BusinessDay 31 Aug 2020

businessday market monitor FMDQ Close Benchmark NTB* & CP*

Bitcoin

NSE

Everdon Bureau De Change

Foreign Reserve $35.7bn

Biggest Gainer

Biggest Loser

CAP

3.41pc N15.6 25,309.37

GBP-$:1.29 YUANY - 56.44

Commodities

Guinness

N16.15

Cross Rates

-9.29 pc

Gold

Cocoa US$2,623.00

$1,964.83

Crude Oil

Foreign Exchange

Buy

-5.02

Sell

MTN Nigeria plc CP

FGN

Dangote Cement plc

Axxela Nsp-spv Funding 1 (Natural Gas) PowerCorp plc plc

Spot ($/N) 25-Feb-21 5-Mar-21 23-Jul-30 30-Apr-25 20-May-27 27-Feb-34

Market

₦ 5,098,499.60

ntb

Benchmark Sovereign & Corporate Bonds

I&E FX Window 385.67 CBN Official Rate as at August 27, 2020

379.00

1.09

0.91

0.00

-0.10

-0.09

0.00

2.40

5.33

9.00

9.12

9.97

11.16

$-N 470.00 478.00 3m 60m 1m 2m 6m 36m 12m £-N 600.00 618.00 Currency Futures ngus sept 30 2020 ngus oct 28 2020 ngus nov 25 2020 ngus feb 24 2021 ngus Aug 25 2021 ngus aug 30 2023 ngus aug 27 2025 420.81 498.32 590.10 403.75 420.81 498.32 590.10 €-N 543.00 555.00 ($/N)

$45.81

*NTB - Nigerian Treasury Bills; *CP - Commercial Paper

news you can trust I ** monDAY 31 AUGUST 2020 I vol. 19, no 640

I

N300

g

www.

Nigerian economy needs industrial bolsters to create manufacturing jobs Vietnam, India hold lessons As China pivots to domestic consumption

Odinaka Anudu

A

liko Dangote’s refinery in Lagos will be adding $13 billion into the Nigerian economy at

BUSINESSDAY JOBS & GROWTH SERIES its completion, equivalent to 3.25 percent of today’s GDP, and 700,000 jobs.

Assuming Nigeria is able to

attract 10 more Dangotes, it would have created 7 million jobs, added 33 percent to the GDP and $130 billion into an

@

g

economy that has just returned 27 percent unemployment rate and 6 percent negative growth in the second quarter (Q2) of 2020.

Continues on page 30

g

Planned reform of container regime to save over N1.7bn yearly … to replace container deposit with insurance cover AMAKA ANAGOR-EWUZIE

I

mporters, including manufacturers that depend on the nation’s seaports to do business, will soon get some relief as the Federal Government has started perfecting plans to reform the container management regime in Nigeria.

Shipping companies collect container deposit before Continues on page 31

Inside

Without subsidy, petrol price to reach N157.55 for P. A1 September Wigwe named African Banker of the Year P. A6

2

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

3

4

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

5

6

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

7

8

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Monday 31 August 2020

comment

9

comment is free

Send 800word comments to comment@businessday.ng

Nigeria’s hate speech law: A tool to silence victims of organised violence global Perspectives

OLU FASAN

O

ver the past five years, Nigeria has been a macabre theatre of organised violence. In a report titled Nigeria: The Harvest of Death, Amnesty International paints a Hobbesian picture of terrorist-induced carnage in Nigeria. Yet, the government has failed to hold perpetrators of the appalling killings to account. Instead, it introduced a hate speech law on the wrong-headed assumption that terrorists are driven primarily by speeches rather than by deep-rooted beliefs and ideology.

Even worse, the hate speech law is based on the perverse idea of moral equivalence. It treats victims of terrorist attacks as if they are not different from the terrorists. For instance, to date, the hate speech law has not caught any known sympathiser of Boko Haram or the marauding herdsmen but has been invoked against the media and individuals who postulate about those behind the terrorist groups and their motivations.

