western France.

The former French prime minister has since launched a new career as a partner in Tikehau Capital, an asset management and investment company with more than €25bn under management.

US Supreme Court strikes down restrictive Louisiana abortion law Chief justice John Roberts sides with court’s liberal wing in deciding the closely watched case

LAUREN FEDOR

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he US Supreme Court has struck down a restrictive abortion law in Louisiana, in a blow for American conservatives who want to overturn Roe vs Wade, the landmark 1973 decision that established a woman’s legal right to an abortion.

In its first major abortion decision since Donald Trump became president, the court ruled 5-4 that a Louisiana law requiring doctors who perform abortions to have “admitting privileges” at nearby hospitals violated the rights established in the Roe decision.

The Louisiana law, which opponents said in effect limited the number of abortion clinics in the state, was near-identical to a Texas measure that the Supreme Court struck down in 2016.

John Roberts, the court’s chief justice who was appointed by George W Bush, sided with his

The case had been seen as a test of how the court would rule on abortion after adding two Trump-appointed conservative justices © JIM LO SCALZO/EPA-EFE/Shutterstock

more liberal colleagues in the case, but provided his own legal reasoning in a separate decision.

The ruling, published on Monday, marked the second time this www.businessday.ng

month that Mr Roberts swung the court in favour of his more liberal colleagues. Earlier this month, the court blocked the Trump administration from cancelling Obama-era

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protections against deportation for 700,000 immigrants. Mr Roberts also sided with the court’s four liberals in that case.

Both self-described “pro@Businessdayng

choice” and “pro-life” groups had eagerly anticipated Monday’s ruling on the Louisiana abortion law, given it was the first significant abortion-related case heard by the country’s highest court since Mr Trump appointed two conservative justices — Neil Gorsuch and Brett Kavanaugh — to the bench.

Both Mr Gorsuch and Mr Kavanaugh sided with the court’s other conservative justices, Samuel Alito and Clarence Thomas, on Monday in dissenting.

Abortion has long been a divisive issue in American politics, although public opinion has remained remarkably consistent.

According to Gallup, 53 per cent of Americans say abortion should be “legal only under certain circumstances”, compared with 25 per cent who say it should be “legal under any circumstances” and 21 per cent who say it should be illegal in all circumstances” — virtually unchanged from when the question was first asked in the mid-1970s.

Tuesday 30 June 2020

BUSINESS DAY

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Wall Street mixed as investors weigh Covid-19 options Analysts consider risk of setback to recovery of world’s largest economy HARRY DEMPSEY AND HUDSON LOCKETT

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all Street’s major bourses were mixed as investors considered whether the acceleration of coronavirus infections in the US would lead to further tightening of lockdown measures that could hold back economic recovery.

The S&P 500 opened 0.1 per cent lower while the Dow Jones Industrial Average was up 0.4 per cent and the tech-heavy Nasdaq slipped 0.8 per cent. Equities endured some choppy trading in Europe, with London’s FTSE 100 gaining 0.5 per cent and the regional benchmark Stoxx Europe 600 largely unchanged.

Investors have been considering the risks of a significant setback in the recovery of the world’s largest economy a day after top US health officials said that the window to halt the pandemic’s spread across America was closing.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said the latest Covid-19 developments in the US “can potentially slow the recovery, but are unlikely to derail it”.

“With virus cases still rising in a number of US states, a more volatile trial-and-error approach

to reopening now appears more likely, but we expect any new restrictions to be localised,” he said.

The US has 2.5m confirmed Covid-19 cases and more than 125,000 deaths from the disease — a quarter of the 10m infections and half a million global fatalities, according to Johns Hopkins University.

Alex Azar, US health and human services secretary, said on Sunday that Covid-19 cases were “surging” in the southern US where several states ended lockdowns early. He accused the

Trump administration of being “in denial about the problem”.

Hours earlier, shares in the Asia-Pacific region suffered heavy losses, with Japan’s benchmark Topix index 1.8 per cent lower, Hong Kong’s Hang Seng down 1 per cent while South Korea’s Kospi slipped 1.9 per cent.

The S&P 500 last week fell 2.9 per cent after the Federal Reserve said it would limit share buybacks and dividends by America’s biggest banks, and Texas and Florida took steps to reverse their reopening measures, stoking fears that a

nascent economic recovery could be thwarted.

Some investors are concerned that a rally in stocks since March based on hopes of a strong economic rebound following the pandemic may have gone too far.

“Equities were getting ahead of economic fundamentals,” said Tai Hui, chief Asia market strategist at JPMorgan Asset Management.

However, other strategists believe that the market rally will power ahead next month as economic data are likely to pick up. Sebastien Galy of Nordea Asset Management

said equities were under pressure due to the rise in Covid-19 cases in the US. He added that, as the end of the month and the quarter approaches, investors are obliged to sell some stocks to rebalance their portfolios.

“This pressure should ebb as we start a new month while economic data should start to show some signs of an economic recovery,” he said.

