BusinessDay 30 Mar 2020

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As FG moves to contain coronavirus spread Media, health workers, other essential services exempted See story on page 38 Buhari announces 3 months moratorium payment of TraderMoni, others

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Nigeria’s private sector fight to curb coronavirus shows what economy is missing lolade akinmurele

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ince the first case of the deadly coronavirus was recorded in Nigeria February 27, the country’s private sector has played a starring role in supporting the government to curb the global pandemic and pledged more support than their counterparts anywhere else in Africa.

From the commercial banks to oil companies and wealthy individuals led by the continent’s richest man, Aliko Dangote, Nigeria’s private sector has committed to pour nearly N20 billion into giving treatment, building isolation centres and providing other critical resources needed to combat the spread of the virus.

While the country’s largest lender, Access Bank, will be Continues on page 38

Inside

A test centre and an isolation centre (inset) being built by Access Bank and Aliko Dangote Foundation at Gbagada General Hospital, Lagos, in partnership with Lagos State government.

Pic by Olawale Amoo

Nigeria’s political elite stuck with country’s neglected healthcare system P. 4

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news Nigeria’s political elite stuck with country’s neglected healthcare system

Banks won’t book much FX gains from currency devaluation

… as medical tourism window closes over coronavirus

enders in Africa’s largest economy won’t make money from foreign exchange revaluation gains this time around even as central bank (CBN) weakened the currency to protect the external reserve from the vagaries of global macroeconomic uncertainties.

Banks make money from foreign exchange either by using the capital to buy and sell foreign exchange in the interbank market or by helping their customers buy foreign exchange from the CBN. A foreign exchange revaluation gain, which is part of other income in the profit and loss account, is an exceptional item that adds impetus to profitability.

But lenders no longer have dollar-denominated assets in their balance sheet like they used to a few years ago, and the regulator has said that assets must match liabilities.

“This time people cannot take money from the official market to carry out such transactions anymore.

There was foreign exchange rush four years ago so lenders made money,” said Ayodele Akinwunmi, head of corporate banking at FSDH Merchant Bank Limited.

The 10 largest banks by market capitalisation made a

MICHAEL ANI & SEGUN ADAMS

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he room for medical trips abroad has disappeared due to the ravaging coronavirus pandemic, and the Nigerian political elite are stuck with the country’s poor health facilities that they have neglected over the years.

Successive Nigerian political leaders and their family members have made foreign medical trips their pastime while neglecting the country’s health sector.

Since coming to power in 2015, President Muhammadu Buhari has gone on several medical trips to various advanced countries, in-

cluding the United Kingdom and Germany, in a brazen display of his lack of trust in the country’s healthcare system. In 2017 alone, Buhari spent more than five months receiving medical attention in foreign countries. Buhari spent 51 days in London early in 2017 (January 19-March 10) and another 103 days (May 7-August 19, 2017) on medical grounds, making a total of 154 days.

Late President Umar Musa Yar’Adua spent 109 days out of his 1,072 days as president in hospitals in Germany and Saudi Arabia.

Now Abba Kyari, Buhari’s chief of staff, and Bauchi State Governor Bala Mohammed

have tested positive for the deadly coronavirus, but the window of medical tourism has closed on them, as it has for other members of the Nigerian elite who could afford the cost.

Most advanced countries where Nigeria’s political elite go for medical treatment are battling to control the spread of coronavirus and have, therefore, restricted visitors, leaving political leaders in Africa’s most populous country with no option but to put their fate in the country’s failed healthcare system.

Nigeria boasts some of the worst health indicators in the world occasioned by years of utter neglect by the ruling

class. The country’s health system is bedevilled with a lot of challenges due to low budgetary allocation, poor infrastructure and low remuneration for medical staff, said Olusegun Ogunnibi, a consultant psychiatrist, public health physician and lecturer.

“Many of our facilities can’t boast of modern-day equipment like ventilators that can take care of an average of 50 patients. The best centre in Nigeria is at best in level two, and they are privately owned with our teaching hospital likened to mortuary, yet we are named as spending the most on healthcare treatment

Continues on page 38

BALA AUGIE

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foreign exchange loss of N4.23 billion in December 2019 from a gain of N176.94 billion the previous year.

The loss in 2019 was majorly driven by N83.37 billion negative figure incurred by Access Bank.

Foreign exchange gains reached an all-time high of N269.33 billion in 2016, when the central bank resorted to defending the local currency by trying to meet all demand for dollars as foreign investors were exiting the country due to uncertainties brought by the precipitous drop in crude oil price of mid-2014.

“When you are holding assets in foreign currency than liability, you tend to make money during devaluation,” Johnson Chukwu, CEO and managing director of Cowry Asset Management Limited, said.

The Abuja-based central bank weakened the official exchange rate on its website by 15 percent to N360 per dollar from N307. The rate for foreign portfolio investors was also altered to N380 per dollar from N366.

Nigerian banks still trying to recover from an economic contraction in 2016 and stringent rules put in place by the regulator now face a triple whammy of coronavirus, plunging oil prices and volatile markets that could further delay progress.

FID on 4 oil fields threatened on low break-even price

UBA supports Lagos State in fight against COVID-19. Kennedy Uzoka (l), group managing director/CEO, United Bank for Africa, presenting a cheque of N1 billion to Governor Babajide Sanwo-Olu of Lagos State, as part of the bank’s donation of over N5 billion (USD14 million), through the UBA Foundation, to catalyse a comprehensive pan-African response to the fight against the coronavirus (COVID-19) global pandemic, in Lagos House, Marina, yesterday.

Nigerian businesses can leverage these 5 measures to withstand heat of coronavirus ENDURANCE OKAFOR

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he outbreak and rapid spread of the deadly coronavirus pandemic have disrupted industries across the globe and forced businesses to rethink their strategy.

For most companies operating in Nigeria, it is no longer business as usual as the impact of the virus is taking a toll on their operations and showing signs of ‘infecting’ their bottom line.

Gabriel Idahosa, an economist and CEO of UHY Maaji, said the coronavirus outbreak would have consequences for Nigerian businesses, especially those “who require physical presence or need to travel for import and export transactions”.

As at Friday, Nigeria had confirmed 65 cases of coronavirus, one of the highest in Africa. Three of the cases were said to have recovered with one death recorded.

Like most countries around the world, the fear of high transmission rate drove Nigeria to adopt some drastic measures, including closing its international airports, and national and sub-national governments in Africa’s most populous country are advising citizens to work from home, observe social distancing and self-isolate.

This had led to disruption in the global supply chain, and restaurants, hotels, shopping malls and business offices are closing down. There has been increase in demand for drugs, food items, hygiene products and online www.businessday.ng

transactions, but most companies who are not in these lines of business are taking the most heat.

Analysts and the Nigerian business community are, however, optimistic that the situation will not last forever as they see a rebound at the end of the tunnel.

“The impact of the virus may be unavoidable but can be eased,” Ayorinde Akinloye, a research analyst at CSL Stockbrokers, said.

Industry experts and economists polled in a BusinessDay survey recommended these five measures for businesses to withstand the effect of the pandemic.

Safety of employees According to industry analysts, a company is as good as the quality of its staff. As such, putting the

safety of its employees at the forefront of its business is one of the key ways any company can withstand the shock caused by the virus.

Analysts at the advisory arm of Ernst&Young (EY) recommended that Nigerian businesses should sustain flexible and remote working arrangement, while also providing infection protection for on-site workers.

“Issue regular, transparent communications that reassure employees,” they said.

Make provision for liquidity The ratios of a company’s assets and liabilities are measured and tracked through its business liquidity. It is a key factor in determining whether a company is in good financial health.

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… fields contain 1.4bn barrels of oil equivalent DIPO OLADEHINDE

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our major oil and gas projects with a combined capacity of 1.4 billion barrels of oil equivalent (boe) scattered around Nigeria, Africa’s biggest oil-producing country, may suffer delay in Final Investment Decision (FID) as a result of lower break-even oil price and the impact of the deadly coronavirus pandemic.

The critical oil and gas development projects include Bonga SouthWest Aparo with 630 million boe operated by Shell, Etan-Zabazaba with a capacity of 510 million boe operated by Italian ENI, Preowei field with a capacity of 145 million boe operated by French major Total, and HA gas project with a capacity of 210 million boe operated by Shell

Petroleum Development Company of Nigeria Limited (SPDC).

Norway-based independent energy research and @Businessdayng

business intelligence institution, Rystad Energy, said these projects are at a risk of being delayed which will lead to a decline in liquids production for most of this decade.

These big-ticket projects are expected to create thousands of new jobs, spur domestic gas demand, generate electricity, and create an opportunity to diversify Nigerian government revenue, strengthen the country’s revenue base and turn the country into a dominant geopolitical player in Africa, using its gas resources, just like Australia, Russia or Qatar.

“There is no economic sense in taking FIDs on Bonga SouthWest Aparo, Etan-Zabazaba, and Preowei oil field now because of the current economic challenges,” Charles Akinbobola, an energy analyst at Sofidam Capital, said.

While the oil price is currently hovering well below $30 per barrel, Rystad Energy said upcoming final investment decisions (FIDs) in Africa have a breakeven crude price of over $45 per barrel, with some even close to $60 per barrel.

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news Reps deny distributing exotic cars to members James Kwen, Abuja

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he House of Representatives has debunked a newspaper report on Friday, which insinuated that the House was distributing official vehicles to the 360 members of the House at this critical moment the country was battling to contain the Covid-19 pandemic.

The said newspaper reported that the House had started taking delivery of the Toyota Camry 2020 model cars acquired for members as official cars, and its correspondent sighted some of the cars at different parking lots within the National Assembly Complex, on Thursday.

But the chairman House Committee on Media and Public Affairs, Benjamin Kalu, said the story was rather unfortunate at this time that Nigeria and Nigerians were striving hard to address the pandemic that had forced the Federal Government, and even the various states’ governments to take drastic measures.

Kalu said in a statement in Abuja that, not only had the National Assembly been closed since Tuesday, March 24, in the wake of the pandemic, but most lawmakers were also in their constituencies.

He said: “As a House, we are not unmindful of the mood of the nation at this critical time and are committed to ensuring the country stands united in this trying times.

“It is out of that commitment that the House on Tuesday, March 24, 2020, introduced and passed the Emergency Economic Stimulus Bill, 2020.

It is on record that the leadership of the National Assembly on Wednesday, March 25, 2020, about 24 hours after adjournment, engaged some top government officials in the Executive arm and approved the release of N6.5BN for the National Centre for Disease Control (NCDC), N10BN for Lagos state, as part of efforts to address the issue of Covid-19 pandemic.

“Despite adjourning for two weeks to curb the spread of the virus, the House had expressed its readiness to reconvene at any time to consider measures aimed at addressing the situation, including a review of the 2020 Appropriation Act, if need be.

“We are committed, as lawmakers, to join hands with the Executive arm to take measures aimed at containing the pandemic and providing succour to Nigerians as a result of the economic shock necessitated by Covid-19 all over the world.

“We, therefore, urge Nigerians to disregard the newspaper report on the vehicles’ distribution as it is mischief taken too far. Just yesterday, the same paper on its back page, claimed that the house “closed shop and went on holiday” three weeks ago, a clear falsehood that is common knowledge.

ABCON advises forex users to shun street traders HOPE MOSES-ASHIKE

… as naira falls to N410 per dollar at black market

he Association of Bureaux De Change Operators of Nigeria (ABCON) has asked foreign exchange buyers not to patronise street traders because of the dangers associated with such transactions.

The advice came after a twoweek market holiday granted to the bureaux de change (BDCs) by the Central Bank of Nigeria (CBN) during which the regulator will not sell forex to the BDCs. This followed a request by the ABCONtotheCBNfortheregulatorto grantittheholidaysgiventheongoing challenges faced in local and global economies due to the impact of the Coronavirus(COVID-19)pandemic.

In a notice to BDC operators

and directors, ABCON president, Aminu Gwadabe, said the CBN’s approval meant that sales of foreign exchange to BDCs was now suspended till further notice.

Nigeria’s currency on Friday weakened to N410 per one dollar at the black market after the Central Bank of Nigeria (CBN) suspended sales to Bureau De Change (BDCs).

Nigeria’s currency weekend weakened to N410 per dollar at the black market after the Central Bank of Nigeria (CBN) suspended sales to Bureau De Change (BDCs).

With the current rate, naira has depreciated by N20 from N390 per dollar traded on Wednesday.

“There is no dollar, walahi,” one of

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the black market operators at Eko Hotel, told BusinessDay. The CBN has suspended foreign exchange sales to the BDC operators until further notice.

The CBN’s action was in response to a letter dated March 24, 2020, by the BDCs recommending the CBN to declare market holiday on its weekly bidding pending the re-opening of the nation’s borders and the control of Covid-19.

At the Investors and Exporters (I&E) forex window on Thursday, the local currency deprecated by 1.39percenttocloseatN385.53kobo per dollar, data from FMDQ show.

The naira weakened to N361 to the dollar on the official market, supported by the central bank.

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Furthermore,Gwadabealsoadvised the public not to go into panic buying, hoarding and patronising the street traders as the CBN had enough reserves to sustain supplies whentheBDCsreturntooperations.

The CBN had also acknowledged the contributions of BDCs in promoting stable exchange rate in recent months despite challenging circumstancesfacingtheForexmarket due to drop in crude oil prices.

“This is to urgently bring to the notices of our members nationwide that following our letter of Recommendations to the CBN to grant us a market holidays on our bidding days as a proactive and preventive measures on the scourge of the novel Covid-19

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epidemic and the ban on all Air/ land travels. The CBN has granted our request, effective tomorrow Friday March 27, 2020, there shall be no market days henceforth for a tentative period of two weeks”.

Gwadabe advised members to observe strict guidelines on the preventive measures on the dangers of the Covid-19, wear their mask, gloves, and frequent washing of hands.

“We also want to advise members to strictly comply with their regulatory obligations on their daily operation. If you are trading be cautious not to fall under the hand of security agencies. Do not be involved in giving black market rates street trading as doing so might create regulatory breach,” he said.

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Giving and misgivings: Poverty across the globe and effect on welfare

(Sixth in the series of an address delivered at the Rotary Foundation dinner/dance at the MUSON Centre, Marina, Lagos on 8th February 2020)

Bashorun J.K Randle

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n the digital inclusion front, it cites a program in India that changed how the government helps people get natural gas to heat their homes. Previously, the government subsidised the cost of natural gas, but this led to inequity: Wealthy people could simply buy more cheap gas. Instead of offsetting the market price, the country began a new program, which created bank accounts for the poor that they could access via mobile phones and were protected by biometric identification (to avoid fraud).

Now, when people buy natural gas, a credit is applied to their account after purchase. With the savings from not subsidising an entire industry, the government funded a program that lowers the costs of buying and hooking up a gas stove in the first place. Natural gas stoves aren’t great for climate change, but for women who previously had to spend hours gathering firewood and suffered health issues from the smoke in their homes, a gas stove can be a lifechanging intervention.

For climate adaptation, the report cites Ethiopia, which has been financing agriculture-related public works projects that both offer employment and help subsistence farmers store and con-

serve, practices that have become even more vital as climate change has made rainfall more unpredictable. It’s also put more resources into agriculture extension programs that can predict weather patterns and help farmers prepare for the unexpected.

“These aren’t rich countries,” adds Desmond-Hellmann. “And they’ve achieved progress with a model that can be adopted for limited budgets.

So those kinds of things are meant to make this come to life for policy makers who do have limited resources… Even countries who feel like they’re getting it right need to look at an inequity within their country.”

Most people in the world live in poverty. Two-thirds of the world population live on less than $-int. 10 per day.

And every tenth person lives on less than $-int. 1.90 per day. Both can be seen in this visualisation.

The research here is concerned with the living conditions of the worst off: those who live in extreme poverty.

The World Bank is the main source for global information on extreme poverty today and it sets the “International Poverty Line”. The poverty line was revised in 2015 – since then, a person is considered to be in extreme poverty if they live on less than 1.90 international dollars (int.-$) per day. This poverty measurement is based on the monetary value of a person’s consumption.

Income measures, on the other hand, are only used for countries in which reliable consumption measures are not available.

A key difficulty in measuring global poverty is that price levels are very different in different countries. For this reason, it is not sufficient to simply convert the consumption levels of people in different countries by the market ex-

change rate; it is additionally necessary to adjust for cross-country differences in purchasing power. This is done through Purchasing Power Parity adjustments.

It is important to emphasise that the International Poverty Line is extremely low. Indeed, “extreme poverty” is an adequate term for those living under this low threshold. Focusing on extreme poverty is important precisely because it captures those most in need. However, it is also important to point out that living conditions well above the International Poverty Line can still be characterised by poverty and hardship. Accordingly, in this entry we will also discuss the global distribution of people below poverty lines that are higher than the International Poverty Line of 1.90 int.-$.

But relying only on higher poverty lines would mean that we are not keeping track of the very poorest people in the world and this is the focus of this entry.

Poverty is a concept intrinsically linked to welfare – and there are many ways in which one can try to measure welfare. In this entry we will focus mainly (though not exclusively) on poverty as measured by “monetized” consumption and income, following the approach used by the World Bank.

But before we present the evidence, the introductory sub-section here provides a brief overview of the relevance of this approach.

Global poverty is one of the very worst problems that the world faces today. The poorest in the world are often hungry, have much less access to education, regularly have no light at night, and suffer from much poorer health. To make progress against poverty is therefore one of the most urgent global goals.

The available long-run evidence shows that in the past, only a small elite

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Global poverty is one of the very worst problems that the world faces today. The poorest in the world are often hungry, have much less access to education, regularly have no light at night, and suffer from much poorer health. To make progress against poverty is therefore one of the most urgent global goals

enjoyed living conditions that would not be described as “extreme poverty” today.

But with the onset of industrialisation and rising productivity, the share of people living in extreme poverty started to decrease. Accordingly, the share of people in extreme poverty has decreased continuously over the course of the last two centuries. This is surely one of the most remarkable achievements of humankind.

Closely linked to this improvement in material living conditions is the improvement of global health and the expansion of global education that we have seen over these last two centuries.

We also discuss the link between education, health, and poverty in this entry.

During the first half of the last century, the growth of the world population caused the absolute number of extremely poor people in the world to increase, even though the share of people in extreme poverty was going down. After around 1970, the decrease in poverty rates became so steep that the absolute number of people living in extreme poverty started falling as well.

This trend of decreasing poverty—both in absolute numbers and as a share of the world population—has been a constant during the last three decades. But as we highlight in the first section of this entry it is unfortunately not what we can expect for the coming decade. It is the fact that still almost every tenth person lives in extreme poverty and the slowing progress against extreme poverty that motivate this entry.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Randle is Chairman/Chief Executive JK Randle Professional Services Chartered Accountants

The nature of luxury (2)

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o many things influence the definition of luxury in Africa. Our diversity is one.

How do you want to define luxury in a country like Nigeria with large numbers of ethnic groups? By extension, the entire African continent?

When you talk about luxury on the continent, it is usually not about price, but instead, as Nisha Kanabar, co-founder of Industrie Africa, a platform showcasing the work of African designers puts it: “It is about the strength and depth of the story that a brand seeks to tell through its craft – be it a new take on indigenous textiles, a reinterpretation of artisanal techniques, or a genuine understanding of their identity and influences.

“Where luxury once used to be synonymous with exclusivity, and aspiration, today it resonates with a much younger consumer through pillars of authenticity, emotional connection, uniqueness, and environmental consciousness.”

The definition of luxury today might be taking a whole new form with many designers and luxury creators defining luxury to suit their cultural realities and heritage.

There are some salient questions to ask: How much influence does culture have on the creation and consumption of luxury? Does luxury exist in Africa before now? Do we have to create new yardsticks to define luxury is in Africa or do we take hook, line, and sinker the West’s definition of luxury as ours? Can creators and consumers of luxury in Africa adopt the tenets of luxury in the West to define their luxury? Or should Africa create her yardsticks to measure what luxury is? These are some of the questions that arise from my interrogation of what luxury is. In the coming weeks, I will seek to find answers to these questions through some of the

points I will highlight here.

I think the first step will be to seek answers to the question, does luxury exist before now in Africa? Categorically, my answer to this is yes.

Africa has always had its luxury industry from time immemorial. It may never have been so labelled, but it has been there.

Taking a look at history, in Nigeria, for instance, there are some premium fabrics associated with royalty or the wealthy. Chief among these are the Etu and Sanyan variants of the Aso Oke. These fabrics are made of premium cotton and strictly handwoven by artisans of a particular lineage. The craft is handed down from generation to generation in that family.

Some designs are made exclusively for kings, and they are usually not repeated. These treasured designs of Sanyan or Etu are treasured keepsakes carefully stowed away or locked up in a portmanteau by owners who often passed them down from one generation to another.

Usually, the Sanya and Etu fabrics are superior and used by Kings, chiefs or the affluent across the Yoruba land.

There are also bespoke shoes handmade of premium fabrics with intricately embroidered designs made by artisans who are skilled in that area. Often, these shoes are made specially for kings, chiefs and the rich who could afford them.

Besides, there is also well-crafted handmade furniture with carefully carved images made by skilled craftsmen. Most of these antiques are still decorating the palaces of kings and some homes were such rare pieces are appreciated.

However, like every aspect of our lives, the African luxury has enjoyed its fair share of colonisation. Now, we are beginning to use external yardsticks as parameters for measuring our luxury industry. www.businessday.ng

Not only that, Africans, especially Nigerians, are avid consumers of European and American luxury. We no longer treasure our craftsmanship. What we often hear is: “Italian craftsmanship. This piece is made by craftsmen in a remote village in Italy. It took them 100 hours to make.”

When we hear this, we become enamoured and desire to collect such prized pieces. Whereas here in Africa, there are craftsmen spending hours creating rare pieces in towns like Osogbo, Ile Ife, and countries like Benin, Kenya, Ghana, South Africa, Tanzania, Botswana, Zimbabwe and other remote villages across the continent.

And whenever we desire any of these local brands, we often under-price them by thinking: “is this not made here in Nigeria, why should it be so expensive?” Although there have been arguments that some of these local brands are overpriced. That is another exciting aspect of pricing, quality and value that we will look at in future editions of this column.

Often, price is determined by the number of hours spent in making a piece, the quality of material used, the number of pieces made in that range (that is if it is a limited-edition piece of 1,000 or less) and the entire process involved in the production.

The argument by most people is African Luxury brands are poorly finished or packaged. But there are some local brands in leather goods, perfumery, arts and fashion who are doing remarkably well. They have turned the curve in terms of their presentation and packaging. They are emerging luxury brands that can compete fairly with some international brands.

For me, there is a luxury in Africa. We need not look to the West or be Eurocentric in our approach to understand the concept of African luxury. As Vogue International editor Suzy Men-

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FUNKE OSAE-BROWN kes puts it in an interview with Luxury Society: “There are two reasons why ‘Africa’ and ‘luxury’ should appear in the same sentence.

The first is a new vision of what luxury means in the 21st Century. Consumers, particularly in the Western hemisphere, are beginning to prize objects touched by human hands – and the handwork in Africa is exceptional. From the work that the Tuaregs have done for Hermes to the bags that are created in Kenya for Ilaria Fendi and Stella McCartney and Vivienne Westwood, African hands make artistic pieces, often with the added bonus of being sustainable and also ethical (…).”

To this end, should Africa and luxury stand side-by-side in all these descriptions or definitions of the nature of luxury? My answer is yes!

African luxury has a market for luxury retail.

It also can manufacture world-class luxury brands.

The world over, any handcrafted item is treasured. Africa has this in abundance. In Africa, some craftsmen are manufacturing daily interesting pieces with their hands. But how much do we value them? We need to reposition the African luxury industry and begin to see that it exists and consume what we produce.

Funke is the publisher of The Luxury Reporter magazine.

Funkeadetutu@gmail.com

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Private sector takes lead role in Covid-19 roll back

Patrick Atuanya

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igeria’s private sector is taking a leading and commendable role in the country’s fight to roll back the spread of the coronavirus pandemic which has affected much of the globe.

Access Bank Plc, Nigeria’s biggest lender by assets, is teaming up with Africa’s richest man Aliko Dangote to provide treatment and isolation centres across the country as it braces for the impact of the pandemic.

Nigeria has recorded 65 cases of the Covid-19 virus, including one death.

Some experts have expressed fears that the spread could become much larger than this and similar to the surge in numbers, witnessed in Italy or the United States, if community infections aren’t curtailed due to poor health facilities.

To date less than 500 people have been tested and the government is tracing 4,370 persons that have made some contact with confirmed virus cases, the ministry of health said last week.

This is why the private sector intervention is much welcome.

The facilities, which will be located across the country with a total of 1,000 beds, will be ready within weeks, Access Bank said last Thursday.

They will have Chinese experts and also serve as testing, isolation, treat-

ment and training centres.

United Bank for Africa Plc (UBA) for its part announced a donation of over N5 billion ($ 14 million), through the UBA Foundation, to catalyse a comprehensive pan-African response to the fight against the coronavirus (COVID-19) global pandemic.

The donation will provide significant and much needed support to Nigeria and 19 other African countries, by supplying relief materials, critical care facilities, and financial support to Governments. The UBA support programme will be allocated as follows: N1 billion ($2.8 million) to Lagos State Government in Nigeria, N500 million ($1.4 million) to Nigeria’s Federal Capital Territory, Abuja, and N1 billion ($2.8 million) to the remaining 35 states in Nigeria, N1.5 billion ($4.2 million) to UBA’s presence countries in Africa, and N1 billion ($2.8 million) for Medical Centres with equipment and supplies.

UBA will fund a medical centre immediately in Lagos, Nigeria, with beds for isolation and ICU facilities, managed and operated in partnership with Heirs Holdings’ healthcare subsidiary, Avon Medical Hospital.

In addition, UBA is providing a free telemedicine platform, that is physician-led, to provide direct access to medical advice to citizens, in compliance with social distancing requirements.

UBA Group Chairman Tony O. Elumelu, stated: “This is a time when we must all play our part. This global pandemic must bring citizens, governments and business leaders together – and quickly. As we see a rapidly increasing number of cases of the coronavirus in Nigeria and Africa, the private sector has to work hand in hand with various Governments, in stemming the spread of the global pandemic.”

Another iconic private sector firm, Guaranty Trust Bank (GTBank), Nigeria’s leading lender, is setting up a 100bed Intensive Care Centre in Lagos for Nigerians that may be infected by the coronavirus.

Segun Agbaje, Chief executive Officer, GTBank in a statement said that the center will be fully equipped with all the necessary gadgets, including respirators and personnel to treat and care for those that may be affected.

The Centre will be fully set up by the end of this week, Agbaje said.

The Nigerian National Petroleum Corporation (NNPC) and oil companies in the country have also stepped up to be counted in the fight against COVID-19 with a support of N11bilion ($30 million) which would be used to provide medical consumables, logistics and in-patient support system and medical infrastructure.

In a joint statement by the NNPC, Oil Producers Trade Section (OPTS) and Independent Petroleum Producers Group (IPPG), they said the effort was in recognition of the impact of the Coronavirus pandemic on the Nigerian population and economy.

According to the group, the support was necessary to address the demand for medical services, “We are immediately providing medical consumables covering testing kits, medical protective suits and ambulances to the highly impacted areas across the Federation. This will be followed in the next few days with the deployment of ventilators, beds and temporary intensive care facilities across the geopolitical zones in the federation,” the statement said.

The OPTS is a sub group within the Lagos Chamber of Commerce and Industry, an umbrella group of companies that have come together to promote their common interests.

The group membership includes both

‘

The poor state of health care facilities in Nigeria mean that these donations are vital in the fight to stop the spread of the disease

Atuanya is the editor of BusinessDay. Email: patrick.atuanya@businessday.ng Twitter: @patrick_atuanya

Don’t forget the ‘public’ in public health

A

s COVID-19 continues to wreak havoc across economies around the world, I guess there is really no other topic worth discussing. The usual caveats apply here. I am not a public health expert or an epidemiologist so as usual I will recommend you listen to the experts as you try to figure out what to do. That being said, the global pandemic has brought the issue of public health to the forefront of discussions, especially in the context of financing health care.

We know the typical Nigerian mantra.

I provide my own electricity, provide my own water, hire my own security guards, send my children to private school. Basically, due to a variety of reasons including poor state capacity, we constantly try to do everything ourselves. The same is true when it comes to healthcare. I have no statistics to back this up, but many look forward to earning enough to afford their own health care or at least purchase their own private health insurance which will allow then go to privately run hospitals. The idea of public

health care receives almost the same attention as public schools. It is often seen as only for the poor and those unfortunate enough to not afford better.

Unfortunately, as this COVID-19 pandemic has demonstrated, when it comes to healthcare you cannot really forget the “public” part. If a contagious virus hits your community and the community has no way to deal with the outbreak then everybody suffers, regardless of if you have access to private hospitals or not. This is not something unique to pandemics by the way. If you live in an area that is infested with malaria carrying mosquitoes, then you are more likely to get malaria frequently. Same for other “public” health issues. The health of your community is just as important as any measures you are taking for yourself.

So, can we really continue on this our path where the rich and well to do are left to their private health devices and everyone else has to manage with an increasingly broken health care system? Or do we have to figure out a way www.businessday.ng

ECONOMIST

to put public health at the front and centre. Not forgetting public education of course, which is also as important.

To be clear there are no easy options, as we frequently see from public health debates around the world. And the days of government funding everything with free revenue from crude oil are well and truly over. This is a discussion that needs to be had because the consequences of public health failures can be very deadly.

With regards to this COVID-19 outbreak, our whole strategy seems to be the flatten the curve as other are doing.

Flattening the curve meaning limiting the spread of infections so that those who catch the virus and need hospitalization do not overwhelm the health care system. All that assumes there is a health care system to be overwhelmed in the first place. How flat does the curve have to be to overwhelm our healthcare system? It seems we are scrambling at the last minute, with the help of the private sector, to purchase emergency equipment and build emergency facili-

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local and foreign-owned companies registered in Nigeria who hold an oil prospecting license or an oil mining license.

IPPG is an association of indigenous exploration and production companies with a current membership of 25 companies. Companies under IPPG include Oando, Seplat, Pillar Oil, Yinka Folawiyo, Shoreline Natural Resources, Waltersmith Petroleum and Niger Delta Petroleum Resources among others.

Femi Otedola, one of Nigerian renowned businessman, philanthropist, and former chairman of Forte Oil Plc has also pledged to contribute N1bn towards the eradication of COVID-19 in Nigeria, while founder of BUA Group, Abdul-Samad Rabiu, has announced a donation of N1 billion in cash through the BUA Foundation, plus an additional donation of equipment and medical supplies including testing kits and medical protective gear to 9 states in Nigeria.

Union Bank has also partnered with 54gene, a U.S.-based genetic research company, using a $500,000 funding facility to increase Covid-19 testing capacity in Nigeria to 1,000 daily. 54gene launched the testing support fund with $150,000 to secure instruments and protective equipment needed to keep health-care workers safe. The company aims to increase rate of testing in Nigeria to 5,000 tests daily working with other partners.

The poor state of health care facilities in Nigeria mean that these donations are vital in the fight to stop the spread of the disease. It is truly a great moment in time for Nigeria’s private sector and to be commended by all.

NONSO OBIKILI ties. I hope we have not forgotten that health care really starts and ends with personnel and we may soon find out that all those our healthcare workers who migrated to saner climes have not exactly been replaced. I hear we are already asking for retired workers to volunteer their services. The same retired workers who are the most susceptible to complications from the virus?

Anyway, I fear I have overstepped by boundaries and strayed into an area where I have no real expertise. As always, please follow the advice of the experts. Stay home. Minimize contact.

Wash your hands often. We hope for the best.

Dr. Obikili is the chief economist at BusinessDay

@Businessdayng

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BUSINESS DAY

Monday 30 March 2020

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

Making the most of the lockdown for citizens These times demand large-heartedness from individual and corporate citizens

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

Bashir Ibrahim Hassan

N

igerians enter this Monday the first week of the lockdown declared across the country.

It commenced on Thursday 26 March in most states. The call is on all citizens to stay home to curtail the spread of the coronavirus.

Many issues arise from the near-total shutdown of the civic space. A government order has compelled business and social activities to collapse. Everyone agrees that it is for a good cause, citing instances in countries such as Italy. However, the price for this prize differs from country to country and from one location to the other even in the same country.

We commend the proactivity of most state governments following the unprofessional delay of the federal government. That delay allowed many officials to travel to Covid-19 afflicted countries and to return with the infection that they have now spread across the country. The nation would have to address the irresponsibility of its elite some

other time.

A primary concern now is how citizens forced to stay home can make the most of the experience.

While they observe social distancing, citizens must remember to ensure there is social caring and social connection. Our culture speaks to the imperative of caring for one another in all conditions.

What can we do? There are many approaches, tried and tested in some climes, that Nigerians can adapt to meet the needs of the moment. The underlying principle is the need to ensure that Nigerians look out for each other in their various communities.

The background is that as the state governments forced shutdowns, not one of them spoke of how citizens would manage the process. Indeed, many state governments forced economic deprivation on small scale operators of many private sector businesses such as transporters, restauranteurs and others who depend on daily earnings. There was no mention of any palliatives.

These times demand large-

heartedness from individual and corporate citizens. We need more corporate social investments in the provision of health facilities such as GTB, Access Bank and others have done. We also need the collaboration of philanthropists with corporates to deliver structured assistance to citizens and communities.

Relief funds. Banks, insurance companies and similar organisations should consider alliances with unions to provide relief funds for those rendered out of work by the current measures.

Food banks. We need to cultivate the habit of providing food banks where the poor can turn to for meals. A few entrepreneurs have attempted this in the past in Nigeria. Many high net worth Muslims also practice this as a stipulation of their faith. We now need to go beyond this and create food banks in the inner cities to assist citizens to overcome the physical challenges of the period.

Remote teaching. Many students at primary and secondary school levels rushed home without taking their qualifying examina-

tions. Professionals forced to stay at home should assist with teaching services of not more than 15 enrolees in each case. Utilise the period productively to the benefit of your community and mankind.

Shared infrastructure. Organisations have compelled many knowledge workers to work from their homes. As with the governments, however, many employers did not make any provisions for how such workers can do so. The fact is that many cannot be productive given the failings of providers of power, data and telecommunications as well as costs. We enjoin citizens with a little extra to open services such as data to others through arrangements. Some of these are easier to do within estates and similar closed communities. Dedicated efforts will show the way.

Necessity being the mother of invention, we look forward as a medium to report positive developments and initiatives that communities and citizens would lead this period. Buzz us with your news. Let’s make the most of the challenge.

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

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

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Covid-19: A world-shaking pandemic that poses a threat to globalisation global Perspectives

OLU FASAN

M

y first personal encounter with the coronavirus or Covid-19 crisis was earlier this month.

No, thank God, I didn’t, and do not, have the virus! Yet, it was a coronavirus-related experience that reflects how the pandemic has turned the world upside down and disrupted everyday life. As someone put it, “Everyone had preoccupations a few weeks ago that now seem self-indulgent.”

Thanks to Coronavirus!

I had been billed to speak at the annual conference of a large UK industrial sector on March 19. Nearly 300 people had registered to attend.

Then, on March 6, I received a call from the organisers: “Sorry, we’ve been constrained to postpone the conference”. But why? Well, the key sponsors, particularly those with headquarters in Japan and other countries with severe coronavirus, had been told by their head offices to withdraw their sponsorships on health and safety grounds. By March 19, large gatherings were already being widely discouraged, so the conference had to be called off. It was a common tale across the world!

Writing in the Financial Times two Saturdays ago, Ben Okri, the Londonbased Booker prize-winning poet, recounted how the opening of his adaptation of “Moby-Dick” in Antwerp, Belgium, was suddenly closed. “I spoke to many friends who had suffered the cancellations of their films, plays, operas and dances, all across world”, he wrote, adding that “the contagion of cultural closures” had begun to sweep across the world.

Of course, Nigeria is not immune to the contagion. In last Monday’s edition, BusinessDay announced the postponements of its March and April events,

including conferences and awards. And the Vanguard newspaper postponed its scheduled Economic Discourse and Personality of the Year Award events.

It’s, indeed, a contagion of closures!

Last week, Japan and the International Olympic Committee, IOC, agreed to postpone this year’s Tokyo Olympics and Paralympics because of the pandemic, the first time the games have been cancelled during peace time.

Similarly, the World Trade Organisation, WTO, cancelled its 12th Ministerial Conference, scheduled to take place in Kazakhstan in June due to the spread of the coronavirus. Think of it. Olympics cancelled! WTO Conference cancelled!

Other international events between now and June cancelled! Covid-19 is truly world-shaking!

The world has witnessed several pandemics over the past 20 years, including Sars in 2003, the HINI or Swine flu in 2009, and Ebola in 2013. But none shook the world as Covid-19 is doing.

The fear of coronavirus has paralysed the world.

Many aspects of the pandemic, particularly Nigeria’s response to it, are subjects for future discussions. For now, using the metaphor of “closures”, my focus here is the impact on globalisation. The contagion of closures, whether it is border closures, ban on international flights, hostility towards foreigners or the shift towards nationalism and protectionism, represents a retreat from globalisation, which is characterised by openness, liberalisation and international cooperation.

The instinct to turn inwards, to erect barriers, is very evident in the national responses to the Covid-19 pandemic.

But are closures the right solution? Can globalisation really be rolled back? And if it can, what are the consequences?

In a powerful book entitled “Global Transformations”, edited by David Held, Anthony McGrew and others, the authors explained the nature of globalisation in this way. They said we now live in a world “rapidly being moulded into a shared social space”, in which “developments in one region of the world can have profound consequences for the life chances of individuals or communities on the other side of the globe.”

Although the book was published in 1999, those words were prescient. I mean, who would have thought that a virus that was passed from Chinese bats

to human through a contaminated meat at a market in Wuhan, China, would create such a global pandemic? Who would have thought that one man in China with a zoonotic infection would cause BusinessDay in Nigeria to suspend six prestigious events or, indeed, force the IOC to cancel the Olympics games?

Sadly, that’s a negative side effect of globalisation, an otherwise highly-beneficial phenomenon. Through the interconnectedness of world economies, through the diffusion of technologies and through freer movements of goods, services, capital and people, including the ease of the transport systems that facilitate these movements, globalisation has massively reduced poverty and increased prosperity across the world. But, well, it has also increased the possibility of a virus originating in one country spreading across the world.

Yet, what that calls for is greater international cooperation, not a retreat from globalisation or a gravitation towards nationalism or autarchy. You can build big walls against foreigners, but can you stop your own citizens from going abroad and returning home? What if they contract a virus while overseas and come home to spread it? Surely, self-interest demands collaboration.

As Gideon Rachman, a Financial Times columnist, rightly put it, “A pandemic is a quintessential global problem that ultimately demands international cooperation.”