Recently, the Department of State Services (DSS), invited Obadiah Mailafia, former deputy governor of Central Bank of Nigeria, for “questioning” after he told a radio station that “one of the northern governors is the commander of Boko Haram.” In tow, the Nigerian Broadcasting Commission, NBC, slammed a N5m fine on the radio station (Nigeria Info 99.3 FM), for giving its platform to Mailafia “to promote unverifiable and inciting views.”

The government knows, of course, that the hate speech penalty will do absolutely nothing to deter Boko Haram or the killer-herdsmen from their terrorist activities. Indeed, the hate speech law is not aimed at the terrorist groups or their sponsors. Does anyone think that terrorists and their sponsors would be

deterred by a fine of N5m? Absolutely not, they raise and spend billions for their cause.

So, who is the hate speech code aimed at? Well, it is aimed at victims of the terrorist groups who want to speak out. It is an attempt to intimidate and silence people like Mailafia, whose communities in Southern Kaduna or in the Middle Belt, have faced genocidal attacks from insurgents and armed bandits.

Of course, the hate speech law is also aimed at the media, to intimidate and stop them from ventilating the anger and frustrations of victims of terrorist attacks who have been denied protection and justice by the state. Recently, the hate speech penalty was increased from N500,000 to N5m.

According to the Director-General of the NBC, Armstrong Idachaba, the increase was “to serve as a deterrent to erring practitioners against misconduct, especially hate, violence and spread of fake news.” But who decides who is an “erring practitioner”?

The Board of NBC is said to have declared the N5m fine on Nigeria Info 99.3 illegal. If so, it shows that the NBC lacks judgement and cannot be trusted to administer the code. But, more importantly, the NBC should not be intimidating the media, which, in a democracy, has a duty to give voice to even controversial views. Putting the media under a cloud of fear is incompatible with democratic norms. Secondly, you cannot have a situation in a democracy where oppressed people cannot speak out.

The DSS said it would “not stand idly and watch disgruntled and aggrieved elements take laws into their own hands.” But victims of organised violence, who are denied protection and justice by the State, will be “disgruntled” and “aggrieved”, and have the right to tell the world their stories. If the State fails to protect and give justice to victims of violence, and then denies them a voice, the inevitable conclusion is that it is complicit in the violence.

Which brings us to Mailafia’s allegation. He said that some terrorists told him that “one of the northern governors is the commander of Boko Haram in Nigeria.” He did not name any of the 19 northern governors, leaving the “culprit” to speculation. He subsequently said he got the information from “some

Fulani traders” in a market.

For me, given that he named no governor, there is nothing outlandish about the comment. Why? Well, because all major terrorist organisations in the world have financial backers and political patrons. If powerful people are not behind them, providing them with sophisticated weaponry, they can’t withstand the State for long; they would easily be crushed by the State’s superior firepower. The reason a terrorist group lasts long is because it has powerful backers, sometimes within government, who fund and arm them.

The State can also give passive support to a terrorist group by turning a blind eye to their activities.

Now, given the seeming indestructibility of Boko Haram and the killerherdsmen, whose attacks are wellplanned, organised and systematic, with sophisticated weaponry, such as machine guns, AK47s, rocket launchers and rocket-propelled grenades, according to an Amnesty International report, Nigerians are entitled to ask: Who are behind them? Nigerians have a right to know their financial backers and political sponsors, and the ideology that sustains them, Mailafia was, therefore, right to air a national concern.

Of course, he was not the first to say that powerful political forces are behind the terrorist groups. Former President,Olusegun Obasanjo once described Boko Haram’s agenda as the “Fulanisation” and “Islamisation” of Nigeria, and in March 2018, Theophilus Danjuma, former chief of army staff and defence minister, told the Middle-Belt people to “protect” themselves, saying: “The armed forces are not neutral.

They collude with the armed bandits.

They facilitate their movements, they cover them”!