The US dollar partially reversed gains from last week, as it shed 0.3 per cent against a basket of currencies. Meanwhile, the British pound fell to a three-month low against the euro, after it dropped 0.7 per cent to trade at €1.0913, as intensified Brexit talks got under way on Monday.

Crude steadied after positive economic data raised hopes of demand recovery as Chinese industrial profits rebounded in May, and eurozone businesses and consumers began to show signs of confidence in a recovery.

Brent crude, the international benchmark, was up 0.6 per cent at $41.28 a barrel while West Texas Intermediate, the US marker, gained 0.9 per cent to $38.85.

It reversed losses in the wake of Chesapeake Energy, a pioneer of the US shale revolution, declaring bankruptcy following an oil price crash that has ravaged producers.

Analysts said the company’s Chapter 11 filing could prompt others in the shale sector to follow suit.

‘Large demand gap’ looms for US government bonds Markets debate how far the mismatch will push up Treasury yields COLBY SMITH

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gulf is growing between the amount of US government debt to be issued by the Treasury department this year and what the Federal Reserve is planning to buy.

The US fiscal deficit is on track to reach levels not seen since the second world war and the Treasury department is preparing to issue a record amount of securities to fund it, meaning that issuance could exceed $4.7tn this year. An increasing proportion of that borrowing will come from longer-term debt.

Meanwhile, the Fed has sharply scaled back the pace of its asset purchases, from $75bn a day at the height of the pandemic in March to roughly $80bn a month since early June.

At this rate, the central bank will snap up just a quarter of the gross long-term Treasury supply in the second half of the year, JPMorgan calculates.

That left a “large demand gap”, the bank said, especially

if private investors do not ramp up their purchases. However, fears that this gap could cause www.businessday.ng

yields to spiral higher, potentially upsetting still-fragile financial markets, may be unfounded.

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The analysts at JPMorgan do expect yields to climb but think the rise will be “modest,” as in@Businessdayng

vestors will continue to demand safe assets during the contraction in economic activity and growing deflationary risks.

Treasury yields have hovered at record lows since the coronavirus outbreak ripped through global markets three months ago. Inflation expectations have fallen dramatically in the months that followed, with one market measure derived from inflation-protected US government securities — the 10-year break-even rate — remaining at just over 1 per cent.

Given that this is some way short of the Fed’s 2 per cent target, few investors see the central bank tightening its monetary policy by raising rates or scrapping asset purchases any time soon.

“Unless inflation expectations rise rapidly and the market prices an aggressive tightening path for the Fed, long-term yields are unlikely to rise significantly, despite deficits larger than we have seen in over 80 years,” said the JPMorgan analysts.

Thebigread

BUSINESS DAY Tuesday 30 June 2020 www.businessday.ng

How wealth creation gap between African, white Americans maintains generational inequities STEPHEN ONYEKWELU

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ifty-two years after a decade long civil rights movement in the US led to the Fair Housing Act, the gap between the finances of blacks and whites remains wide.

Based on data from the Federal Reserve’s Survey of Consumer Finance, the typical black family has only 10 cents for every dollar held by the typical white family.

Before 1968, centuries of unequal treatment of African Americans was sorely manifest in nearly every part of American society and business. Although many have pointed out the far larger share of white millionaires than black, but among the middle class, the inequities are stark.

In 1968, a typical middle-class black household had $6,674 in wealth compared with $70,786 for the typical middle-class white household, according to data from the historical Survey of Consumer Finances (after been adjusted for inflation).

According to Kriston McIntosh et al., in ‘Examining the BlackWhite Wealth Gap’ at $171,000, the networth of a typical white family is nearly ten times greater than that of a black family ($17,150) in 2016.

“The historical data reveal that no progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years,” economists Moritz Kuhn, Moritz Schularick and Ulrike I. Steins in their analysis of US incomes and wealth since World War II noted.

Gaps in wealth between black and white households show the effects of accumulated inequality and discrimination, as well as differences in power and opportunity that can be traced back to America’s inception. The black-white wealth gap reflects a society that has not and does not afford equality of opportunity to all its citizens.

Wealth takes into account, not just the wages that people earn for work, but homes, stock-market investments and other assets they have. More wealth makes for a more comfortable, safer living. And, more importantly, it is passed on to the

next generation.

Inheritance: A boost at birth Parents’ wealth gives many white children a boost at birth, an advantage many of their black peers lack.

In 2020, Americans are projected to inherit about $765 billion in gifts and bequests, excluding wealth transfers to spouses and transfers that support minor children. Inheritances account for roughly 4 percent of annual household income, much of which goes untaxed by the US government. White families receive much larger inheritances on average than Black families.

The wealth gap is even more pronounced among less-educated Americans. A white household whose head has only a high school diploma has almost 10 times the wealth of a black family with the same education. The fact that black families start with so much less wealth makes it difficult to catch up, research has found.

All of this matters because wealth confers benefits that go beyond those that come with family income. Wealth is a safety net that keeps life from being derailed by temporary setbacks and the loss of income.