But while scientists and medical experts are working collaboratively worldwide to develop a vaccine to tackle Covid-19, nations and political leaders are engaging in rivalry, hostility and opportunism. And, of course, the biggest culprits are the world’s economic superpowers: the US and China. Their failure to cooperate weakens and undermines the international institutions, such as the World Health Organisation, the IMF, the World Bank and the WTO, that, from a global governance perspective, help to facilitate globalisation. But even more regrettable, given the current global crisis, their isolationism prevents the emergence of the global public good of collectively fighting a global pandemic. As the Financial Times wrote in a recent editorial, “US tensions with China hamper antivirus efforts.”

President Trump provocatively relabelled the coronavirus “Chinese virus”

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The world has witnessed several pandemics over the past 20 years, including Sars in 2003, the HINI or Swine flu in 2009, and Ebola in 2013.

But none shook the world as Covid-19 is doing. The fear of coronavirus has paralysed the world

Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

Nigeria: What changes can be made to governance of debt?

H

igher debt levels in recent years were caused mainly by commodity price decline of 2014/2015. In light of low global interest rates, it was not an unreasonable government policy response to secure more debt to accelerate growth. Our failure to build strong foreign exchange reserves, during commodity booms also left limited policy options. In 2017 alone, Nigeria accessed the international capital market thrice and raised bonds that totalled $4.1 billion – 14 percent of our total external debt in 1999, pre debt cancellation.

Nigeria needs to achieve growth and build its global competitiveness. In that regard, debt in and of itself is not a bad thing. This piece focuses primarily on debt governance system across responsibility areas namely the Budget Office, the Debt Management Office (DMO) and the Fiscal Responsibility Commission.

On budgeting, why do we remain so optimistic about the prospects of oil both in the short term and medium term? We cannot control the price of oil. What if oil becomes like coal, rejected and unwelcome as a fuel in global markets.

We all know we should build our budget from ground up, on non-oil income that government can control. If the controllable income cannot

cover recurrent expenditure, we must not borrow to fund the shortfall. Instead, we should prioritise the expenditure. Oil receipts should be a bonus and savings should be accumulated to the trillions of dollars for monetary and fiscal benefits. This may be a good season to fully remove subsidies and then obtain local or international insurance against subsequent global oil price increases (which makes the proposition to deregulate more sellable).

We have a very clear optimism bias when we forecast oil prices. A benchmark oil price of $57 was set for 2020 to 2022 in the medium-term expenditure framework/annual budget. Would it not be more conservative to peg oil price at breakeven price – and preferably enshrine it in law?

The National Assembly must be very critical of every naira demanded (and spent) by the executive. As an example, the UK parliament severely grilled officials of the Bank of England on entertainment expenses incurred on its 2,500 staff that translated to only GBP40 per head! In public spending, every single naira counts and must be guarded jealously! The authorities must also recall that significant new investments in oil & gas industry are being held back by fiscal and regulatory uncertainties – action is urgently www.businessday.ng

Mayowa Amoo

required.

We need to critically re-examine the use of dollar denominated funding. More often than not, such funds are for capital or infrastructure projects. Instead of government borrowing upfront to pay the private sector for projects, is it impossible for the private sector, if it really wants the contracts, to itself borrow the dollars internationally (or naira locally as the case may be) including possibly from off shore parent or related companies or commercial banks, to execute the said projects? As a result, government balance sheet actual dollar liabilities are lighter (meaning less pressure on external reserves) because government would pay the private sector contractors in naira equivalent of dollar cost post project execution and verification.

The DMO undertakes debt sustainability analysis annually, which considers 10-year historical macroeconomic data and 20-year projected data to assess the level of risk of debt distress.

Section 44(1) of Fiscal Responsibility Act (FRA) requires that “Any government in the Federation or its agencies and corporations desirous of borrowing shall specify the purpose for which the borrowing is intended and present a cost benefit analysis, detailing the economic and

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or “Wuhan flu”. China retorted that it was US soldiers who brought the virus to Wuhan in the first place. Policy and diplomatic hawks in the US are angry that 97 per cent of all antibiotics in America are imported from China. Against the backdrop of the trade war rumbling on since 2018, there are calls for economic “decoupling” with China, which means disentangling economies and supply chains and erecting trade barriers – the direct opposite of globalisation!

China, on the other hand, is widely believed to be exploiting the pandemic, which started from its territory, to advance its global interests. At the time when the West has become the epicentre of Covid-19, and thus distracted, China is using its generous aid budget to boost its diplomatic standing globally.

But unlike during the 2008 global financial crisis and the 2013 Ebola epidemic, when it worked collaboratively with the US and others to find solutions, this time, China is going it alone, portraying itself as “the magnanimous global power offering leadership at a time of panic and peril”, as the FT puts it.

Of course, it irks the West that China is turning the pandemic into a geopolitical advantage. As President Xi Jinping recently implied, China sees its support and those of its citizens, such as the billionaire Jack Ma’s recent donation of thousands of testing kits, masks and protective suits to Africa, as a “health silk road”, a reference to the Belt and Road Initiative that China is using to win influence around the world through infrastructure projects. But China’s attempt to exploit the pandemic to its advantage is making global cooperation difficult and provoking a backlash. As the London Times editorialised recently, “The West must not allow Beijing to use this crisis to extend its global power.”

At the heart of globalisation is international cooperation. But coronavirus is driving a pushback against it. Of course, globalisation cannot be fully rolled back. Yet, the impacts of Covid-19 would pale into insignificance compared with the consequences of even a temporary retreat from globalisation.

Nations must pull back from the abyss!

social benefits of the purpose to which the intended borrowing is to be applied.” The FRA also states that loans should only be taken for capital expenditure and human development. The FRA further states that borrowing should only be done on concessional terms. It is important for all relevant state agencies to self-examine for compliance with the foregoing.

The Fiscal Responsibility Commission (FRC) should have more bite to monitor, control and ensure compliance with legal national debt limits and have independent oversight of DMO for instance. To discharge that duty, FRC should develop early warning systems with shorter timelines than the annual analysis conducted in-house by the DMO. This is necessary because there is a tendency for DMO to have a high degree of confidence in “strong” long term solvency ratios as against taking actions to mitigate weak short-term liquidity ratios which negatively affect our capacity to service our debt.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Amoo is an investment banker based in Lagos

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Monday 30 March 2020

BUSINESS DAY

In Association With

Everything’s under control

The state in the time of covid-19 Big government is needed to fight the pandemic. What matters is how it shrinks back again afterwards

E

ditor’s note: The Economist is making some of its most important coverage of the covid-19 pandemic freely available to readers of The Economist Today, our daily newsletter. To receive it, register here. For more coverage, see our coronavirus hub IN JUST A few weeks a virus a ten-thousandth of a millimetre in diameter has transformed Western democracies. States have shut down businesses and sealed people indoors. They have promised trillions of dollars to keep the economy on life support. If South Korea and Singapore are a guide, medical and electronic privacy are about to be cast aside. It is the most dramatic extension of state power since the second world war.

One taboo after another has been broken. Not just in the threat of fines or prison for ordinary people doing ordinary things, but also in the size and scope of the government’s role in the economy.

In America Congress is poised to pass a package worth almost $2trn, 10% of GDP, twice what was promised in 2007-09. Credit guarantees by Britain, France and other countries are worth 15% of GDP. Central banks are printing money and using it to buy assets they used to spurn. For a while, at least, governments are seeking to ban bankruptcy.

For believers in limited government and open markets, covid-19 poses a problem. The state must act decisively. But history suggests that after crises the state does not give up all the ground it has taken.

Today that has implications not just for the economy, but also for the surveillance of individuals.

It is no accident that the state grows during crises. Governments might have stumbled in the pandemic, but they alone can coerce and mobilise vast resources rapidly. Today they are needed to enforce business closures and isolation to stop the virus. Only they can help offset the resulting economic collapse. In America and the euro area GDP could drop by 5-10% year-on-year, perhaps more.

One reason the state’s role has changed so rapidly is that covid-19 spreads like wildfire. In less than four months it has gone from a market in Wuhan to almost every country in the world. The past week logged 253,000 new cases.

People are scared of the example of Italy, where almost 74,000 recorded cases have overwhelmed a worldclass health system, leading to over 7,500 deaths.

That fear is the other reason for rapid change. When Britain’s government tried to hang back so as to minimise state interference, it was accused of doing too little, too late. France, by contrast, passed a law this week giving the government the power not just to control people’s movements, but also to manage prices and requisition goods. During the crisis its president, Emmanuel Macron, has seen his approval ratings soar.

In most of the world the state has so far responded to covid-19 with a mix of coercion and economic heft.

As the pandemic proceeds, it is also likely to exploit its unique power to monitor people using their data (see article). Hong Kong uses apps on phones that show where you are in order to enforce quarantines.

China has a passporting system to record who is safe to be out. Phone data help modellers predict the spread of the disease. And if a government suppresses covid-19, as China has, it will need to prevent a second wave among the many who are still susceptible, by pouncing on every new cluster. South Korea

says that automatically tracing the contacts of fresh infections, using mobile technology, gets results in ten minutes instead of 24 hours.

This vast increase in state power has taken place with almost no time for debate. Some will reassure themselves that it is just temporary and that it will leave almost no mark, as with Spanish flu a century ago. However, the scale of the response makes covid-19 more like a war or the Depression.

And here the record suggests that crises lead to a permanently bigger state with many more powers and responsibilities and the taxes to pay for them. The welfare state, income tax, nationalisation, all grew out of conflict and crisis (see article).

As that list suggests, some of today’s changes will be desirable.

It would be good if governments were better prepared for the next pandemic; so, too, if they invested in public health, including in America, where reform is badly needed. Some countries need decent sick pay.

Other changes may be less clear-cut, but will be hard to undo because they were backed by powerful constituencies even before the pandemic. One example is the further unpicking of the euro-zone pact that is supposed to impose discipline on the member-states’ borrowing. Likewise, Britain has taken its railways under state control—a step that is supposed to be temporary but which may never be retracted.

More worrying is the spread

of bad habits. Governments may retreat into autarky. Some fear running out of the ingredients for medicines, many of which are made in China. Russia has imposed a temporary ban on exporting grain. Industrialists and politicians have lost trust in supply chains. It is but a small step from there to long-term state support for the national champions that will have just been bailed out by taxpayers.

Trade’s prospects are already dim (see article); all this would further cloud them—and the recovery.

And in the long term, a vast and lasting expansion of the state together with dramatically higher public debt (see article) is likely to lead to a lumbering, less dynamic kind of capitalism.

But that is not the biggest problem. The greater worries lie elsewhere, in the abuse of office and the threats to freedom. Some politicians are already making power grabs, as in Hungary, where the government is seeking an indefinite state of emergency. Israel’s prime minister, Binyamin Netanyahu, appears to see the crisis as a chance to evade a trial for corruption.

The most worrying is the dissemination of intrusive surveillance. Invasive data collection and processing will spread because it offers a real edge in managing the disease. But they also require the state to have routine access to citizens’ medical and electronic records. The temptation will be to use surveillance after the pandemic, much as anti-terror legislation was extended after 9/11. This might start with tracing TB cases or drug dealers. Nobody knows where it would end, especially if, having dealt with covid-19, surveillancemad China is seen as a model.

Surveillance may well be needed to cope with covid-19. Rules with sunset clauses and scrutiny built in can help stop it at that.

But the main defence against the overmighty state, in tech and the economy, will be citizens themselves. They must remember that a pandemic government is not fit for everyday life.

A Balkan The nextbetrayal calamity

The coronavirus could devastate poor countries It is in the rich world’s self-interest to help

E

ditor’s note: The Economist is making some of its most important coverage of the covid-19 pandemic freely available to readers of The Economist Today, our daily newsletter. To receive it, register here. For more coverage, see our coronavirus hub THE NEW coronavirus is causing havoc in rich countries. Often overlooked is the damage it will cause in poor ones, which could be even worse. Official data do not begin to tell the story. As of March 25th Africa had reported only 2,800 infections so far; India, only 650. But the virus is in nearly every country and will surely spread. There is no vaccine.

There is no cure. A very rough guess is that, without a campaign of social distancing, between 25% and 80% of a typical population will be infected.

Of these, perhaps 4.4% will be seriously sick and a third of those will need intensive care. For poor places, this implies calamity.

Social distancing is practically impossible if you live in a crowded slum. Hand-washing is hard if you have no running water (see article).

Governments may tell people not to go out to work, but if that means their families will not eat, they will go out anyway. If prevented, they may riot.

So covid-19 could soon be all over poor countries. And their health-care systems are in no position to cope. Many cannot deal with the infectious diseases they already know, let alone a new and highly contagious one. Health spending per head in Pakistan is one twohundredth the level in America.

Uganda has more government ministers than intensive-care beds.

Throughout history, the poor have been hardest-hit by pandemics.

Most people who die of AIDS are African. The Spanish flu wiped out Continues on page 13

Monday 30 March 2020

BUSINESS DAY

15

In Association With

Continental contagion

Africa is woefully ill-equipped to cope with covid-19

People cannot stay away from work if they have no money

Continued from page 14

Editor’s note: The Economist is making some of its most important coverage of the covid-19 pandemic freely available to readers of The Economist Today, our daily newsletter. To receive it, register here. For more coverage, see our coronavirus hub

I

N THE TOWNSHIP people are not worried at all,” says Lesedi Kgasago, a student from Soweto, Johannesburg. Among his friends “corona” is seen either as something that afflicts white people or a fiction.

When life is a struggle it is hard to worry about a threat you cannot see.

Besides, asks Mr Kgasago, what can Sowetans do about it? “Selfisolation is just not practical in the ’hood.” Most of the township is poor and crowded. Just 55% of households have piped water. “There is a mentality of if we die, we die, but we’re going to have a good time,” he says.

That may now be more difficult.

On March 23rd Cyril Ramaphosa, South Africa’s president, announced a nationwide lockdown. The number of recorded cases in the country is the highest in Africa, at 709 as of March 25th. The rate of increase is similar to that of Italy at the same stage.

Other countries in Africa could be just days behind. Most of its 54 states have confirmed infections.

Some hope that hot and humid weather may slow the spread of the virus. But the evidence for that is inconclusive and any effect will be “modest”, reckons Marc Lipsitch of Harvard University. “We don’t know what it will do in Africa,” notes David Heymann of the London School of Hygiene & Tropical Medicine. But there is no reason to think it would be different from anywhere else, he says.

It could be worse. Most rich countries have struggled to respond to the outbreak. African ones have fewer medics and less kit. Social distancing is far harder in overcrowded slums. Lockdowns could increase poverty and hunger. Nor do most African countries have the money to tide people and companies over.

Africa has some advantages. It is a young continent facing a virus that mainly kills the old. There are an estimated 47m Africans over 65 and 6m over 80, out of a population of 1.3bn. In Europe the figures are 143m and 40m out of 750m people.

Africa has also had more time to prepare. Governments have closed borders and restricted air travel.

Many have banned large gatherings.

The vast majority of children are no longer at school. These steps have been taken sooner in the course of the disease than elsewhere. Uganda, for instance, closed schools before it had any confirmed infections.

South Africa’s lockdown was announced before Britain’s, though Britain had more than 16 times as many known cases. Sierra Leone has declared a 12-month state of emergency despite not having a single confirmed case.

Advance warning has also allowed Africa to boost testing capac-

ity. Today more than 40 countries can test for covid-19, up from just Senegal and South Africa in early February. Although they have many fewer testing kits than richer countries do, more are on the way. Jack Ma, the founder of Alibaba and perhaps China’s richest man, has donated 20,000 testing kits, 100,000 masks and 1,000 protective suits to each African country.

Experience in dealing with other infectious diseases may prove useful. Roughly one in three deaths in Africa every year is from an infectious or parasitic disease, compared with one in 50 in Europe. Recent Ebola outbreaks, across west Africa in 2014-16 and in eastern Congo in 2018-20, have taught policymakers vital lessons.

People who have dealt with Ebola, such as David Nabarro, a special envoy for covid-19 to the World Health Organisation, say it is essential to win over communities.

One sign of success in Sierra Leone was when Ebola became known in the Mende language as “bonda wote”, literally “family turn round”— a sign that people were changing behaviour. “I am absolutely convinced that African countries can get on top of this quicker than European countries,” says Dr Nabarro.

Experts also urge vigilance. “We are veterans of outbreaks,” says Monica Musenero, a Ugandan epidemiologist. The country has contained regular flare-ups of diseases such as Ebola and Marburg virus.

Whereas Ebola always “announces itself”, covid-19 spreads quickly and quietly, she says. As doctors find cases of the new virus, they may be only “catching the tail”.

That is the worry across Africa, where outbreaks could rapidly overwhelm health systems. Sub-Saharan Africa has about one doctor for every 5,000 people, compared with one per 300 in Europe. Data are patchy, but the average American hospital may have more intensive-care beds than most African countries. Kenya has 130; Uganda 55; and Malawi about 25. In Zimbabwe there are

probably even fewer in the public system, and doctors and nurses are on strike. Ventilators are scarce: Mali and Mozambique may have one per 1m people. Given the lack of capacity, the disease could be “horrific”, says Tom Frieden, a former head of the Centres for Disease Control and Prevention in America.

The underlying health of Africans may not help either. Doctors do not know if the more than 25m Africans infected with HIV are at greater risk from covid-19. Some speculate that anti-retroviral drugs may help fight the new virus, though early studies suggest otherwise. Even if this were the case, notes Denis Chopera, a Durban-based virologist, only about 60% of South Africans with HIV regularly take their pills.

The burden on health-care systems from covid-19 could impede treatment of other diseases. Studies of the Ebola outbreak in west Africa suggest that about as many people died because they could not get treatment for malaria, HIV and tuberculosis as from Ebola itself. Others died from being unable to give birth safely. Suppressing outbreaks of Lassa fever in Nigeria and measles in Congo could be hampered by the diversion of resources to covid-19.

Governments may also have a hard time convincing their citizens to take the new virus seriously. Fake news is one reason. Dodgy cures and conspiracy theories are spreading on WhatsApp groups, which typically have more members in Africa than elsewhere. In Congo the virus is seen as a “mzungu” (white person) disease. Some Ethiopians see their country as blessed and therefore protected. More than a quarter of Nigerians say they are immune, most commonly because they are “a child of God”.

Religion may be doing more to spread the disease than stop it. Senegal was slow to stop pilgrims from travelling to the holy city of Touba, despite an outbreak. A Christian gathering in South Africa has been linked to another outbreak. Thousands still attend megachurches in

The coronavirus could devastate poor countries

Nigeria. Although many pastors and imams are spreading the gospel of handwashing, others are talking nonsense. Orthodox Christians in Ethiopia have promoted quack “cures” involving garlic, lemon and ginger. Prices of these foodstuffs have risen by more than 200%, and fights have broken out in markets over them.

Many African leaders have been swift to ban religious meetings.

Some churches are streaming services online. But this is not the case in Tanzania, where President John Magufuli has refused to close churches, saying: “That’s where there is true healing. Corona is the devil and it cannot survive in the body of Jesus.”

African governments face practical as well as spiritual obstacles.

The state’s ability to enforce social distancing and lockdowns is questionable in cities, where two in every five Africans live. More than half of city-dwellers are in crowded slums (see map). In Alexandra, a slum in Johannesburg, there are more than 9,000 households per square km, compared with fewer than 700 in neighbouring Sandton, a posh suburb. In Kampala 71% of households sleep in a single room. Frequent handwashing with soap is difficult.

In Makoko, a huge slum in Lagos, less than 20% of households have piped water. Conditions in refugee camps are often worse.

Persuading slum-dwellers to stay in one-room shacks with many relatives will be tougher than getting people in New York or London to stay on the sofa watching Netflix.

And few can work from home. Six in ten Ugandan workers are either self-employed or help out in a family business. If people do not work they do not eat, says Steven Agaba, who lives in a poor part of Kampala, Uganda’s capital. He gestures at a man selling fruit from a tarpaulin spread across the muddy ground. “It will not be the coronavirus to kill us, but the hunger.” It may also send the poor back to their villages, further

6% of India’s entire population.

Dozens of developing countries have ordered lockdowns. India has announced a “total ban” on leaving home for 21 days (see article). South Africa has deployed the army to help enforce one. They may slow the disease, but they are unlikely to stop it.

Many places are still in denial.

Street markets in Myanmar are packed. Brazil’s populist president, Jair Bolsonaro, dismisses covid-19 as just “a sniffle” (see article). Some leaders are clueless. Tanzania’s president, John Magufuli, said churches should stay open because the coronavirus is “satanic” and “cannot survive in the body of Christ”. Many autocrats see covid-19 as a handy excuse to tighten their grip. Expect some to ban political rallies, postpone elections and extend surveillance over citizens’ daily lives—all to protect public health, of course.

Granted, there are some reasons for hope. Poor countries are young— the median age in Africa is under 20—and the young appear less likely to die from an infection. The poorest are very rural: two-thirds of people in countries with incomes per head below $1,000 a year live in the countryside, compared with less than a fifth in rich countries. Farmers can grow yams without breathing viral droplets on each other. The climate may help. It is possible, though far from certain, that hot weather slows the spread of covid-19. Some places have useful experience. Countries that endured Ebola learned a lot about hand-washing, contact-tracing and securing public trust.

Alas, even the good news comes with caveats. People in poor countries may be young, but they often have weak lungs or immune systems, because of malnutrition, tuberculosis or HIV. Rural folk may get the virus later, but they will probably still get it. Lockdowns will be hard to sustain unless governments can provide a generous safety-net.

Firms need credit to avoid laying off staff. Informal workers need cash to tide them over. Unfortunately, poor countries do not have the financial muscle to provide these things, and covid-19 has just made it much harder.

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BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

BANKING

Fitch slams downgrade on Nigerian lenders after Moody’s warned about banks’ asset quality SEGUN ADAMS

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itch Ratings has downgraded the three-highest rated banks in Nigeria to Long-Term Issuer Default Rating (IDR) ‘B’ and Viability Rating (VR) ‘b’, and placed National Ratings of all 10 rated Nigerian banks (excluding Stanbic IBTC Holdings) on Rating Watch Negative (RWN), it said Friday.

Ratings of Zenith Bank (Zenith), Guaranty Trust Bank (GTB) and United Bank for Africa (UBA), were revised to Long-Term Issuer Default Rating (IDR) ‘B’ and Viability Rating (VR) ‘b’ over the dampened outlook for the industry due to external pressure on the economy. “... all Nigerian banks will face material pressures from a weaker operating environment over the next few months given the oil price crash, a potential further devaluation of the Nigerian naira and the impact of the COVID-19 pandemic on individuals and businesses,” Fitch said.

The rating agency said while the full extent is not yet known, “it is our view that

‘b+’ VRs and ‘B+’ IDRs are no longer compatible with the deteriorated operating environment.”

Fitch’s credit-worthiness revision on bank came after Moody’s last week told Bloomberg that a weaker naira would put negative

pressure on Nigerian banks’ asset quality and capital metrics as they have a high proportion of foreign-currencydenominated loans.

However, Moody’s noted that Nigerian banks hold good capital buffers, a position shared by CSL analyst

Gbolahan Ologurno.

According to Ologurno, lenders have since 2017 increased their risk-assessment framework, while some have restructured their loan books and taken additional measures to ensure their obligors

L-R: Adewunmi Alode, general counsel and company secretary; Ikechukwu Ogah, minister of mines and steel development; Adamu Mohammed, acting plant manager Ewekoro, and Titilope Oguntuga, sustainable development and corporate brand manager, during the visit of the Honourable Minister to the Lafarge Africa Ewekoro Plant in Ogun State.

FINANCIAL SERVICES

AfDB raises $3bn bond program to support African economies OLUFIKAYO OWOEYE

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he African Development Bank (AfDB) sold a record $3 billion debt issue joining the fold of multilateral and public lenders ramping up efforts to raise financing to help combat the fallout from the coronavirus outbreak.

The three-year bond, the AfdB’s biggest dollar issue to date, aims to provide “support and financing to countries and businesses fighting against COVID-19”, a note from a lead manager of the issue said.

Through this Fight COVID-19 Social Bond, investors will be able to support African communities to help curb the spread of the virus and overcome the many challenges caused by the outbreak,” the statement said.

Order books grew to more than $4.6 billion, according to

have a hedge contract as protective measures.

But Fitch draws lessons from the 2015/2016 oil price crash which saw banks’ bad loan spike, and expects the current oil price shock to adversely impact the oil and gas sector, which accounts for

lead managers. The bond will pay a coupon of 0.75%.

The development bank, which is AAA-rated, is just one of a number of public issuers selling fresh debt linked to efforts to combat the virus spread.

The International Finance Corp has also sold a $1 billion dollar-denominated social bond as part of the World Bank Group’s $12 billion coronavirus financing package.

While on Thursday, the Inter-American Development Bank (IADB) launched on a five-year dollar-denominated bond expected to price in the days to come.

It is part of the IADB’s $2 billion programme aimed at helping “countries throughout Latin America and the Caribbean cope with challenges posed by the pandemic”, according to another term sheet.

The African Export-Import Bank (Afreximbank) during the week announced a $3-billion facility, named Pandemic Trade Impact Mitigation Facility (PATIMFA), to help African countries deal with the economic and health impacts of the COVID-19 pandemic.

The fund, PATIMFA, approved by the Bank’s Board of Directors during its sitting on 20 March, will provide financing to assist Afreximbank member countries to adjust in an orderly manner to the financial, economic and health services shocks caused by the COVID-19 pandemic, according to information released by the Bank.

It will support member country central banks, and other financial institutions to meet trade debt payments that fall due and to avert trade payment defaults, said

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Afreximbank. It will also be available to support and stabilize the foreign exchange resources of central banks of member countries, enabling them to support critical imports under emergency conditions.

In addition, PATIMFA will assist member countries whose fiscal revenues are tied to specific export revenues, such as mineral royalties, to manage any sudden fiscal revenue declines as a result of reduced export earnings.

It will also provide emergency trade finance facilities for import of urgent needs to combat the pandemic, including medicine, medical equipment, hospital refitting, etc.

The facility will be available through direct funding, lines of credit, guarantees, cross-currency swaps and other similar instruments, according to Afreximbank.

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around 30% of the banking sector’ gross loans.

Fitch said its stress tests show that asset-quality risks arising from deterioration of the banks’ oil and gas exposures are the biggest threat to their ratings.

Additionally, it expects the non-oil segment to be impacted by the slower economy, but also due to the COVID-19 crisis, which could severely affect communities and industries, Fitch said.

“It would particularly test the quality of consumer and SME loans.”

Last year the Central Bank of Nigeria (CBN) forced banks to lend as much as 65% of their deposits as loans but prioritized the SMEs sector.

In the light of the COVID-19 outbreak and oil price decline, the CBN introduced regulatory forbearance to consider temporary and time-limited restructuring of loan terms and tenors to households and businesses affected by COVID-19.

Non-Performing Loans (NPLs) ratio of banks fell from 6.59 percent in January to 6.54 percent in February 2020, still above the prudential benchmark of 5.0 per cent of the CBN.

CSR

Mandilas group supports GTBank’s Covid-19 Isolation Centre at Onikan Stadium MIKE OCHONMA

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andilas Group Limited, owners of the Carrier brand of air-conditioning systems in Nigeria is offering support to the coronavirus isolation centre by powering the centre Carrier Ceiling Concealed Ducted Air-conditioning units at the newly set-up GT Bank isolation centre at Onikan stadium, Lagos.

The installation of the Carrier units is part of the fight against the coronavirus pandemic in Lagos state.

The ceiling concealed units worth over N20 million will be active for the entire duration of the isolation centre.

Mandilas sources say the @Businessdayng

A/C units will enable suspected individuals brought at the centre by the state government to feel comfortable and encourage habitation for isolation purposes.

The installation is expected to be completed today in readiness for the launch of the centre. Carrier is the pioneering air-conditioning system in the world and is renowned for its quality, durability and performance.

Earlier this month, Mandilas group donated Carrier split air-conditioning units to the National Centre for Disease Control (NCDC) for the isolation centre in Yaba.

This gesture is in line with the corporate mission of Mandilas group that is committed to improving the quality of lives of all Nigerians.

Monday 30 March 2020

BUSINESS DAY

COMPANIES&MARKETS BANKING

FCMB guarantees hitch-free services, rolls out safety measures to contain spread of coronavirus pandemic MICHAEL ANI

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irst City Monument Bank (FCMB) has assured its teemi ng c u st o m e rs of prompt and convenient financial services accessibility and delivery despite the ongoing challenges posed by the COVID-19 (coronavirus) pandemic in Nigeria.

The assurance follows the full activation of the Bank’s Business Continuity plan and implementation of safety measures for customers and staff to contain the spread of the pandemic.

The action is in line with the customer-first approach philosophy of the Bank and best practice international protocols, including the recommended measures by the World Health Organisation (WHO) and the Nigeria Centre for Disease Control (NCDC).

In a statement, FCMB informed that part of the safety measures it has put in place is the cleaning of teller counters at all

branches with disinfectants every hour. This is in addition to compulsory enforcement of temperature screening, the use of hand sanitisers for all those that must gain access to any of its business premises and keeping a keen eye on social distancing rules. The Bank disclosed that while majority of its branches will remain open to serve customers who may require physical services, a few other branches had been temporarily closed since March 25, 2020.

Based on this and considering the critical services offered by Banks, especially at a time like this, FCMB has further optimised its world class alternate and digital banking channels to effectively cater for all forms of transactions required by customers, thereby limiting the threat of inter-personal interaction.

The lender has therefore encouraged customers to make use of its self-service channels, including, internet banking, the new FCMB Mobile app, *329# USSD solution, automated teller machines, among

others, to send money, pay bills, request for loans, purchase airtime, check account balance and carry out other transactions on the go.

Also, FCMB has temporarily changed its work structure by ensuring that some category of staff can now work remotely to minimise physical interaction as well as adhere to social distancing guidelines. This is to further safeguard the institution’s stakeholders and its host communities against the threats posed by COVID-19. Also, the Bank has suspended all training programmes, while meetings are to be held virtually.

FCMB has assured that it is constantly monitoring the COVID-19 situation and will continue to deploy the necessary measures in the best interest of customers, staff and other stakeholders.

The Bank has advised the populace to remain safety conscious by diligently adhering to all the rules put in place by the government and the health authorities to avoid further spread of the virus.

SERVICES

CWG implements Business Continuity Plan as Coronavirus takes larger scale MODESTUS ANAESORONYE

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s part of measures to key into the Lagos State Government strategy of working from home in the wake of the Covid-19 Pandemic, Nigeria’s CWG Plc said its Business Continuity Plan (BCP), which it has been practicing partially since last year is fully being implemented.

Martin Nwoga, CWG’s director, Managed Services made the disclosure in a statement circulated to journalists in Lagos.

He said CWG, which has operations in four African countries and is touted as the largest integration company in Nigeria, has pieces of machinery in place that allows its staff to work from home. “CWG has implemented its Business Continuity Plan (BCP) where almost 100 percent of our staff are presently working from home,” he announced.

According to him, as a deliberate attempt to support work-life balance, CWG implemented two-days a month work from home (WFH) for most of its staff since 2019. This, he noted has proven useful now that the world is facing the COVID-19 pandemic.

Nwoga also disclosed that the Business Continuity Plan is allowing the company to share up to date communication on events as they unfold and interface with customers to collaborate for effective business continuity.

With regards to essential services, which require the physical presence of people, Nwoga stated that a few select individual staff at CWG have volunteered to go into the Data Centre if required during this crisis.

He believes that while it is possible to get alerts and warnings on any issues, it requires physical intervention to resolve the issue around servers, racks, www.businessday.ng

switches, SAN enclosures, patch panels, and power connections.

Meanwhile, in another further interaction with Nw oga, he argue d that though there is still a great Information Technology market in Nigeria, a lot of companies have been slow to the digital transformation. Thus, making most of the public organizations to have relatively low IT penetration.

He said Managed Services are excellent options for those companies, especially those in the small and medium-sized category, as they don’t have to buy a lot of technology that they can ill afford.

“The small and mediumsized companies can only pay for what they consume, while the larger enterprises can focus their attention on changing business strategy rather than fighting fires in their IT systems,” he advised. https://www.facebook.com/businessdayng

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Monday 30 March 2020

BUSINESS DAY

Monday 30 March 2020

BUSINESS DAY

PHOTOSPLASH

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2019 BusinessDay Excellence in Public Service Award

Ogho Okiti, MD BusinessDay Media Limited

L-R, Ahmad Kaita, chairman senate committee on Tertiary Institutions and TETFUND with Famous Eseduwo, representing minister of Works and Housing.

Samson Makoju, representing GMD NNPC.

L-R, Kamal Adamu Shuaibu, sarkin Gabas Abaji, representing Ona of Abaji with Femi Adesina, SA to the President.

L-R, Ogho Okiti, MD BusinessDay Media Limited, Kamal Adamu Shuaibu, sarkin Gabas Abaji, representing Ona of Abaji and Femi Adesina, SA to the President.

L-R, Femi Adesina, SA to the President with Suleiman Elias Bogoro, executive secretary Tertiary Education Trust Fund ( TETFUND)

L-R, Femi Adesina, SA to the President withOgho Okiti, MD BusinessDay Media Limited

L-R, Femi Adesina, SA to the President with Suleiman Elias Bogoro, executive secretary Tertiary Education Trust Fund ( TETFUND)

L-R: Elias Bogoro, executive secretary Tertiary Education Trust Fund ( TETFUND) with Ogho Okiti, MD BusinessDay Media Limited

L-R, Zainab Ahmed, minister of Finance, Budget and National Planning, Bashir Hassan Ibrahim, GM BusinessDAY Media, Northern Operation and Ogho Okiti, MD BusinessDay Media Limited.

L-R, Benjamin Onigbinde, CEO Sigvent Property Trust Limited with Ogho Okiti, MD BusinessDay Media Limited

L-R: Ogho Okiti, MD BusinessDay Media Limited with Musa Nuhu, DG Nigerian Civil Aviation Authority (NCAA) representing minister of Aviation.

L-R, Zainab Ahmed, minister of Finance, Budget and National Planning, Yunsa Tanko, SA to Minister of Finance and Ogho Okiti, MD BusinessDay Media Limited,

L-R: Femi Adesina, SA to the President with Suleiman Elias Bogoro, executive secretary Tertiary Education Trust Fund ( TETFUND)

L-R, Kamal Adamu Shuaibu, sarkin Gabas Abaji/representing Ona of Abaji with Zainab Ahmed, minister of Finance, Budget and National Planning

L-R, Zainab Ahmed, minister of Finance, Budget and National Planning with Suleiman Adamu, minister of Water Resources,

L-R, Kamal Adamu Shuaibu, sarkin Gabas Abaji/representing Ona of Abaji with Suleiman Adamu, minister of Water Resources.

L-R, Ahmad Kaita, chairman senate committee on Tertiary Institutions and TETFUND with Okeke Francis, representing CEO Nigeria Export Promotion Council (NEPC).

L-R,Sani Datti, chief information officer, Ministry of Avia- L-R Kamal Adamu Shuaibu, sarkin Gabas Abaji/representing L-R: Kamal Adamu Shuaibu, sarkin Gabas Abaji/representing Ona tion with James Odaudu, director public affairs, Ministry of Ona of Abaji with Aondona Mkon, representing the minister of Abaji with Eli Jidere Bala, representing minister of Science and of Special Duties and Intergovernmental Affairs.

Technology Aviation.

L-R: Femi Adesina, SA to the President with Peter Osamuede Aghahowa representing DG PENCOM

L-R, Femi Adesina, SA to the President and Babatunde Irukera, DG/CEO Federal Competition with Consumer Protection Commission.

L-R, Suleiman Elias Bogoro, executive secretary Tertiary EducaL-R: Samson Makoju, representing GMD NNPC with Ogho tion Trust Fund ( TETFUND),Femi Adesina, SA to the President and Aondona Mkon, representing the minister of Special Duties Okiti, MD BusinessDay Media Limited, and Intergovernmental Affairs.. Pictures by Tunde Adeniyi.

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Monday 30 March 2020

BUSINESS DAY

cityfile Residents turn to ATMs as security agencies enforce lockdown in Kaduna

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Inside Ikotun Market in Lagos, non essential lockup shops shut to customers to observe the stay at home order by the state government to curb the spread of Covid-19.

Pic by Pius Okeosisi

Road repairs suffer setback in Lagos over Covid-19 JOSHUA BASSEY with agency report

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onstruction firms handling major road projects in Lagos are shutting down sites over the Coronavirus pandemic.

The spread of the virus is also taking a toll on minor road repairs by the Lagos State Public Works Corporation (LSPWC) and the state ministry of works In Alimosho, ongoing expansion of the Ikotun road-about aimed at addressing perennial traffic jam in the area has been slowed down with the possibility it might be abandoned for a while if the Covid-19 continues to spread.

The new Federal Controller of Works in Lagos, Kayode Popoola, also confirmed the effect of the coronavirus on construction works being handled some construction giants for Federal Government in Lagos.

Popoola listed the firms to include Julius Berger (JB), Reynolds Construction Company Ltd., (RCC) and CGC Nigeria Ltd., among others.

The controller said that the firms had in a circular to the federal ministry of

works and housing notified the ministry that the sites would close down due to the outbreak of the virus.

He said that Julius Berger had completed ongoing rehabilitation works on the Independence Bridge and opened it to traffic on March 22.

“We were working on the Independence Bridge but we completed work and opened the Bridge to traffic on Sunday morning after we completed the last trunk of the asphalt laying,’’ he said.

He, however, lamented that the firm would suspend ongoing rehabilitation works on the Ijora Olopa Ramp under Eko Bridge as well as planned rehabilitation of the Marine Bridge in Apapa due to the site closure.

“Julius Berger is closing down all its’ site today, they are moving out of site, so from tomorrow you will not see any of them on site.

They informed us yesterday and said it was because of Coronavirus.

“CGC is not on site, they have closed down, and they too served us the circular yesterday. RCC has also closed down.

“We were to work on Ijora Olopa Ramp this weekend and we had even

closed a section of the bridge in preparation for the work but because Julius Berger is shutting down in compliance with their management directive, we had to reopen the bridge because work cannot be done now.

“Julius Berger is still working on Lagos-Abeokuta Expressway to make sure that the road become motorable soonest but they will stop work today. JB will move out of site,’’ Popoola said.

He added that rehabilitation and reconstruction works which were progressing on the LagosBadagry Expressway would also have to be suspended.

He, however, noted that Hitech sub contractor handling the ApapaOshodi-Ojota-Oworonsoki Expressway reconstruction and rehabilitation project on behalf of the Dangote Group was the only firm still on site.

The controller expressed hope that the firm would remain on site and not serve any closure notices since it was complying with the restriction of the number of workmen permitted on site per time.

Speaking on the Alaka/ Eko Bridge, he said that materials for repairs being

imported from China was being slowed down by the same COVID-19 pandemic and that the materials had not arrived in Nigeria.

He appealed to Lagos residents to comply with government directive to end the raging scourge of the virus in Nigeria while pledging his commitment to clean highway drains to combat flooding.

The controller said that massive desilting of highway drains would begin across Lagos to avert flooding but appealed to residents to shun drain stuffing habits.

Popoola also pledged his commitment to ensuring smooth roads in Lagos, saying: “My vision is to see that all our roads and bridges in Lagos are maintained timely, we will attend swiftly to failures on roads and bridges to ensure they are smooth always.