Some commentators described Mailafia’s comment as a “conspiracy theory.” But what is their own theory?

If Mailafia’s theory of political sponsorship of Boko Haram is flawed, if Obasanjo’s thesis of Fulanisation and Islamisation is wrong and if Danjuma’s postulation about the military’s collusion in ethnic cleansing is outlandish, what is the correct theory?

Certainly, the cause of the herdsmen’s genocidal attacks cannot simply be desertification and competition for resources. The struggle for grazing routes and water by the nomadic herds-

‘

So, who is the hate speech code aimed at?

Well, it is aimed at victims of the terrorist groups who want to speak out

men is not a credible explanation for the thousands they have killed or displaced and the hundreds of villages they have destroyed.

The herdsmen’s attacks on farmers are not only well planned and coordinated, with the use of sophisticated weaponry, they are often carried out with cattle nowhere in sight. So, as Lord Alton said in a UK House of Lords debate, the narrative that the attacks are herder-farmer clashes is inadequate.

There is a strong ethno-religious dimension to them. Indeed, in 2018, the House of Representatives declared the killings in Plateau State to be a genocide.

So, why is it hate speech to ask who are behind genocides?

And what theory explains the fact that the military is offensively and defensively too weak to confront Boko Haram’s spread and daringness? How could Boko Haram, supposedly “technically defeated” since 2015, overrun an army base in 2018, “leaving hundreds of soldiers unaccounted for”?

Of course, one plausible theory is that all this is happening because Nigeria is a failed or fragile state; that it is too ill-equipped to respond effectively to organised non-state violence. But while the failed or fragile state theory is valid, it cannot explain or excuse the serious ethno-religious dimensions of the Boko Haram and Fulani herdsmen attacks. And it cannot explain the state’s seeming passive support for the insurgents.

For instance, when the Kaduna State governor, Nasir el Rufai, who secured a second term on a Muslim-Muslim ticket in a religiously divided state, decided to turn Christian communities into Muslim-led emirates, he laid his government open to accusation of complicity in the state’s ethno-religious violence.

A hate speech law that then aims to intimidate and silence people like Mailafia, whose communities in southern Kaduna or elsewhere are victims of organised violence and denied protection and justice, must count as an instrument of oppression by a complicit State!

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

A twist in the tale - the new CAMA and the independent director

B

oard independence is considered pivotal to corporate governance as a result of which governance reforms in recent years have increasingly pinned hope as well as responsibility on independent directors to drive higher standards of governance.

An independent director is typically a nonexecutive director who is free from such relationships or circumstances with the company, management, or controlling shareholders, which may appear to impair his/her ability to make independent judgment towards the affairs of the company.

By way of background, in the first half of the twentieth century, a managerialist model of corporate governance was practiced in the United States with Inside directors, chosen and controlled by the CEO, dominating corporate boards.

The concept of the independent director and the related model of the “monitoring board” appeared in 1970 following the occurrence of two watershed events namely the sudden collapse of the major railway company, Penn Central in 1970 and Eisenberg’s bestseller “The Structure of the Corporation” published in 1976. According to Eisenberg, the Board’s essential function

is to monitor the company’s management by being independent from it. Today, the reliance on independent directors as a panacea for corporate misconduct is at the heart of corporate governance in the US. In the UK, the concept of Independent Director was embraced following the adoption of the Cadbury Report. Similarly, the European Model Company Act of 2015 and the OECD Principles of Corporate Governance of 2015 recommend assigning important tasks to independent board members.

Over the years, respective jurisdictions have adopted Codes of Corporate Governance including the UK Corporate Governance Code 2019, the Deutscher Corporate Governance Kodex 2019 (German Corporate Governance Code) the Afep Medef Code of Corporate Governance 2016, the Spanish Corporate Governance Code 2015, and the US Corporate Governance Principles for Listed Companies. The Codes in the main recommend that majority of directors on the board should be independent directors who have no personal or business relationship that will cause substantial conflict of interest.