This safety net allows people to take career risks knowing that they have a buffer when success is not immediately achieved. Family wealth allows people (especially young adults who have recently entered the labour force) to access housing in safe neighbourhoods with good schools, thereby enhancing the prospects of their children.

Wealth affords people with opportunities to be entrepreneurs and inventors.

A burden too big to bear Heather Long and Andrew Van Dam in an article in The Washington Post accentuated how blacks are living the impact of COVID-19. They observed that the first economic victims of the COVID-19 crisis was the service industries that employ disproportionate numbers of nonwhite workers. As a result, after the “Great Lockdown”, fewer than half of all black adults had a job.

“The pandemic is falling on those least able to bear its burdens.

It is a great increaser of inequality,” Jerome H. Powell, Federal Reserve Chair said in a recent videoconference with Princeton University. “It is low-paid workers in the service industries who are bearing the brunt of this.”

A special survey by the US Census in late April and early May 2020, revealed how stark the situation is for African Americans. More than 1 in 5 black families now report they often or sometimes do not have enough food — more than three times the rate for white families.

Black families are also almost four times as likely as whites to report they missed a mortgage payment during the crisis.

Education and restitution?

Despite the progress black families have made in civic and economic life since the passage of the Civil Rights Act of 1964, they face systemic and cumulative barriers on the road to wealth accumulation

due to discrimination, poverty, and a shortage of social connections (including role models and mentors in their communities) as both mechanisms and results of racial economic inequity. These adverse elements have helped maintain a persistent and widening wealth gap. ”In our view, education alone cannot address the centuries-long exclusion of blacks from the benefits of wealth-generating policies and the extraction of whatever wealth they may have” stated Darrick Hamilton, executive director of the Kirwan Institute for the Study of Race and Ethnicity, Ohio State University, and Trevon Logan, the Hazel C. Youngberg Distinguished Professor of Economics, Ohio State University. “The most just approach would be a comprehensive reparation programme that acknowledges these grievances and offers compensatory restitution, including ownership of land and other means of production.”

Boardrooms and C-suites lack colour “In the ‘new normal’, racial and gender equality is a crucial part of building a good business – period.

Companies can lead, follow or cease to exist, the choice is theirs,” Olu A. Verheijen, energy sector executive, impact investor and philanthropist said in an email to BusinessDay. Diversity along racial and gender lines in American companies’ boardrooms are still dismal and need to be redressed.

Black professionals in 2018 held just 3.30 percent of all executive or senior leadership roles, which are defined as within two reporting levels of the chief executive officer, according to the US Equal Employment Opportunity Commission (EEOC).

Among Fortune 500 companies, less than 1 percent of CEOs are black. Today there are only four, down from a high of six in 2012, according to Fortune. And over the past two decades, there have only been 17 black CEOs in total. Of those, only one has been a woman – Ursula Burns, who ran Xerox from 2009 to 2016.

Black Enterprise’s 2019 Power in the Boardroom report found that among S&P 500 companies, there

were 322 black corporate directors at 307 companies. Of those, 21 were chairmen and lead directors. But the report also found that more than a third of S&P 500 companies did not have any blackboard members whatsoever.

One major factor responsible for this variance is that corporate leaders are not doing enough to develop a pipeline of black talent to promote into the C-suite and to be named to boards, said Cari Dominguez, former chair of the EEOC and a member of the National Association of Corporate Directors. “I see companies asking for a diverse slate of candidates, but not saying what percent should be made up of people of colour.”

The culture of promotion can also exclude qualified black candidates, who may not be part of the social networks that board members and CEOs often use to vet a candidate.

Can taxes bridge the wealth gap?

The widening racial wealth gap disadvantages black families, individuals, and communities and limits black citizens’ economic power and prospects and effects are cyclical. Such a gap contributes to inter-generational economic precariousness: almost 70 percent of middle-class black children are likely to fall out of the middle class as adults.

Other than its obvious negative impact on human development for black individuals and communities, the racial wealth gap also constrains the US economy as a whole.

Darrick Hamilton and Sandy Darity, economists, have concluded that inheritances and other intergenerational transfers “account for more of the racial wealth gap than any other demographic and socioeconomic indicators.”

Some experts have proposed the use of taxes to rectify these historical race dependent wealth gaps. The core objectives of tax policymaking should be to raise revenue efficiently and equitably.

Current taxation of estates and gifts (and non-taxation of inheritances) fails to meet these goals, perpetuating high levels of economic inequality and impeding interdenominational mobility.

Lily Batchelder at the New York University School of Law recommends reform to the way the US tax inheritances by taxing inherited income through income and payroll taxes. She suggests three-lifetime exemption levels – $2.5 million, $1 million, and $500,000 – to ensure that the proposal only taxes individuals receiving the largest inheritances. The proposal would limit tax avoidance through reforms to the rules governing the timing and valuation of transfers through trusts and other devices.

The income from inheritances and from wealth more generally, is taxed at an inequitably low rate, especially when compared to earnings.

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