“We will ensure we monitor all drainage facilities to ensure there is no blockade. “We are going to take the issue of desiliting very seriously because we do not want flooding, so I am appealing to all residents of Lagos to please not drop refuse inside drains so that we will not record flooding during the rainy season.’’

CAN orders total shutdown of churches in Ogun RAZAQ AYINLA, Abeokuta

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he Christian Association of Nigeria (CAN) in Ogun has directed all churches in the state to completely close down.

The directive was given through a statement issued by the state chairman, Bishop Tunde Akin-Akinsanya.

Akin-Akinsanya had, on March 19, directed all churches to reduce their worshipers “to the nearest minimum” www.businessday.ng

within a confined space, in line with government’s directive which banned all high- density gatherings within the state.

Last weekend, however, the chairman ordered immediate and total shutdown of all churches in the state.

“As a follow up on our earlier statement on March 19 in respect of the Coronavirus pandemic and consequent upon our continued findings on the disease, the Ogun chapter of CAN hereby directs that all churches be immediately

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esidents of Kaduna metropolis now throng Automated Teller Machines (ATM) for transaction amid enforcement of total lockdown declared by the Kaduna State in the wake of the Covid-19 pandemic.

Checks around the metropolis at the weekend also showed some level of compliance with the stayat-home order.

Some ATMs were, however, not dispensing cash due to network failure.

At U n g u w a n B o ro, many residents were seen hanging around ATMs that were not dispensing cash.

A similar situation was noticed around Sabon Tasha, leaving long queues of customers waiting in anticipation.

Some bank customers, who spoke on the development, expressed disappointment with the banks for failing in their hours of need.

“Many people were not prepared for a total

lockdown,” said a man who identified himself as Simon.

He lamented further: “We came here to withdraw the little amount in our accounts; it is either there is no cash in the ATM or there is a network failure.”

Also, Hauwa Ibrahim said she had no cash at hand and had been on queue for four hours but yet to make withdrawals due to slow network.

Meanwhile, security personnel have taken over strategic location sending residents home and forcing traders to close their shops.

The security personnel comprised the Police, Nigerian Security and Civil Defense Corps, and Kaduna State Traffic Law Enforcement Agency, and Civilian Joint Task Force.

Motorists at the weeke n d w e re a l s o b e i n g stopped and turned back while a few were allowed through depending on the reasons provided.

NSCDC deploys 250 operatives to enforce safety measures in Abia

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he Nigeria Security and Civil Defence Corps (NSCDC) command in Abia has deployed 250 personnel to different parts of the state to enforce government safety measures against spread of COVID-19 in the area.

The state NSCDC commandant, Nnamdi Nwannukwu, said in Umuahia that the operatives would work with the Federal Government task force for the purpose of surveillance, enforcement and response.

Nwannukwu said that the deployment was in c o mp l i a n c e w i t h t h e directive from NSCDC commandant-general, Abdullahi Mohammadu, for state commands to mobilise 250 operatives to be trained in the fight against COVID-19 by the National Centre for Disease Control (NCDC).

“The 250 personnel

are our contribution from the Abia command to the 9,500 personnel the corps deployed nationwide to curtail spread of Coronavirus through enforcement of government restriction order,” he said.

He directed area commanders, divisional officers, heads of operations to mobilise personnel under them to enforce government directive.

He said that the command was collaborating with sister agencies and ministry of health to achieve the desired goal in the state.

The commandant advised residents to adhere to safety and precautionary measures, including avoiding large gatherings, handshakes, hugging and to embrace regular handwashing and use of sanitisers. He warned against the spreading of rumours and fake news, especially through the social. NAN

shut down across the state.

“At this trying time, let us apply Godly wisdom and follow His directive in the book of Isaiah 26:20, which says: Go, my people, enter your rooms and shut the doors behind you; hide yourselves for a little while until HIS wrath has passed by.

“This too shall pass in the precious name of our Lord

Jesus. We watch and pray,” he said.

The CAN chairman urged all churches and their leaders, to ensure full compliance with the directive. According to him, house fellowships are also encouraged to ensure full compliance, adding “law enforcement officers have government’s instructions to enforce this directive.

@Businessdayng

Monday 30 March 2020

BUSINESS DAY

This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

23

• Utilities • Managing your Tax

How to gain innovation immunity The Solid Wealth Messenger

Grace Agada

I

nnovation is the ability to create value that is different, acceptable. And has a positive impact on the lives of current and future consumers. It is the ability of a product or service to unseat a one-time admired product in the mind of consumers. This means that innovation can be a good thing.

It is a good thing when it helps businesses raise their standard of value to consumers. And give businesses a fair chance to compete. But innovation can also be a bad thing when it takes the life of businesses.

Chop off their market share. And reduce their profitability. All brick and mortar Businesses are at risk of disruptive innovation.

And here is why. Old consumers are winding down and new consumers are emerging. Consumers are demanding the same level of service across different industries. This means that the days for comparing only apples for apples are over. The brick and mortar businesses are also at risk because their business model is being disrupted.

There are disrupted by start-ups who diminish the value of their offerings. And slice off a core part of their operations. Additionally, the skills needed to serve tomorrow’s consumers are lacking in most brick and mortar businesses. And Business Leadership is shifting from founders who serve old consumers. To Successors who will serve new consumers.

All these increases the risk that brick and mortar businesses are exposed to. To mitigate this risk.

Owners of brick and mortar businesses must develop strategies to protect their businesses. Thus, the purpose of this article is not to encourage business owners to remain where they are. Adopt the lets “wait-andsee” approach. And double down on traditional businesses. When the ground beneath their company is wobbling. But to show business owners how they can lead innovations.

Find stable grounds to compete.

Raise their standard of value, keep their most profitable consumers. And understand when to change.

No business will survive longterm without reinventing itself.

Businesses that remain the same will disappear. Business leaders must thus overcome the temptation of staying put in their current business model. Even when these business models are working and indeed still profitable. Because today’s profit is

not a guarantee for tomorrow’s success. The ability to change on an ongoing basis is thus the most critical competitive advantage in the 21st century.

So how then can Businesses gain innovation Immunity?

To gain innovation immunity business Leaders must do three things.

First, they must have a unique differentiation. Second, they must have an Innovation Focused Leadership. Third, they must leverage on Technology. Let’s discuss each of these three points in detail.

First a unique differentiation.

Having a unique differentiation is having the ability to stand out, be seen and recognized as unique and different from a myriad of choices.

Unique differentiation is important because it makes it easy for consumers to find you. In today’s competitive world with many look-alike businesses, the ability to be seen is critical for cash-flow. If you are not the industry market leader you need to differentiate to stand out. Standing out does not mean being only slightly better than the competition.

The best way Professor Michael Porter a Professor at Harvard Business school define standing out is this.

The ability to have a robust innovation strategy that you can own and protect. According to him, companies that perform the same activities as competitors. Only a little better have operational efficiency. Operational efficiency is not a sustainable unique advantage. Having a unique differentiating advantage is like having a unique name consumer can call when they want to do business with you.

Next is having an Innovation Focused Leadership. There is a popular saying that everything rises and falls on leadership. This is true with regard to innovation. While many business leaders claim to be innovation-focused. It is not hard to see how this is not true. The culture in

many companies is set up to murder innovation. Business leaders find it hard to reposition their businesses in new ways. And here are some of the reasons. Business leaders are stuck in the dilemma of growing today’s profitable and predictable businesses. While seizing Tomorrow’s unpredictable opportunities.

They are at a loss of how to simultaneously meet the performance requirements of their current business model. While dramatically reinventing new ones. Worse of all is that they are concerned about the effect of diverting focus from their most profitable customers. To emerging consumers who currently have a weak purchasing power. Even so, business leaders must understand that the billionaire consumers of today are tomorrow’s dead men.

Business leaders must thus find the right strategies. That will help them gradually shrink their disrupted business model. So, they can expand their value to the billionaires of tomorrow.

They must also find ways to gradually transfer their profit centers from old business models to new ones. Creating a culture of innovation. And being an innovationfocused leader is more than lip service. It requires the ability to stay safe from the effect of innovation by leading innovation. And swiftly adapting to it. When Business Leaders lead innovation. They are able to flip innovation dilemmas into opportunities.

Next is Technology. There are three attributes that make the emerging consumers a difficult segment to focus on for most brick and mortar businesses. First is there are not the most profitable consumer segment. Second, their needs and values are different from those of the most profitable consumers. And third, they have weak purchasing power. That makes it hard for them to contribute to the profitability profile of a company. This makes many

‘

Having a unique differentiation is having the ability to stand out, be seen and recognized as unique and different from a myriad of choices

companies view them as liabilities and not assets.

Companies do not see any immediate incentive or reason to pursue them or make them the center of their business model. Even so, without their patronage. All brick and mortar businesses will go out of fashion. To resolve this dilemma.

Business leaders must do three things. First, they must create a separate business entity and model.

That places emerging consumers at the center of the business. Second, they must develop new products and services.

And new human capital skills that can deliver the kind of value.

That is important to the emerging consumer markets. Third, they must use technology to bring down the cost of operation. Reach more consumers at the same time and make emerging consumers profitable. These are the three ways to make emerging consumers market immediately Profitable Innovation may create certain problems for businesses. But it can also bring huge opportunities for businesses that are prepared. The impact innovation will have on your business in the coming years depends on how you are thinking. Prioritizing, responding and approaching the concept of innovation.

Perhaps you need help reinventing your brick and mortar business.

And putting some of the ideas in this article into practice. We can help you. With our “DOG” Business Longevity Program we will help you achieve three things. First, we will help you identify Disruption fault lines(D). That exposes your current business model to disruption so, you can take proactive actions. Second, we will help seize new Emerging Market Opportunities (O). So, you can compete unfairly and profitably. And third, we will help you create a Generational Relevance Plan (G). That will keep your business alive for up to 100 years. These three things we will do to help your business gain innovation immunity.

If you are interested in this kind of help send an email to info@createsolidwealth.com.

Is your business standing on a burning platform?

Grace Agada is the First indigenous Family Business Longevity and Legacy Expert. With unique expertise in helping Self Made Business Men Transition from Vanishing Mortals. To Men with Indestructible Name, Wealth and Legacy. Grace’s philosophy is simple. Successful Business Men do a lot of good in the world. This good should Expand.

Receive great recognition and extend beyond life. Her goal is to help Family business Men Eliminate factors that murder Businesses. Differentiate and deepen Customer value. Create, Own and Dominate New Market Space.

Lead Innovation. And reinvent their Businesses for Generational Relevance. To learn more about how Grace can help you send an email to info@createsolidwealth.com.

Objectives • Solid Wealth Creation • Solid Wealth Preservation www.businessday.ng

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24

Monday 30 March 2020

BUSINESS DAY Harvard Business Review

MondayMorning

In association with

How speech patterns lead to hiring bias Michael W. Kraus, Brittany Torrez and Jun Won Park

R

esearch indicates that organizations are not meritocratic. Senior executives of large firms weight ambiguous factors like “culture fit” as equally important as critical job skills when making promotion decisions.

Social class is also a part of this process, and research has shown that a 60-second social interaction between two strangers is enough to lead perceivers to accurately infer the parental income and education of undergraduate college students.

We wanted to test whether people’s speech patterns — how they pronounce words and phrases — would allow perceivers to predict their socioeconomic status and make them more or less attractive as job candidates.

In our first study, we presented participants with audio clips from people saying the same list of seven words out of context. In a followup study, participants listened to 75-second recordings of speakers describing

themselves. In our last study, we enlisted 274 people with prior hiring experience and had them listen to a 25-second sample of speech from job applicants. As in our other experiments, participants accurately perceived the socioeconomic status of those speaking, and, alarmingly, judged those of lower status to be less competent, a worse fit for the job and deserving of a lower starting salary and signing bonus than their higher

status counterparts. Critically, participants made these judgments without any information about the applicants’ qualifications.

What can organizations do? A first, and ill-advised, reaction is to suggest that job applicants should learn and practice the speech patterns of the people who populate the jobs to which they aspire. Asking people to “code switch” has clear costs. Another possible organizational

solution is to use automation and machine learning in hiring to avoid human bias. But algorithmic decision-making still relies on people to decide what data to use and which characteristics are valued.

We advocate for a third solution: Ensuring that hiring decisions both value and incentivize the creation of a workforce that is diverse in terms of race and socioeconomic status. Though our work reveals a disturbing and

relatively rapid psychological process that biases hiring in favor of higher-status job applicants, we can override it by embracing capable job applicants who exhibit all the requisite skills but do not look or sound exactly like the people doing the hiring.

(Michael W. Kraus is a faculty member at Yale University, where Brittany Torrez is a graduate student and Jun Won Park is a fourth-year doctoral student.)

What job crafting looks like Jane E. Dutton and Amy Wrzesniewski

J

ob crafting — changing your job to make it more engaging and meaningful — can take many forms.

First, there is task crafting, which involves altering the type, scope, sequence and number of tasks that make up your job. Next, you can relationally craft your job by altering whom you interact with in your work. Finally, there is cognitive crafting, where you modify the way you interpret the tasks and/ or work you’re doing. Here are stories of three people who redesigned their jobs to unlock more meaning.

Candice Walker, a housekeeper at a university hospital, used her emotional intelligence to make gentle inquiries that showed care and interest without overstepping boundaries. She used similar skills to discern who might need additional attention and conversation on a particular day or night

because they were experiencing pain, fear or loneliness. She would then alter which patients she spent time with so that her work could make a bigger difference in their lives. By cognitively crafting her job in these ways, Candice reported finding a greater sense of meaning.

Rachel Heydlauff is a con-

sultant who works for a firm specializing in organizational change. When she joined the firm several years ago, Rachel made it clear that she cared about sharing her expertise on positive organizational scholarship, or POS. During her early years as a junior consultant she provided formal and informal workshops on POS to her

clients and fellow consultants. This was not explicit in her formal job description, but she made it a larger part of her role, and she gained a reputation — inside and outside her firm — for her expertise.

Finally, meet Jake (a pseudonym), a longtime employee at Burt’s Bees. Jake would describe himself as a

people person, yet his work, as designed, provides little opportunity for personal connection. He decided to change that. Jake was fascinated by the technicians in his plant who designed and built the specialized equipment needed for production. He initiated numerous conversations with the equipment engineers and attended their meetings to learn more about their approach and knowledge. He wove that information into more effective procedures for onboarding new teams and is now fully in charge of that process.

The principles of job crafting remain deeply relevant in a world where job structure is rapidly changing, putting more and more responsibility on the individual for the experience and engagement in their work.

(Jane E. Dutton is a professor at the University of Michigan. Amy Wrzesniewski is a professor at Yale University.)

Monday 30 March 2020

Harvard Business Review

BUSINESS DAY

MondayMorning

25

In association with

Coronavirus is exposing deficiencies in U.S. health care David Blumenthal and Shanoor Seervai

C

oronavirus is shedding a merciless light on the failings of the U.S. health care delivery system.

The first is its deficient primarycare capability. Many Americans lack access to affordable primary-care providers they know and trust, and who know them. In the case of epidemic illness, primarycare professionals offer a first line of defense in the form of trusted advice and care that keeps people from flooding emergency rooms and hospital outpatient departments.

Another problem is the lack of reserve capacity to handle health care crises of the type that the country may now be experiencing. Nationally, there is legitimate concern that the nation’s supply of 160,000 ventilators may be insufficient to care for the critically ill victims who are unable to breathe for themselves during a major outbreak. Such patients need intensive care unit beds.

For years, epidemiologists

have warned of possibly catastrophic epidemics of new flulike illnesses — whether swine flu or bird flu or SARS or MERS — but the U.S. delivery system is still not ready. The U.S. needs a much more robust national reserve of health care resources — think of

the U.S. strategic petroleum reserve — that it can draw on when the apparently inevitable crisis arrives. Congress would have to appropriate the necessary funds, but it has been reluctant to provide even minimal relief for past epidemics, much less support

advance preparedness at the level required.

Despite the many strengths of the U.S. health care system — especially its care of highly complex, specialized problems — it often falls short on the basics. As COVID-19’s spread continues, it

will demonstrate how essential those missing basics truly are.

(David Blumenthal is president of the Commonwealth Fund, where Shanoor Seervai is a senior research associate and communications associate.)

Your employees are more loyal than you think to local labor-market conditions.

Finally, don’t buy into the narrative of the inevitable rise of the job-hopping millennial, and don’t give up on fixing your retention challenges after a few small setbacks. Remind yourself that 95% of all Fortune 500 companies have operated during times with lower overall retention rates, so you can probably do it too.

Atta Tarki and Arvid Malm

T

he narrative is familiar by now: Job-hopping is increasingly common in the United States, while long-term employment relationships are hard to establish. But new research shows that the story is much more complicated; in fact, business leaders of a generation ago would have envied the low job-switching rates that U.S. companies enjoy today.

Given these stats, why is the perception of increased job-hopping so widespread?

The first reason is that one highly visible cohort — male employees — do in fact stay with their employer for shorter periods of time. The second reason is the generational narrative, branding millennials as the job-hopping generation. A number of recent studies and surveys refute this view, but perception can take a long time to change. The third reason has been the strong U.S. labor market.

So, while job-hopping

(Atta Tarki is the founder and CEO of ECA. Arvid Malm is a research economist at the Henderson Institute, Center for Macroeconomics at the Boston Consulting Group.) may not be as common as many people think, the trends suggest employers should prepare for a future where job-hopping does become the new normal, at least for a while.

How should business leaders prepare? First, they should take a fresh look at their recruiting models to

ensure that they are attractive to female employees, as women have become significantly more likely to stick with their employer in recent decades.

A second trend employers can capitalize on is that Americans are moving at historically low rates. In 2019, for the first time since track-

ing of mobility started some 70 years ago, less than 10% of the population moved.

Third, employers can review their compensation bands. Don’t simply pay according to traditional norms in the industry. Instead, pay how much the position is worth to you, making sure to adapt your pay and benefits

Brought to you courtesy of First Bank Nigeria

26

Monday 30 March 2020

BUSINESS DAY

MARKETS INTELLIGENCE Supported by Asset Management Corporation of Nigeria (AMCON)

Stocks

Currencies

Commodities

Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

Large caps maintain dominance as profits jump BALA AUGIE

N

igeria’s largest stocks are maintaining their dominance in the local bourse as they recorded improvement in profit while valuations are attractive but uncertainties caused by the coronavirus pandemic could damp future earnings growth.

Investors focus is unlikely to shift soon from few high-quality names which continue to steadily growth faster than the economy.

The large cap’s combined market capitalization of N6.37 trillion make up 67.40 percent of the entire market cap of the bourse.

Despite the tough regulations by the central bank, United Bank for Africa recorded a 13.32 percent jump in net income to N89.09 billion as at December 2019, from N79.60 billion recorded last year.

The pan African lender with branches across the continent is generously rewarding its owners from distributing profit as it will be paying a final dividend of N0.80 for every N0.50 ordinary shares while its dividend yield stood at 16 percent.

Zenith Bank, the largest lender by profit in Africa’s largest economy saw net income increase by 8.73 percent

to N208.84 billion in the period under review from N193.44 billion.

The lender’s dividend yield of 22.22 percent, the highest among 30 most capitalised and liquid firm in the country; this means it an investor will get N221,000 in dividend income for every N1 million invested.

Dangote Cement, the largest builder of the building material and the most capitalized firm in Nigeria will be paying shareholders N16 for every N0.50 ordinary shares held.

MTN Nigeria has continued to leverage the country’s huge population that crave for consumption as it saw profit spike by 38.97 percent to

N145.69 billion as at December.

The outbreak of the coronavirus that is increasingly crippling the global economy and the sharp drop in oil price due to disagreement between Saudi Arabia and Russia has further damped investors’ appetite for the country’s equity market.

Analysts say aside lack of clarity on policies for sustainable economic growth, a major risk facing Nigerian capital markets in 2020 stem from recent policies of the Central Bank of Nigeria (CBN) and their possible negative impact on banking sector profits.

Following CBN’s announcement

barring non-banking corporates as well as individuals from accessing the OMO market, increased liquidity in the secondary debt market as well as auctions has since sent yield crashing.

The hike in Loans to Deposit ratio to 65 percent and the slash in charges by apex bank have crimped lenders earnings as gleaned from their 2019 audited financial statement.

The equities market was in the negative region of -17.80 percent in 2018 and 14.60 percent in 2019 as the global financial crisis, devaluation of the currency and sustained pressure of oil of the mid 2014 convulsed investors and kept them out of the market.

While the Nigerian stock market begun the year on a positive note, it has continued its bearish run as the NSE ASI recorded a negative year to date of -17.48 percent.

Expectedly, foreign portfolio investment (FPI) interests in Nigeria’s risky assets have been stagnated.

Reflecting the subdued participation of foreign investors in the local bourse, data from the Nigerian Stock Exchange (NSE) showed that foreign inflows from January to November declined 28 percent to N397.44 billion from N553.47 billion in the same period in 2018.

The data further revealed that net outflows from January to November increased 62 percent to N84.53 billion from N52.07 billion in the same period in 2018.

Despite the macroeconomic uncertainties as evidenced in rising inflation that has continued to pressure consumer wallets and undermine company profit, the stock market valuation remains compelling.

Across Emerging Markets (EMs) and Frontier Markets (FMs), Nigerian equities had a PE ratio of 6.48 x compared to MSCI EM and MSCI FM of 15.4x and 10.6x respectively. African peers like South Africa, Egypt and Morocco traded at trailing PE ratios of 15.7x ,11.8x, and 21.1x respectively.

Why Nigerian banks might struggle to create risk assets in 2020 IFEANYI JOHN

T

he Central Bank of Nigeria’s (CBN) reiteration of the 65 percent Loan-toDeposit ratio (LDR) means banks must create up to N1.2 trillion in loans to comply with the directive assuming that bank deposits do not grow this year.

The N2 trillion in loans created

in the last 9 months of 2019 might be difficult to replicate this year as economic fundamentals in 2020 have weakened significantly compared to 2019.

For example, the Naira was recently devalued to N380/$1 compared to N306/$1 last year, foreign reserves dropped $8.97 billion in the last 9 months, inflation rate has increased by 89 basis points in the last one year and crude oil prices have dropped more than 50 percent

since the beginning of 2020.

With the economic environment rapidly worsening, the odds of an economic recession this year are now back to 2016 highs, meaning 2020 may not be the best year to be creating risk assets considering recessions typically lead to poor asset quality for banks.

Meanwhile, commercial banks who are already facing significant impairments of their foreign currency loans to local businesses as a

result of the recent devaluation by the CBN, might also want to tread cautiously in creating more loans as debtors now require more naira to payback their dollar denominated loans.

Recall that before the apex bank’s review of the LDR to 65 percent, commercial banks who couldn’t meet up to the initial 60 percent required LDR as of 30 June 2019 were fined almost N500 billion and Continues on page 27

P.E

SHORT TAKES N312m After a disappointing 2018, Fidson healthcare seems to have regained its mojo as it records an after-tax profit of N312 million in full-year 2019 for the period ended 31 December. Revenue dipped 13.5 percent to N14.06bn from N16.22bn in the same period in 2018. Efficient cost management saw its cost of sales decline 17.35percent to N8.19bn from N9.91bn

5 The stock market declined for the fifth-straight trading session on Friday to end its worst week after CBN’s CRR policy weighed on banking stocks and set off 2020’s longest bear-run.

Nigerian equities fell for all five trading sessions last week to close 2.65 percent lower weekon-week, and end January on a very different tempo than it began the month.

Bank stocks shed 5.17 percent to push Year-to-date return to 7.46 percent, down from around 10 percent at the beginning of the week, while analysts say the bearish sentiment will likely extend to trading this week.

“Next week, we expect bearish pressures on the equities market to remain, as investors continue to selldown on banking counters,” said analysts at Lagos-based Chapel Hill Denham in a note to clients.

N23bn Interswitch Limited has listed its N23bn callable senior unsecured bond with a tenor of seven years at a fixed rate of 15percent, embedding a call option that can only be exercised from the second year, are payable in full at maturity A callable bond is a bond that the issuer may redeem before it reaches the stated maturity date. In essence, a callable bond allows the issuing company to pay off their debt early.

According to the company, this is part of its N30bn debt issuance programme through a special purpose vehicle, Interswitch Africa One Plc.

BusinessDay MARKETS INTELLIGENCE Team Lead: BALA AUGIE, IFEANYI JOHN; Graphics: FIFEN FAMOUS

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Continues on page 37 Email the BMI team balaaugie@yahoo.co.uk; augiebala@gmail. www.businessday.ng

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@Businessdayng

Monday 30 March 2020

BUSINESS DAY

27

MARKETS INTELLIGENCE Why revision 2.0 on national budget and crude oil price benchmark remains a possibility … fiscal deficit set to rise as crude oil price remains below revised benchmark …Nigeria has spent more than N4.5trn in excess of revenue in the last 2 years IFEANYI JOHN

C

rude oil price decline can’t seem to find a bottom a n d Ni g e r i a n government revenue stream appears to be going down with it. At market close on Thursday, bonny light crude oil price stood at $24.83, a sharp decline from around $67 that the Nigerian crude traded at start of the year.

While the significant drop in crude oil prices has inspired an emergency downward review of budget spending and revenue targets, it appears Nigeria’s fiscal deficit may once again exceed revised budgetary targets as crude oil price continues to decline below the revised oil price benchmark. In the last 2 years, accumulated

budget deficit has exceeded N4.5trillion.

On Thursday, crude oil price traded at 17% below our revised oil price benchmark, further compounding the woes of Nigerian federal government who had earlier warned that oil revenue could slip about 45% below budgetary target in 2020 approved national budget where oil revenue was estimated at N2.63 trillion. Thus, bringing the revised budgetary target to N1.44 trillion in oil revenue.

With bonny light oil prices now sub $25, analysts say that oil revenue could drop by more than 50% due to the fact that crude oil price today is about 56 percent below the initial benchmark price of $57.

The downward trend in Nigeria’s oil revenue could signal higher budget deficit for

the country who have recently made progress in reducing the fiscal deficit from a record high of N2.98 trillion in 2018 to just N1.48 trillion in the first 9 months of 2019 according to data sourced from the national budget office. Based on analyst’s expectation, Nigeria finished the year 2019 with a budget deficit around N2.08 trillion, suggesting a fiscal deficit contraction of about N900 billion.

In response to a projected drop of around N1.2 trillion in crude oil revenue, Minister of Finance, Budget and National Planning, Zainab Ahmed said the government are looking to cut recurrent expenditure by 25 percent and capital expenditure by 20 percent which translates to a budget spending reduction of around N1.7 trillion, which is a more aggres-

sive cut than the expected drop in oil revenue. Asides the drop in oil revenue, the government is also expecting 50 percent decline in revenue from privatization proceeds and customs revenue which was initially projected at N1.5 trillion.

While the revised budget benchmark of $30 appears to be a 47% decrease from the initial $57 benchmark the country had adopted for its 2020 benchmark, the impact on total government revenue may not be as steep as many Nigerians fear. Budget performance reports for 2019 show that oil revenue to total government revenue reduced from about 57 percent in 2018 to 34 percent in 2019 as years of economic diversification and tax collection strategies have

Stocks lower as investors bank profits from wild week Wall Street had enjoyed its best rally since 1930s, but momentum has faded Colby Smith, Philip Georgiadis, Hudson Lockett and Daniel Shane, FT

U

S stocks faltered on Friday after three days of gains, as investors refocused on the uncertain progress of the coronavirus pandemic and the wide economic fallout, despite a historic US stimulus bill entering the final stretch in Congress.

The S&P 500 fell over 3 per cent in morning trading in New York, even as the House of Representatives prepared to vote on the relief package on Friday.

“There is no doubt the market loved the $2tn stimulus package, but now the rubber needs to actually meet the road,” said David Lafferty, chief market strategist at Natixis Investment Managers.

“Getting this money into the hands of large firms . . . and into the hands of consumers isn’t as operationally easy as it sounds.”

The US sell-off extended losses seen globally. London’s FTSE 100 fell over 5 per cent, also snapping three days of gains that had pushed the index up more than 10 per cent this week. Stock markets dropped across Europe, leaving the Stoxx 600 index of the www.businessday.ng

region’s largest companies down 3.6 per cent.

The pullback followed rises in Asia and Wall Street’s best three-day run since the 1930s.

The MSCI All-World index of global stock markets is on course for one of its best weeks on record following the run of gains.

The US stimulus deal “alleviated the panic” this week, said Johanna Chua, an emerging Asia strategist at Citi. But she said the rally in US markets on Thursday was unconvincing, given the dire economic background and growing rates of infection. “Many market participants view this ‘squeeze up’ in the markets as a bear

market rally,” she said.

Line chart of S&P 500 showing US stocks have best three-day run since 1930s this week “The first phase of the market correction has been completed as we learn how to cope with the virus,” said Johanna Kyrklund, chief investment officer at Schroders in London.

“The next phase [of the selloff] will be about processing the economic consequences.”

Haven assets rose on Friday. Japan’s yen strengthened 0.7 per cent to ¥108.82 per dollar, while the 10-year US Treasury yield fell 0.10 percentage points to 0.75 per cent. Yields fall as bond prices rise.

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now began to yield results.

Still with oil revenue contributing up to one third of Federal government revenue, year to date oil price decline of more than 50 percent could mean Nigeria’s revenue generation this year could contract by at least 15 percent. Non-oil revenue will also decline significantly as statewide lockdowns in several states of the country to slowdown the coronavirus outbreak is expected to reduce business revenues and economic activities which will cause a decline in sales tax and company income tax for government this year.

Analysts also fear that the growing health pandemic and oil price war could cause oil prices to continue trending lower, meaning the govern-

ment may once again revise the price benchmark downward for the 4th time in 2 years if crude oil prices fall below $20 in Q2 as Goldman Sachs is currently forecasting. Some analysts are even speculating that the oil price benchmark could be reduced before approval for the $30 benchmark is obtained from the National Assembly.

The revised budget is yet to be approved by NASS which is dangerous for the federal government who must continue spending as initially projected by the approved 2020 budget until the revision is approved.

Any delay in approving the revision may prove very costly to the Nigerian government, making its approval urgency very critical.

Why Nigerian banks might struggle to ...

Continued from Page 26 refunded after compliance was met. Reliable sources say CBN has also issued sanctions of up to N600b sanctions to banks who failed again to meet the required LDR as of 31 December 2019.

However, analysts say while they expect bank lending to the private sector to grow this year, they do not believe that the stellar credit expansion the industry witnessed last year will be replicated this year due to a more difficult economic environment and the fact that the industry is already close to achieving the 65 percent LDR target.

Wale Okunrinboye investment analyst at Sigma Pensions said “We will see @Businessdayng

growth and banks will nearly push to 65%. CBN have pushed banks from the low levels they were to where they are today which is not far off from the 65%.

“Meanwhile, relative to where the banks are coming from last year we won’t be there. There will be credit growth, but it won’t reach last year’s levels and also CBN will be a bit weary in pushing the banks since we have now had devaluation.”

However, the private sector having benefitted from increased lending by banks over the past year, might now be in need of even more credit as Covid-19 slows down economic activities leading to dwindling revenues and increasing financial obligations.

28

Monday 30 March 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Friday Friday 27 March 2020

Top Gainers/Losers as at Friday 27 March 2020 LOSERS

GAINERS Company

Closing

Change

NB

N26.8

N25.5

-1.3

0.5

CILEASING

N6.85

N6.2

-0.65

0.45

AFRIPRUD

N3.8

N3.42

-0.38

N4.15

N4.05

-0.1

VALUE (N billion)

N2.15

N2.05

-0.1

MARKET CAP (N Trn)

Closing

Change

CAP

N21.5

N23.2

1.7

ZENITHBANK

N12.1

N12.6

GUARANTY

N18

N18.45

INTBREW

N5

N5.4

0.4

N3.5

N3.85

0.35

GLAXOSMITH

Company

ASI (Points)

Opening

Opening

FBNH OANDO

DEALS (Numbers) VOLUME (Numbers)

21,861.78 3,968.00 251,411,479.00 3.357 11.393

Global market indicators FTSE 100 Index 5,510.33GBP -305.40-5.25%

Nikkei 225 19,389.43JPY +724.83+3.88%

S&P 500 Index 2,558.12USD -71.95-2.74%

Deutsche Boerse AG German Stock Index DAX 9,632.52EUR -368.44-3.68%

Generic 1st ‘DM’ Future 21,710.00USD -638.00-2.85%

Shanghai Stock Exchange Composite Index 2,772.20CNY +7.29+0.26%

Nigeria stock market depreciates by 1.52% in remote trading week Stories by Iheanyi Nwachukwu

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igeria stock market benchmark performance indicator - the NSE All-Share Index (ASI) and Market Capitalisation depreciated by 1.52percent and 1.51percent to close the review week ended March 27 at 21,861.78 points and N11.393 trillion respectively.

The stock market recorded four days of remote trading as dealing members responded to both Federal and State Governments guideline in line with the efforts to control the spread of Coronavirus Pandemic.

All other indices finished lower with the exception of NSE Banking, NSE Insurance, NSE-AFR Bank Value and NSE MERI Value which appreciated by 2.06percent, 3.25percent, 3.47percent and 2.93percent while NSE ASeM Index

closed flat.

Thirty-five (34) equities appreciated in price during the review trading week, lower than thirty-five (35) in the preceding week. Thirty (30) equities depreciated in price,

higher than twenty- seven (27) equities in the preceding week, while ninety-nine (99) equities remained unchanged, lower than 101 equities recorded in the preceding trading week.

The market recorded total turnover of 1.452 billion shares worth N14.918 billion in 21,828 deals in contrast to a total of 2.804 billion shares valued at N32.559 billion that exchanged hands the

preceding trading week in 31,715 deals.

The Financial Services industry (measured by volume) led the activity chart with 1.224 billion shares valued at N10.590 billion traded in 14,944 deals; thus contributing 84.32percent and 70.99percent to the total equity turnover volume and value respectively.

The Conglomerates followed with 50.261 million shares worth N61.457 million in 442 deals, and the Consumer Goods industry, with a turnover of 47.276 million shares worth N2.509 billion in 2,225 deals.

Trading in the top three equities namely, Zenith Bank Plc, Guaranty Trust Bank Plc and FBN Holdings Plc (measured by volume) accounted for 713.795 million shares worth N8.610 billion in 8,608 deals, contributing 49.18percent and 57.71percent to the total equity turnover volume and value respectively.

IOSCO report examines how existing regulatory principles could apply to stablecoins

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he Board of the International Organisation of Securities Commissions published a report identifying the possible implications of global stablecoin initiatives for securities markets regulators.

The report entitled Global Stablecoin Initiatives examines the regulatory issues arising from the use of global stablecoins and explores how existing IOSCO Principles and Standards could apply to these arrangements.

IOSCO´s Fintech Network prepared the Report as part of an effort to evaluate global stablecoin proposals from a securities market regulator´s perspective.

The Report finds that, depending on its structure, a global stablecoin may fall within securities market regulatory frameworks.

Coronavirus: CSCS activates Business Continuity Plan, goes fully digital

Union Bank partners 54Gene towards Nigeria’s fight against Coronavirus, donates N50m

s a critical financial market infrastructure (FMI), the Central Securities Clearing System (CSCS) Plc has reiterated its commitment to continued delivery of efficient service despite the challenging coronavirus (COVID-19) pandemic.

In line with its commitment, CSCS has activated its business continuity plan and goes fully digital.

According to the messages to all its participants and partners, exchanges, brokerage firms, custodians and registrars, CSCS is leveraging its digital channels to meet all requests at this period, as it joins global institutions in the campaign for social distancing.

Notably, the X-alert, an SMS sent by CSCS on all transactions carried out on the Nigerian Stock Exchange is also being used to educate

nion Bank, one of Nigeria’s foremost financial institutions has announced a $130,000 (N50million) donation to tackle the spread of the Coronavirus pandemic in Nigeria.

The donation was made into a fund set up by 54gene, an African genomics research, services and development company working closely with the Nigeria Centre for Disease Control (NCDC) to fight the COVID-19 pandemic.

The money will help increase COVID-19 testing capacity in the country by up to 1,000 additional tests a day, by buying testing instruments and critical biosafety materials such as biosafety cabinets and personal protective equipment urgently needed to keep frontline healthcare workers safe.

The procured equipment will be installed in general hospitals and laboratories across

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investors on the need for social distancing and safety precautions against the coronavirus (COVID-19), with hashtags such as #StaySafe, #WashHandsAlways, #SocialDistancing and #WeAreDigital.

Whilst it is campaigning social distancing by suspending services to walk-in clients, who are enjoined to use the digital channels, including customer contact centre lines (070 CALL CSCS – 070022552727 or 01 448 0500), chat platforms, web portals, social media, Mobile Apps and Data Exchange platforms amongst others, CSCS’ client service and broader support to the efficient functioning of the capital market, remains strong and active as always.

Speaking on COVID-19, Haruna Jalo-Waziri, the Chief Executive Officer, CSCS Plc hinted that “as the Finanwww.businessday.ng

cial Market Infrastructure for the Nigerian Capital Market, we are fully committed to efficient delivery on all our services, as we work with all stakeholders to reinforce the resilience and liquidity of the Nigerian capital market, even at this globally challenging period.

Having activated our business continuity plan, which has long been envisaged as a part of our crisis management framework, we are fully operational, even as a notable percentage of our staff have been empowered to work remotely from home. More importantly is our campaign on social distancing, better hygiene practice and other precautions against the contagious spread of COVID-19, as the safety of everyone is paramount to us, just as we have activated all relevant measures to ensure the safety of all depository assets”.

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the country, and will remain in place even after the ongoing COVID-19 pandemic, to be used in the case of future outbreaks. In addition, there will also be extensive training and support to medical practitioners and volunteers working across the country to curb the menace.

Announcing the donation, the Chief Executive Officer of Union Bank, Emeka Emuwa, said: “Community is one of our core values at Union Bank, and there’s no better time to live this value than now. A

@Businessdayng

critical need for the country at this time is to scale up our testing capabilities and give us a better chance of slowing the spread of the virus. We are therefore pleased to be supporting 54gene who is directly collaborating with NCDC and World Health Organisation who are coordinating Nigeria’s Covid-19 response.

While commending Union Bank on its donation, the CEO of 54gene, Abasi Ene-Obong also said: “The rapid and assured response from some of Nigeria’s most reputable institutions, such as Union Bank, to join us in our fight against this deadly disease is highly welcome, and we thank them for their unwavering support.

They, like us, understand the need for a multi-stakeholder, co-ordinated plan, that can be implemented almost immediately, as we work together as a community, side-by-side, to fight COVID-19 and protect our population.”

Monday 30 March 2020

BUSINESS DAY

Start-Up Digest

29

In association with

Ikegwuonu: Reducing post-harvest losses with solar-powered storage facilities ODINAKA ANUDU

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t is estimated that Nigeria loses 30 to 50 percent of its crops to post-harvest losses.

Gloria Elemo, former director-general of the Federal Institute of Industrial Research Oshodi (FIIRO), estimated in 2017 that Africa’s biggest economy recorded post-harvest losses valued at $9 billion annually. One major reason for losing such humongous amount of money is lack of cold storage facilities or farmers’ limited access to them.