Being not closely related to the company, independent directors are not susceptible to undue www.businessday.ng

influence from management. Similarly, independent directors promote corporate credibility and governance standards and bring on board their expertise and experience. Independent directors play a pivotal role in neutralizing conflict on the board and ensure an added layer of accountability, credibility, and unbiased decision-making.

In Nigeria, the need for independent directors has been underscored by the Nigerian Code of Corporate Governance (NCCG) 2018 as well as the respective sectoral Codes. According to the NCCG 2018 an independent non-executive director should represent a strong independent voice on the board, independent in character and judgment and accordingly free from such relationships or circumstances with the Company, its management, or substantial shareholders as may, or appear to, impair his/her ability to make independent judgment.

Whilst the meaning of independence may be contextual, the Code defines an independent director as that non-executive director who amongst other criteria holds not more than 0.01 percent of the paid-up capital of the Company.

The SEC Code of Corporate Governance and the sectoral Codes contain similar provisions in this regard.

https://www.facebook.com/businessdayng

Bisi Adeyemi On 7th August 2020, the President of Nigeria assented to and signed into law the Companies and Allied Matters Act, 2019 (“CAMA 2019”) – the primary legislation for corporate practice in Nigeria which repealed the 30 year old Companies and Allied Matters Act, 1990 (“CAMA 1990”).

The new CAMA remarkably introduces a lot of novel provisions including single shareholder companies, electronic filing, signatures, share transfers, and virtual meetings amongst others.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comments and reactions to badeyemi@dcsl.com.ng

@Businessdayng

10

Monday 31 August 2020

BUSINESS DAY

comment

comment is free

Send 800word comments to comment@businessday.ng

Resilience: Forging ahead – ending decadence and inept leadership

(Third article in six series)

Bashorun J.K Randle

A

s confirmation that our ailments and underlying issues have been festering for several decades, “The Guardian” newspaper published on its front page forty years ago, the views of Professor Lambo who had served as Deputy Director-General of the World Health Organisation [WHO]. His was a diametrically different perception form that of Chief Remi Fani-Kayode.

Headline: “Lambo blames woes on his generation” “Renowned psychiatrist Professor Thomas Adeoye Lambo yesterday indicted his generation for throwing a spanner into the works in the noble attempt at raising a virile post-independent Nigerian nation.

His indictment came in Ibadan as the government raised an alarm on the swelling army of lunatics in the streets.

In critique of what he tagged Nigeria’s slow march to greatness, the former deputy director-general of the World Health Organisation (WHO) told government officials and fellow psychiatrists at their yearly conference that “the cumulative result of the decadence and inept leadership foisted on the nation had resulted in dislocation of all ramifications of the country’s political and socio-economic life”. Going through the nation’s history, Lambo discovered that it was characterised by conceit, blunders, corruption, and indecision-a situation he said was responsible for the ailments afflicting the polity.

“We went into the first republic with a great deal of idealism, hope and trust, sincerely believing that it was an independence to end colonialism social inequality and poverty - one that will bring more freedom and democracy to the people of our country, but when the corrupt republic failed, we accepted the fact without rebellion,” he recalled.

To shake off the decadence of the past, the respected academician advocated a “new political institution and a very new constitution,” but quickly noted that the first act of military intervention was the suspension of the constitution: “We will need new concepts with a new social theory. We don’t know when we will get these and what they will look like, but we know we are disenchanted with the government, primarily because they do not perform, he said.

His antidote for inept and purposeless government is “a government that can and does govern, focusing on its specialisation.”

Just before Oyo State Governor, Col. Adedeji Oresanya had sounded the alarm on burgeoning lunatics.

Lambo warned on the rising incidence of mental illness in developing countries, describing the upswing as a new challenge to governments in the Third World. These countries are facing a rapid increase in the frequency and severity of health problems which until recently were erroneously associated with affluence and civilisation.

He listed Nigeria’s health related problems as: i.) high incidence of infectious diseases; (this was long before the COVID-19 pandemic !!) ii.) increasing concentration of people in urban areas with attendant problems of alcoholism, drug abuse and other social vices; and iii.) lack of coordination and national health policy.

In Lambo’s view, Nigeria’s first attempts at development were at variance

with its socio-cultural peculiarities. “Too often when we look for assistance, we look in the wrong direction, whereas we could achieve the same end by using our talents and employing our energy to great advantage.” He said.

There is also a class dimension to our problems – going back to the days of the IMF/Structural Adjustment Programme under General Ibrahim Babangida “Many of the problems revolve around the middle-class who are traditionally the guardians of our social values and economic relativities.

However, the evidence before us provides abundant proof that the middle-class is itself an endangered species - crushed from all sides by the new economic game of survival. When economic pressures become suffocating, social values are inevitably the first victims. This is what probably prompted Professor Dotun Philips, the DirectorGeneral of the Nigerian Institute for Social and Economic Research (NISER) to ask the damning question: “Who bears the burden of SAP (Structural Adjustment Programme); to what extent; and with what relativities?

So, it would appear that the brunt of the burden is on those with fixed incomes - wage and salary earners and the middle-class. The question that should constantly agitate the minds of policy-makers is whether this category will be compensated and to what extent? History teaches that in virtually all countries, it is the middle-class (not the rich or poor) which constitutes the major agents of dynamism and progressive change in a society. Nigeria cannot escape this historical lesson. She must not destroy her middle-class on the altar of SAP.” Perhaps, we should add what Vincent Ezenwa declared on CNN: “Our society encourages corruption as criminals and crooks who amassed their wealth by hook or crook are publicly idolised and worshipped; and those who can’t make it through corrupt prac-

‘

The cumulative result of the decadence and inept leadership foisted on the nation had resulted in dislocation of all ramifications of the country’s political and socio-economic life … leadership characterised by conceit, blunders, corruption, and indecision – a situation responsible for the ailments afflicting the polity

tices are jeered at and openly mocked in their communities, because there are no mansions and flashy cars to show for their stint and toil in the public service. So it is even a sin in Nigeria, given the scale of rampant corruption, for an honest and faithful public servant to live within his legitimate income.

Without belabouring the point, there is clearly a linkage between what obtains in our schools and universities; and what prevails in the outside world where the norms established by a previous generation have been ruthlessly crushed by the new generation - impatient, unscrupulous and unrepentant.”

Who is listening when Ezenwa adds: “Corruption would be greatly curbed when Nigerians are not prepared to die at all costs because of naira; when they revise their value system outside naira and kobo (money); and believe in other ennobling values, sacrifice, hard work, devotion and commitment to one’s duties no matter what they are.

Those who laid down their lives for the economic survival of this country in the first military coup could be weeping in their graves because these vices they fought against are still very much with us, and worse still, it seems it is now a sin for paupers and nonentities who could previously boast of only mud houses in villages not to leave office as millionaires.’’

The late ken Saro-Wiwa, the NigerDelta activist who was hanged by the military government of General Sani Abacha was prescient. Long before he was given the death sentence for murder, he virtually wrote his own obituary: “What is wrong with pain? We go through that all the time. Living in Nigeria is to die so many times in one day.”

J.K. Randle is a former President of the Institute of Chartered Accountants of Nigeria (ICAN) and former Chairman of KPMG Nigeria and Africa Region. He is currently the Chairman, J.K. Randle Professional Services.

Email: jkrandleintuk@gmail.com

Nigeria data protection regulation (2)

D

ue diligence and prohibition of improper motives (a) No consent shall be sought, given or accepted in any circumstance that may engender direct or indirect propagation of atrocities, hate, child rights violation, criminal acts and anti-social conducts; (b) A party to any data processing contract, other than an individual data subject, shall take reasonable measures to ensure the other party does not have a record of violating the principles set out in Section 5 and he is accountable to NITDA or a reputable regulatory authority for data protection within or outside Nigeria; accordingly, every Data Processor or Controller shall be liable for the actions or inactions of third parties which handles the personal data of Data Subjects under this Regulation; (c) In this section, “a party” shall include directors, shareholders, servants and privies of the contracting party; and record shall include report public record and reports in credible news media. Accordingly, the distinction between legal and natural persons for the purpose of limiting due diligence is irrelevant.