Nnaemeka Ikegwuonu, founder and chief executive officer of ColdHubs, has come to the rescue. He provides solar-powered cold storage facilities to farmers in Nigeria.

His company has solarpowered, walk-in cold room made of 120mm insulating cold room panels which facilitate cold retention.

Energy from solar panels mounted on the roof-top of the cold room is stored in high capacity batteries. The

batteries feed an inverter, which, in turn, supply energy to the refrigerating unit.

Coldhubs provides farmers with a flexible payas-you-store subscription model. Farmers transfer their perishable foods into reusable crates, which fit neatly onto the shelves.

They are allowed to pay a daily flat fee for each crate of food stored.

Coldhubs says it extends the shelf life of perishable food from two to 21 days and reduces post harvest loss by 80 percent. By doing so, it raises smallholder farmers’ income by 25 percent, it says.

ColdHubs sees its solution as a ‘plug and play’ modular cold room, which enables it to provide 24/7 off-grid storage and preservation of perishable foods.

“Our solution adequately addresses the problem of post- harvest losses in fruits, vegetables and other perishable food,” the firm says.

“ColdHubs is installed in major food production and consumption centers (in markets and farms),” it notes.

Nnaemeka Ikegwuonu

The firm says its target is to hire mainly women to manage the operations while making more nutritious food available to rural and urban dwellers, especially children.

Ikegwuonu is a graduate of Arts, History and International Studies from Imo State University.

He is an innovator and leading social entrepreneur. He founded Smallholders Foundation Limited in 2003.

The entrepreneur also created Smallholder Farmer Rural Radio, with over one million Nigerian listeners.

He is likewise the founder of the Agriprenuership Acad-

emy, the Smallholders Seed Store, and Smallholders Microcredit.

He has won over 23 awards, including Ashoka Fellow 2008; Rolex Awards 2010; Nigeria’s Young Person of the Year 2011; Niigata International Food Prize Laureate 2012; and 2013 Laureate of the Yara Prize for Green Revolution.

Speaking to CTA, an agriculture- and entrepreneurship-focused platform in 2019, the entrepreneur said his decision to produce solar-powered cold storage came as a result of his passion to eliminate food spoilage resulting from lack of refrigerated facilities.

“To run the cold units, we needed access to energy, which is incredibly unreliable in Nigeria. We therefore wanted a system where we were the ones in control of our energy generation and electricity infrastructure, and our best option was to incorporate solar power,” he said.

He said his firm’s solar panels generate 5,500 megawatts (MW) of energy every hour, though it uses

only about 1,000 MW per hour to power each of its cold rooms.

“Last year, our units were accessed by 650 farmers and saved 11,400 t of food from spoiling,” he disclosed.

“As a result, farmers increased their incomes from around €50 to over €100 per month, simply by eliminating their previous postharvest losses due to lack of refrigeration.”

He told CTA that his firm’s target in 2020 is to increase to 100 cold rooms across Nigeria.

“Our goal is to make sure that 45,000 smallholder farmers have access to cold storage by 2030, using a pay-as-you-store model,” he said.

“Through this model, farmers pay based on the amount of fruit and vegetables they store in our units, with one 20 kg plastic crate costing €0.44,” he explained.

Ikegwuonu pointed out that his company tackles limited awareness of postharvest losses for perishable food among farmers and other food supply chain actors through training.

Ewuzie: Raising new generation of innovators in design industry Gbemi Faminu

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ore than 500,000 graduates of higher institutions are pushed into the labour market each year. However, many of these graduates are unable to get jobs and are therefore part of the growing unemployment rate. Many talent experts affirm that many Nigerian graduates are not equipped with the essential skills needed to succeed in the 21st century.

Ewuzie Chibueze is one of the few entrepreneurs who are aware of this challenge and he is changing the narrative.

Although born and raised in Port Harcourt, Ewuzie is a native of Nkwerre in Imo State and a graduate of the Imo State University, Owerri, where he obtained bachelor’s and master’s degrees in Architecture.

Despite his background in design and drawings, he has spent the last seven years creating innovative

customer-focused solutions for the financial sector and also providing techniques for graduates and undergraduates in the design field.

He describes himself as an advocate for youth career development and an activist for human-centred design.

He says as a fresh graduate, he lost some opportunities due to lack of skills because his education did not prepare him to compete with counterparts who studied abroad or in private universities.

He explains that these and some other reasons formed his decision to establish the DesignLab, which is a research and mentorship programme aimed at engaging students on critical issues shaping the design industry as well as exposing them to advanced digital tools and workflows shaping the industry worldwide.

Sp e a k i n g a b o u t t h e DesignLab, Ewuzie says the programme seeks to bridge the gap between schools and the job market— which limits www.businessday.ng

the employability of graduates and undergraduates in design disciplines.

“DesignLab was formed as a result of the increase in the rate of unemployable locally trained design graduates, and the need to correct that problem by providing them with the skills required in securing decent jobs or starting their business,” he says.

The programme, which he describes as a social initiative fully funded by the Agency for Design Intelligence and Research (ADIRE) Projects Ltd, a research and consulting firm, kicked off in August 2019, and has graduated 12 students from its maiden edition while its lecture, exhibition and events have impacted over 150 people.

He says ADIRE’s spon-

Ewuzie Chibueze https://www.facebook.com/businessdayng

sorship came because of his company’s project objective to investigate and confront critical issues at the intersection of urbanisation, culture and the development of resilient communities within Nigeria.

He says that although his firm has employees who supervise the affairs of the programme, there are more volunteers who render help whenever it is necessary.

“It is quite tough for a fresh graduate to project their career growth within the industry, and this is because there is no standard to encourage their career prospects,” he says.

“There is a lot to be done in terms of establishing quality institutions, segmenting the value chain, enforcing government policies, raising the standard to a competitive level with global counterparts,” he further says.

He urges the government to step in by adequately enforcing the laws that govern the design practice, adding that some of those laws are @Businessdayng

redundant hence need to be reviewed to reflect current realities. Ewuzie also urges the organised private sector to invest more in design education. He notes that when people know better, there will be a satisfactory exchange of services and rewards.

He describes his brand as unique as it focuses on building the human capital within the design industry.

Speaking on expansion plans, he says, “We plan to grow the capacity of our cohorts as funds become available. A huge part of our strategy is fostering collaboration between the tertiary institutions and the firms that require the talent that they produce. We believe that this coming together will birth industry-relevant curriculum development and that will result in desired graduate recruitment outcomes.”

He says as a long-term goal, he wants to partake in the birthing of Nigeria’s first art and design academy that will host the best in the world.

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Monday 30 March 2020

BUSINESS DAY

Start-Up Digest

Meet Elo Umeh, entrepreneur who acquired Singapore-based mobile tech company Josephine Okojie

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ver the last two decades, Nigeria has seen significant growth in its mobile telecommunication industry. Currently, data is being viewed as the new oil on the African continent.

Owing to this prospect, Elo Umeh founded Terragon Group, a data analytics business based in Lagos that provides software services to meet clients’ marketing and analytics needs.

Having worked in the communication industry of different African countries including Nigeria, Kenya, Uganda, Ghana, and Cote d’Ivoire, Umeh was able to acquire a vast amount of experience across Africa’s mobile telecommunication industry.

With the experience acquired over the years and his love for digital life, the young entrepreneur was inspired to

establish Terragon in 2009.

“The development of mobile communications was a real game-changer and from the beginning, it began to make a significant impact across the continent. I realised it was going to change everything,” Elo said in a Forbes interview.

“I saw the potential of reaching an untapped market. We seek to transform the way companies reached their customers across Africa in the early years, and more recently, as data capabilities grow globally,” he said.

“We have focused on innovating with data by paying attention to the local realities within African markets,” he noted.

He said since starting, the business has experienced unprecedented growth over the past years and there is more opportunities on the horizon following the launch of Adrenaline, the company’s proprietary platform.

Currently, Terragon operates beyond Nigeria and has

Elo Umeh

operations in several African countries including Kenya, Ghana, and Cameroon.

To further expand its operations, Terragon acquired

How SMEs can reduce negative impact of COVID-19 on contractual obligation Anu Ogunro

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he corona virus pandemic has brought about several government restrictions on movement and association, among others.

This is greatly interrupting business contracts and obligations. For instance, some businesses have agreements in place for the supply of raw materials from other countries and this pandemic has hampered their operations.

More so, it has a ripple effect as they are unable to also fulfill several other contractual obligations. Several scenarios abound. Nevertheless, such businesses need to ascertain whether they will be excused for a delay in the performance or for non-performance of their contractual obligations, or whether their contracts can be rightly terminated.

A thorough assessment of the Force Majeure provisions of a contract will be instructive. This is necessary in order to determine whether a valid assertion of force majeure can be made. For contracts without a Force Majeure clause or an incomprehensive Force Majeure clause, an assessment of the peculiar facts could enable a business rely on Frustration as a ground for its inability to perform the

contract.

However, a mistaken assertion of Force Majeure or Frustration could amount to a breach or anticipatory breach of contract. Hence, it is necessary that a thorough assessment be carried out.

Force Majeure This is a clause commonly inserted in contracts to protect the parties, for instances where they delay or are unable to fulfill their contractual obligations as a result of events beyond their control.

The wordings of the Force Majeure clause in a contract will determine whether a situation like the Coronavirus pandemic itself or situations related to government restrictions to contain the pandemic will constitute a Force Majeure. It is necessary therefore to properly consider whether the Coronavirus pandemic and attendant events fall into the category of events specifically mentioned in your contract as constituting a Force Majeure Event.

If the Force Majeure Clause in your contract covers the event, you must carefully consider whether the performance of your obligations under the contract has actually been delayed or rendered impossible by the Coronavirus pandemic.

Before invoking the clause, it is imperative that you take cognizance of the consewww.businessday.ng

quences of Force Majeure as stated in your contractual agreement. Most clauses will state that neither party will be liable for a delay or failure to fulfill their obligations. Ensure that the consequence of invoking the clause as contained in your contract is in the best interest of your business.

Upon ascertaining that a Force Majeure Event has arisen, the notification requirements contained in the Force Majeure clause should be complied with. You should comply with the notice period as well as the mode of notification, as contained in the agreement.

Some Force Majeure clauses require parties to take steps to mitigate the Force Majeure Event. Thus, where possible, ensure you take all reasonable mitigation measures.

Frustration Where a contract does not contain a force majeure clause or where the clause does not cover the situation that has arisen, reliance can be made on the doctrine of frustration.

This is a legal principle that seeks to discharge a party from the fulfillment of its contractual obligations, where a change in circumstances makes it impossible for a party to fulfill its obligations.

Ogunro is the managing partner of Top-Notch Legal Practitioners

Bizense – a Singapore based mobile ad platform for telcos in 2018.

Elo said that the deal has been a long time coming and

would strengthen the company’s tech offering to its clients during the announcement.

“Bizense is a perfect fit for us as we’ve had time to grow our partnership and ascertain compatibility. We are united by a common culture of innovating game-changing mobile solutions — this is the unique differentiator,” he explained.

With the acquisition, Terragon has grown its propriety marketing technology business beyond Africa to other prospective markets in Asia and Latin America.

Umeh did not disclose how much was involved in the acquisition deal.

In the same year, the business secured a $5million investment from venture capital firm, TLCom Capital.

In explaining how the business operates, the young entrepreneur said that Terragon- Adrenaline is helping to redefine the advertising landscape by plugging mobile operators in Africa into an existing web ecosystem,

thereby targeting previously unidentified consumers and allowing for personalised ad serving and monetisation.

“Using a unique mix of web and non-web inventory (as well as data sources from both inventory) and delivered via a programmatic technology, the software enables advertisers to access a variety of channel options at scale,” he said “Adrenaline boasts of unrivalled access to data on the continent and can reach targeted mobile audiences in Africa, as well as the 70 percent of consumers who are not connected to the internet,” he explained.

“The software leverages media that sits within the operator environment, generated by the 97 percent of mobile subscribers who are prepaid, and their interactions on their phones,” he added.

Currently, the company has over a hundred employees and directly connects to 150million people in SubSaharan Africa, he said.

Professionalism has kept us in business— Outsourcing entrepreneur

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yo-Akanbi Kolawole, chief executive officer of Incafaith Consults, a subsidiary of Incafaith Nigeria Limited, says professionalism has kept the company in business.

In an interview, the outsourcing entrepreneur said finding the right talents was becoming time-consuming and costly for many organisations in Nigeria.

He said many companies had come to terms with the reality that outsourcing gave them the advantage of accessing a larger talent pool, critical manpower at lower costs, improved efficiency, and higher returns on investments.

He explained that higher level of employee engagement led to greater productivity, adding that most US companies engaged the service of outsourcing companies in order to remain competitive in the global market.

“It allows them to sell to foreign markets with overseas branches and enables them to maximise profits by keeping labor costs low,” he said.

Kolawole said Incafaith Comsults was fully registered with the Human Capital Providers Association of Nigeria (HuCaPAN) and existed to provide unique HR strategies and solutions to meet the needs of companies in Nigeria.

The HR entrepreneur said shortage of needed skills and favouritism were challenges facing many organisations today. He pointed out that his firm had been able to bridge

https://www.facebook.com/businessdayng

Ayo-Akanbi Kolawole

this gap according to industry standards by fostering and promoting professionalism which actively discouraged any form of unfair treatment.

He further said his firm was conscious of the fact that top talents were holding the cards in today’s market and lack of appropriate staff members could hamper efforts to increase productivity, turnover and profitability, thereby preventing the company from reaching its full potential.

He further said that Incafaith used referral systems most times; chose ability over experience; created a database of talented candidates, and recruited via online platforms.

“These and many more have given us an edge in the industry,” he said.

“Incafaith Consults has @Businessdayng

always served the recruitment and staffing needs of manufacturing, banking and finance, oil and gas, construction, and hospitality industries in Nigeria,” he noted.

“One of the things working for us as a brand is the fact that we take up the challenge of sourcing the most suited manpower for our plethora of clients,” he explained.

Speaking on operational process, the CEO explained that the firm was in charge from the first activities of the sourcing of the candidates till such candidates got selected by the clients, even till retirement.

Highlighting the brand’s deliverables, he said it handled all aspects of staffing needs, including hiring, payroll, benefits, insurance, taxation and legal compliance.

Monday 30 March 2020

BUSINESS DAY

31

real sector watch Covid-19: MAN, LCCI canvass low tariffs, tax waivers on raw materials, pharma products …want regulatory agencies to treat requests from manufacturers expeditiously ODINAKA ANUDU

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he Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) are asking the Federal Government and its various agencies to reduce import duties and initiate waivers on critical items that will mitigate Coronavirus spread or impact on Nigeria.

They also urged all regulatory agencies in the country to treat all requests from manufacturers expeditiously.

“There should be immediate import duties and tax waivers for medical equipment, pharmaceutical products, food processing, raw materials and intermediate products and other essential items,” Toki Mabogunje, president of the LCCI, said in a statement sent to BusinessDay weekend.

“All customs bottlenecks to these sectors should be removed without delay,” she further said.

The outbreak of Covid-19, popularly known as Coronavirus, has brought global economy on its knees as countries fight to keep their citizens alive. The deadly disease has affected over 500,000 people across the world and killed thousands.

Africa’s largest economy has 65 cases as of Friday, March 27, but there are fears it

Toki Mabogunje

might further spread.

Nigeria’s pharmaceutical industry is not ready as it does not manufacture critical masks and ventilators needed to keep Nigerians alive at this time.

Many businesses in Nigeria are dying and recession and job losses look more likely.

Mabogunje advised the Central Bank of Nigeria (CBN) to prevail on commercial banks to give concessions on pending private sector credit liabilities over the period of the economic crisis.

“The Nigerian Customs Service, the terminal operators and other agencies

Mansur Ahmed

of government should extend similar concessions to port users at this time,” she advised.

While acknowledging over N1 trillion the stimulus package proposed by the CBN last week, she said the economic stimulus bill needed to introduced by legislators.

“What is paramount at this time are the quick wins to safeguard public health, security and food security,” Mabogunje said.

“We need to invoke appropriate Executive Orders to make this happen. There should be seamless access to medical and food supplies,

especially by the vulnerable groups. We should explore the option of cash transfers to the vulnerable groups to mitigate the pains associated with the current and imminent lockdowns in many parts of the country,” she further said.

She urged businesspeople to complement the current efforts of the government and the various private sector coalitions to ensure effective containment of the pandemic.

On his part, Mansur Ahmed, president of MAN, said in the case of a national lockdown, government should consider the intro-

duction of fiscal measures such as waivers on import duties on Active Pharmaceutical Ingredients (APIs) and other essential products, and extend tax holiday to companies on corporate tax while waiving the Value Added Tax (VAT).

He asked the government to reduce the burden of personal income tax as a way of increasing the disposable income of an average Nigerian worker.

“Government should ensure that all regulatory agencies such as Nigeria Customs Service (NCS), Nigeria Ports Authority (NPA), Standards Organisations of Nigeria

(SON), National Agency for Food and Drugs Administration & Control (NAFDAC) treat all requests from Manufacturers expeditiously and with the required sensitivity to the prevailing situation,” he said.

He said as manufacturers adhered to safety rules and kept the economy running, it was expedient that government provided safety nets for them to ensure seamless operations.

He urged the CBN to consider directing commercial banks to freeze interest charges.

“The financial support offered by CBN should be extended to the supply of foreign exchange to the manufacturing sector at preCOVID-19 rates,” he advised.

“On our part, in a bid to address the potential impact of the virus on the Nigerian economy, MAN has advised members to ensure they sensitise and educate their workers on compliance with Nigeria Centre for Disease Control (NCDC) guidelines and provide requisite facilities and supplies for the prevention of COVID-19 in line with extant guidelines of the NCDC,” he noted.

Ahmed urged the government to include the logistics and distribution arm of manufacturing to make possible delivery of manufactured items to the final consumers.

Gloomy days for Nigerian manufacturers as Covid-19 spreads Gbemi Faminu

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any manufacturing companies struggled in 2019, but the spread of the novel Coronavirus could be the biggest hit on their margins in several decades.

The outbreak of the pandemic started in China, a major manufacturing hub and one of Nigeria’s largest trading partners. It has spread to 151 countries already.

Countries are yet to contain the pandemic as the number of infected persons and death continues to rise on daily basis.

As a result, there has been an abrupt interruption in the supply of raw

materials, goods, tools and machinery for manufacturing companies, forcing many of them to limit their operations.

According to a statement on the impact of Coronavirus on the economy from the Lagos Chamber of Commerce and Industry (LCCI), signed by the director-general, Muda Yusuf, the pandemic has disrupted the global supply chains which will cause a setback in the operations of many manufacturing companies.

“Many manufacturers and service providers in the country are already experiencing acute shortage of raw materials and intermediate inputs. This has implications for capacity utilisation, employment generation [and retention] www.businessday.ng

and adequacy of products’ supply to the domestic market,” Yusuf stated.

Nigeria has 65 positive cases as of Friday, March 27.

There are indications that the entire country may be shut down within the short-

est possible time.

Sales have dipped as Nigerians focus of being alive and keeping themselves away from the deadly virus.

Manufacturing firms are not selling, and the possibility of another recession

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means some manufacturers may go under except there is a stimulus that will go round.

Nigeria’s manufacturing Purchasing Managers’ Index (PMI), a gauge for manufacturing sentiments, slowed in March 2020 to its lowest in almost three years, according to data by the Central Bank of Nigeria (CBN).

The PMI for March stood at 51.1 index points, representing a sluggish growth when compared to the 58.3 points achieved in February. According to analysts, the slow growth depicts the impact of the disruption in economic activities brought about by the outbreak of Covid-19.

The production level index and new orders metrics @Businessdayng

slowed down as supplier delivery time, employment levels and raw material inventories recorded their first contraction in over 20 months.

A statement by C SL Stockbrokers on the PMI report stated that “the virus has affected global supply chains as countries across the globe have implemented a total lockdown and restricted cross border movement of people as well as goods and services.”

The statement said this had resulted in the shutdown of factories as manufacturers could no longer import raw materials required for production even as demand from customers remained constrained by the ‘stay at home’ policy amidst loss of jobs.

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Monday 30 March 2020

BUSINESS DAY

Access Bank Rateswatch Market Analysis and Outlook: March 23 – March 27, 2020

KEY MACROECONOMIC INDICATORS GDP Growth (%)

2.55

Q4 2019 — higher by 0.27% compared to 2.28% in Q3 2019

Broad Money Supply (N’ trillion)

36.48

Increased by 2.9% in Nov’ 2019 from N35.45 trillion in Oct’ 2019

Credit to Private Sector (N’ trillion) Currency in Circulation (N’ trillion)

26.7 2.20

Increased by 0.38% in Feb’ 2020 from N26.6 trillion in Jan’ 2020 Increased by 7.17% in Nov’ 2019 from N2.06 trillion in Oct’ 2019

Inflation rate (%) (y-o-y)

12.2

Increased to 12.2% in February 2020 from 12.13% in January 2020

Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor)

13.5 13.5 (+2/-5)

Adjusted to 13.5% in March 2019 from 14% Lending rate changed to 15.5% & Deposit rate 8.5%

External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

35.59 24.83 1.79

March 26, 2020 figure — a decrease of 1. 85% from March start March 26, 2020 figure— a decrease of 52. 63% from the previous wk February 2020, figure — an increase of 1.64% from January 2020 figure

COMMODITIES MARKET

STOCK MARKET Indicators

Friday

Friday

27/3/20

20/3/20

NSE ASI Market Cap(N’tr)

21,861.78 11.39

22,198.43 11.57

Volume (bn)

0.25

0.38

Value (N’bn)

3.36

3.42

MONEY MARKET NIBOR Tenor

Friday Rate

Friday Rate

(%)

OBB O/N CALL 30 Days 90 Days

(%)

27/3/20

20/3/20

15.80 17.10

4.80 5.30

18.67 15.32 6.63

Indicators

Change(%)

(N/$)

Tenor

1307.0 218 (662.8)

Friday

1 Month

(N/$)

Rate (N/$)

20/3/20

27/2/20

Official (N) Inter-Bank (N) BDC (N)

360.00 385.00 0.00

307.00 370.00 0.00

306.95 365.34 0.00

Parallel (N)

410.00

380.00

360.00

3-Year 5-Year 7-Year 10-Year 20-Year 30-Year

Friday

Friday

Change

(%)

(%)

(Basis Point)

0.00 8.42 11.76 11.60 13.01 13.01

0.00 8.81 11.30 11.54 12.85 13.04

(61.48) (46.34)

2258.00 116.85 51.80 11.16 575.25

0.49 1.61 (7.27) 0.27 5.45

16.63 (10.25) (33.16) (27.20) 32.70

1626.99 14.78 216.95

8.18 15.11 (2.73)

23.49 (14.02) (33.82)

0.0 (38.2) 45.8 5.5 15.8 (3)

Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Friday

Change

(%)

(Basis Point)

20/3/20

13/3/20

1 Mnth 3 Mnths

2.10 2.33

2.33 2.58

(22) (25)

6 Mnths 9 Mnths 12 Mnths

3.01 3.47 4.37

3.17 3.76 4.53

(16) (29) (16)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

AVERAGE YIELDS

13/3/20

0.04 (3.53)

Friday

BOND MARKET

20/3/20

(%)

24.83 1.64

(%)

27/3/20

Tenor

YTD Change

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS 1100.0 1180

5.60 13.14 13.26

Friday

1-week Change (%)

Energy Crude Oil $/bbl) Natural Gas ($/MMBtu) (33.75) Agriculture Cocoa ($/MT) (1.92) Coffee ($/lb.)

Cotton ($/lb.)

Sugar ($/lb.)

Wheat ($/bu.)

Metals Change Gold ($/t oz.)

Silver ($/t oz.)

(Basis Point) Copper ($/lb.)

(1.52) (1.51)

FOREIGN EXCHANGE MARKET Market

27/3/20

Friday

Friday

Change

(%)

(%)

(Basis Point)

27/3/20

20/3/20

Index

3617.98

3625.18

(0.20)

Mkt Cap Gross (N'tr) Mkt Cap Net (N'tr) YTD return (%) YTD return (%)(US $)

11.30 7.52 47.29 -35.96

11.33 7.56 47.58 -8.26

(0.26) (0.53) (0.29) (27.70)

TREASURY BILLS (MATURITIES) Tenor

Amount (N' million)

Rate(%)

Date

91 Day

2,000

2.31

18-Mar-2020

182 Day

8,385.20

3.46

18-Mar-2020

364 Day

37,176.06

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation.

4.82

18-Mar-2020

Global Economy The Bank of England cut its key interest rate to 0.1% at a special meeting which held last week.

This rate cut follows a 50-basis point reduction two weeks ago, bringing borrowing costs to a fresh record low. The central bank said the spread of Covid-19 and the measures being taken to contain the virus will result in an economic shock that could be sharp and large but should be temporary. The central bank also announced it will increase its holdings of UK government and corporate bonds by £200 billion. Elsewhere, the Central Bank of Brazil lowered its benchmark interest rate by 50bps to an all-time low of 3.75% last week, in a bid to mitigate the effects of the coronavirus spread. This is after it cut its rate by 25 bps at its February meeting. The monetary authority noted that the coronavirus pandemic is causing a significant global growth slowdown and that economic conditions necessitates stimulative monetary policy. The Committee said that it would continue to use its entire arsenal of monetary, exchange rate and financial stability policies to fight the crisis. Policymakers added that currently it is appropriate to keep rates at its new level and that new information will be essential to define its next steps. In a separate development, the US current account deficit contracted by $15.6 billion to $109.8 billion in Q4 2019 according to the U.S Bureau of Economic Analysis, mainly reflecting a reduced deficit on goods that was partly offset by an expanded deficit on secondary income. The Q4 2019 deficit was equivalent to 2% of GDP, down from 2.3% in Q3 2019. Considering 2019 full year, the current account deficit expanded by $7.4 billion, or 1.5%, to $498.4 billion in 2019, equivalent to 2.3% of GDP, down from 2.4% in 2018.

Domestic Economy The National Bureau of Statistics (NBS), revealed that the Federation Accounts Allocation Committee (FAAC) disbursed the sum of N716.3 billion among Federal, States and Local Governments in January 2020 from the revenue generated in December 2019. The amount distributed was from the statutory account, value added tax (VAT) and exchange gain allocation comprising of N600.31 billion, N114.81 billion and N1.18 billion respectively. A breakdown of the sum disbursed among the three tiers, revealed that the Federal Government received N287.93 billion, states received N191.3 billion and the local governments received N143.7 billion. The oil producing states received N50.28 billion as the 13% derivation fund. Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received a N5.24 billion, N9.64 billion, N4.47 billion, respectively as cost of revenue collection.

In a separate development, inflation rate for February 2020 printed at 12.2% year-on-year from 12.13% in January 2020. Prices rose for both food and core inflation. Food inflation climbed to 14.9% in February from 14.85% in the prior month. Highest increases were recorded in prices of fish, meat, oil and fats, bread and cereals and vegetables. Food inflation on a year-on-year basis was highest in Sokoto state (17.12%) and lowest in Bayelsa state (11.89%). Core inflation rose 9.43% in February, up by 0.08% compared to 9.35% reported in the prior month. Highest increases were recorded in prices of pharmaceutical products, non-durable household goods, catering services, passenger transport by air, repair of furniture, maintenance and repair of personal transport equipment, water supply, carpet and other floor coverings, major household appliances, dental services, hospital services and vehicle spare parts Stock Market Trading activities on the Nigerian Stock Exchange remained volatile amidst global fears as the coronavirus scourge fuelled the bear market, resulting in the seeming sell-offs across high cap stocks. Consequently, the all share index dipped 2.35% to close at 22,198.43 poi nts from 22,733.35 points the prior week. Similarly, market capitalization trimmed 2.35% to N11.57 trillion

from N11.85 trillion the prior week. This week, the market will likely remain skittish on concerns over the impact of coronavirus on consumer spending and business investment.

Money Market Liquidity in the money market tightened slightly, an aftermath of the Retail Secondary Market Intervention Sales (SMIS) held the preceding week. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates settled higher at 4.8% and 5.3% from 3.29% and 4% previous week. The slightly longer dated instruments such as 30-day and 90-day Nigeria Interbank Offered Rate (NIBOR) closed at 13.14% and 13.26% from 10.96% and 11.44% the prior week. Rates are expected to dither around current levels as Federation Account Allocation Committee (FAAC) payments flow into the system.

Foreign Exchange Market The local unit depreciated against the greenback across most market segments. The official rate marginally declined ending at N307/$, a 5 kobo drop from the previous week. The local currency at the Nigerian Autonomous Foreign Exchange (NAFEX) window lost N2.26 to close at N370/US$ from N367.74/US$ the prior week. The loss in value stemmed from demand for funds outweighing supply at the Investors and Exporters (I&E) window as the dollar scarcity experienced the preceding week persisted. The parallel market remained unchanged week-onweek at N380/US$. Given recent comments from the government about possible convergence of the nation's exchange rates and data showing that the CBN sold FX to foreign portfolio investors at N380.2/US$ last week from N366.7/US$ previously, we anticipate some major news on a new FX policy direction by the monetary authority.

Bond Market The bond market witnessed frenzied activities following the coupon payments that hit the system as participants reinvested the fixed income proceeds. Subsequently, average yields dropped as yields on the seven-, ten- and thirty-year debt papers finished at 11.30%, 11.91% and 13.04% from 11.34%, 11.91% and 13.96%, respectively. The Access Bank Government Bond index lost 15.62 points to settle at 3,625.18 points last week. We anticipate that the buying sentiments might persist given expected inflow of N12 billion in coupon payments.

Commodities Crude oil price remained pressured last week as Saudi Arabia announced plans to boost its oil exports to 10 million barrels per day from May, which is 3 million bpd more than it exported in February. Bonny light, Nigeria's benchmark crude fell 25.13% or $8.33 to close the week at $24.82 per barrel due to an over supplied market and coronavirus continuing to cause disruptions to supply chains around the world. Similarly, precious metal prices slipped further. Investors preference to save capital is weighing on bullion counters.

Consequently, gold tapered 3.79% to close at $1,504 per ounce while silver dropped 17.9% to $12.84 per ounce. This week oil prices might gain respite on word that the Trump Administration could take actions intended to force Russia and Saudi Arabia to back down from their plans to flood global oil markets. Precious metals may get some support from a pick-up in investment demand given its safe-haven appeal. The lowered interest rates also offers excellent opportunity for investors to buy bullion assets.

MONTHLY MACRO ECONOMIC FORECASTS Variables

Mar’20

Apr ’20

367

366

365

Inflation Rate (%)

12.20

12.25

12.27

Crude Oil Price (US$/Barrel)

33

35

40

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

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May ’20

Exchange Rate (NAFEX) (N/$)

@Businessdayng

Monday 30 March 2020

BUSINESS DAY

33

NEWS Welcome to the Spurt!

BusinessDay column! creates solutions that support companies.

In making informed operational and strategic decisions that lead to better customer experience.

She does this by making data analysis more accessible and promoting a data-led culture. Her work experience cuts across the logistics, transportation, telecommunications, finance and technology industries, with a focus on data analysis, machine learning and optimization.

And Spurt! co-founder and Lead Strategist, Kristin, also heads up the Spurt! Research Practice. She is a business advisor specialising in operations and strategy.

She has nearly 10 years of experience as a researcher and brings a consistent research driven and evidence-based approach to her practice.

She has extensive work-

being revenue-driven, indeed, our biggest constraint is time. We have limited amounts of it and want to make sure we are investing our time in the right businesses. We are invested in being your growth partners and have committed to be as committed to your business as you are.

We do not know everything (open secret: no one does), but we have proven time and time again that multiple intelligent heads working together is often a better deal than one head drowning under a mountain of work. We will not be careless with your business, we stake the entire value of our work not on our bottom line, but on yours.

Spurt! works to ensure businesses on the African continent succeed along multiple value chains— moving to export their

‘ We do not know everything (open secret: no one does), but we have proven time and time again that multiple intelligent heads working together is often a better deal than one head drowning under a mountain of work

‘

W

e are a dynamic c o n s o rtium of professionals keen to share simple but useful insights to help people at the helm (and in the thick) of businesses in Africa become more productive, more efficient and more strategic.

You will hear from us on here every other week, but if you have questions, do send them our way too.

We want to offer productive reflections and interrogations of processes you can adopt to help your businesses do better. Our work spans the across a range of industries but we are partial to family businesses, startups and small enterprises.

We are aware that most small business and startup founders are very busy and end up having to wear many hats. This means that you might focus on the two urgent things that need doing at your firm today and perhaps never get around to thinking about the less urgent but very important things until they become so urgent that they have the potential to cripple your business. It can feel like every day is a crisis. Our work at Spurt! interrupts this cycle and reshapes the way you build your business.

Perhaps, you plan to hire a consulting firm or the perfect employee to think deeply about and implement those important issues into the daily running of your business operations. Most consulting firms are expensive and finding the right employee talent is hard. We work to translate your hard-earned money into productive results. Our work bridges the gap between your aspirations for your business and the constraints that your environment imposes.

Spurt! is an atypical firm and we are first and foremost invested in supporting businesses on the path to success. We have the luxury of not

products and services across the continent and beyond. We hold a vision for the increased and unparalleled success of the African businessman firmly in our minds. We hope you will find this column both useful and insightful.

This new and inspiring column will be written

by Spurt! co-founder and Lead analyst Oladoyin and will focus on using Operations Research methods – Optimization and Machine Learning – to drive cost and time efficient operations decisions and practices. She primarily www.businessday.ng

ing experience in health, education, agriculture and creative industries (fashion, visual arts) with specialisations in digital media, tech adoption and consumer goods value chain management across West Africa.

Let’s work together to bring about your growth Spurt!

Best.

Kristin & Oladoyin www.spurt.solutions Reach us at admin@spurt. group if you have any questions or comments.

Shops at Nnamdi Azikwe Street, Lagos Island closed down in compliance with the Lagos State Government against the spread of the Corona virus in Lagos, at the weekend. Pic by Olawale Amoo

COVID-19: Police issue alert on emerging crime trend, reel-out security tips Innocent Odoh, Abuja

I

nspector-General of Police (IGP) Mohammed Adamu has called on members of the public to remain vigilant and take precautionary actions against criminal elements who might explore the emergency situation created by the Covid-19 pandemic to increase and diversify their criminal activities.

According to a statement issued on Sunday by the Force public relations officer, Frank Mba, the IGP’s advice was informed by intelligence at the disposal of the Force that suggested that fraud and cybercrime were expected to rise at this time owing to the lock-down emplaced by government at all levels to contain the Covid-19 (Coronavirus) pandemic.

“Specifically, intelligence obtained from the INTERPOL Headquarters shows that scammers in Nigeria and other parts of the globe have begun to create and set up fraudulent websites, e-commerce platforms, fake social media accounts and emails claiming to sell and deliver (covid-19) medical products. In some cases, they use the names of

prominent companies involved in the production and distribution of these items. Victims are then asked to pay via bank transfer,” the statement said.

The IGP therefore urged the public to strictly adhere to the following security tips and warned them to avoid opening suspicious emails and clicking on links in unrecognised emails and attachments; Ensure proper back-up of online and offline files regularly and securely; Use strong passwords for securing your emails and social media handles; Keep your software updated, including antivirus software and manage your social media settings and review your privacy and security settings.

The police boss also said, “You are advised to be wary of scammers who use names of prominent companies to create fraudulent websites, e-commerce platforms, social media accounts and emails claiming to sell and deliver medical products; You are advised to ignore and report calls purportedly emanating from a caller who pretends to be a relative currently being treated at hospital asking you to pay for the cost of the medical treatment by transferring money or by paying cash to fake public

health representatives; Do not open letters or emails related to the pandemic from unknown persons who claim to be health authorities.”

He added that often times criminals access sensitive information, steal personal information and steal funds of victims by tricking them into connecting to a specific webpage and logging-in with their credentials.

“Be mindful of fake news, deliberate misinformation/ disinformation and avoid circulating untrusted and unverified messages on your social media handles; Educate your family, especially your children, about how to stay safe online and offline; If you become a victim, ensure prompt report to the police,” the IGP advised.

Against the foregoing, the IGP has placed the Commissioner of Police in charge of the Interpol National Central Bureau (NCB), Abuja - Nigeria on red alert. The NCB, which houses the cybercrime unit of the Force, shall in the coming days and beyond work closely with other Interpol member states across the globe particularly to carry out intense monitoring of the internet highway in the most legitimate and ethical manner, the statement said.

Tinubu represents our unifying, rallying point - APC Governors James Kwen, Abuja

A

ll Progressives Congress (APC) governors under the auspices of the Progressive Governors Forum (PGF) say the party’s national leader, Bola Tinubu, represents their unifying and rallying point for all.

The Progressive Governors stated this in a felicitation

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message to Tinubu on his 68th birthday anniversary, signed by their chairman and Governor of Kebbi State, Atiku Bagudu.

PGF acknowledged and commended Tinubu’s leadership and commitment to a united prosperous Nigeria as well as his contributions to the Progressive Governors through his insightful and resolute inputs to the processes of managing governance in Nigeria and @Businessdayng

the APC. “Once more, as we rejoice with Asiwaju Bola Ahmed Tinubu, we advise all Nigerians to stay at home and stay safe until we continue to work together towards overcoming the current COVID-19 global pandemic.

“Congratulations and Happy Birthday to Asiwaju Bola Ahmed Tinubu, the Jagaban of the Bogu Kingdom. We rejoice with you and wish you a happy birthday”, PGF said.

34 BUSINESS DAY

Monday 30 March 2020

news

Lagos to close Marine Bridge for 20 weeks for repair works Joshua Bassey

L

agos State government is closing the Marine Bridge for 20 weeks to enable the Federal Government carry out repair works from 8pm of Saturday, March 28, to Saturday, August 15, 2020.

A statement from the state ministry of transportation said the construction works by the Federal Ministry of Works and Housing would replace the worn-out elastomeric bearing, and expand the metallic joints on the bridge.

Other repair works will include construction of drain gully, jacketing, skin repairs of the piers and laying of asphalt.

The repair works would be done in two faces to ease traffic movements. The first half of the

construction works will last for the first 10 weeks, thereafter, the second half would commence equally and last for 10 weeks.

The closure has been slated between 8pm and 8am daily to ensure there is smooth and uninterrupted flow of the repair works, therefore road users are advised to comply with the traffic diversions to minimise inconveniences in movements, as they will be allowed to ply only the available sides of the roads while the construction works last.

The Lagos government appealed to residents of the state, especially motorists that ply these corridors to bear the pains, as the project was being executed for their safety and seamless movements that would meet the transportation needs of the larger populace.

Coronavirus: APM Terminals commits N100m to contain outbreak in Nigeria AMAKA ANAGOR-EWUZIE

I

n the wake of Coronavirus pandemic, APM Terminals Nigeria is maintaining continuity in its operations in Apapa and Onne ports, and has earmarked N100 million to support the efforts of the Federal Government in curtailing the spread of the virus.

The firm says it has also adopted stringent measures in line with the guidelines of the World Health Organisation (WHO) and the Nigeria Centre for Disease Control (NCDC) to ensure that the supply chain remains uninterrupted, and that availability of essential supplies is maintained in the face of the pandemic.

“As an essential service provider, all terminal operations are running normally and we urge importers to continue taking delivery of their containers to enable the fresh discharge of incoming cargo,” said, Mohammed Ahmed, managing director of APM Terminals Nigeria.

According to Ahmed APM Terminals has contributed N75 million to the United Nations in Nigeria basket fund and is committing another N25 million on community awareness through radio, social media as well as fliers to sensitise the Apapa community on how to curb the spread of the pandemic.

“No one is immune nor invulnerable from this disease. We urge all to adhere to the guidance from government in order to curb the spread of this pandemic. In this time of need, APM Terminals is honored to discharge its duty to the nation. The wellbeing of our community remains of paramount importance to us. Through our contribution to the UN basket fund, we will play our part in strengthening the country’s capacity to respond,” Ahmed said.

Also speaking on the donation, Edward Kallon, UN resident and humanitarian coordinator in Nigeria, said, “The UN system in Nigeria will support and complement government’s efforts to immediately set up a national response fund that will serve as a single national platform and financing framework, coordinating partnerships and mobilising resources that can make an effective impact on the ground.”

The UN in Nigeria basket fund aims to mobilise resources to boost the efforts of the government in addressing the COVID-19 pandemic.

In coordination with the government, the UN is mobilising funds that will ensure adequate essential health equipment needed for testing, quarantine and medical care, including equipping of temporary hospitals/quarantine centers and designated emergency centers.

Naira falls to N410 per dollar at black market HOPE MOSES-ASHIKE

N

igeria’s currency weekend weakened to N410 per dollar at the black market after the Central Bank of Nigeria (CBN) suspended sales to Bureau De Change (BDCs).

With the current rate, naira has depreciated by N20 from N390 per dollartradedonWednesday.“There is no dollar, walahi,” one of the black market operators at Eko Hotel, told BusinessDay. TheCBNhassuspendedforeign exchange sales to the BDC opera-

tors until further notice. The CBN’s action was in response to a letter dated March 24, 2020, by the BDCs recommending the CBN to declare market holiday on its weekly bidding pending the re-opening of the nation’s borders and the control of Covid-19.

At the Investors and Exporters (I&E) forex window on Thursday, the local currency deprecated by 1.39percenttocloseatN385.53kobo per dollar, data from FMDQ show.

The naira weakened to N361 to the dollar on the official market, supported by the central bank.

Nigeria’s $3.3bn Eurobond at risk of higher cost amid S&P junk rating ENDURANCE OKAFOR

N

igeria’s credit rating was further downgraded into junk

by Standard & Poor’s (S&P) Global Ratings, an international credit rating agency, which cited, among other reasons, the country’s declining foreign exchange reserves resulting from the lower crude price.

The long-term rating of Africa’s largest economy was lowered by the New Yorkbased agency from B to B(short-term still B), stating that the Federal Government’s policy responses are unlikely to be enough to mitigate the effect of lower oil prices which will hurt Nigeria’s external and fiscal positions and put further pressure on the foreign exchange reserve.

The downgrade could dampen investors’ appetite towards Nigeria’s Eurobond

issuance and increase borrowing costs, analysts have said, especially considering the two other prominent rating agencies – Moody’s and Fitch Ratings – also recently changed their outlooks for Nigeria to negative.

“A rating down of this such is usually negative for new issuance. When Nigeria needs to go to the international market to borrow money it is going to be more expensive because of the rating by S&P,” Yinka Ademuwagun, research analyst, FMCGs, United Capital plc, said, adding that the downgrade meant Nigeria was riskier and had a probability of defaulting in its loan payment.

Ni g e r i a’s d o w n g ra d e comes as the country prepares to tap into the international debt market for $3.3 billion to plug its budget deficit for 2020 and refinance existing Eurobond.

With the recent downgrade, Nigeria may be at risk of a higher borrowing when it eventually goes to the inter-

national market. A higher loan cost was one of the reasons why it has earlier suspended the Eurobond issuance.

Zainab Ahmed, minister of finance, budget and national planning, recently disclosed that the Federal Government had suspended the issuance of the $3.3 billion Eurobond in view of the current unfavourable debt market situation.

Specifically, the minister linked the fiscal decision to the negative impacts of the Coronavirus pandemic on the global economy.

“We are in the process of doing that and I can tell you that we are not going out immediately because of the market indication of external borrowing at this time. Even if we get the approval, we will defer it and watch the market and go out only when the time is right,” she said.

According to the Debt Management Office (DMO), the capital that will be raised will see $2.786 billion committed to financing capital

projects in priority sectors of the economy that include power, transport, works and housing, aviation, health, education, agriculture and rural development.

Meanwhile, Patience Oniha, director-general of DMO, had expressed fears about the capacity of Nigeria meeting its debt service obligations in the 2020 fiscal year.

The anxiety is coming from the crash in the price of crude oil and dwindling revenues as a result of the impact of the coronavirus pandemic on the global economy.

Oniha cited that the shrinking revenues from oil could hamper current efforts to keep the debts at a sustainable level.

About N2.6 trillion was considered by the Federal Government for debt servicing in the N10.59 trillion 2020 budget, but crude price hovering around $30 per barrel the revenue streams from where the debts will be serviced is under threat.

L-R: Ahmed Idris Wase, deputy speaker, House of Representatives; Femi Gbajabiamila, speaker of the House of Representatives, and Ahmed Lawan, Senate president, during a meeting between the leadership of the National Assembly and the Executive to consider interventions to cushion the negative economic impact of Covid-19 on the country’s economy at the National Assembly, Abuja.

MFBs seek N50bn intervention fund for small businesses as Covid-19 spreads HOPE MOSES-ASHIKE

M

icrofinance Banks (MFBs) operating in Nigeria are asking the Central Bank of Nigeria (CBN) to provide a N50 billion intervention fund to be disbursed to small businesses, tailored specifically as working capital loans.

Rogers Nwoke, president, National Association of Microfinance Banks (NAMB), explained that the tenure would be for three years at affordable interest rates.

To ensure adequate outreach across the country, the association proposed a breakdown of allocation of the fund as follows: Tier-2 Unit MFBs – N50 million each, Tier-1 Unit MFBs – N250 million each, State MFBs – N500 million each and National MFBs

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… extension of recapitalisation to 2023 – N1 billion each.

The CBN had in March 16, 2020, established a N50 billion credit facility through NIRSAL Microfinance Bank Limited, for households and Small and Medium Enterprises (SMEs) that have been particularly hard hit by coronavirus.

The board of trustees of the NAMB drew the attention of the CBN to the fact that micro entrepreneurs and small businesses would be most affected in the possible economic lockdown that Coronavirus may create, given that the active poor and most vulnerable persons in the economy are found in this subsector.

The NAMB also called on the CBN to consider an amendment in the provisions for classified risk assets and possibly align

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it with the commercial banks provision requirements for Small and Medium Enterprises (SME) short- and long-term loans.

This measure becomes most auspicious at this time as MSMEs would have highest loan defaults at difficult economic situations.

To avoid a total collapse and complete erosion of capital from potential loan defaults, the board of trustee said adjusting the prudential guidelines in the form as recommended would preserve the over N275 billion risk assets of the microfinance sub-sector.

At a time when the microfinance banks are preparing and struggling to meet new capital thresholds, any activity that further erodes the existing capital will frustrate the efforts of the CBN and the banks to strengthen the capital adequacy ratios of the @Businessdayng

sub-sector.

Furthermore, NAMB appealed to the CBN to grant an extension of time till the year 2023 for MFBs to meet the new capital requirements.

“This indeed will be a strong palliative measure towards the survival and sustainability of the microfinance sub-sector. We believe that this will be a more sustainable operational and risk management business model,” said Nwoke.

In a statement signed by Ibrahim Bamalli, chairman, and Dan Ogun, secretary, NAMB said the near total lockdown of various economies and its impact on several fund-raising activities of the microfinance has negatively affected the ability of the operators to meet the new minimum capital requirements.

Monday 30 March 2020

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news

COVID-19: LAPO Microfinance Bank suspends union meetings HOPE MOSES-ASHIKE

L

APO Microfinance Bank Limited, Nigeria’s leading microfinance bank, has enforced a temporary suspension of its weekly and monthly clients’ Union Meetings across the country.

This disclosure was contained in a statement issued by Oluremi Akande, the bank’s head of communications, last week.

The statement read in part: “Given the intense nature of our interactions with our Clients, the suspension of Union Meetings is a deliberate step to immediately achieve social distancing and

curtail the spread of the COVID-19 pandemic. Importantly, this measure will guarantee the protection of the lives of our Clients, Staff and Family; and by extension the communities we serve”.

The statement further noted, “LAPO Microfinance Bank will continue to deploy mass enlightenment campaigns to educate members of the public, thereby, minimizing the level of infection and by implication enabling the systemic defeat of COVID-19 in our country”.

LAPO Microfinance Bank remains committed to the fight against the Coronavirus pandemic in Nigeria.

LPG not responsible for Abule Ado explosion, says NALPGAM IFEOMA OKEKE

T

he Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) on Thursday said its preliminary investigation had revealed that Liquefied Petroleum Gas (LPG) also known as cooking gas, was not responsible for the explosion that rocked Abule Ado in the Trade Fair axis of Lagos on March 15.

Bassey Essien, its executive secretary, in a statement issued in Lagos, commiserated with victims of the incident which left over 20 persons dead and several houses and vehicles destroyed, but said immediately NALPGAM was in-

formed of the incident, members of its Technical, Monitoring and Surveillance Committee visited the scene for an immediate and on the spot assessment of the damage.

He said the team also obtained eye-witness accounts to unravel the empirical cause(s) of the explosion.

“Contrary to insinuations from various quarters, our preliminary investigation has revealed that LPG (cooking gas) was not the cause of the explosion.

“An LPG plant in the vicinity of the explosion as well as two LPG storage vessels with their contents in a skid plant located in a petrol filling station close to the scene of the explosion were still intact without any sign of damage done to them.

AfDB issues world’s biggest social bond in virus fight

T

he African Development Bank (AfDB) said it issued the world’s biggest social bond yet by selling $3 billion of notes to fight the impact of the coronavirus on the continent.

Africa’s biggest multilateral lender received $4.6 billion in bids for its Fight Covid-19 social bond, it said in a state-

ment Friday.

More than half of bids for the three-year bond, which will pay interest at a rate of 0.75%, was allocated to central banks and official institutions, the lender said.

The bond issuance, AfDB’s biggest yet in dollar terms, is the first of the bank’s measures in response to the virus that has so far seen the confirmation

of more than 3,000 infections across the continent.

“We are here for Africa, and we will provide significant rapid support for countries,” AfDB president Akinwumi Adesina said in the statement.

The continent needs an immediate emergency economic stimulus of $100 billion to combat the impact of the corona-

virus pandemic, according to the United Nations Economic Commission for Africa.

Banks involved with AfDB’s bond sale included Credit Agricole SA and Goldman Sachs Group Inc. At least 37% of the bonds were allocated to European institutions, 36% to US and 17% to Asian investors, AfDB said.

SystemSpecs launches Paylink, empowers SMEs, others with easier funds collection SEGUN ADAMS

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s more businesses in Nigeria encourage remote work and social distancing, leading financial technology (fintech) firm, SystemSpecs has launched Paylink, a web-based solution that helps Micro, Small and Medium-scale Enterprises (MSMEs) as well as religious organisations, not-for-profit outfits, social media sellers, freelancers, individuals and many more to swiftly receive payments from everywhere, even abroad, this period and beyond.

Paylink by Remita assists merchants to get paid quickly, regardless of their size, structure or geographical location, by simply sharing a customised link connected to their bank account with their payers via social media, WhatsApp or email.

According to a statement signed by SystemSpecs’ man-

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aging director, John Obaro, Paylink was developed to address the pain point of SMEs and individuals who require an easy-to-use, personalised and memorable means of collecting money without sharing their account details. This need remains just as crucial at a time when various organisations need to collect funds for various purposes while practising social distancing.

With Paylink, users can customise their payment link with their logo, brand name and account number. They can also create specific links for distinct products and services, generate e-invoices for the settlement of the cost of specific goods and services and collect additional information they might require from payers.

“Paylink is a secure and simple means of collecting funds. It enables the merchant to extend their market reach,

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convert their social media profiles to a one-stop-shop for end-to-end consummation of business transactions, and track their inflows through comprehensive reports. Above all, it costs nothing to set up,” said Obaro.

Divisional head, Payment Applications and Vertical Markets at SystemSpecs, David Okeme, affirmed the signup process for Paylink to be simple.

“It takes just a few seconds for merchants to set up their link. They simply sign up on the product’s website, www.paylink. ng, with a few individual and financial details,” he said.

Okeme said that users of the solution include religious organisations for offering, tithes, zakat and other collections; non-governmental organisations for donations and contributions; MSMEs for payments for good and services; individuals for personal

@Businessdayng

needs; insurance companies for premium contributions; investment houses for savings; and estate management companies for collections.

Okeme added: “Associations can use Paylink by Remita for due payments and crowdfunding, while cooperative bodies can use it for savings and schemes; religious institutions can use it for tithe and offering payments; e-commerce firms can use it for payments for goods and services; and schools for fees. Essentially, there is a Paylink for everyone.”

With Paylink customisable for each user, new adopters are encouraged to grab their unique username before someone else does.

SystemSpecs, the developer of Paylink by Remita, is a Nigerian company with interests in financial technology as well as design and development of human capital management solutions and services.

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news Nigeria’s private sector fight to curb...

Continued from page 1

teaming up with Dangote to provide treatment and isolation facilities with a 1,000-bed capacity, an-

L-R: Zouera Youssoufou, managing director/CEO, Aliko Dangote Foundation; Everistus C. Aniaku, head emergency operations centre, NCDC/lead national rapid response team on COVID 19; Olusegun Ogboye, permanent secretary Lagos State Ministry of Health, and Eniayewu Ademuyiwa, permanent secretary, Lagos State Health Service Commission, during the presentation of 4 ambulances to support the fight against COVID-19 in Lagos by Aliko Dangote Foundation on behalf of CACOVID, at Marina, Lagos.

Lagos, Abuja, Ogun on 14-day lockdown Tony Ailemen & Solomon Ayado, Abuja

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resident Mu hammadu Buhari on Sunday ordered the cessation of all movements in Lagos and the FCT for an initial period of 14 days with effect from 11pm on Monday, March 30, 2020. This is in an effort to contain the spread of the deadly coronavirus.

The president, who stated this in his nationwide broadcast, said the “restriction will also apply to Ogun State due to its close proximity to Lagos and the high traffic between the two states”.

He advised all citizens in these areas to stay in their homes, while travels to or from other states should be postponed.

“Based on the advice of the Federal Ministry of Health and the NCDC, I am directing the cessation of all movements in Lagos and the FCT for an initial period of 14 days with effect from 11pm on Monday, 30th March 2020.

This restriction will also apply to Ogun State due to its close proximity to Lagos and the high traffic between the two states,” Buhari said.

“All citizens in these areas are to stay in their homes. Travel to or from other states should be postponed. All businesses and offices within these locations should be fully closed during this period,” he said.

Buhari said the governors of Lagos and Ogun States and the minister of the FCT have been notified, and that heads of

security and intelligence agencies have also been briefed.

“We will use this containment period to identify, trace and isolate all individuals that have come into contact with confirmed cases. We will ensure the treatment of confirmed cases while restricting further spread to other states,” he said.

Buhari, however, announced that experts offering essential services such as media, petrol station operators, electricity generation companies are exempted from the stay-athome directive.

He also said health experts such as doctors and nurses, as well as those selling food items and medicine are exempted from the lockdown order.

“This order does not apply to hospitals and all related medical establishments as well as organisations in health care related manufacturing and distribution.

Furthermore, commercial establishments such as food processing, distribution and retail companies; petroleum distribution and retail entities; power generation, transmission and distribution companies; and private security companies are also exempted,” he said.

“Although these establishments are exempted, access will be restricted and monitored. Workers in telecommunication companies, broadcasters, print and electronic media staff who can prove they are unable to work from

home are also exempted.

“All seaports in Lagos shall remain operational in accordance with the guidelines I issued earlier.

Vehicles and drivers conveying essential cargoes from these Ports to other parts of the country will be screened thoroughly before departure by the Ports Health Authority.

“Furthermore, all vehicles conveying food and other essential humanitarian items into these locations from other parts of the country will also be screened thoroughly before they are allowed to enter these restricted areas.

“Accordingly, the Hon. Minister of Health is hereby directed to redeploy all Port Health Authority employees previously stationed in the Lagos and Abuja Airports to key roads that serve as entry and exit points to these restricted zones,” he said.

The government also suspended movement of all passenger aircraft, both commercial and private jets. Special permits would be issued on a needs basis.

“We are fully aware that such measures will cause much hardship and inconvenience to many citizens.

But this is a matter of life and death, if we look at the dreadful daily toll of deaths in Italy, France and Spain,” Buhari said.

Speaking on palliative measures, the president said he has directed that a three-month repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans be implemented with immediate effect.

“I have also directed that a similar moratorium be given to all Federal Government funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export Import Bank,” he said.

Others include onlending facilities using capital from international and multilateral development partners, where the president directed development financial institutions to engage these development partners and negotiate concessions to ease the pains of the borrowers.

“For the most vulnerable in our society, I have directed that the conditional cash transfers for the next two months be paid immediately. Our internally displaced persons will also receive two months of food rations in the coming weeks,” he said.

He appealed to all Nigerians to take personal responsibility to support those who are vulnerable within their communities, helping them with whatever they may need.

“As we are all aware, Lagos and Abuja have the majority of confirmed cases in Nigeria. Our focus therefore remains to urgently and drastically contain these cases, and to support other states and regions in the best way we can. Our goal is to ensure all states have the right support and manpower to respond immediately.

“So far, in Lagos and Abuja, we have recruited hundreds of ad-hoc staff to man our call centers and support our tracing and testing efforts,” he said.

other leading lender, United Bank for Africa, is donating N3.5 billion to curtail the virus in Nigeria and a further N1.5 billion to the rest of Africa.

Add Access Bank’s donation, which wasn’t officially valued, and the N3.5 billion contribution of UBA to the N180 million ($500,000) funding facility set up by Union Bank and a US-based genetic research company, 54gene, and the 100-bed facility being set up by another leading Nigerian lender, Guaranty Trust Bank, and there’s about N5 billion coming from the four banks, according to conservative estimates. Other banks are likely to follow suit in the coming weeks.

While wealthy members of the private sector including Dangote, Jim Ovia, Tony Elumelu, Herbert Wigwe, Segun Agbaje, Femi Otedola, and Abdulsamad Rabiu are giving N1 billion each to make N7 billion, oil firms are donating N11 billion, although in partnership with the state-owned NNPC. Using the 60/40 percent Joint Venture model in place between the NNPC and the oil firms, one can assume that the oil firms are contributing around 40 percent of that donation which will be N4.4 billion.

When the N5 billion from the banks is added to the N7 billion from wealthy individuals and N4.4 billion from oil companies, it gives N16.4 billion.

That’s nearly double the N10 billion the Federal Government approved to fight the virus and the figure is certain to rise in the coming days as more private sector players step up to the plate. If the country’s estimated 40 million businesses gave an average donation of N10,000 each, that will give N400 billion.

The difference in firepower between the Federal Government and the private sector exposes a well-known fact, which is that the private sector is able to outdo the government economically given the

latter’s limited resources.

“I hope when this coronavirus scare is out of the way, the government learns a valuable lesson that it cannot boost economic growth without the private sector,” said an independent consultant who has in the past urged the government to tap private capital to fix the country’s gaping infrastructure deficit.

“If the private sector is invited to take part in building the economy with the same level of commitment with which this virus has been taken, the country will do better,” the person said.

Starved of growth drivers (especially private sector investment) and hamstrung by a crippling infrastructural deficit, the Nigerian economy has been wobbling since 2016 when output contracted on the back of the collapse in global crude oil prices and decline in local production.

The economy bounced back from recession in 2017 but has failed to grow above population growth every year since. That has seen growth in average per capita GDP turn up negative since 2015 with the International Monetary Fund (IMF) projecting eight straight years of negative GDP per capita growth.

An easy way out of Nigeria’s growthproblemwhichhasbeen flagged by a motley crew of local and international development experts is to tap private capital, especially at a time when government revenue is nowhere near the days of a $100per barrel oil price when the government could afford to spend its way out of a downturn.

The current government, led by President Muhammadu Buhari, has resorted to borrowing to attempt to fix Nigeria’s growth problem but that has failed to achieve the desired outcome as economic growth has remained below 3 percent despite doubling the country’s debt stock in under five years and accumulating expensive interest payments.

“There’s a huge chunk of interest-free domestic capital waiting to be tapped but we are not ready,” a senior banker told BusinessDay.

Nigeria’s political elite stuck with...

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abroad,” Ogunnibi said.

Nigeria’s healthcare system ranked 187 out of 190 in the 2017 ranking by the World Health Organisation (WHO), only ahead of Democratic Republic of the Congo, Central African Republic and Myanmar.

In terms of funding, Nigeria’s budgetary allocation to its health sector that caters for some 200 million of its citizens has averaged 4 percent in the last five years. That amount in nominal terms is 15 times less than what Africa’s second largest economy, South Africa, spends in taking care of the health needs of its citizens, despite having a population that is nearly four times less.

Health expenditure as a percentage of the Gross Domestic Product (GDP) averaged 3.4 percent between 2007 and 2016, compared with South Africa (6.5 percent) and Kenya (4.5 percent), according to data sourced from the World Bank.

With nearly 20 percent of all global maternal deaths between 2005 and 2015, and no less than 900,000 maternal near-miss cases in the country, according to a WHO article published last year, Nigeria’s health system is unable to address what should be considered minor health issues, let alone major ones like kidney or heart transplant, cancer treatment etc.

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news

A broken global oil market is drowning in crude nobody needs and could get worse

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he global oil market is broken, overwhelmed by an unmanageable surplus as virus lockdowns cascade through the world’s largest economies.

Onshore tanks in many markets are full, forcing traders to store excess oil in idle supertankers. Refineries are starting to shut down because nobody needs the fuels they produce.

In physical oil markets, barrels are already changing hands for less than $10, and in a few landlocked markets producers are paying consumers to take away their crude.

“The physical oil market has frozen up,” said Gary Ross, an influential oil watcher and chief investment officer of Black Gold Investors LLC. “The logistics are struggling to cope because we are facing a catastrophic loss of demand.”

And oil traders say it’s likely to get worse this week as global petrol demand is set to drop as much as 50 per cent in some key markets like western economies that have come to a halt in response to the coronavirus pandemic.

“It’s like the entirety of Europe, Africa and the Middle East combined stopped driving,” said Cuneyt Kazokoglu, FGE’s head of oil demand, about the drop in petrol usage in the US. Petrol consumption in the

US is expected to fall to levels not seen since the Nixon administration in the early 1970s, according to Tom Kloza, global head of energy analysis at Opis, a division of IHS Markit.

The drop in US petrol demand will also mark an abrupt change from recent weeks, when fuel consumption held relatively steady despite the growing coronavirus emergency, as commuters moved from public transport to private cars, shoppers drove to malls to stock up and students returned home from colleges.

The root cause is an accelerating plunge in consumption that’s without precedent since a steady flow of oil became essential to the global economy more than a century ago.

The great crash of 1929, the twin oil shocks of the 1970s and the global financial crisis don’t come close. The world normally uses 100 million barrels of oil day, and traders and analysts reckon as much as a quarter of that has disappeared in just a few weeks.

The global airline industry is grounded, countless businesses and factories are shuttered and billions of people have been forced to stay home.

“Demand clearly is off, in some parts of the world, very dramatically,” Chevron CEO Mike Wirth told Bloomberg TV.

The immediate problem is a lack of storage in the right places.

With demand running 20 million barrels a day below supply, the world won’t have enough tanks to store the surplus in two or three months.

But the issue is even more pressing because global tank capacity, mostly concentrated in a few hubs like Rotterdam, the Caribbean and Singapore, isn’t available to every producer. For those without access to pipelines and ports, local storage will run out in days, traders and consultants say.

For those with access to the coast, one solution is to use the supertanker fleet as floating storage tanks, and that’s happening at an unprecedented rate.

The CEO of the world’s largest tanker owner, Frontline Ltd., said on Friday that he’d never known such demand to hire ships for long-term storage.

Traders could book ships to put 100 million barrels at sea this week alone, he estimated, but even that could accounts forless than a week’s oversupply.

In the US, one of the largest pipeline companies, Plains All American Pipeline LP, has asked oil producers to voluntarily cut output to avoid overwhelming the network that connects well heads to refineries through thousands of

miles of pipelines.

The world is running out of places to put oil because the shutdown of vast swathes of the economy has been catastrophic for demand. The collapse in commercial air travel has cut jet fuel use by up to 75%, or almost 5 million barrels a day.

As for gasoline, American drivers are the single biggest source of demand, using more than 9 million barrels a day, according to the Energy Information Administration. As whole states, including California and New York, have told people to stay home, billions of car journeys have been lost. It’s a pattern repeated in Europe and Asia.

“Demand destruction is unprecedented,” said Ben Luckock, co-head of trading at Trafigura Group, the second-largest independent oil trader. He estimates the hit to consumption will total 22 million barrels a day in April.

Around the world, about 700 refineries turn crude oil into gasoline, diesel and other fuels.

They are starting to dial down production and even shut outright because demand for the fuel they produce is so dire. In India, for example, where 1.3 billion people are under lockdown until mid-Aptil, the nation’s biggest refinery has cut processing rates at most plants by as much as 30%.

A small refiner in Italy, the epicenter of Europe’s virus outbreak, shut on Friday because demand for fuel plunged 85%. The fundamental problem is the oil products market is not designed to cope with this kind of collapse in demand. The whole industry has been designed around security of supply, with little built-in redundancy should demand fall.

As the refining system withers, the crude oil market is suffering. Many crudes, especially sticky, sulfurous grades that refiners find hard to process, trade at hefty discounts to international benchmarks.

Western Canadian Select, a tarry blend squeezed from Alberta’s oil sands, reached a record low of $4.51 a barrel on Friday.

In the US, Oklahoma Sour is changing hands at $5.75, Nebraska Intermediate at $8, while Wyoming Sweet prices at $3 a barrel.

In one obscure corner of the American crude market, prices have already turned negative.

Wyoming Asphalt Sour, a dense oil used mostly to produce paving bitumen, was bid at minus 19 cents a barrel in mid-March

by Trading Mercuria Energy Group Ltd. The surprise, perhaps, is that benchmark futures are still trading as high as they are. Brent, the

North Sea grade that sets the price for about two-thirds of the world’s oil, ended last week at $24.93 a barrel, well above the historic low of $9.55 a barrel in 1998.

Luckock at Trafigura says future prices are likely to fall another $10. Black Gold’s Ross also says Brent and the US benchmark, West Texas Intermediate, will be trading in the teens within days.

The next stage of the oil market’s meltdown will be widespread production shutdowns as drillers decide the only option is to leave it in the ground until better days return. There are signs this is starting to happen.

Brazil’s state oil company Petrobras has announced it will reduce output by 100,000 barrels a day this year because of the lack of demand. In Canada, some producers have shut down output, and Glencore Plc., the world’s largest commodity trading house, has shut down its production in Chad.

Many producers are reluctant to shut wells because even though they’re losing money at today’s prices, some cashflow is often better than none at all. But as more refineries idle, the pipeline system grinds to a halt and storage tanks fill to the brim, they will soon have no choice.

“The problem is no one wants to be the first to shut-in,” Black Gold’s Ross said.

Ogoni Liberation to raise N1bn in funding for community development Francis Sadhere, Warri

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goni Liberation Initiative, a non-governmental organisation, focusing on the development of Ogoni environment and its people, has called for support of national and international donors as it prepares to raise N1 billion in funding for the development of Ogoniland.

Convener of the movement, Douglas Fabeke, a reverend, says the fund is critical to the restoration of the region from its current state of disrepair.

The funding is targeted at actualising business and economic resurgence in the region, he says, noting, “We are poised for business and economic change, the advancement of education, global peace support and community development. We already have our plans mapped out and they are in line with the late Ken Saro Wiwa’s fellowship programme for peace

ambassadors and leaders.”

To achieve restoration, there is a need for equitable partnership, corporate collaboration and critical support of investors and stakeholders in and outside Ogoniland for the movement’s course, he notes.

“Ogoni is one of the Nigerian regions that has been marginalised, neglected economically, politically and environmentally in the past.

Government and oil companies operating in the area have subjected the land to penury through their neglects,” he stresses.

The convener says the fund is aimed at empowering Ogoni youth through the launch, the first phase of the development and empowerment project in the region.

“To facilitate the smooth transformation of the Ogoni youth to an embodiment of socio-economic and crime-free persons, we call on concerned entities globally and nationally to support the dream of the Ogoni Liberation Initiative.

Tanker drivers will continue work amid Coronavirus pandemic - NUPENG Joshua Bassey

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eadership of National Union of Petroleum and Natural Gas Workers (NUPENG) says its members, especially tanker drivers, will continue to lift products for supply to different parts of the country, notwithstanding the Coronavirus pandemic.

The union had on Tuesday threatened it might asked its members, including tanker drivers, fuel stations as well as depot attendants to stay at home in view of the rising cases of the virus infection in Nigeria.

President and secretary general of NUPENG, William Akporeha and Afolabi Olawale, speaking again on Friday, said the union and its members had resolved to continue their essential service of fuel supply to the nation at this trying period.

“Our great union met today Fri-

day, March 27, 2020 and carefully examined the critical roles we play in the socio/ economic landscape of our dear nation vis a vis the current rampaging coronavirus epidemic the global community is currently facing.

“Arising from our discussions we came to the conclusion that the nation needs our essential services in same manners the nation requires the services of all those in the frontlines of the fight to curtail the spread of the virus,” according to them.

The union leaders advised all members on the value chain of distribution of petroleum products for commercial, industrial and domestic uses to continue work.

These sets of workers include the petroleum tanker drivers, petrol stations’ workers, petroleum products depots workers, oil and gas suppliers, liquefied petroleum gas retailers, and others. www.businessday.ng

L-R: Oluseyi Folaranmi, vice president, customer and dealer experience, Cars45; Timi Tope Ologunoye, director, corporate services; Mayokun Fadeyibi, vice president, Consumer Business Group; Samuel Odewumi, dean, school of transport, Lagos State University; Olayiwola Giwa, faculty member, school of transport, and Mohammed Iyamu, vice president, trade, Cars45, at the launch of the Cars45 Middle-Manager Fast Track Programme in Lagos.

Nigeria dangerously exposed to oil crash Olusola Bello

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he crash in crude oil prices means volume, especially for oil-dependent Nigeria, as there will be no OPEC output limits to adhere to after March, the country can pump at will.

The recent drop in oil prices is hitting the country hard, making a big dent in government revenues and threatening the viability of upstream projects.

Experts are however of the view that even if the country decides to produce at will it may not be able to produce beyond 2.3 million barrels per day, given the fact that the country has been too lackadaisical about exploration activities. To achieve this may take a few years. They also say even at

this volume of production Nigeria would have to sell it commodity at a highly discounted rate to be able to create market for it, and the revenue from it may not make so much impact on the economy.

AccordingtoPetroleumEconomist, the country is bracing up to take a big hit from the collapse in oil prices resulting from the end of the OPEC+ agreement and the Covid-19 pandemic. Nigeria is particularly vulnerable as it has yet to fully recover from the previous crash in 2014. Nigeria’s 2020 budget is based on an anticipated oil price of $57/bl, but thedeclineinthepriceoftheBrent benchmark crude has forced the government to revise this to $30/ bl while maintaining proposed production volumes at 2.18mn bl/d, condensate inclusive.

Diran Fawibe, chairman/

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chiefexecutiveofIESL/DorisJoint Venture, says presently Nigeria can hardly produce up to 2.6 million barrels per day, which it did just for a few times in the past. He howeverstatesthatifthecountryis able to improve national production through exploration, it may beabletoproduceabove2million barrels per day.

He says producing above 2 million barrels would have to dependonmarketavailability.Toget marketsforthecommoditywould also depend on if it can give a discount to the tune of about $3 per barrel at the international market.

Seye Fadunsi, former executive director of Pillar Oil, says the country currently does not have the capacity to ramp up beyond 2 million barrels per day because it does not have the capacity.

Even if the Petroleum Indus@Businessdayng

try Bill (PIB) is passed today and investors comes into the industry for them to start drilling, development of fields and production it will take about two to three years to start seeing result, he says.

AbiodunAdesanya,managing director of Degeconek, notes that without the price war between Saudi Arabia and Russia, Nigeria had never been able to sustain it 2.2 million quota allocation given to her by OPEC, though it has always tried to move closer to it.

He attributes this situation to constant infractions on the pipeline infrastructure by militants in the Niger Delta, saying the strategy for Nigeria should be to appeal to both Russia and Saudi Arabia because it will not pay her even if she was able to ramp up a few volumes because of market availability.

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Monday 30 March 2020

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FT

FINANCIAL TIMES

World Business Newspaper

EU backs bank rule delay to spur crisis lending Brussels reassessing its own plans after one-year deferral of capital standards, says financial regulation chief Jim Brunsden

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u r o p e ’s f i n a n c i a l regulation chief has pledged to delay tough new capital rules for banks, saying that support for lending has to be the overwhelming priority in the fight against coronavirus.

In remarks likely to be well received by Europe’s financial sector, Valdis Dombrovskis said now was not the time to push ahead with standards that would force banks to raise additional equity.

He applauded moves by global regulators on Friday to defer the rollout of new capital standards by one year, confirming Brussels would make sure European banks could benefit.

“It’s a welcome development because it gives us more time,” Mr Dombrovskis, the European Commission’s executive vicepresident in charge of economic and financial policy told the Financial Times. “Our intention of course is to use this possibility,” he said, adding that the move would help ensure “that banks are financing the real economy”.

European policymakers are grappling with how to keep credit flowing during the crisis as millions of businesses put their operations on hold and the economy is braced for a deep recession.

Already now we are adjusting our work programme, postponing certain other work streams, and having an extra year here of

Valdis Dombrovskis says now is not the time to push ahead with standards that would force banks to raise additional equity © Riccardo Antimiani/EPA

course is helping Valdis Dombrovskis Governments have already introduced loan guarantee programmes, while super visors have freed up lending capacity by reducing the capital buffers banks must have to cover possible losses on their loans. EU officials note that the bloc’s economy is particularly dependent on bank financing because of its underdeveloped capital markets.

Mr Dombrovskis said Brussels would now “reassess” its policy timetable for 2020, which had included making legal proposals in the second quarter to implement

the latest round of international capital rules set by the Basel Committee on Banking Supervision.

“Already now we are adjusting our work programme, postponing certain other work streams, and having an extra year here of course is helping,” he said. “We will need to go through now and see exactly what is needed.”

The Basel rule changes, which overhaul standards for how banks should measure the risk of losses on their investments, have been the subject of an intensive lobbying campaign by the sector which has warned they could lead to an increase in capital requirements

forcing banks to rein in lending.

Regulators insist that the measures, which complete the Basel III rule book drawn up after the 2008 financial crisis, will boost banks’ resilience to shocks.

The European Banking Authority, an EU watchdog, estimated in December that the new standards could increase banks’ capital requirements by 23 per cent compared with a June 2018 baseline, triggering a shortfall in total capital of €124.8bn.

But Mr Dombrovskis said the impact would ultimately depend on policy choices made at EU level, given that the stan-

dards needed to be implemented through European law.

He pointed out that the G20 had agreed not to let this round of Basel rulemaking create a further significant increase in overall capital requirements across the sector.

“That’s something we are looking very carefully at”, he said.

Basel agreements only have legal effect in the EU once the European Parliament and national governments have approved legislation on how to apply them.

The commission is responsible for making those legislative proposals.

Global central bank and regulatory chiefs announced on Friday that they had postponed the implementation date for swaths of Basel rulemaking by one year.

The change affected several pieces of regulatory work concluded between December 2017 and January 2019.

The move means that countries now have until January 2023 to put in place many of the rules, which revise how banks should measure the capital they need to cope with credit, market and operational risks.

Measures to restrain banks’ use of their own internal models to measure capital requirements — the most contentious part of the plans — were already set to be phased in over a longer timeframe through to 2027. They would now need to be fully applied from January 2028.

Officials warn Africa is at ‘break the glass’ moment Urgent action needed to avoid human and economic catastrophe

David Pilling

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frica has reached a “break the glass moment”, an emergency in which international actors need to take drastic action if the world’s poorest continent is to avoid a human and economic catastrophe, Ken Ofori-Atta, Ghana’s finance minister, told the Financial Times.

Mr Ofori-Atta, who is also chairman of the joint World Bank-IMF Development Committee, said the two institutions had acted swiftly, but would need to do much more.

They should provide governments with liquidity support as well as money to fight the virus and debt relief, he said, adding that the coronavirus threatened to overwhelm Africa’s inadequate health systems.

Last month, Bill Gates warned that the pandemic could kill 10m Africans if it were allowed to rip through the continent and Imperial College London published a study saying that, if governments failed to act, the virus could claim 40m lives worldwide.

Mr Ofori-Atta said the pandemic would also cause economic havoc. It could wipe out 5-10 per cent of Africa’s gross domestic product at a stroke, he said, as commodity prices sank and receipts from tourism, trade and remittances shrivelled.

Moody’s on the weekend cut South Africa’s debt rating to junk, ending the investment-credit rating it had had for 25 years. Tito Mboweni, South Africa’s finance minister, said: “To say we are not concerned and trembling in our boots about what might be in the coming weeks and months is an understatement.”

Abebe Selassie, director of IMF’s Africa department, said the continent faced its deepest economic challenge in several generations.

Bilateral lenders should consider immediate debt relief, he said, while the IMF would waive debt payments for the poorest countries.

African governments must temporarily abandon fiscal austerity, Mr Abebe added. “Even with constrained fiscal space, the right thing to do is to expand fiscal deficits to www.businessday.ng

counter the immediate impact of the shock.”

Mr Ofori-Atta last week cochaired a meeting in which African finance ministers called for a $100bn stimulus package. The IMF said it was making $50bn available for emerging countries, with $10bn for low-income countries.

Mr Ofori-Atta said the poorest countries would be eligible to receive up to 50 per cent of their IMF quota — a formula that determines voting rights — but that this needed to quadruple to 200 per cent.

“The Fund and World Bank are moving quickly, the sentiments I hear from G20 finance ministers are in the right direction,” he said.

“But we need to increase the pace and increase the amounts.” By the time of the World Bank-IMF spring meetings in mid-April he expected “we should be able to have an even more comprehensive and aggressive posture”.

Charles Robertson, chief economist at Renaissance Capital, said African economies would suffer a double hit: a collapse in revenue and a need to ramp up spending

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both on emergency health measures and to counter the economic impact of lockdown measures.