Privacy policy Notwithstanding anything contrary in this Regulation or any instrument for the time being in force, any medium through which personal data is being collected or processed shall display a simple and conspicuous privacy policy that the class of Data Subjects being targeted can understand. The privacy policy shall in addition to any other relevant information contain

the following: a) what constitutes the Data Subject’s consent; b) description of collectable personal information; c) purpose of collection of personal data; d) technical methods used to collect and store personal information, cookies, JWT, web tokens etc.; e) access (if any) of third parties to personal data and purpose of access; f) a highlight of the principles stated in section 5; g) available remedies in the event of violation of the privacy policy; h) the time frame for remedy and i) any limitation clause, provided that no limitation clause shall avail any Data Controller who acts in breach of the principles set out in Section 6.

Data security Anyone involved in data processing or the control of data shall develop security measures to protect data; such measures include but not limited to protecting systems from hackers, setting up firewalls, storing data securely with access to specific authorised individuals, employing data encryption technologies, developing organisational policy for handling personal data (and other sensitive or confidential data), protection of emailing systems and continuous capacity building for staff.

Third party data processing contracts Data processing by a third party shall be governed by a written contract between the third party and the Data Controller. Accordingly, any person engaging a third party to process the data obtained from Data Subjects shall ensure adherence to this Regulation. www.businessday.ng

Objections by the data subject The right of a Data Subject to object to the processing of his data shall be safeguarded at all times. Accordingly, a Data Subject shall have the option to: a) Object to the processing of personal data relating to him whom the Data Controller intends to process for the purposes of marketing; b) Be expressly and manifestly offered the mechanism for objection to any form of data processing free of charge.

Advancement of right to privacy Notwithstanding anything to the contrary in this Regulation, the privacy right of a Data Subject shall be interpreted for the purpose of advancing and never for the purpose of restricting the safeguards the Data Subject is entitled to under any data protection instrument made in furtherance of fundamental rights and the Nigerian laws.

Penalty for default Any person subject to this Regulation who is found to be in breach of the data privacy rights of any Data Subject shall be liable in addition to any other criminal liability, the following: a) In the case of a Data Controller dealing with more than 10,000 Data Subjects, payment of the fine of 2 percent of Annual Gross Revenue of the preceding year or payment of the sum of 10 million naira whichever is greater; b) In the case of a Data Controller dealing with less than 10,000 Data Subjects, payment of the fine of 1 percent of the Annual Gross Revenue of the preceding year or payment of

https://www.facebook.com/businessdayng

ULOAKU EKWEGH the sum of 2 million naira whichever is greater.

Transfer to a foreign country Any transfer of personal data which is undergoing processing or is intended for processing after transfer to a foreign country or to an international organisation shall take place subject to the other provisions of this Regulation and the supervision of the Honourable Attorney General of the Federation (HAGF).

Accordingly: a) a transfer of personal data to a foreign country or an international organisation may take place where the Agency has decided that the foreign country, territory or one or more specified sectors within that foreign country, or the international organisation in question ensures an adequate level of protection;

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Ekwegh is a private legal practitioner with over 15 years legal experience in law firms and as in-house counsel.

She is also a fellow of the Institute of Management Consultants.

Email: uloekwegh@yahoo.com

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

comment

11

comment is free

Send 800word comments to comment@businessday.ng

How I fixed my payday problem in under one year Money Brain with

JR Kanu

F

or a long time, my relationship with money was solely in the receiving and the spending of it. Then, I became an adult and responsibilities followed.

I moved to Lagos. I got my own apartment. I now had to pay rent.