In an op-ed in the Financial Times last week, Abiy Ahmed, Ethiopia’s prime minister, said that, if coronavirus were not controlled in Africa, it would quickly bounce back to the rest of the world.

Mr Ofori-Atta said that trying to contain coronavirus through lockdowns in a continent where most people were under 30 and many lived from hand to mouth threatened mass unrest. Social distancing was almost impossible when millions depended on going out each day to earn a living and bought food from crowded markets.

Ghana has nevertheless imposed a lockdown on its two main regions, including Accra, the capital, from Monday.

South Africa’s police have resorted to tear gas to disperse crowds since a lockdown there on Friday. In Kinshasa, capital of the Democratic Republic of Congo, there were reports of police beating people with canes as they tried @Businessdayng

to get on crowded buses. Several countries, including Kenya, have imposed a curfew.

Mr Ofori-Atta said Ghana, considered one of Africa’s most stable and best-run economies, would need to spend 0.5-1 per cent of GDP bolstering a health service that had proportionately one-tenth the number of hospital staff as Britain. It would also have to consider direct cash transfers — via electronic payments to mobile phones — to protect people from destitution.

Ghana was relatively lucky because it had a $900m stabilisation fund from oil revenues and had in January managed to issue a $3bn Eurobond. “Without it, we would have been in tatters completely,” he said, noting that markets had now slammed shut to African issuers.

The African Development Bank on Friday said it had placed a $3bn three-year “Fight Covid-19” social bond carrying a 0.75 per cent coupon. That showed there was a way back to the debt markets for African sovereigns, Mr Ofori-Atta said.

Monday 30 March 2020

BUSINESS DAY

44

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Big companies raise record sums from bond market in dash for cash Investment-grade borrowers topped up their coffers by $244bn even as costs soared Joe Rennison and Eric Platt

T

he world’s highest-rated companies, including Warren Buffett’s Berkshire Hathaway, Disney and the drugmaker Pfizer, have bolstered their ability to weather the economic downturn, swallowing higher borrowing costs to raise hundreds of billions of dollars of debt while lower-rated issuers struggle.

Global corporate bond issuance by “investment grade” companies has surged to $244bn so far in March, the highest monthly total since a record $252bn was sold in September, according to Dealogic. The US has led the charge with a record $150bn of new bonds sold, and $28bn has been raised in Europe. Adding in a raft of new bank bond sales from the likes of Wells Fargo and Goldman Sachs takes the global tally to $408bn this month, separate data from Refinitiv showed.

Issuance was particularly prolific last week, after central banks and governments around the world announced further supportive measures for financial markets, including the Fed taking the unprecedented step of announcing that it would begin to buy corporate bonds.

The coronavirus outbreak has prompted a general dash for cash from companies around the globe, with groups drawing down emergency credit lines alongside the

Berkshire Hathaway, the conglomerate controlled by Warren Buffett, above, came to the bond market twice in March © REUTERS

spate of debt issuance. Corporate treasurers are trying to shore up balance sheets so they can outlast any drag on revenues from the economic slowdown.

“People want to build a cushion for economic uncertainty,” said Andrew Karp, who runs Bank of America’s global investment grade capital markets business, who noted that previous weeks had seen a virtual drying-up of issuance, as alarm over the virus spread. “When you get the opportunity to access the market, people will jump through that window.”

The past week’s US corporate

issuance also made records, topping $73bn, according to the Dealogic data. The sum is extraordinary because unlike previous weeks of hefty issuance, it has not included financing for a big acquisition, said bankers.

Borrowing costs for US investment-grade companies have risen as the coronavirus crisis has threatened the creditworthiness of many issuers and caused dislocations in parts of financial markets.

The average yield on an index of investment-grade bonds run

by Ice Data Services sits at 3.9 per cent, up from an all-time low of

2.26 per cent earlier this month.

Some companies have come to market multiple times in recent weeks, despite the rising costs. Berkshire Hathaway issued a $500m 10-year bond on March 4, paying just shy of 0.9 per cent above US Treasury yields. Last week its energy subsidiary sold $1.1bn of 10-year debt at an interest rate 2.85 per cent above Treasuries.

“In uncertain times like this it is important to demonstrate you have market access and can secure liquidity,” said Tomas Lundquist, head of European corporate debt capital markets at Citigroup.

Lower-rated companies in the high-yield, or “junk” bond market have not had the same access. There have been no new high-yield bond sales in the US since March 4, while the drought in Europe has lasted more than a month.

Analysts warn that despite higher-rated companies bolstering their cash piles, rising corporate defaults could still ricochet through the economy. Around $9tn of outstanding corporate debt has built up over the past decade while borrowing costs have been low.

Companies have already begun cutting staff in an attempt to save costs, with the number of Americans filing unemployment claims in the US hitting an unprecedented 3.3m over the past week, from just 200,000 two weeks ago.

On Friday, rating agenc y Moody’s said that if lockdowns around the world are short and swift, the global default rate would reach 6.5 per cent this year. But in a more severe recession, extending into the second half of the year, defaults could surpass levels seen in the 2008 financial crisis and soar to 18.3 per cent.

“If you are [a company] reliant on cash flow from revenues and those stop then that is a severe shock,” said Atsi Sheth, chief credit officer for the Americas at Moody’s. “At the same time credit conditions would become tighter and tighter for those companies.”

The ventilator challenge will test ingenuity to the limit Manufacturers face technical, logistical and regulatory hurdles as they step outside their comfort zone Michael Pooler, Joe Miller , Hannah Kuchler and Claire Bushey

F

rom inventors to academics, carmakers and aerospace companies, a race is under way to build hundreds of thousands of ventilators: the machines that help severely ill coronavirus patients breathe that are in desperately short supply worldwide.

The numbers required dwarf the normal industry output — New York State alone has said it will need 30,000 extra machines — so big names of industry such as General Motors, Airbus, McLaren and Dyson have offered their engineering expertise or factory lines, which in many cases have slowed or halted because of the pandemic.

Yet for all their technical expertise, the question is whether manufacturers inexperienced in the field can overcome the technical, logistical and regulatory hurdles in time to deliver an enormous number of life-saving machines.

“The actual scaling up to manufacture at a great level isn’t the tricky part — it’s having the supplies and components,” said an

employee at a ventilator maker.

In some of the areas worst hit by the pandemic, crisis has sparked ingenuity. An Italian 3D printing start-up, Isinnova, has converted a snorkelling mask from the Decathlon sportswear chain into an emergency mask for hospital ventilators, based on an idea from a doctor.

To cope with the peak of infections expected in weeks, there will need to be an enormous push by industry. UK authorities are looking at ways to boost production of two existing models made domestically as well as new ones drawn up in response to the emergency. However, many of the ventilators used in Britain are imported.

UK engineering company Dyson this week said it had received a government order, subject to regulatory clearances, for 10,000 ventilators it designed from scratch in 10 days with The Technology Partnership (TTP), a consultancy with experience in medical devices.

The company’s billionaire owner Sir James Dyson has said he will pay for another 5,000.

Meanwhile, Volkswagen, whose European plants have come to a standstill, said it had a task force working to see if it could use its 125 industrial 3D printers, which www.businessday.ng

can rapidly make components and complex shapes, to make parts.

Skoda, a VW brand, has printed test parts in co-operation with local universities.

However, many manufacturing experts and medical device makers are sceptical about whether companies new to this specialised and heavily regulated sector can easily repurpose shop floors, and cast doubt on how quickly new ventilators can be made.

“Just ordering the tools, for example for the plastic moulding, for assembly, the test equipment, will take three to six months,” said Bernhard Langefeld, a manufacturing expert at consultancy Roland Berger. “If you don’t take [the decision] now, you will not have 100,000 devices in June.”

The most sophisticated ventilators used in intensive care units can cost more than £20,000 and are responsive to a patient’s breathing, ensuring “synchronisation” so that excessive pressure and gas is not delivered.

These highly specialised machines apart, a range of other options could be deployed depending on the stage of the disease, according to medical devices engineer Paul Dixon. These include transport

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ventilators, which are found in ambulances and often sell for less than £5,000.

“A device that produces some positive pressure [to keep airways open] and some additional oxygen can be very simple,” said Mr Dixon.

“You could fill that gap quite rapidly with relatively high-volume manufacturing with very little need for complex controls.”

This could take the form of a simple ventilator with a mask, similar to continuous positive airway pressure (CPAP) machines given to patients with sleep apnoea, a condition where breathing stops and starts when a person is not awake.

Mr Dixon estimates more basic CPAP devices will be needed at a rate of two or three for every advanced ICU ventilator. This opens the door to industries with advanced pneumatics expertise, such as aerospace and automotive.

But some worry about the risks of these well-intentioned efforts to fill the gap in supply.

Mick Farrell, chief executive of ResMed, a large ventilator maker that is increasing production up to three-fold, said he would rather other manufacturers helped boost their production, rather than becoming competition for scarce @Businessdayng

resources.

“When we get help offers from others like large electric car manufacturers we say: ‘Fantastic, we don’t actually need another final manufacturing production line, we need, for example, a lithium ion battery, or from an aerospace manufacturer, we need a certain part’,” he said.

One of the top three ventilator manufacturers, Hamilton Medical in Switzerland, is doubling production to about 500 a week. Among the components it sources from overseas are non-complex metal fittings, computer screens and electronic circuit boards.

“Raw materials will be a limiting factor. You don’t know if suddenly a supplier can keep up,” said Jens Hallek, chief executive.

Instead of starting from scratch, some manufacturers have turned to existing designs. GM will build approved Ventec ventilators at its manufacturing site in Indiana, donating resources at cost. The first will be delivered next month and together the companies will have capacity to increase production to 10,000 a month.

While all of the carmaker’s North American factories are temporarily closed, 1,000 staff will return to assemble the devices.

Monday 30 March 2020

BUSINESS DAY

FT

45

ANALYSIS

Migration: tales of brutality along Europe’s borders Sophisticated technology protects the frontiers but violence is also being used to deter asylum-seekers Erika Solomon

W

hen Ibrahim was caught on the Romanian side of the border with Serbia, he and his fellow asylum-seekers thought they were lucky. The guards smiled, and promised to take them to the closest city to request asylum. Instead, they drove the migrants back into the Serbian forest, donned masks and beat them with batons before speeding away.

Ibrahim, 22, protected his face with his hands, and escaped with a broken wrist. His friend, a fellow Syrian refugee, was struck on the head so hard he lost consciousness. Ibrahim cannot bring himself to tell his family what happened: after surviving air strikes, Isis and conscription, it is in Europe, he says, he reached his lowest point.

“I had no idea they’d treat humans like they do in Syria,” Ibrahim says from the Kikinda border camp in Serbia near the Romanian border. “Maybe the idea of Europe is a big lie.”

Violence, increasingly routine at the doorstep of the EU, is hardening into what asylumseekers and rights groups see as brutal, if unofficial, policy.

Interviews with 25 migrants and several aid organisations suggest beatings and “pushbacks” — the forcing of asylum seekers out of a country before their applications can be reviewed — are now systemic, despite violating EU law. The normalisation of violence grows as migrants seek new routes. Initial criticism focused on Hungary, before allegations rose in Bulgaria and Greece. In recent months, as more migrants try Balkan routes passing through Croatia and Romania, accusations of violence along these borders have soared.

“This idea of [using] violence is spreading instead of shrinking,” says Jovana Arsenijevic, programme co-ordinator for the International Rescue Committee in the Balkans. “It is a huge shame that Europe, a place that has built a

reputation as the cradle of human rights, is not treating people in a dignified manner.”

The use of these dangerous routes, she says, is inevitable when Europe has made it so difficult for asylum seekers to flee and apply for refuge legally.

Rolling back such tactics will only get harder as populism across Europe, which has grown on the back of anti-migration sentiment, politicises any discussion around rights violations. Europe’s growing tolerance of aggression became evident when Ursula von der Leyen, the European Comm i ss i o n p re s i d e nt, p ra i s e d Greece as Europe’s “shield” even as videos showed border forces using tear gas and rubber bullets, and harassing boats of asylum seekers, earlier in March.

Critics say the EU risks eroding its own human rights laws, while defenders say such crossings are illegal, and blame Turkey for ushering refugees towards Greece in a cynical bid to manufacture a new crisis. Ankara had signed a 2016 deal with the EU to reduce arrivals after more than 1m people, mostly Syrians escaping civil war, flowed into Europe almost unchecked in 2015.

Although the EU is working with Turkey to reduce border tensions, the resort to such primitive tactics comes even as EU border police adopt ever more sophisticated technologies. Surveillance helicopters, robotic camera and sensor systems and drone “swarms” are now tested on border patrols.

Most of the migrants interviewed claimed to have suffered at least one severe beating. All recalled being stripped down to their underwear, made to wait for hours on icy ground, and receiving their clothes back with shoelaces and belts removed, their mobile phones smashed.

Responsibility for the violence allegedly meted out to migrants is often levelled at countries supported by the EU for migration control, such as Libya, yet more and more EU member states are now directly complicit, with the unofficial policy spreading along www.businessday.ng

the union’s borders, say rights groups.

Ro ma n i a n b o rd e r p o l i c e say migrants detected on their territory are investigated and instructed on asylum procedures.

In a statement they said: “All the actions taken by the Romanian border guards when detecting migrants acting illegally at the border are carried out in accordance with the national and international legislation, always respecting human rights.”

But at the Serbian border camp where Ibrahim sleeps, many of the men packed on to mattresses in grimy rooms show signs of abuse: two wear casts and slings, one sports two black eyes, and another walks with a painful limp.

Since the coronavirus outbreak struck Europe, the Serbian and Bosnian militaries have locked down migrant camps, arguing it was for the safety of those housed there. But it is a reminder of how the virus may exacerbate hostility towards asylum seekers at a time when economic recession and social strife in the wake of the pandemic could trigger even more migration.

Comprehensive statistics are impossible to collect given how many migrants go under the radar, but a January study by the Border Violence Monitoring Network, a rights group in the Balkans, said over 80 per cent of 263 people it studied while documenting pushbacks in Croatia reported assault.

Frontex, the European Border and Coast Guard agency, said its patrols face violence from migrants throwing stones, as happened at the Greek border.

“This is the violence that should concern every EU citizen,” it said in comments to the FT. It added that increased deployments could reduce violence.

“Officers deployed in Frontex operations are present to support member states and to ensure the rule of law,” Frontex said.

Yet, Ms Arsenijevic argues that growing displays of force do not even act as effective deterrence — an argument borne out in inter-

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views with asylum seekers, who are vowing to keep trying. “We are like ants,” says 25-year-old Abu Laith, who, like all migrant interviewees, asked not to be identified by his real name. “You put a rock in front of us, and we’ll keep moving to get around it.”

On the night of his assault in Romania, Ibrahim marvelled at how accurately the patrol had spotted his group, right down to where they were hiding. He and his fellow interviewees were also tracked by helicopters, patrols with nightvision goggles and camouflaged robotic sensors that detect movement and alert police. Since 2016, Romanian police say they have been increasing “distance-vision equipment at maximum capacity” to prevent crossings.

Ibrahim and two other refugees also described being chased by drones while crossing a Hungarian forest. They say the objects appeared in fours, circling and pursuing them until they left the border. “It’s a strange feeling — like you’re in some kind of awful movie,” says one refugee.

Researchers from the Hungarian Academy of Science have been developing drone swarms, and Hungary was also part of the “Roborder” project supported by the EU research fund Horizon 2020. Roborder tests automated vehicles that could be used from air, land or underwater, including an option to create “swarms” to triangulate a person’s location. Critics warn such research could lead to armed automated weaponry, easing the path toward the broader use of robots that shift lethal decisions away from humans.

“These research projects are used to test aggressive new ideas,” says Mark Akkerman, from the Dutch anti-arms trade campaign Stop Wapenhandel, who researches EU border fortifications for Transnational Institute (TNI), an advocacy group. “[This will] fuel the cycle of militarisation of the borders and the use of ever more draconian methods to do so.”

The European Commission @Businessdayng

has poured money into Frontex, whose annual budget is now €420m, a more than 34 per cent rise from 2019. Its budget was just €6m in 2005. TNI argues such funding contributes to Europe’s militarisation, increasing the purchase of surveillance equipment and weaponry and, soon, troops. Last May, Frontex announced its first standalone border force, which it says could reach 10,000 by 2027 — it currently has 1,500 officers, who are seconded by member states. At the same time, it launched patrols in Albania, its first outside an EU country.

The commission says Frontex has mechanisms in place to promote and monitor respect for fundamental rights. But a 2018 report from the Frontex Consultative Forum, an independent oversight body, said “the almost negligible number of reports received by the Agency . . . raises serious concerns about the effectiveness” of such measures.

On a recent attempt to enter Hungary, one family says border patrols assaulted a young man in their group, but stopped when two Frontex guards arrived and told the migrants they had the choice to apply for asylum. “We said OK, but when the Hungarians drove us away, they dumped us [back] in Serbia,” says 19-year-old Hani, from Iraq. “We didn’t actually have the choice.”

Andras Lederer, of the Hungarian Helsinki Committee, a Budapest-based rights group, says Frontex risks being “a silent partner in the crime of breaching EU law.” Its presence can diminish violence, he says, but does nothing to prevent the trend of illegally dumping people back over the border. A Hungarian spokesperson denied border forces use pushbacks.

With migrants now spending longer navigating trickier routes inside Europe, the risk of fatalities grows. Data from the International Organization for Migration shows 148 refugees died on European soil last year, higher than previous

Continues on page 46

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Monday 30 March 2020

BUSINESS DAY

FT

NATIONAL NEWS

Venezuela faces threat of coronavirus catastrophe Oil price collapse and crumbling health system put Latin American nation at risk Gideon Long

F

or health workers on the front line of Venezuela’s humanitarian crisis, the coronavirus has added a terrible twist — a lack of masks has left them unprotected.

“Some workers are buying their own masks,” said Mauro Zambrano, a health worker and union leader in Caracas who has provided detailed information on the state of the city’s hospitals.

“You can get one for $1 which will last you a day or you can get a proper one for $7-$8. But — just imagine — we’re on salaries of $5-$6 a month — not enough to buy a single mask.”

Few countries are in a worse position to deal with Covid-19 than Venezuela. It was already reeling from US sanctions amid a worsening economic and social crisis, and has now been hit by lower oil prices which have slashed what is virtually its only legal source of revenue.

Its health system is falling apart. One recent study concluded the country was the worstprepared in the Americas to deal with a pandemic, behind the likes of Haiti and Honduras. Most clinics lack basic equipment such as gloves, soap and surgical masks and gowns — or even clean water. At the Magallanes de Catia hospital, staff are making their own masks, water is available only in emergencies, there is no soap and no disinfectant. The situation is similar at the José Manuel de los Ríos children’s hospital and at other clinics across the city.

President Nicolás Maduro pleaded with the IMF last week for a $5bn loan to deal with the pandemic, but the fund turned him down saying there was no clarity over who rules the country. With the government scrambling for cash, analysts say the chances of a military coup or perhaps a desperate civil uprising is increasing.

Mr Maduro said there have been only 113 confirmed cases of coronavirus so far but many doctors question that figure. Two deaths has been recorded.

Workers at the main maternity hospital in Caracas prepare makeshift masks with disposable blue sheets to distribute to medical staff to protect against illness © AP

“The data is centralised in one government institution so they can say or not say whatever they want,” said Huniades Urbina, president of the Venezuelan Society for Childcare and Pediatrics and the former director of a hospital in Caracas.

“This crisis has hit us at the worst possible moment. It’s arrived when the Venezuelan health system is in its worst state for 100 years.”

Analysts say that if the disease takes hold it will spread like wildfire.

“There are strong reasons to believe the worst coronavirus numbers in Latin America will come out of Venezuela,” warned James Bosworth of political risk consultancy Hxagon. “If cases begin to overrun the country, at least 100,000 Covid-related deaths should be expected over the next year.”

A study published late last year ranked Venezuela 176th out of 195 countries worldwide in terms of its readiness to deal with a pandemic.

“Their medical system wasn’t functioning even before this outbreak,” said Priya Bapat, a consultant at the Economist Intelligence Unit and one of the researchers

behind the report. “The systems are more and more overwhelmed every day. To all intents and purposes they have no capacity to address this epidemic.”

In a survey conducted just as Covid-19 hit Latin America in late February, Médicos Unidos de Venezuela, a local non-governmental organisation, asked more than 1,000 health workers how prepared their clinics were to deal with the virus.

At public hospitals, a third of respondents said they had no clean water and a further 43 per cent said supply was intermittent.

Some 57 per cent said they had no medicines to treat the symptoms of Covid-19 and 26 per cent said such medicines — along with basic equipment — were in short supply.

After the first confirmed case on March 13, the Maduro government responded swiftly and decisively, in contrast to Brazil or Mexico. He ordered the country into lockdown and grounded flights. He even stationed troops outside supermarkets to ensure no one entered without a face mask.

But stopping the spread of the disease will be difficult. Many Venezuelans say they cannot afford

to stay away from work. Increasingly, those who remain in the country have become dependent on remittances from relatives living abroad, but with the global economy reeling, that money is likely to dry up.

The collapse of the oil price will deprive the government of a huge chunk of its foreign revenue. Even before Covid-19, Venezuela was selling its oil at a hefty discount to persuade buyers to run the risk of US sanctions. With oil now trading at about $25 a barrel and the market oversupplied as the world economy shudders to a halt, that oil is virtually worthless. Russ Dallen, head of investment bank Caracas Capital Markets, said it is selling for as little as $3 a barrel.

Gasoline is also starting to run short. “It is essentially not available, and the military has taken over the few gas stations that remain open,” Mr Dallen said.

As the situation worsens, such military action is likely to increase, and could even bring about what US sanctions, street protests and political pressure have failed to achieve — regime change.

“Maduro’s inability to deal with the virus outbreak increases the

likelihood of a radical change in power dynamics, with the military taking over,” said Diego MoyaOcampos, principal political risk analyst at IHS Markit in London.

Juan Guaidó, the leader of the opposition who has been trying to force Mr Maduro from power for more than a year and is recognised by many countries as Venezuela’s legitimate interim president, said the coronavirus crisis is one more reason why Mr Maduro should go.

And yet, as Mr Bosworth pointed out, the crisis has also shown “how incapable Guaidó’s government is of doing anything other than making public comments.

They cannot import food or medicine or implement any measures to boost the economy”.

Faced with that reality, some observers said the US should ease its sanctions on Caracas in order to save Venezuelan lives. Alexander Main, the director of international policy at the Center for Economic and Policy Research — a leftwing think-tank in Washington — said sanctions “are fanning the deadly flames of the Covid-19 pandemic”.

But on Thursday the US ramped up its campaign to oust the regime by charging Mr Maduro and other Venezuelan officials with being part of a narco-terrorism scheme.

It offered a $15m reward for information leading to the arrest or conviction of the Venezuelan leader.

“The best way to support the Venezuelan people during this period is to do all we can to rid the country of this corrupt cabal,” said William Barr, the US attorney-general.

But the prospect of an orderly transition of power in Venezuela in the midst of an economic meltdown and a coronavirus epidemic is a distant one.

Diego Area at the Atlantic Council in Washington painted a dark picture of what lies in store for the country.

“The precarious state of Venezuela’s healthcare system, the uncertain state of manufacturing, the collapse of gas prices and the political conflict could result in a spiral of violence and a humanitarian catastrophe without historical precedent,” he warned.

Migration: tales of brutality along Europe’s borders Continued from page 45 years and even the 135-person toll of 2015, when more migrants crossed.

Ibrahim intended to meet his cousin in Serbia and continue their journey into the EU together.

But Ibrahim got lost in the mountains for two days, without food or water, and by the time he reached their meeting point in Belgrade, he learnt that his cousin’s body was in a freezer in Tirana, killed in a car accident while being smuggled out of Albania.

His family began a new round of scrounging for money — but this time, to bring a body back.

The tragedy only strengthened his resolve, he says. He is plotting with

friends to dig a tunnel next. “It’s not just for me, but for my family. After everything they’ve gone through, I won’t fail — I can’t fail.”

Such determination is why rights activists argue brutal border strategies do not work. In 2016, migration into Europe fell after Brussels signed a deal promising Turkey an initial €6bn in two tranches for refugee support in exchange for blocking migrant flows.

So humanitarian officials in Bosnia and Serbia were surprised by the rise in migrant numbers in recent months. But the trend underlined the original problem with the Turkish-EU deal: it left refugees stuck in another unwelcoming place, even as the problems that caused them to flee their own www.businessday.ng

countries remained unresolved.

Ankara, in addition to complaining that Europe has not sent all the promised funds, is also demanding its western allies support Turkish military operations in northern Syria after an offensive launched by Syrian President Bashar al-Assad and backed by Russia bombarded Idlib, the country’s last opposition enclave. Since December nearly 1m people have been displaced and are on the move in the northern region, heading ever closer to Turkey’s border — itself now fortified with a wall and EU-funded patrol vehicles.

Meanwhile, attacks and deportations targeting migrants in Turkey, home to the world’s largest

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refugee population of 3.6m, have been on the rise. Afghan and Syrian migrants interviewed in Serbia say this is what has pushed many to leave. According to Suleyman Soylu, Turkey’s interior minister, a total of 104,000 people were forcibly removed from Turkey last year.

But Ankara denies forcing refugees from Syria to return to the country against their will.

Ahmad, a 30-year-old Syrian, fled Turkey after being arrested for working at a hotel without a permit, something extremely difficult for refugees to obtain. For 20 days, he was held in a deportation centre, where he says officials tried to force Syrians to sign paperwork saying they were leaving voluntarily. Blan@Businessdayng

kets, sheets and even shampoo given to detainees, he says, had the stamp of the EU flag and the words “European Union” in Arabic — supplies he assumed were meant for refugees. Once released, Ahmad immediately set off for Europe, fearing next time he’d be deported.

Now he is stuck in Serbia, having tried more than eight times in two weeks to enter the EU. He is not alone. In the dingy lobby, beneath clouds of cigarette smoke, weary men and women from Africa, Afghanistan, Iraq and Syria huddle and debate various plots for crossing: from two-week treks to swimming the Danube. Two young men, preparing their 18th attempt, hold up

BD Money

Monday 30 March 2020

BUSINESS DAY

INVESTING

PERSONAL FINANCE

Cover Story

Personal finance

Why you should hold Crypto Currencies like Bitcoin, Tatcoin over Fiat Currencies

How to make money when in isolation

FOREX 2.0: All you need to know as a beginner about trading in Forex

3 survival tips for Nigerian businesses in a corona economy As the coronavirus outbreak is gradually bringing economic activities in Nigeria to a standstill, the possibility of companies recording poor revenue is becoming a closer reality.

The world is currently on the verge of a severe economic crunch that could rival the Great Depression of the 1930s, according to some experts.

The global outbreak of the Coronavirus (COVID-19) has forced most people to observant selfisolation by staying at home.

Page 48

In our article last week, we started a series on FOREX trading, and we looked at some of the basic skills and terminologies used in trading.

Page 49 www.businessday.ng

https://www.facebook.com/businessdayng

Page 51

Page 50 @Businessdayng

48

Monday 30 March 2020

BUSINESS DAY

Investing Why you should hold Crypto Currencies like Bitcoin, Tatcoin over Fiat Currencies Lucky Nwanekwu and Segun Adams

T

he world is currently on the verge of a severe economic crunch that could rival the Great Depression of the 1930s, according to some experts. The Coronavirus (COVID-19) is roiling markets, but leading economies think they can spend their way out of the coming downturn – the cost? The value of traditional currency.

Just early this week, the US Federal Reserve said it would unleashing unlimited Quantitative Easing (Push unlimited amount of money into the economy through asset purchase), the US lawmakers approved the country’s biggest-ever stimulus package of $2trillion which would put around $1,200 in the hands of consumers.

The US is not alone. From rate cuts to monetary and fiscal boosts, countries around the world are trying to boost liquidity and demand in their economies. All these money will chase limited goods in the economy since businesses have shut down, and the effect would be a surge in price.

Coming home, in response to pressures on foreign reserve the Central Bank of Nigeria (CBN) “devalued” the naira pegging official rate at N360/$ from N307/$ while it quoted the rate for foreign bonds and stocks investors at N380/$.

Automatically, Nigerians lost over 10% of their wealth in dollar terms and facing domestic inflation levels of 12.2%, the real worth of the naira is fell.

What a weaker naira means is that your fiat money would lose purchasing power over time and what it could afford last year might not fetch you that much this year.

The 17% devaluation notwithstanding, analysts believe the naira is still too strong and should be quoted at around N401/$.

What’s worse is that Nigeria with a high preference for foreign goods (both consumers and producers rely on abroad for a lot of products), imported inflation could be a concern.

Are savers losers?

Today, your money might not fetch you much interest rate if you put it in the bank.

With just 0.2% a year, if you put N10,000 today in the bank, in a year you won’t make up to N10,100. And at 12.2% inflation, your money

is down by N1,200.

Savers are getting wiped out today and you won’t make much if your money is just sitting dormant without putting it to work. This, therefore, means that investors should look for certain vehicles that can increase their spare money is invested in.

Interest rates are at its lowest today and if you really want to hedge your money or really make more money, then you need to do your research and invest in better products than just saving your money in the bank.

Bitcoin and Tatcoin as a relational hedge According to coin desk, Cryptocurrency has many value propositions, including censorship resistance, seizure resistance, and global coordination without middlemen.

Until recently, one value proposition seemed largely hypothetical – depreciation resistance (that is, a store of value immune to inflationary money printing at the whim of central bankers or politicians).

While Bitcoin fans have long noted how fiat is devalued over time, Bitcoin often appeared like a solution in search of a problem in this regard. Over the last decade , Bitcoin has grown by over 9,000,000%. It has proved itself as both a store of value and a means to generate wealth over a period of time.

The Founder of Binance tweeted about the humongous rise of the digital asset over time. CZ also suggested his followers try and imagine how high the BTC price may soar if

or when a new financial crisis breaks out and stocks plummet. CZ is not making any specific predictions, though.

The biggest returns on investment in the past decade was not real estate, any technology stocks, not gold but Bitcoin. But if you missed bitcoin investment when it was just one dollar, then something big is coming – it is Tatcoin. With just a few months to end its pre-sale, you wouldn’t want to miss investing in an asset that holds a lot of opportunities for people especially around this part of the world. This utility token is focused on simplifying payment processes for goods and services and would be available to every user on the ABiT network. This means that using Tatcoin on the ABiT platform would include discounted rates on every product and service.

Services such as real estate, payments, shopping, and entertainment would be easy to purchase with the Tatcoin.

“At ABiTnetwork, we are always looking for smart solutions to prevailing issues in the economy,” says Gaius Chibueze, CEO ABiTnetwork. See this article for more There is so much opportunity available to those that take the opportunity to invest now when the price of the asset is low.

Purchasing power of Bitcoin Won’t Erode like Fiat As the coronavirus brings China’s economy to its knees and causes global stock markets to fall, World leaders like Donald Trump urge the Fed for more quantitative easing. So much money is being printed and currently in circulation which will decrease the buying power of the U.S dollar.

Just take a look at the purchasing power of the US dollar over the last 100 years. If you had a $100 bill in 1990, that would be worth around $3.48 today. Your $10,000 would only leave you with $348. That’s a 96.4% decrease in its buying power.

Bitcoin’s purchasing power on the other hand, with its built-in scarcity and limited supply, will not erode, but increase over time.

This makes bitcoin and Tatcoin a far superior store of value when compared to fiat. What next? Stay more updated as we bring you value and information on how to hedge your money with Tatcoin and other crypto products.

About BD Money: This finance supplement is targeted at investors and other readers keen to make their money work harder.

Team Members: Lolade Akinmurele (Lead); Hope Moses Ashike; Segun Adams; Olufikayo Owoeye; Graphics: Fifen - Famous www.businessday.ng

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Monday 30 March 2020

BUSINESS DAY

49

PersonalFinance

How to make money when in isolation BUNMI BAILEY

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he global outbreak of the Coronavirus (COVID-19) has forced most people to observant selfisolation by staying at home.

And staying at home can be extremely boring especially if you are not working from home or unemployed. But being in isolation can help think of ways to make money without leaving your home during the coronavirus pandemic.

Self-isolation presents a great opportunity for e-commerce platforms. With just your tablets, smart phones, laptops and other electronic gadgets, you can make money during this coronavirus pandemic.

Here are few ways you can make money online Set up online tutoring classes With schools shut down in almost all the states in Nigeria to curb the spread of the COVID-19, parents will be looking for ways to keep their children busy learning at home. And this is what you can leverage on, by establishing your own online tutoring service. Websites like Skooli, Tutor Me and Tutor.com provide resources for entering into the online tutoring space.

And if you don’t want to use this platforms due to the fact that they provide a lower friction entry point into the market.

You could search for online tutoring gigs on a variety of other sites like Upwork, Freelancer and others.

Delivery Services People staying at home to prevent further spread of the coronavirus presents an opportunity for you to either set up a delivery app or partner with a delivery company. But focus should be on the delivery of essential commodities like groceries, pharmaceutical products and food because these are most important to consumers at the moment.

And do make sure that both the delivery agents and packages are contamination free. In other countries, companies are scrambling to hire enough workers to pick up and deliver those orders.

Launch an E-commerce site Like I earlier said, the virus has restricted the movement of people to places like grocery stores, pharmaceutical stores and restaurants. With e commerce booming, you can actually launch an e commerce platform specifically on essential commodities, backed up with delivery services.

Online trading The internet has allowed people to access the world of online opportunities.

From sales and purchase of tangible commodity, e-commerce has taken a leap further into the world of online trading.

Online trading businesses can be defined as those business ventures that deals with stock exchange and the market in an online capacity. You can conduct the business anywhere in the world. It is based on entirely digital medium. But just like any business it can both be beneficial and risky And analysts suggests on Foreign Exchange(FOREX) trading as the most appropriate to trade at the moment due to the COVID-19 and falling oil prices. For you be successful in trading, you must first learn the FOREX market, establish a trading strategy, understand the impact of FOREX leverage, Implement a risk management plan, practice with your demo account, avoid emotional trading and understand tax implications.

Start a blog You can leverage on the COVID-19, by producing entertainment and health content. You can write on gossips to keep people entertained while home and on health news on the virus. It is possibly one of the best ways to earn a passive income. www.businessday.ng

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Monday 30 March 2020

BUSINESS DAY

Monday 30 March 2020

BUSINESS DAY

Cover Story

Economy

FOREX 2.0: All you need to know as a beginner about trading in Forex MICHAEL ANI

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n our article last week, we started a series on FOREX trading, and we looked at some of the basic skills and terminologies used in trading.

In today’s article, we shall delve deeper into some more trading skills needed to trade successfully Currencies traded in the Forex Market.

There are eight major currencies traded on the exchange market and they are: USD, (United State dollars); EUR , (Euros); GBP,(Great Britain pounds); JPY,( Japanese Yen); CAD,(Canadian dolloars); AUD,(Australian dollars); CHF,(Swiss France; and lastly, the NZD( New Zealand dollars).

Currency Pricing Currency pairing is simply placing currencies side by side to leverage on the exchange rate difference based on its strength and weaknesses. For instance: (EUR/USD) – Euro/Dollar Pair, known as the “Euro” (USD/JPY) – Dollar/Japanese Yen also called the “Gopher” (GBP/USD) – British Pound Sterling/ US Dollar, often referred to this pair as the “Cable” (USD/CHF) – US Dollar/Swiss Franc also called the “Swissie” (AUD/USD) – Australian Dollar/US Dollar, known as the “Aussie” (NZD/USD) – New Zealand Dollar/US Dollar, often referred to as the “Kiwi” There are 3 categories of currencies pairing and they include Major Currency Pairing: This is when other currencies are pairing with the USD. It has a major spread.Eg GBP/USD, EUR/ USD, USD/CAD, AUD/USD, USD/CHF, NZD/USD, USD/JPY. Minor/crosses/exotic pairs: This is when other currencies are paired without the dollar currencies. They are moderate spread.

Emerging pairs: They are new and are in vogue currencies that is newly adopted but not mostly traded by some segments of experts. They have high spread. Eg USDZAR, USD/nok, USD/TRZetx Based and counter currencies (quotes) A base and counter currency relates to how currencies are paired together. For instance if A/B are two currencies, The A would be the base while the B is counter.

Put differently, the base currency is the first currency in the pairing or the currency on the left hand side.

It is seen as the currency that one takes

action upon.( Whether to buy or to sell) The quote or counter currency is the 2nd currency in the pairing.It is usually on the left hand side.

It is seen as the currency that one should take reverse action on ( whether buy or sell).

Note: you buy the strong currency and sell the weak currency.

Basic Forex terminologies Now that we have known what Forex is and how Forex trading works, it’s time to take a look at some basic Forex terminology.

Whether you read somewhere about “pips” or “spreads”, this is the basic terminology that all Forex traders should know.

PIPs – A PIP( point In price)is the smallest increment that a currency pair can change in value. It represents the fourth decimal place of an exchange rate. In certain cases, such as in pairs which involve the Japanese yen as either the base or counter currency, a PIP can be located at the second decimal place. A PIPETTE is one-tenth of a PIP, i.e., ten PIPETTE make up one PIP. Spread – A spread represents the transaction cost for opening a position. The spread is simply the difference between the buying and selling price of a currency pair (Bid and www.businessday.ng

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Ask prices), and this is usually the only fee you’ll pay when trading Forex.

Position Size – The position size is the size of your trade and represents the amount of the base currency that you’re buying or selling. The standard position size in Forex trading is called a standard lot, which amounts to 100,000 units of the base currency. For example, if you buy one standard lot on the EUR/USD pair, you’re basically buying €100,000 and selling the same amount of US dollars. Of course, you can determine how large your position size will be, with most brokers offering mini lots (10,000 units of base currency) and micro lots (1,000 units of the base currency) nowadays.

TP and SL – Take Profit and Stop Loss orders are an extremely important concept in Forex trading. A Take Profit order is used to lock in your profits once the price reaches a pre-specified level by automatically closing your open position. A Stop Loss order, on the other hand, is used to prevent large losses by automatically closing your position once the price goes against you by a pre-specified amount. Always use Stop Loss orders on all of your positions, or you will

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eventually blow your account with a single losing position. * Leverage – Leverage is a concept which is extremely popular in Forex, and one of the main reasons why so many traders are attracted to the world of Forex trading. Leverage is a loan from your broker which allows you to open a much larger position than your initial trading account balance would allow. Leverage is expressed in ratios, such as 50:1, 100:1, and 200:1, to name a few. A 100:1 leverage ratio allows you to open a position which is 100 times larger than your trading account.

Margin – When trading on leverage, your broker will allocate a small portion of your trading account as the margin for the leveraged position. A margin basically acts as collateral for the loan that your broker is providing to you. A 50:1 leverage requires a 2 percent margin, while a 100:1 leverage requires a 1 percent margin of the total position size that you’re trading. * Timeframe – Timeframes are closely related to price charts of currency pairs, and represent the amount of time that is incorporated in a single bar or candlestick on the chart. Popular timeframes include the 1-hour, 4-hour, and daily timeframes, meaning that a single bar or candlestick includes the last one hour, 4 hours, or 24 hours of trading, respectively.

Risk Management The risk management and trading psychology are the two most important aspects of attaining forex trading success. You have a great trading strategy in place but after a few trades, your capital is cut in half.

Before you know it you’re receiving that dreaded margin call! You need to protect your capital and a margin call means you lost capital. How do we protect capital? Through risk management! Risk management involves limiting your trade lot size, trading with a stop

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loss, risking only 2 to 3 percent of your account on open trades and various other techniques.

Unfortunately, many traders fail to implement risk management measures to pursue the big bucks by making risky investments using large amounts of leverage despite the high risk of losing it all. If a trader were to invest $1000 with leverage equal to 100:1, the total amount available for trading would be $100.000. This allows traders to place trades that they normally would not be able to. There are some brokers outside of the US who offer 3000:1 leverage. Unfortunately in the US, the max allowed leverage by US brokers is 50:1.

When you are seeing these Instagram traders showing the fancy cars, big houses and so forth, these traders are probably using very high leverage in hopes of hitting that home run. Sure if your trading with 1000:1 leverage you can generate a profit that’s 1000 times larger than a trade without leverage. However, don’t forget that if you aim for a profit that’s 1000 times larger, it also exposes you to 1000 times more risk, meaning you can profit more, but you can also lose more compared to trading with smaller leverage.

So after everything we just talked about, you’re ready to start living that forex lifestyle which involves blood, sweat, and tears which lead to eventual profit.

Analyze the Market and Start Trading.

The mentioned below pieces of advice will help you become a trader, even if you had no clue where you had to start. Once your account is approved, you can begin trading.

However, to ensure your success, you need to analyze the market, and there are different strat-

egies you could try.

1. Technical analysis – By reviewing charts or historical data, you can predict how the currency will move based on past events.

2. Fundamental analysis – By looking at a country’s economic fundamentals, you can use this information to make better trading decisions.

3. Sentiment analysis – By trying to analyze and predict the mood of the market, you could determine whether the market is “bearish” or “bullish.”

4. Is getting signals from experts. This will help you to earn while you are learning as adults and it also sharpen our horizon on the reality of the market in review.

There is one more thing beginners should learn before they start trading forex, and that is what kinds of orders they can place.

1. Market order – You have told your broker to execute your buy or sell order immediately at a current market price.

2. Limit order – You have specifically instructed your broker to execute a trade at a specific price or better.

3. Stop order – You make the Stop order once the market price reaches a specified stop price. Once the stop price is reached, stop orders become market orders.

Understanding Lots size.

What is a Lot Size in Forex?

In Forex trading, a standard Lot refers to a standard size of a specific financial instrument. It is one of the prerequisites to get familiar with for Forex starters.

It is the standard measurements through which you take risk. It defines your risk in the market . There are 3 basic Categories of lots size which are: ---Standard Lots (1---infinity) This is the standard size of one Lot which is 100,000 units. Units referred to the base currency being traded. When someone trades EUR/USD, the base currency is the EUR and therefore, 1 Lot or 100,000 units worth 100,000 EURs. Mini Lots (0.1----0.9) : Traders use Mini Lots when they wish to trade smaller sizes.

For example, a trader may wish to trade only 10,000 units. So when a trader places a trade of 0.10 Lots or 10,000 base units on GBP/ USD, this means that he trades 10,000 British Pounds.

-----Micro Lots( 0.01----0.09) There are many beginners or small investors who wish to use the smallest possible Lots sizes. In contrary to the Mini Lots that refer to 10,000 units, traders are welcome to trade 1,000 units or 0.01. For example, when someone trades USD/CHF with a Micro Lot the trader basically trades 1,000 USDs. www.businessday.ng

3 survival tips for Nigerian businesses in a corona economy ENDURANCE OKAFOR

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s the coronavirus outbreak is gradually bringing economic activities in Nigeria to a standstill, the possibility of companies recording poor revenue is becoming a closer reality.

With the possibility of a lockdown insight, the bottom line of most businesses in Africa’s largest economy is likely to take the most hit from the virus outbreak.

Nigeria recorded the biggest daily surge of coronavirus case on Thursday after its reported 14 positive tests. This brought the total confirmed cases to 65 with just a death compared to three recoveries.

In order to control the increasing number of cases of the outbreak, companies operating in the country have enacted a partial closure of some of their operations, forcing staff to work from home.

Non-food markets in Lagos and Abuja will come under lock and key today as both the federal and state governments sweep into action to keep the virus at bay.

According to market analysts, the move, though commendable to contain the outbreak, could put more stress on sales activities of companies, already struggling with tumbling revenue.

While the Nigeria government like its global counterparts is working in partnership with different stakeholders is to curtail the spread of the virus, there is however no confirmed cure for the Covid-19 disease.

For the meantime, economists have recommended the three following survival tips to help Nigeria businesses to ease the unavoidable impact of the virus outbreak.

Staff safety In order for companies to ensure their businesses are still in operation while also keeping their employees safe from the virus, industry experts recommended that Nigerian companies should set up a facility that can enable them to work from home.

According to Andrew S. Nevin, Partner and Chief Economist at PwC private sector need to play a major leadership role in combating the crisis like a large number of the country’s corporations are already doing.

“With the unprecedented challenge presented by COVID19, Nigeria and the Nigerian business community need to be totally focused on the health of Nigeria’s people,” Nevin said.

Other recommendation from industry

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experts included the fact that businesses need to be focused on their crisis management plans and business continuity management.

Secure business continuity The ability of companies to maximize efficiency, productivity and remodel their businesses strategy to reflect current realities is one of the survival tips cited by industry experts.

“An option would be for businesses where possible to retool their activities to manufacture essentials that would be in major demand during the virus outbreak,” Ayorinde Akinloye, a research analyst at CSL stockbrokers said.

The governor of the Central Bank of Nigeria while encouraged Nigerian businesses urged them to take “advantage of turning the seeming adversity of COVID-19 into an opportunity”.

“Review terms and conditions on commercial relationships to identify constraints.

Develop and test contingency scenarios for the workforce, supply chain and footprint to operate in a restricted capacity,” advisory team of EY said advising that companies should confirm responsibilities and delegate authorities under contingency measures.

Communicate with stakeholders Considering the virus outbreak came as a surprise to Nigerian consumers and industry stakeholders, companies are advised to create cross-functional response team to address emerging challenges and issues and also track position daily.

“Understand critical stakeholders and their priorities in the short and mediumterm, including people, commercial partners, financial stakeholders, shareholders, government and tax authorities, regulators and pensions,” analysts at EY recommended adding that companies would need to prepare engagement plan to address needs and priorities

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Monday 30 March 2020

BUSINESS DAY

Economy

Here’s what S&P’s downgrade on Nigeria means for you SEGUN ADAMS

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lobal ratings agency Standard & Poor’s has downgraded Nigeria’s credit rating further into junk territory on weak external position linked to the oil price crash, it said.

Nigeria’s long-term rating was lowered from B to B- (short-term still B) and S&P said the FG’s policy responses is unlikely to be enough to mitigate the effect of lower oil prices which will hurt Nigeria’s external and fiscal positions, and put further pressure on the foreign exchange reserve.

Junk bonds are typically rated ‘BB’ or lower by Standard & Poor’s; B is a notch lower than BB and a speculative grade.

S&P had in early March lowered its outlook on Nigeria from “stable” to “negative” after Moody’s and Fitch slammed lower rating on the country.

The latest down grade of B- is only one notch above CCC which would mean that Nigeria is currently highly vulnerable to non-payment and S&P expects default to be a virtual certainty, regardless of the anticipated time to default.

Here’s what it means for you.

Nigeria should be expecting other rating agencies to review its creditworthiness like S&P, said Omotola Abimbola, Chapel Hill Denham analyst. “Fitch rating is still around two notches above S&P at a B+, so there is a very good chance Moody’s will lower their lower their ratings too.”

Abimbola explained that ratings agencies lag market movement hence the ratings by S&P confirms the risk weaker oil prices and COVID-19 pose to Nigeria’s external and fiscal accounts which is seen in recent price of the country’s Eurobonds.

A wave of downgrades will increase cost of borrowing, not only for Nigeria but also for corporates in the country.

Importantly, as Nigeria’s borrowing cost increase and the country issues more bonds to cover for income shortage due to low oil price and demand, investment in capital projects and social investment could be hampered.

In the approved 2020 budget (before lower revision by N1.5trn), N2.45trn was

earmarked for debt service (local and foreign) compared to capital expenditure of N2.78trn. Interest fee on its Eurobond for Nigeria stood at $263m in the third quarter of 2019, according to the Debt Management Office (DMO).

This is equal to N80.5bn based on forwww.businessday.ng

mer official rate of 306/$. Given the currency adjustment to 360/$, it would cost the country N94.7bn just to pay interest fee on the same debt.

In 2020, the sixteen countries studied

by IIF will need to pay around $4.3bn in interest, compared to $1.6bn five years

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ago and only $300m ten years ago.

“Ghana, Nigeria, and the Ivory Coast alone are responsible for more than half of the 2020 total.”

For 15 of the countries studied by twothirds of an outstanding Eurobond debt of around $75bn will require repayment over the next ten years.

It costs Nigeria no less than 50 percent of its income just to pay interest on debt.

This crowds out much-needed capital investment and affects business operating environment.

In addition, a downgrade on Nigerian could worsen sentiment of foreign investors and plunge the stock market further down.

In February, foreign investors sold-off N52.37bn worth of stocks, more than two times what domestic investors sold off.

At the same time, foreign stock investors brought in only 18.97bn compared to inflow of N55.36bn from local counterpart.

Moreso, capital flight will exert more pressure on the foreign exchange reserve of around $35.7bn. This could cause a further “devaluation” and reduce your naira worth.

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Monday 30 March 2020

BUSINESS DAY

53

FixedIncome

Here’s what you need to know before buying that Commercial Paper Olufikayo Owoeye

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here has been a surge in the number of corporates approaching the debt market to raise funds through commercial paper.

Just this year, corporates such as Nigerian Breweries, Flour Mills, United Capital, Sterling Bank just to mention few, have either raised or in the process of raising a CP program.

Yinka Ademuwagun consumer goods analyst at United Capital said the rush for CP is due to the lower rate environment as corporates want to take this opportunity to meet short term demands.

According to Ademuwagun, most businesses want to stay liquid in this challenging period for businesses to continue and meet some short term demands.

So what then is a commercial paper and what should investors be looking out for when buying one.

Commercial Paper is a money-market security issued by corporates to obtain

funds to meet short-term debt obligations and this is usually backed only by an issuing bank or company promise to pay the face amount on the maturity date specified on the note.

Commercial Papers are usually issued

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for maturities between 15 days to 270 days maximum tenor, including rollover, from the date of issue.

How does it work?

For an investor in a commercial paper, you are purchasing at a discount to receive

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the full value at maturity.

For example, when you buy a commercial paper with a face value of N200,000 and an implied interest rate of 10%, you actually pay the company N190,000 and upon maturity, the company redeems the commercial paper by paying you N200,000.

With commercial paper, the yield is usually higher than for any of the other money market instruments because its repayment lies on the ability of the issuing company to honour the repayment obligation.

What should I look out for when buying a Commercial Paper?

Apart from the attractive yield, investors must check for the company’s fundamentals, asking question such as can this company survive the next one year? looking out for indices such as liquidity ratio, solvency ratio, credit rating from a reputable rating agency such as Agusto.

The yield a company attracts for commercial papers also depends on the credit rating of the company.

Commercial Paper is a liquid instrument with strong secondary market trading possibilities making it an attractive product for potential investors.

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Monday 30 March 2020

BUSINESS DAY

Market Wrap-up Here’s how the market performed last week

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ransaction on the Nigerian equity market on Friday ended the week on a high note, sustaining yesterday’s positive sentiment with a gain of 0.48%, halting the seesaw movement of alternating gains and losses of eight consecutive trading days. Today’s positive sentiment was buoyed by bargain-hunting on ACCESS, ZENITHBANK, GUARANTY and 20 other stocks. Consequently, the market breadth closed positively, recording 23 gainers as against 7 losers In summary, the All-Share Index (ASI) increased by 104.31

absolute points, representing a growth of 0.48% to close at 21,861.78 points. Similarly, the overall Market Capitalization size gained N54.36 billion, representing a growth of 0.48% to close at N11.39 trillion.

GLAXOSMITH emerged as the top gainer while AFRIPRUD emerged as the top loser.

The upturn was impacted by gains recorded in large and medium capitalized stocks, amongst which are; HONYFLOUR (+7.69%), ETI (+5.95%), ZENITHBANK (+4.13%), ACCESS (+4.07%), UBA (+3.88%), GUARANTY (+2.50%) UACN (+1.37%) and JBERGER (+0.23%).

Chart of the week

WeekAhead Ahead Week

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lobal(Monday, equity markets were bullish last week a swathe of bumper stimulus measures Week Ahead 8th April – Friday, 12th as April, 2019)

from around the globe had brought about a modicum of stability in equity markets.

In Nigeria, the Monetary Policy Committee (MPC), faced with the choice of reducing or leaving policy parameters unchanged – unanimously elected to maintain the status quo by keeping all monetary policy metrics at current levels – Monetary Policy Rate (MPR) at 13.5%; Asymmetric corridor around the MPR at +200/-500bps; Cash Reserves Ratio (CRR) at 27.5%; and Liquidity Ratio (LR) at 30.0%. As the CBN’s policy responses to tackle COVID-19 were recently announced, the MPC resolved to allow time for the measures to permeate the economy before further policy responses.

It seems the committee has lost faith in the effectiveness of a rate cut in tackling economic growthrelated problems. Rather, it expressed its confidence in utilizing other expansionary toolkits to limit the impact of COVID-19 on economic activities.

Last week, for the third straight month, Nigeria’s composite PMI grew at a slower pace to 50.2 index points. The change in the pace of activities in March (-8.3 points) is the steepest in the history of the survey. The impact of COVID-19 on Nigeria’s economy is now becoming evident. The nonmanufacturing sector appears to be the worst hit as the index contracted to 49.2 points, the first time since April 2017. All subcomponents contracted, save for Business Activities (52.2). However, the resilience in the manufacturing segment (51.1 points) was enough to keep the composite PMI afloat.

Capital markets Equities Despite pocket of gains, weak sentiments continued to dominate the domestic equities market, as the All-Share Index plummeted by 1.52percent w/w to 21,861.78 points. Consequently, the MTD and YTD returns settled at -15.3percent and -18.6percent respectively.

Analysing by sectors, significant losses recorded in the Consumer Goods (-8.1%) and Oil and Gas (-2.2%) sectors weighed on the market performance, as both indices declined. The Industrial Goods (-0.5%) index also followed suit. The Insurance (+3.3%) and Banking (+2.1%) indices were the sole gainers.

The trend witnessed this week is likely to persist, as weakening market sentiment in the face of the fast-spreading coronavirus pandemic and the weakness across global markets are expected to pressure market returns. Nonetheless, investors are advised to take positions in fundamentally justified stocks.

Money market In the coming week, inflows from OMO maturities at NGN293.75 billion are expected to hit the system. Barring any significant outflow for the weekly FX auction or mop-up by the CBN, the Over night rate to stay around the same level. www.businessday.ng

On February 27 Nigeria recorded its first confirmed coronavirus cases; a foreigner who has recovered.

Exactly a month after, the number of confirmed cases had risen to 65 (as of noon Friday).

This graph shows the sharp rise since March 12.

It took 11 days to 11 days for Nigeria to record its second case, 8 days for the third case and 1 day to add 5 more, another one to add four cases, two to add the next ten and the curve went steeper since then BUT we can flatten it by social-distancing and ensuring we observe proper hygiene.

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Monday 30 March 2020

BUSINESS DAY

55

abujacitybusiness Comprehensive coverage of Nation’s capital

Stakeholders hold talks on high internet speed in Nigeria Gift Wada, Abuja

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n line with the drive for a digital economy, stakeholders in the Telecommunications sector have delibrated on guidelines for the use of Television white space (TVWS) to provide broadband to unserved and underserved parts of the country.

The stakeholders spoke at an event organized jointly by the Nigerian Communications Commission, (NCC) and the National Broadcasting Commission, (NBC) in order to come with subsidiary legislations: that is, the guidelines for the deployment and usage of TVWS .

Ali Pantami, Minister of Communications who represented Buhari said that for Nigeria to have a robust digital economy, rural areas would need to be provided with broadband.

Why noting that the innovation technology has the ability to connect the world’s to unconnected people, Pantami said, “Television Whitespace statutorily is been given to NBC by National Frequency Management Council which I happen to be the Chairman of that council being the Minister of Communications and NCC has a mandate of broadband penetration in Nigeria and TV Whitespace is been used today in broadband particularly to penetrate unserved and underserved areas.

“It is because of this that the National Frequency Management Council charged the NCC and NBC to work together to come up with guidelines for TV Whitespace in order to provide broadband to unserved and underserved areas. I think this is key to the digital economy of Mr President. As we all know, the whole world today is about digital economy, it is dominating the traditional economy.

They are working on regulation, developmental regulation, which is the number one pillar of digital economy in Nigeria and secondly, they are working on solid infrastruc-

ture which the third pillar of digital economy” “According to Oxford Economics, digital economy today is around 15 trillion USD and it has been predicted to reach up to 60% of the world economy by 2022 according to world economic forum. So the whole world is about digital economy, it is because of this we discovered that you cannot promote digital economy without broadband and if you look at our unserved and underserved areas, the earlier we reach out to them by providing broadband the better for the digital economy.”

Meanwhile, Umar Danbatta Executive Vice Chairman of NCC assured that within six months to one year, Rural area dwellers will enjoy high internet speed as according to him, the innovation would help reduce poverty in the country and foster connectivity: “Nigerians especially those living in rural communities should expect high speed internet as well as with the volume that is needed to facilitate access to high speed internet.

These are the two issues and this is what broadband is all about.”

“There is going to be gradual alleviation of poverty, improvment in learning, we will build through this effort a sustainable way of sharing prosperity. It will also make the society more open and cohesive. Timeline for this to come will be Minimum 6 months and maximum 1 year.”

However, President of the Association of Telecommunications Companies of Nigeria, ATCON, while briefing journalists on the advent of TVWS revealed that coverage of 4g will be 90% by 2025: “This journey started about 18 months ago when we collaborated with the former Minster of Communications, and we intervened to establish the TV Whitespace.

One of out members took up the mantle to draw the attention of the possibilities and potentials that this technology gives to those that are still underserved and unserved.

COVID-19: CGMi Abuja Bishopric suspends services around Abuja Cynthia Egboboh, Abuja

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hu rc h o f G o d Mission international (CGMi) on the heels of the scourge of Corona virus (COVID-19) in Abuja and the nation at large has announced the suspension of its services.

Festus Akhimien, Bishop, CGMi Abuja Bishopric headquarters, in a statement signed by the Resident Pastor, Alex Ibeakuzie said

that in accordance with the federal government directive on public gathering, the global office has directed suspension of Church activities nationwide.

“All services including the Home fellowship should be stopped for now.

Every services henceforth will be online”.

The Bishop urged the church to remain focused and connected to the Almighty God who is a father, fortress and strength. www.businessday.ng

COVID-19: FCTA begins fumigation of Abuja, sensitizes traders James Kwen, Abuja

T

he Federal Capit a l Te r r i t o r y Administration (FCTA) has commenced fumigation of some parts of the territory, as part of measures to curtain the spread of coronavirus in the nation’s capital, Abuja.

In order to achieve a hitch free exercise, the FCT Minister of State, Ramatu Tijjani-Aliyu, took sensitization awareness campaign to Gwarinpa market, where she appealed to traders to vacate the market for the period of the fumigation exercise.

T h e Mi n i s t e r, w h o spoke in the language

of the people (pigin and Hausa) told the traders that the coronavirus is not only real but contagious, just as she appealed to residents to abide by the preventive measures outlined by the relevant authorities.

While reacting to sit at home order, Aliyu threatened that the FCT Administration may be forced to impose curfew on the city if residents fail to comply with social distancing rule in market places and other social or religious gatherings across the territory.

According to her, “If the situation continues like this, we will be forced to impose a curfew, that is why I came out myself

to monitor and appeal to their conscience to vacate the market especially those not selling food stuffs and other essential commodities.

“I have called the Commissioner of Police myself to ensure that the enforcement team commence enforcement immediately.

We want to fumigate this market, but people refused to quite the market, making fumigation difficult for government. I am personally out to see things for myself.

“I appeal to citizens and residents to comply with the preventive measures outlined by government. Please comply and vacate the market to make

job easy for government because inhaling this substances could be injurious to your lungs. We are appealing that the traders should stay at home for this period of fumigation.

“Government is aware of the economic situation and it is not in our best interest to destroy your goods. Please stay at home and as a mother, I feel for you”.

Aliyu assured that the FCT authorities will fumigate the major markets, parks and religious centres in the city centre and other satellite towns in the territory as one of the steps to prevent the spread of the dreaded coronavirus.

FCT Minister, Muhammad Bello and FCT Minister of State, Ramatu Tijjani-Aliyu, at a briefing on the containment of covid 19 in the nation’s capital, Abuja.

Nigerian Military deploys strategies to tackle spread of Coronavirus Godsgift Onyedinefu, Abuja

I

n response to the ongoing fight against the spread of the Coronavirus disease, the Armed Forces of Nigeria has developed a twopronged approach to fight the pandemic, namely; the medical and security approaches.

The Coordinator, Defence Media Operations who made this known in Abuja explained that the medical approach is the deployment of military personnel in the aid of all Ministries Departments and Agencies of

the Federal Government through the provision of land, maritime and air assets, for transportation of emergency cases and medical supplies. “ Fu r t h e r m o re, u n der the medical aid, we have 17 medical facilities spread across the C o u nt r y , w h i c h hav e been designated for isolation and treatment of confirmed cases of the COVID-19. We have also concluded plans to recall our retired medical personnel to complem e nt t h o s e i n a c t i v e service,” he said.

On Security Related

https://www.facebook.com/businessdayng

Support, Enenche explained that the Armed Forces of Nigeria will activate its Disaster Response Units across the Country in conjunction with National Emergency Management Agency.

These units, according to him, will be responsible for security management of emergencies other than medicals.

Meanwhile, the Armed Forces said it has destroyed some structures belonging to elements of the Islamic State of West Africa Province (ISWAP) in air strikes conducted at Muktu in the Northern @Businessdayng

part of Borno State.

B e r n a r d O n y e u k o, Acting Director Defence Media Operations explained that the mission was executed by the Air Component of Operation Lafiya Dole on 25 March 2020, as part of the ongoing subsidiary Operation Decisive Edge.

“A c c o r d i n g l y , O p eration Lafiya Dole dispatched its fighter jets to engage the identified compounds, scoring accurate hits leading to the destruction of the structures as well as the neutralization of their occupants”, he said.

STARCOMMS PLC

J. OLIZ ENERGY LIMITED FARGO PETROLEUM & GAS LTD

PEACE MARINE ENERGY LIMITED

2

3 4

5

www.businessday.ng

DISCOVER & COMPANY LIMITED

10

OCHE O.MARY; ADEPOJU S. AYODEJI ILOLO GIFT AMAKINO

15,AKWOR STREET RUMUOMO, 4, EJIM STREET RUMUOMASI

NIGERIAN PRISON SERVICE, PRISONS VILLAGE, BILL CLINTON DRIVE, AIRPORT ROAD, ABUJA

JAMES AKPOMIMIE HOUSE, NO 6 POWELL STREET, AKA AVENUE EFFURUN

ARIA COMMUNITY CITI BANK LIMITED

TREDAS LIMITED

ELENWO BESTMAN

NIGERIAN PRISONS SERVICE MULTI­PURPOSE COOPERATIVE (PRISCO)

GREAT BRAIN RESOURCES

MPN & EEPNL EMPLOYMENT AGENCY LTD

F.M.P.H.J VENTURES

15

16

17

18

19

20

OLD ENUGU/OSHA ROAD BOX 2959 ENUGU

https://www.facebook.com/businessdayng

KM 16 PH ­ABA EXPRESSWAY CESIDE CRUSH ROCK PHC

2 UDOFIA STREET EKET AKWA IBOM

5 OIL OF JOY CLOSE WILSON DRIVE BOROKIRI PHC

ONDO WEST LOCAL GOVT EDUCATION AUTHORITY, ONDO

ISLAMIC TRAINING CENTRE MADALLA

ARCHKEN LIMITED DUAL TRANSACT GLOBAL SERVICES LIMITED

JEFFLOC SERVICES NIGERIA LTD

SHOSKY TECH INTER LIMITED

ARAWA INTERNATIONAL SCHOOLS LTD TEVOLI ENTERPRISES LIMITED GODWIN ASEMOTA NIG. LTD FRONTIER MERCHANTS NIGERIA LIMITED TIMELY­LV NIGERIA ENTERPRISES CHOKO WORKS & SERVICES POMO WORKS AND SERVICES

FULLHAM INTEGRATED CO. LTD

INTERIORTRONIX NIGERIA LIMITED

ONDO WEST LOCAL GOVERNMENT EDUCATION AUTHORITY

DE­SHADOW ASSOCIATES NIG LTD

1ST MEK GLOBAL SERVICE LTD

RISSUN NIGERIA LTD

CRITICAL CARE MANAGEMENT COMPANY LTD

25

26 27

28

29

30 31 32 33 34 35 36

37

@Businessdayng

38

39

40

41

42

43

OVERDRAFT

CHIEF ERIC OGUOMA­SORONNADI DR. ADEKUNLE TINUBU; TINUBU TITILOLA

T3, MARIMPEY IMPERIAL GARDEN ESTATE WORKS YARD RD, GRA IKEJA, LAGOS

JOHN SADO MAJI, MRS. UNEKWU MAJI, MISS LADI OKOLO SUNDAY OKOLO IPINMORITI OLUYINKA ANIKE, IPINMORITI FELICIA ANJOLA, PINMORITI ESTHER FOLAKE, IPINMORITI VICTOR GBOYE

TERM LOAN

TERM LOAN

TERM LOAN

OVERDRAFT

TERM LOAN

TERM LOAN

ORUBO IBINABO JACK, MBAA LAWRENCE KELLY ORUBO, INYECHIKA DOREEN IBINABO JACK, RACHEAL IBINABO JACK AKINOLA J. O, IFANIKA OLAYEMI, ONIYE FOLAKE I

TERM LOAN

ILOLO GIFT AMAKINO

TERM LOAN TERM LOAN TERM LOAN TERM LOAN OVERDRAFT TERM LOAN OVERDRAFT

TERM LOAN

TERM LOAN

OVERDRAFT TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN

OVERDRAFT

TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN

OVERDRAFT

TERM LOAN

TERM LOAN

OVERDRAFT

17­Dec­2015

28­Dec­2012

11­Feb­2013

9­Dec­2011

9­Sep­2011

28­Aug­2014

21­Jul­2010

29­Nov­2012 31­Aug­2012 26­Jan­2011 19­Dec­2013 25­Jan­2013 21­Jul­2010 25­Jan­2013

20­Aug­2010

29­Jun­2012

7­Jan­2013 11­Aug­2009

19­Jun­2014

10­Mar­2010

23­Oct­2008

08­Oct­13

15­Aug­2011

5­Oct­2009

17­Mar­2014

29­Jul­2009

8­Mar­2010

1­Jul­2013

5­Sep­2007

8­Feb­2007

31­Jul­2012

11­Jan­2013

4­Jan­2013

31­Mar­2008

14­May­2009

16­Jan­2016

29­Nov­2013

10­Apr­2013

31­Jan­2012

30­Dec­2014

28­Sep­2014

21­Oct­2010

20­Nov­2013 2­Aug­2013 26­Jan­2013 18­Dec­2013 31­Dec­2013 21­Oct­2010 31­Dec­2013

20­May­2011

17­Jul­2012

31­Dec­2013 11­Aug­2010

28­May­2020

5­Mar­2011

24­Oct­2011

7­Oct­2014

16­Aug­2011

5­Oct­2011

30­Apr­2015

28­Oct­2009

28­Jul­2014

31­12­2013

31­03­2008

31­12­2009

30­Jan­2013

31­Dec­2013

31­Dec­2013

30­May­2008

17­May­2009

4­Jun­2013

31­Dec­2013

20­Jul­2016

25­Oct­2016

29­Feb­2016 14­Jan­2013

31­Aug­2007

30­Nov­2013 30­Nov­2013

EXPIRY DATE

257,964,514.30Dr

230,397,595.00Dr

231,018,023.87Dr

231,676,081.85Dr

237,226,005.44Dr

251,388,159.65Dr

256,718,906.52Dr

296,651,935.35Dr 285,377,510.86Dr 273,066,035.31Dr 272,445,234.00Dr 256,770,938.38Dr 256,707,274.51Dr 254,290,834.44Dr

296441827.90Dr

300,526,324.04Dr

341,398,865.96Dr 302,520,229.77Dr

553,090,016.15Dr.

352,445,559.87Dr

372,490,726.18Dr

438,407,438.25Dr

457,403,161.12Dr

449,277,672.25Dr

515,877,902.32Dr

549,152,202.11Dr

549,062,103.84Dr

63,228,011.60Dr

569,911,867.86Dr

642,760,590.28Dr

727,611,891.58Dr.

796,839,655.40Dr

812,328,236.69Dr

1,251,545,586.95Dr

1,935,726,704.28Dr

4,570,374,524.87Dr

2,400,440,279.37Dr

2,687,972,804Dr

2,462,726,031.13Dr

8,245,101,675.57Dr 4,833,914,669.45Dr

13,022,638,199.27Dr

36,404,361,460.80Dr

AMOUNT

OUTSTANDING

BUSINESS DAY

9 ABDUO DIOF STREET, OFF KWAME NKRUMAH CRES, ASOKORO, ABUJA

21, AGBOOLA STR MAFOLUKU OSHODI

PLOT 78 RALPH SHODEINDE STREET B.C.A. ABUJA ABUJA

13 DDPA HOUSING ESTATE OGBORIKOKO WARRI

ALH. ABUBAKAR ARAWA, ABDULLAHI ABUBAKAR EDET EFFIONG AKPAN, GEORGE ROBERT AKPAN GODWIN ASEMOTA IBRAHIM USMAN, HAWA MOHAMMED DAHIRU OGAGA OGBAKPAH OKORODUDU ISAAC AKPOS OKORODUDU ISAAC AKPOS

OLUSEGUN SOKAN

USTAZ ALFA BOLOGI UMAR, HAJIYA HAUWA SHA'ABA UMAR, MALLAM BADAMASI AYUBA TARDA EMGR. ARCHIBONG EKENG, MR. KESTER JONAH PAUL DUNIA, MRS. IBIENE FAVOUR DUNIA, PAUL DUNIA JNR. CHINDA UCHENNA JEPHET CHIZI WILLIAMS, CHINDA PRINCE OCHIZICHIBUIKE UCHE WILLIAMS, CHINDA OSARUCHI FLORENCE UCHE WILLIAMS(MRS.), CHINDA CHIOMA JUDITH UCHE WILLIAMS

PLOT 161B MADALLA,11,13 AND 15 ISLAMIC CRESCENT, MADALLA PMB 4141, SULEJA NIGER STATE SAMCO HOUSE MBIOHO­ OKU, UYO AKWA IBOM STATE FLAT 2 ALIOLU ESTATE MANGROVE LANE WOJI

ALONG KWADON ROAD GOMBE GOMBE STATE 4 NSIT LANE UYO 136 NEW LAGOS RD NEW BENIN AZ 44 BAKORI ROAD KADUNA NO 4 EMORE STREET OFF AIRPORT ROAD EFFURUN 6 POWELL STREET OFF AKA AVENUE WARRI NO 46 AIRPORT ROAD EFFURUN

ENGR. (CHIEF) EFEKODHA ANTHONY ONOMUEFE

NO. 459 NNEBISI ROAD ASABA

ALHAJI MOAMMED ABDUL AHMED

ROYAL CAT INTERNATIONAL NIG. LTD

24

38 WAREHOUSE ROAD, YINKA FOLAWIYO PLAZA, FOURTH FLOOR APAP A, LAGOS

CITY SYSTEMS GENERAL MERCHANTS

ONORIBHOLO OKPAIBHELE, BOSE OKPAIBHELE

MRS. BLESSING OFORIBO

MKPAORO ISRAEL

N/A

SENATOR ABDULLAHI ADAMU, CHUKS OKORONKWO, ALKALI HADIZA,

23

CHIEF OBINNA M. J . EZEOFOR, BEN ALAKWU MRS. EZINNE OKOROAFOR, OBI CHRISTIANA, AUSTIN IBANGA UDO

ALONG GAUTA­NIKE ROAD. KEFFI, NASARAWA STATE.

95, MISSION ROAD BENIN CITY

AREBS RESOURCES

KEFFI FLOUR MILLS LIMITED

21

22

200 BONNY STREET NEWLAYOUT PHC

20 RCC ROAD EKET, UYO

1ST FLOOR, SUMMIT HOUSE, 6 AJELE STR, LAGOS

SMART ANENE, PATRICK OKERARO, OYIBO EMMANUEL, BEN OPARA

MR ALEX KOMBO, MR PROSPER ALEX KOMBO

OVERDRAFT

ORIANZI EMMANUEL ONDOTIMI FRANK, SALIHU ABDULLAHI OBEITOH ANDY ENOMIE IKEKHIDE

14

NO 13 OBIDIANSO STREET MILE 2 DIOBU PORT­HARCOURT

TERM LOAN

ALEX & TUBMAN NIGERIA COMPANY LIMITED

TERM LOAN

DIKEOMA OKAFOR, IVUOMA S. OKAFOR

SELTEC INVESTMENTS LIMITED

23/29 ABIBU OKI STREET, MARINA

1­Apr­2013 22­Nov­2012

OVERDRAFT TERM LOAN

21­Jul­11

13­Jul­2015

31­Dec­2015 20­Dec­2012

TERM LOAN

TERM LOAN

TERM LOAN OVERDRAFT

6­Oct­2002

1­Nov­2013 1­Nov­2013

TERM LOAN OVERDRAFT OVERDRAFT

DATE GRANTED

TYPE OF FACILITY

MR. OSCAR IGBOKWE, LINDA IGBOKWE, SUNDAY IKENNA IGBOKWE NNENA ADAEZE IGBOKWE

ELI EL­KHAZEN, NICOLAS YAZBECK

12

8 CIRCULAR ROAD, GRA PHASE 1 PRESIDENTIAL ESTATE, PHC

2 ABA ROAD PHC

NO 12 APAPA OSHIDI EXPRESSWAY OLODI APAPA LAGOS

3 OLAGUNSOYE OYINLOLA ABACHA ESTATE, IKOYI, LAGOS

NO2 RD 2 CIRCULAR RD PRESIDENTIAL ESTATE PHC

ALONG GAUTA­NIKE ROAD. KEFFI, NASARAWA STATE.

SENATOR ABDULLAHI ADAMU, SADDIQAH ADAMU MOHAMMAD, NURAINI ADAMU, SHETIMA MUSTAPHA, YUSUF NJIE, CHUKS OKORONKWO ALHAJI M.B. ABDULLAHI, HAJIYA SAFIYA ABDULLAHI, HADI ABDULLAHI, MUNLADI ABDULLAHI

MR. ALI ABUBAKAR JIBIA

OBI UJU; ALILIEKE EBERE; OLISA EMEKA IKEMIFUNA OLUSEUN OGUNBAMBO; OLAMIDE OGUNBAMBO

CHIEF MAAN LABABIDI; LABABIDI OMAR; EDWARD PAUL; AMINU DANTATA TOJUDEEN; OGBECHIE CHRIS; OLADOKUN OLUSOLA

STARCOMMS HOUSE . PLOT 1261C BISHOP KALE, VICTORIA ISLAND, LAGOS

36, INTERNATIONAL AIRPORT ROAD, MAFOLUKU NO 2 OLAMIJUYIN AVENUE PARK VIEW ESTATE IKOYI LAGOS PLOT 23, FURO EZIMORA STREET, OFF MOBOLAJI JOHNSON STREET, LEKKI PHASE 1, LAGOS

GILIAN RALSTON JORDAN; NIGEL CHRISTIAN GAUTREY

DIRECTORS

14/15 MOUNT HAVELCOK, DOUGLAS, ISLE OF MAN

ADDRESS

13

SANOR ENGINEERING NIGERIA LIMITED

SAIDON AFRICA LIMITED

9

11

ABSAF & CO NIGERIA LIMITED

ASTERA ENGINERING LIMITED

7

8

NAGARI INTEGRATED DAIRY FARMS LTD

KARINGTON TELECOMS

1

6

NAME OF OBLIGOR

S/N

The listed debtors are hereby advised to engage the Bank for possible resolution of their unpaid obligations

List of FirstBank Delinquent Debtors

Monday 30 March 2020

A55

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https://www.facebook.com/businessdayng

@Businessdayng

JOMEG NIGERIA COMPANY

103

SURE AGE RESOURCES LIMITED

99

GARTEN ENERGY COMPANY

KOLAWOLE ATOLAGBE ENTERPRISES LIMITED VALTRIF STONES & MABLE LTD

97 98

102

RANGANIS LTD

96

SUEGS SERVICE LIMITED

ALH. ABDULLAHI IBRAHIM & SONS LTD

95

85 KUBITO TECHNICAL SERVICES LTD

ABUOMA ELECRONICS CONIG

94

100

FULAKU NIGERIA LIMITED YERI MUSA MADUGU

92 93

101

OLUDITIS NIGERIA LIMITED

91

KENT­REUBYS MILLS LIMITED

89

INIEM INTEGRATED CONCEPT LTD

FIMARC UNIVERSAL SERVICES LTD

88

90

116 CHOBA NTA RD, PHC

86

10 AKUKWOT STREET, ORON

18 ITU ROAD UYO

MERCY IFIM AKPAN

NIMITEIN AFIBEBOALA

PRINCE AKPAN OKON

ELDER SAM INYANG, ELDER SUNDAY USEN

SAMUEL ITAMA

1. DR. ASHRIEL A ZABSS 2. DILHATU ASHRIEL 3. CHONGMOBNU ASHRIEL KOLAWOLE ATOLAGBE FRANKIE EYAMBA

ABDULLAHI IBRAHIM

ABUCHI CHRISTIAN NWAZULU

OLADUTI OLALEKAN – PRIME MOVER, OLADUTI AYOMIDE OLADUTI YETUNDE ALH. ABUBAKAR ARAWA, ABDULLAHI ABUBAKAR YERI MUSA MADUGU

1. MBOHO INIOBONG ERNEST 2.MBOHO ANIEFIOK ERNEST 3.MBOHO ENO ERNEST

KUNLE OLOYEDE; YOMI OGUNTOYINBO

IFEANYI OGBONNA

IFEANYI OGBONNA

DOUGLAS IGBINOSA

CHUKS KIZZITO UGOCHUKWU; UDOGU DANIEL ORJICHUKWU OJIKA JUSTUS ANTHONY EDEDJOR

CHIJIOKE CHIEDU IYIZOBA; EBUBECHUKWU IYIZOBA

ELD.EFFIONG NYA UDO

AFIBEBOALA DIMITEIN LOVE AJOKU ILOLO GIFT AMAKINO OKORODUDU ISAAC AKPOS

MRS. EFE OSAZUWA

ILOLO GIFT AMAKINO

HENRY BOBBY ADJEBREFE

CHIEF SAMUEL ARHERE; CHIEF DUKE ARHERE

OMORUYI JANE E, LAWSON NGOWARI E

ANTHONY EDEDJOR

MR.OGHENOVO O.OLORI

IDAKWO ADAMS AKPAI IGBINOSA AIFUWA FAITH, NGOWARI ROSELYN LAWSON, TABA JULIET HART YETUNDE MOGAJI, ABIMBOLA KUDIRAT ADENEKAN IDAKWO ADAMS AKPAI, TOJU ADAMS IDAKWO MR. PATRICK ADEKUNLE & DR. CHARA ADEKUNLE. JACKS BECKY IBIBA, WILLIAM WHYTE ZOE, WILLIAM WHYTE VERA WILLIAM WHYTE WILLIAM MR. JUSTUS OJIKA, OKWUDIRI GIFT, MICHEAL ODUNZE BASSEY AKPAN UDOUWEM; MBOTIDEM BASSEY UDOUWEM AIRUEGHIAN JOHN, AIRUEGHIAN JOYCE AKPANIMOWO EFFIONG; ETIM OKON FRANK; BASSEY FESTUS; ONYILO OGWU OMOTAYO KUFORIJI ADJADJE A CHRISTOPHER, CHRISTOPHER O ADJADJE MOSES A. OJO, AYANLEYE OJO, DANJUMA MOHAMMED OJIKA JUSTUS

ADAMS IDAKWO AKPAI, TOJU ADAMS IDAKWO, ARIDA TOJU ADAMS

ENGINEER IKPONWOSA OSUNDE

IGBINOSA AIFUWA DOUGLAS, IGBINOSA NGOWARI ROSELYN, IGBINOSA IYIOSAYI PETER UKAH GERALD; UKAH CAMILLIUS; UKAH LOUIS CHIEF HENRY I IKOH ELEMCHUKWU IDU OJIKA JUSTUS, OJIKA CHARITY AKPEH UFUOMA S ADELEKE ADENIYI DR OPEYEMI AKEJU, MR LOLA OLUJOBI, HON SEGUN OLA MR TOPE OMOJOLA ENG. TIMOTHY O. MICHAEL, PRINCE ANIAKAN, KINGSLEY T.MICHAEL

DIRECTORS

OGCF

LPO FINANCE FACILITY

CONTRACT FINANCE

CONTRACT FINANCE

INVOICE DISCOUNTING FACILITY

OVERDRAFT TERM LOAN

OVERDRAFT

OVERDRAFT/TERM LOAN

OVERDRAFT/TERM LOAN

TERM LOAN OVERDRAFT

OVERDRAFT

OVERDRAFT

TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN TERM LOAN TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN TERM LOAN OVERDRAFT OVERDRAFT

TERM LOAN

TERM LOAN

OVERDRAFT

TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN TERM LOAN OVERDRAFT TERM LOAN

TERM LOAN

TERM LOAN TERM LOAN TERM LOAN

TERM LOAN

TERM LOAN TERM LOAN TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN

TERM LOAN

OVERDRAFT

TERM LOAN OVERDRAFT TERM LOAN TERM LOAN TERM LOAN TERM LOAN

TERM LOAN

TYPE OF FACILITY

17­Nov­08

12­Sep­14

27­Mar­14

14­Apr­14

30­Sep­14

1­Sep­2010 3­Aug­2007

13­Mar­02

28/02/2013

05/01/2010

26­Jan­12 26­Aug­99

30­Dec­2015

22­Oct­2014

10­Nov­2014

18­Nov­2014

18­Nov­2014

13­Nov­2014

18­Feb­2015 30­Oct­2014 25­Sep­2014

5­Dec­2013

30­Dec­2013

18­Sep­2014 29­Sep­2014 25­Jan­2013 25­Jan­2013

10­Feb­2016

27­Dec­2009

28­May­2014

23­Jan­2015

13­Oct­2015

9­Dec­2014

26­Jan­2015

8­Feb­2007 22­Sep­2014 9­Dec­2011 17­Dec­2014

29­Aug­2014

28­Nov­2014 5­Dec­2013 12­Nov­2014

28­Nov­2014

15­Jan­2013 28­Oct­2014 25­Nov­2014

28­Nov­2014

11­Nov­2014

27­Oct­2014

18­Sep­2007

14­Mar­2013

24­Oct­2012

23­Mar­2015 3­Sep­2011 21­May­2012 29­Dec­2014 19­Mar­2012 24­Sep­2014

27­Nov­2014

DATE GRANTED

01­Sep­11

31­Dec­16

20­Nov­15

31­Dec­16

31­Dec­16

1­Sep­2011 26­Mar­2010

31­Mar­2003

28/01/2014

30/04/2011

08­Sep­12 24­Jun­2012

29­Dec­2016

29­Oct­2016

2­Feb­2016

17­Jan­2015

17­Jan­2015

12­Jan­2015

17­Apr­2015 29­Jan­2015 4­Feb­2015

4­Jan­2014

29­Jan­2014

18­Dec­2014 28­Oct­2014 31­Dec­2013 31­Dec­2013

9­Mar­2016

28­Mar­2010

27­May­2015

14­Mar­2015

15­Feb­2015

8­Feb­2015

23­Feb­2015

31­12­2009 23­Oct­2014 31­Jan­2012 16­Feb­2015

28­Feb­2016

30­Dec­2014 7­Feb­2014 11­Jan­2015

27­Dec­2014

22­Apr­2013 30­Jan­2015 22­Jan­2016

27­Dec­2014

12­Jan­2015

28­Nov­2014

27­Oct­2007

19­Jun­2013

31­Oct­2012

25­Apr­2015 31­Dec­2011 30­Aug­2012 28­Jan­2015 14­Jun­2012 23­Oct­2014

27­Dec­2014

EXPIRY DATE

110,502,723.53Dr

116,051,615.71Dr

130,916,283.67Dr

160,579,282.76Dr

187,994,330.06Dr

109,493,567.55Dr 262,702,126.19Dr

168,374,508.06Dr

212,765,960.42Dr.

153,512,503.95Dr.

104,807,070.93Dr. 126,347,408.62Dr.

96,835,294.90Dr

100,509,559.70Dr

104,895,407.51Dr

124,411,983.75Dr

129,807,440.42Dr

136,109,576.33Dr

128,831,692.94Dr 137,781,021.07Dr 136,634,373.55Dr

146,888,442.31Dr.

147,701,795.93Dr

152,860,238.75Dr 150,864,206.55Dr 142,691,738.01Dr 148,507,302.70Dr

153,255,262.16Dr

145,978,705.52Dr

154,175,951.04Dr

154,465,867.06Dr

155,306,769.94Dr

155,381,826.83Dr

131,613,186.45Dr

157,120,501.21Dr 163,169,617.93 Dr 158,430,951.77Dr 157,430,189.19Dr

168,032,071.46Dr

176,312,039.82Dr 170,820,902.02Dr 169,929,025.99Dr

179,855,211.47Dr

183,054,673.86Dr 182,817,867.24Dr 142,239,771.63Dr

183,102,031.77Dr

196,341,451.30Dr

196,446,973.97Dr

186,793,526.93Dr

202,431,820.36Dr

205,034,464.30Dr

214,751,977.40Dr 209,176,093.06Dr 218,835,827.53Dr 211,700,364.29Dr 210,992,192.88Dr 207,814,011.36Dr

225,759,421.51Dr

AMOUNT OUTSTANDING

BUSINESS DAY

98, NSIKAK EDUOK AVENUE, UYO

33 ORON RD UYO

100 ATABONG RD EKET

39 DOSUMU STREET LAGOS ISLAND, LAGOS. FLAT 2,AB MARTINS EST, 205 OLD ODUKPANI RD.

51 LOCAL GOVT. SHOPPING COMPLEX

No20, PANTAMI NEW EXTENSION, ABUJA QUARTERS,GOMBE

ALONG KWADON ROAD GOMBE GOMBE STATE PATHEI COMP NIG LTD MICHIKA, ADAMAWA STATE ADJACENT AA HARUNA BOOKSHOP, SABON LINE GOMBE, GOMBE STATE

13B, NWAOMA CLOSE, OFF ADA GEORGE RD, PHC

11 MBARAJA STR, RUMUOLA RD./ 11 INDUSTRY RD., PORT HARCOURT

KLM 2, IJEBU IGBO ORU ROAD, IJEBU IGBO, OGUN STATE

116, NTA ROAD, CHOBA MGBOUBA PHC

PLOT 27 TRANS­AMADI IND LAYOUT, PORT HARCOURT

FANRI EXTOL SOLUTIONS LIMITED

AZIMAVETH MADRECK NIG LTD JOPAL CONTRACTING COMPANY TONY­ARIES NIGERIA ENTERPRISE

82 83 84

NO.87 HIGH TENSION LINE, ANUA, UYO NO. 295A SURULERE WAY, DOLPHIN ESTATE, IKOYI, LAGOS. NO 22 MANNS STREET, OWERRI 77B WOJI RD. GRA PHASE II PORT HARCOURT NO 236 WARRI/ SAPELE RD, WARRI

AGROGFEEN RUBBER PROCESSING INDUSTRIES (WEST AFRICA) LTD

DEVON ENERGY

81

39 LAGOS ST, PORT HARCOURT 2 EJEKWU CLOSE OFF RUMUMINI RUMUOKUTA PH 6 POWELL STREET OFF AKA AVENUE WARRI DELTA STATE 140 AIRPORT ROAD, EFFURUN WARRI, DELTA STATE

12, MILVERTON AVENUE, ABA

NO 168 P.T.I ROAD, EFFURUN, DELTA STATE.

85

BERTHDOM LIMITED

80

20 SALVATION CLOSE, OFF ADA GEORGE PHC

TRISTART INTEGRATED SERVICES LTD.

AFLACORP NIG LTD LOVOTEX RESOURCES LTD CSK WORKS & ALLIED CO. LTD ISABEL & J INTEGRATED SERVICES LTD

75

HENBOB ENTERPRISES

ZOPHIM CORPORATE SERVICES

73

74

76 77 78 79

NO 1 AKA AVENUE, EFFURUN WARRI, DELTA STATE

TWIN SAM NIGERIA COMPANY

28, OMASI ROAD 1, RUMUDMASI, PORT HARCOURT

1 OSIVHEMU STR, AGBARHO DELTA STATE

KM 4 NPA EXPRESS WAY OPPOSITE NIGERCAT, EKPAN DELTA STATE

4/6 OIL MILL STREET LAGOS ISLAND LAGOS 299/301 ABA OWERRI ROAD, OWERRI NO 17 A BOSTWANA CRESCENT BARNAWA KADUNA 92 OLD ABA RD PORT HARCOURT

72

PETROLEUM PLUS SOLUTION LIMITED JAMESCO AND SONS SERVICES NIG LTD AJORO INTERNATIONAL INVESTMENT NIG LTD CHAR AND TEL NIGERIA VENTURES

65 66 67 68

29 IKONO STREET, UYO, AKWA IBOM STATE

OGHOMWEN GLOBAL RESOURCES LIMITED

ALMIGHTY PROJECTS INNOVATIVE LTD

64

NO.77 ADA GEORGE ROAD, PORT HARCOURT

92 OLD ABA ROAD, PORT HARCOURT 34, IDORO ROAD, UYO AKWA IBOM 28, OMASI RD, RUMUOMAZI, PORT HARCOURT,

71

DESIGN CARDINAL LIMITED BAUNA GLOBAL INVESTMENT LIMITED REBOSA QUEST LTD

61 62 63

HORNBIRD NIG COMPANY

FLOWROCK INTERNATIONAL LTD

60

56, ABEOKUTA STREET, ANIFOWOSE IKEJA ANSBBY PLAZA 2 ORIANWA LANE NKPOGU RD PHC 21 AJANAKU STR OPEBI IKEJA, LAGOS

JORAN VENTURES

GENUINELYNESS OUTLOOK WEDACOSERV GLOBAL LIMITED FITZPATRICK CONTINENTIAL LIMITED

57 58 59

28, OMASI RD, RUMUOMASI PORT HARCOURT

69

TODAH EXPERTISE LIMITED

56

ANSBBY PLAZA, 2 ORIANWO LANE NKPOGU ROAD PHC

2, ORIANWO LANE, NKPOGU RD, ARSBBY PLAZA, PORT HARCOURT

NO 1, THIRA CEMENTRY ROAD NEW­BENIN, B/C

5 OPILI PLAZA BY PETER ODILI RD

18 OKEYINMI STREET ADO­EKITI

173 TETLOW ROAD OWERRI. 4 KINGS AVENUE OFF TOMBIA EXTENSION G.R.A PH 35 CEMENTARY ROAD, PO BOX18, OMOKU, RIVERS STATE NO 1 JUSTUS OJIKA AVENUE PHC 13B MALLE ESTATE OFF DSC WAY EKETE ­UDU DELTA STATE NO.13 ORAZI ROAD OFF EBONY JUNCTION RUMUOLA, PH

28, OMASI RD, RUMUOMASI PORT HARCOURT

ADDRESS

70

KENY CREST ENERGY & LOGISTICS LTD

55

TEXOLAND INTERNATIONAL LIMITED

52

BEAVER­MARK NIGERIA LIMITED

ULAYIN MICRO­FINANCE BANK

51

EXMATSUR OILFIELD SUPPORT LIMITED

SKILL ASSOCIATIES LIMITED MACOM ENG. & CONST LIMITED GODEL ENTERPRISES FAZIG GLOBAL PROSPECT LIMITED MORG­LIS SERVICES WESTWINDS ENGINEERING SERVICES

45 46 47 48 49 50

53

VERSETECH TECHNICAL SERVICES LIMITED

44

54

NAME OF OBLIGOR

S/N

Monday 30 March 2020

A65

PLOT 35 ZONE 1 FINIMA BONNY

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EER(COLOBUS) NIGERIA LIMITED

MEDICAL PRACTITIONERS SERVICES

AREWA COTTON AND ALLIED PRODUCTS LIMITED

COMMONWEALTH CONSORTIUM LIMITED HALIRU ISA NDUDI COMMERCIAL ENTERPRISE ANEJIOFOR GLOBAL VISION LTD HIGH RISE BUILDERS LIMITED

BLISSCOM SERVICES

SOMAFALL SERVICES LTD.

DOREMA TRADING LTD

PAULOLIVE INTERNATIONAL LOGISTIC LTD

IDEAL STRUCSHORE NIGERIA LIMITED

DSW DYNAMICS LIMITED

SILK STRUCTURES NIGERIA COMPANY

REEICO NIGERIA LIMITED

JOHN HOLT PLC

BROADWATERS RESOURCE COMPANY LIMITED

CUTECH NIGERIA LIMITED

SHELTER AND ROADS CONSTRUCTION LTD

TOPMA INTEGRATED SERVICES LIMITED

118

119

120

121 122 123 124 125

126

127

128

129

130

131

132

133

134

135

136

137

138

142

141

140

139

7TH FLOOR, LABOUR HSE, CENTRAL BUSINESS DISTRICT, ABUJA FCT.

OBOTNTE ENTERPRISES LTD NSYKPAN NIG ENTERPRISE BOSSLINKS COMMUNICATIONS VENTURES

115 116 117

NIGERIA UNION OF LOCAL GOVERNMENT EMPLOYEES A/C 2

STRUCKMN NIGERIA LIMITED­DEBT SERVICE RESERVE ACCOUNT TESCOM TEACHING & NON­TEACHING STAFF WELFARE CICS LTD NIGERIA UNION OF LOCAL GOVT.EMPLOYEE, OSE LOCAL GOVT. CHAPTER

4, ITUAK ABANG ROAD, IKOT EKPENE NO. 4 ITUAK ABANG ROAD, IKOT EKPENE, AKWA IBOM STATE 16 ATABONG ROAD, EKET, AKWA IBOM STATE 9TH FLOOR, ST. NICHOLAS HOUSE, CATHOLIC MISSION STREET LAGOS ISLAND, LAGOS GROUP MEDICAL BUILDING, QUEEN ELIZABETH ROAD, MOKOLA, IBADAN, OYO STATE.

HOUSE OF STONES AND CERAMICS LTD

114

ROAD 4, HOUSE 8 FEDERAL HOUSING ESTATE, UYO

IBADAN NORTH LOCAL GOVT. SECRETARIAT, AGODI, IBADAN

OSE LOCAL GOVERNMENT SECRETARIAT, IFON

C/O TEACHING SERVICE COMMISSION SECRETERIAT IBADAN

46, NEMBE ROAD, RUMUIBEKWE HOUSING ESTATE, PORT­HARCOURT

16,KUKAWAH CLOSE, AREA 11, GARKI. ABUJA

GPLAS

GPLAS

COMRADE ADESUNLOYE IDOWU (NULGE CHAIRMAN), COMRADE DISU RASAQ (SECRETARY) KAYODE AKANDE (CHAIRMAN), ADEREMI BIOKU (SECRETARY)

GPLAS

CONTRACT FINANCE FACILITY (DOLLAR DENOMINATED)

INVOICE DISCOUNTING FACILITY (IDF)

INVOICE DISCOUNTING FACILITY (IDF)

CONTRACT FINANCE FACILITY

2011

2011

2011

2005

27/06/2014

06/06/2014

2015

2014

JUNE 2012

1. O/D FACILITY ­ N178.5M, IFF ­ $2M, SPF ­ 125M STOCK REFINANCING FACILITY

11/11/2014

2011

2014

2014

2014

26/07/2015

2012

2015

Jul­13 02­Oct­08 19/6/2014 2013 16/7/2013

2014

Nov­11

28­Dec­18

19­Dec­12 20­Mar­14 29­Nov­14

03­Jul­08

31­Dec­14

24­Sep­14

30­Nov­12

19­Mar­13

04­Mar­11

31­Dec­10

18­Dec­08

24­Nov­09

16­Mar­15

19­Dec­14

DATE GRANTED

STOCK REFINANCING FACILITY

OGCF­LPO TECHNIXS/SPDC

OGCF

OGCF

OGCF

LPO FINANCE

OGCF

OGCF­IDF

TERM LOAN SECURED OVERDRAFT CEMENT DISTRIBUTION FINANCE (CDF) OGCF LPO/ CONTRACT FINANCE

STOCK REPLACEMENT FACILITY

MORTGAGE FINANCE

TERM LOAN

OVERDRAFT CONTRACT FINANCE LPO FINANCE FACILITY

SECURED TERM LOAN

LPO FINANCE FACILITY

CONTRACT FINANCE

CONTRACT FINANCE

CONTRACT FINANCE

LPO FINANCE FACILITY

LPO FINANCE FACILITY

ASSET ACQUISITION FINANCE

SECURED OVERDRAFT

LPO FINANCE FACILITY

CONTRACT FINANCE

TYPE OF FACILITY

MR OLATUNJI OLADUNNI – PRESIDENT; MR TIMOTHY OGUNDEJI ­ TREASURER

RAY CHINDA, AUSTIN CHINDA

1. ILIMMY ADAKOLE OBIDA. 2.IGE OLADIPO

MR. BRIGHT EKURUME 1. IGE OLADIPO, 2. ALHAJI MOHAMMED JIBRIN AHMED, 3. ENGR. ELE­AMEEN MOHAMMED JIBRIM

SURULERE, ITIRE, LAGOS

UJU OBI

CHIEF CHRISTOPHER EZE, DAVID PARMLEY, PAUL NEWNS, RAYMOND OBIERI,

UJU OBI

OMOTADE BIMBO

SUITE 1, BASEMENT. NO. 4, THAM BEKI CLOSE, OFF TY DANJUMA STREET , A SOKORO, ABUJA.

36, INTERNATIONAL AIRPORT ROAD, MAFOLUKU

42, KUDIRAT ABIOLA WAY, OREGUN , IKEJA, LAGOS.

36, INTERNATIONAL AIRPORT ROAD, MAFOLUKU

43 FUTEB PLAZA, EFFURUN, WARRI, DELTA STATE.

NO INFORMATION

NO INFORMATION

PLOT 1B IKENEDU CLOSE OFF ELIJIJI AVENUE RUMUROLU, PORT HARCOURT

ANSBBY PLAZA, #2 ORIANWO LANE NKPOGU, PORT HARCOURT

NO INFORMATION

MUYIWA ODEINDE

SUITE 9 MMA SHOPPING MALL 8 OLD ABA ROAD ABA, PORT HARCOURT

5, UYO STREET. RUMUOMASI PHC

NO INFORMATION

OBI NKEMDILIM

KAYODE AYENI, KIKELOMO AYENI MR. HALIRU ISA CHUKWUKA AGODI NO INFORMATION DELE ASIWAJU, ESSIEN ESSIEN GEORGE

• ACHIMUGU ANIBE • WOLO WISDOM • OLAYIWOLE MICHAEL BAMIDELE • AKINSOLA ADETOKUNBO • BISALLAH IBRAHIM DANLANDI • ALHAJI DOGARA YARO

DR. KUNLE OLAJIDE

ELD. EDEME E. OBOT; MR. ITORO E. OBOT; IDARA E. OBOT AKPAN NSIDIBE OKON ISAAC IBANGA, ABRAHAM UDOH OSAMEDE OKHOMINA, YINKA JOSEP OGUNDARE, GODWIN IMOHI, OLIVIA OKONJI, OLANIKE OLAKUNMI ANANI

EDET ETIM SAMUEL

INIOBONG JACKSON USEN

UDO ARCHIBONG ISAIAH, IBORO ANIEFIOK EKPE

NATHANIEL ASUQUO IMAH

APOSTLE ETIM ANTAI

VICTOR MATTHEW

LAWRENCE ANIEKAN BASSEY

ELDER MRS GRACE ANWANA

NELSON AGHOGU

IBIBA JACKS

JOHN UBIT NYONG

DIRECTORS

NO 5, B OROMENIKE STREET D/LINE

MOSHESHE ESTATE, AIRPORT ROAD, EFFURUN, WARRI, DELTA STATE.

LAPAL HOUSE, 235, IGBOSERE ROAD, LAGOS ISLAND. 48, MUBI ROAD, HONG LGA, ADAMAWA STATE 367 OKENE KABBA ROAD, LOKOJA, KOGI STATE 88 OKERE IGBORIKOKO, WARRI, DELTA STATE. AKWA IBOM

81 UDO EKPO MKPO STR, UYO

OBONG UYOM CLOSE, OFF BANKING LAYOUT,UDO­UDOMA

DONARSON SERVICES LIMITED

GLEEBON TECHNICAL AND INTERNATIONAL LTD

112

1 LOUIS ATING STREET, ORON LGA

NO 13 ELVIS OKPO STRT. ORON

47 AKPAPAN STREET UYO

113

NSOH NIGERIA LIMITED

NATHEC ENGINEERING SERVICES

110

111

CONVENANT GROUND LINKS NIG

PHI­VIC/SAM GLOBAL RESOURCES NIG

108

OFFICE OF THE HEAD OF CIVIL SERVICE

107

109

18 BEN UDO STR, UYO

DALDENA SYSTEMS LIMITED

CIVIL SERVANT COMPUTER AQUISITION SCHEME(AKS)

2,2ND AVE FEDERAL HOUSING ESTATE PHC

188 ORON ROAD UYO

ADDRESS

106

NYONG AND NYONG ARCHITECTS LIMITED

RIMROCK INTERNATIONAL LIMITED

104

105

NAME OF OBLIGOR

S/N

2013

2014

2015

2005

25/09/2014

09/04/2014

2016

2019

JUNE 2013

31­12­2016

2012

2014

2014

2015

25/11/2015

2012

2016

23­Oct­19 02­Sep­09 18/6/2015 2014 30/10/2013

2016

Oct­15

24­Mar­19

19­Nov­13 31­Dec­16 31­Dec­16

01­Sep­11

31­Dec­16

20­Nov­15

07­Dec­14

31­Dec­16

01­Aug­16

01­Aug­13

01­Sep­11

01­Dec­11

31­Dec­16

31­Dec­16

EXPIRY DATE

158,793,937.68Dr

281,968,106.26Dr

599,981,377.39Dr

398,286,190.70Dr

151,914,155.52Dr

154,699,244.26Dr

136,098,666.67Dr

3,143,732,546.30Dr

194,974,988.84Dr

7,168,398,828.20Dr

206,629,007.10Dr

123,250,868.90Dr

142,634,015.66Dr

131,902,885.31Dr

195,709,872.84Dr

428,178,452.46Dr

121,702,661.84Dr

12,291,436,543.14Dr 61,285,260.87Dr 54,813,117.47Dr 177,586,034.17 153,891,016.34Dr

292,726,700.90Dr

81,803,044.27Dr

17,762,068,400.93Dr

114,723,284.90Dr 105,652,193.29Dr 85,465,212.42Dr

67,489,450.53Dr

70,373,396.57Dr

64,625,335.94Dr

85,296,393.15Dr

89,336,526.62Dr

89,741,842.93Dr

91,365,116.79Dr

69,488,445.22Dr

121959796.92Dr

102,908,805.03Dr

106,633,289.73Dr

AMOUNT OUTSTANDING

Monday 30 March 2020

BUSINESS DAY

@Businessdayng

A75

Monday 30 March 2020

BUSINESS DAY

41

Live @ The STOCK Exchanges Prices for Securities Traded as of Friday 27 March 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 227,489.44 6.40 4.07 149 4,728,324 182,966.90 5.35 3.88 310 24,107,872 UNITED BANK FOR AFRICA PLC ZENITH BANK PLC 395,595.82 12.60 4.13 719 42,866,498 1,178 71,702,694 OTHER FINANCIAL INSTITUTIONS MARKET CAP(Nm) PRICE %CHANGE TRADES VOLUME FBN HOLDINGS PLC 145,375.94 4.05 -2.41 309 36,441,621 309 36,441,621 1,487 108,144,315 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,035,451.31 100.00 - 79 920,887 79 920,887 79 920,887 BUILDING MATERIALS DANGOTE CEMENT PLC 2,210,153.81 129.70 - 165 803,721 LAFARGE AFRICA PLC. 149,802.50 9.30 1.08 246 14,644,182 411 15,447,903 411 15,447,903 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 320,408.06 544.50 - 5 1,045 5 1,045 5 1,045 1,982 124,514,150 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 1,386.00 69.30 - 0 0 10,175.81 40.70 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 8,405.05 3.15 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 52,512.75 55.05 - 9 5,886 OKOMU OIL PALM PLC. PRESCO PLC 36,450.00 36.45 - 1 2,000 10 7,886 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,770.00 0.59 - 2 584 2 584 12 8,470 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 28,047.11 0.69 2.99 50 3,677,578 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 21,321.59 7.40 1.37 11 306,410 61 3,983,988 61 3,983,988 BUILDING CONSTRUCTION ARBICO PLC. 423.23 2.85 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 29,106.00 22.05 0.23 74 1,143,194 ROADS NIG PLC. 165.00 6.60 - 0 0 74 1,143,194 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,468.48 0.95 3.26 3 302,000 3 302,000 77 1,445,194 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 5,872.12 0.75 - 16 216,848 GOLDEN GUINEA BREW. PLC. 829.98 0.81 - 0 0 GUINNESS NIG PLC 55,197.65 25.20 - 18 11,280 INTERNATIONAL BREWERIES PLC. 145,055.17 5.40 8.00 16 1,035,916 NIGERIAN BREW. PLC. 203,921.00 25.50 -4.85 88 15,080,417 138 16,344,461 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 108,000.00 9.00 - 27 124,501 FLOUR MILLS NIG. PLC. 85,287.90 20.80 -3.85 34 1,317,514 HONEYWELL FLOUR MILL PLC 7,771.59 0.98 7.69 9 170,775 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 22,520.23 8.50 - 16 51,048 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 86 1,663,838 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 11,644.85 6.20 - 13 108,675 NESTLE NIGERIA PLC. 606,382.03 765.00 - 180 780,709 193 889,384 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,316.09 4.25 - 10 225,350 10 225,350 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 17,470.10 4.40 - 22 152,016 UNILEVER NIGERIA PLC. 60,322.56 10.50 - 42 603,367 64 755,383 491 19,878,416 BANKING ECOBANK TRANSNATIONAL INCORPORATED 81,655.50 4.45 5.95 26 291,448 FIDELITY BANK PLC 52,154.63 1.80 -0.55 95 10,138,795 GUARANTY TRUST BANK PLC. 543,005.26 18.45 2.50 589 54,271,739 JAIZ BANK PLC 15,616.05 0.53 8.16 10 924,435 STERLING BANK PLC. 33,972.69 1.18 9.26 24 2,250,077 UNION BANK NIG.PLC. 192,196.97 6.60 - 15 712,935 UNITY BANK PLC 4,909.52 0.42 - 2 6,620 WEMA BANK PLC. 20,058.72 0.52 - 17 107,486 778 68,703,535 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 8,497.65 0.75 - 10 47,448 AXAMANSARD INSURANCE PLC 18,375.00 1.75 - 2 14,000 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CORNERSTONE INSURANCE PLC 8,543.11 0.58 - 0 0 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,611.16 0.22 4.76 3 550,000 LAW UNION AND ROCK INS. PLC. 4,081.51 0.95 - 0 0 LINKAGE ASSURANCE PLC 3,280.00 0.41 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 0 0 NEM INSURANCE PLC 9,980.15 1.89 9.88 10 328,631 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 3,229.53 0.60 - 1 756 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 6,237.84 0.26 -3.85 11 1,703,985 37 2,644,820 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,629.63 1.15 - 2 50,830 2 50,830

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 6,784.62 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,671.82 1.36 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 6,840.00 3.42 -10.00 61 3,268,164 CUSTODIAN INVESTMENT PLC 34,703.00 5.90 - 10 151,001 DEAP CAPITAL MANAGEMENT & TRUST PLC 495.00 0.33 - 0 0 FCMB GROUP PLC. 30,298.15 1.53 2.00 79 16,294,441 ROYAL EXCHANGE PLC. 1,029.07 0.20 -9.09 1 100,439 STANBIC IBTC HOLDINGS PLC 255,270.71 24.30 - 41 247,516 UNITED CAPITAL PLC 14,400.00 2.40 9.09 49 2,271,425 241 22,332,986 1,058 93,732,171 HEALTHCARE PROVIDERS EKOCORP PLC. 2,991.61 6.00 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 923.82 0.26 8.33 1 127,686 1 127,686 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 9.09 2 120,000 2 120,000 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,111.58 2.45 5.15 60 3,611,035 GLAXO SMITHKLINE CONSUMER NIG. PLC. 4,604.12 3.85 10.00 20 500,000 3,364.21 1.95 - 12 100,509 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 911.60 0.48 - 4 70,473 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 96 4,282,017 99 4,529,703 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 - 4 182,870 4 182,870 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,000.21 0.34 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 216.00 2.00 - 3 45 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 1 311 4 356 PROCESSING SYSTEMS CHAMS PLC 1,080.09 0.23 - 8 13,019 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 8 13,019 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 8 43,654 8 43,654 24 239,899 BUILDING MATERIALS BERGER PAINTS PLC 1,767.92 6.10 - 5 14,443 BUA CEMENT PLC 1,195,411.70 35.30 - 4 1,025 CAP PLC 16,240.00 23.20 7.91 9 117,870 MEYER PLC. 244.37 0.46 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. 18 133,338 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,192.12 2.03 - 0 0 CUTIX PLC. 2,465.85 1.40 - 6 1,831 6 1,831 PACKAGING/CONTAINERS BETA GLASS PLC. 34,998.04 70.00 - 1 7 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 7 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 25 135,176 CHEMICALS B.O.C. GASES PLC. 1,685.79 4.05 - 3 2,000 3 2,000 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 3 2,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 2 425,000 2 425,000 INTEGRATED OIL AND GAS SERVICES OANDO PLC 25,484.40 2.05 -4.65 27 827,947 27 827,947 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 52,827.21 146.50 - 12 6,205 ARDOVA PLC 17,974.24 13.80 - 14 65,291 CONOIL PLC 9,125.47 13.15 - 16 24,286 ETERNA PLC. 3,116.91 2.39 - 3 21,500 MRS OIL NIGERIA PLC. 4,206.05 13.80 - 1 94 TOTAL NIGERIA PLC. 32,695.95 96.30 - 20 14,480 66 131,856 95 1,384,803 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 2 1,000 2 1,000 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,779.06 3.00 - 12 278,850 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 12 278,850 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,058.01 0.99 - 1 1,500 7,076.28 3.15 - 0 0 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 30,401.62 4.00 - 0 0 1 1,500 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 3,960.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 205.63 0.34 - 1 70,000 LEARN AFRICA PLC 771.45 1.00 - 2 11,019 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 427.10 0.99 - 0 0 3 81,019 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 580.20 0.35 - 1 550 1 550 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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Company IN FOCUS

BUSINESS DAY Monday 30 March 2020 www.businessday.ng

Seplat: COVID-19 shock absorber, low oil price buffers seen on cost efficiency, gas business SEGUN ADAMS, OLUFIKAYO OWOYE & DIPO OLADEHINDE

W

hile most companies in the economy, and oil & gas industry especially, are on the edge over historic declines in crude oil price, Seplat Petroleum Development Company plc says it will remain very profitable even at lower oil prices given its low production costs and strong investments in gas.

CEO Austin Avuru says Seplat will draw from its experience with a similar crisis to surmount headwinds in a challenging phase for the global economy.

“Seplat will benefit from being a resilient company built on the solid foundations of prudent financial management and the careful mitigation of risk,” he said. “We are a low-cost producer and will continue to manage our finances prudently.”

In 2014/2015 Seplat was faced with oil price shock, and thereafter the 16-month Trans Forcados shut-in, said Avuru, who points to history, production efficiency and a diversified portfolio in the face of the business-disrupting COVID-19.

The impact of the COVID-19 outbreak has been severe for many countries; the United States in a bid to avert a recession passed the largest stimulus in its history into law last week.

On Friday, Russia was reported by Reuters as calling for a new enlarged OPEC deal to tackle oil demand collapse.

The non-compliance of the OPEC ally to an earlier proposed deeper production cut which could have balanced the oil market had resulted in crude price falling to as low as $25 per barrel from around $65 per barrel.

At such price, it becomes less profitable – if at all – for participants in upstream activities in the oil industry.

Avuru said with the recent addition of Eland and the availability of new pipelines, Seplat’s oil business is broadening and derisking its production fields and routes to market to assure even greater security of revenues in the future.

On a cost-per-barrel basis, production operating expenses were higher at $6 compared to $5.77 because of the decrease in production volumes compared to 2018. Emphasis on careful cost management led to an 11 percent reduction year-on-year in general and administrative expenses, which stood at $71 million in 2019 compared to $80 million to 2018.

“The challenges before us

may be significant, but we are confident that the resilience and discipline of our business will help us consolidate our position as Nigeria’s leading independent oil and gas producer,” he said.

Even at a low unit cost of production of US$6.20/boe and with working interest production of 46,498 boepd (in line with 2019 revised guidance of 45,000 – 48,000 boepd) coupled with liquids production of 23,935 bopd and gas production of 131 MMscfd, Seplat says it is good to go.

The company estimates that its acquisition of Eland Oil & Gas PLC wills Increase WI liquids production by 9Kbopd, increases WI 2P liquids reserves by 36MMbbls In December 2019 Seplat completed the acquisition of London-listed independent exploration company Eland Oil & Gas. With the final investment decision (FID) taken for 300MMscfd ANOH gas processing facility, Seplat’s first gas is expected for Q4 2021.

Company performance Seplat rode on a tax holiday to increase its profit by 13.5 percent despite lower production and oil price.

Despite an average oil price of $64 in 2019 compared to the $71 in the previous year and a 6.8 percent decrease in oil production, Seplat was able to increase its profit before deferred tax by 13.5 percent to N83 billion ($270 million) thanks to tax incentives.

“The financial statements have been prepared taking into consideration the impact Seplat Petroleum Development Company Plc 10 Full-year 2019 financial results of the additional tax holiday and this forms the basis for the Group’s current income taxation and deferred taxation for the year ended 31 December 2019,” Seplat’s said.

In line with sections of the Companies Income Tax Act, which provides incentives to companies that deliver gas utilisation projects, Seplat was granted a three-year tax holiday with a possible extension of two

‘‘

On a cost-per-barrel basis, production operating expenses were higher at $6 compared to $5.77 because of the decrease in production volumes compared to 2018

‘‘

Seplat will benefit from being a resilient company built on the solid foundations of prudent financial management and the careful mitigation of risk years in 2015.

Tax expense for 2019 was $29 million, compared to $117 million for 2018. Previously unrecognised deferred tax assets of $20 million from prior years’ tax losses and unutilised capital allowances were recognised after an assessment of the relevant entity’s future profitability showed recoverability of the deferred tax assets.

This resulted in a deferred tax charge of $6 million for the year compared to $92 million in 2018.

Upon review of the performance of the business in 2018, Seplat provided notification to the Federal Inland Revenue Service (FIRS) for the extension of claim for the additional twoyear tax holiday.

Profit before tax adjustments, was $293 million, up 11 percent

compared to $263 million in 2018 while Finance charges for the period were lower due to the positive impact of deleveraging in the year.

The net finance charge was $20 million, compared to $47 million in 2018 while the Net profit for 2019 was $277 million.

The resultant basic Earnings Per Share (EPS) was $0.49 in 2019, compared to an EPS of $0.26 in 2018.

Operating profit for 2019 was N95.7 billion ($312 million) compared to N94.9 billion ($310 million) last year, helped by the gas-tolling revenue recognised but set against the reversal of previously recognised accrued interest of $40 million on Nigerian Petroleum Development Company Ltd (NPDC) receivables due to the settlement of these receivables.

Gross profit increased slightly to $396 million from $391 million the previous year as a result higher gas processing revenues and lower nonproduction costs primarily consisting of royalties and DD&A, which were $188 million compared to $244 million in the prior year.

Depreciation, Depletion and Amortisation (DD&A) charge for oil and gas assets decreased to $91 million during 2019 compared to $119 million last year, reflecting lower depletion of reserves because of decreased production compared to the prior year.

Direct operating costs, which include crude-handling fees, rigrelated costs and operations and maintenance costs amounted to $105 million in 2019 and remained flat against $105 million in 2018.

Lower crude-handling fees offset the higher rig-related costs that mostly relate to workovers which form part of expenses for the relevant reporting period.

Company outlook Seplat says it is expects production to hit between 47-57 kboepd (including Eland 6-10kbopd) for 2020, although this is subject to market conditions.

It projects 1.5MMbbls/quarter hedged at US$45/bbl from Q1 to Q3 2020 noting that significant cash balance available and Low cost of production will ensure profitability at levels below current oil price.

The company said it would manage 2020 drilling programme to suit market conditions and preserve liquidity, minimum of three wells.

So far in 2020 Seplat shares has plunged 17.22% compared to 18.94 percent broad-market decline as COVID-19 hits hard on the stock market.

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