To be able to get a place that I could afford, I had to live far away from the office - which meant paying more to get myself to and back from work.

Little by little, with every small new responsibility that came, all the money that I typically had left over from when I lived with my parents was nearly depleted before I even received it. Payday was a pot of beans - I never knew what I’d find.

Independence clearly comes with a hefty price tag. And so I joined the throng of workers around the world living for payday, salivating, fiending for that credit alert at the end of each month. But that isn’t me. I hated that feeling of not being in control. It was time to make a few changes.

My first fix was to cut things drastically. I started with my seemingly innocent love of junk food, which was in fact, an addiction. It was pretty painful to wean myself off it but it wasn’t enough for a complete turnaround. Eventually, I found what worked and am proud to say that these new habits were what made all the difference.

Habit 1: I made savings a priority Instead of hoping to have some leftovers at the end of the month, it became “save first, spend later”. In fact, I send the money out into my money market funds within the first three days after receiving it before I start paying my bills or otherwise, just in case I forget any important expense before spending it. No more leaving things to chance. I didn’t get paid by chance so I won’t spend the money like I didn’t work for it.

Habit 2: I channelled my inner “No” If you know you cannot afford that trip, or party or whatever, say

no. I can’t clearly state how much it’s given me in left over cash, but at least, I now have peace of mind. It has definitely cost me a few “friends” but I am glad to advise that friends who cannot understand and respect your financial decisions may not be your friends after all. Cut your coat to your size, not to the size of others around you.

Habit 3: I now live by a budget Going to a wedding? Budget it.

Buying snacks? Budget it. Celebrating your birthday with a party? Budget it.

Buying petrol? Budget it! Challenge yourself. A budget might seem like cruel and unusual punishment at first but I promise you, just like everything else you’re doing for your financial life, it gets better with time and forces you to think of ways to grow what’s available.

Habit 4: I learned to share responsibilities No doubt, there’s a certain pride that comes with doing things yourself but there is respect in allowing you to be helped. It all started when I got a roommate the year before I got married. I had a spacious apartment that I found out I could sub-let. Not only did this ease my housing financial burdens, it also allowed me to enjoy my money more. I saved 45 percent on my rent just by getting a friend

‘

My first fix was to cut things drastically. I started with my seemingly innocent love of junk food, which was in fact, an addiction. It was pretty painful to wean myself off it but it wasn’t enough for a complete turnaround

CAMA 2020 and the noise from the beer parlour

E

arlier in the month, the President Buhari administration signed the revised Companies and Allied Matters Act (CAMA) into law. This is the first major update of our company laws since 1990 and it creates provisions that provide additional clarity while also reducing the burden of regulatory compliance.

For full disclosure, I have canvassed for some of the changes in the enacted law via different articles, letters and contributions to several industry-led initiatives in the past decade. As expected, I am positively biased towards most of the key changes and insertions into CAMA 2020. In fact, this was why I was initially reluctant to write this article as I would only be emphasising the positions I had shared previously.

Small companies and private companies, and their promoters, are probably the major beneficiaries of the new CAMA 2020. Private Companies can now be fully owned by a single member or shareholder. Small companies or any company with a single shareholder are no longer required to mandatorily appoint auditors. Private companies are no longer mandatorily required to appoint company secretaries.

CAMA 2020 has provisions that offer improved corporate governance compliance mechanisms. It restricts any individual from being a director in more than five public companies concurrently. CAMA 2020 offers an improved protection of minority shareholders by restricting firms from appointing a director to occupy the office of the Chairman and CEO of a private company. The best part of the updates is the improved governance of not-for-profit organisations in the new CAMA. The new CAMA now requires five persons as members of the audit committee of the public companies, with three slots being for shareholders’ representatives and two slots being for executive directors. This helps to enhance the independence of the audit committee as against the previous CAMA that required six members of equal representation.

The new CAMA 2020 also offers some provisions to improve the ease of doing business in Nigeria. Remote and virtual annual general

meetings are now expressly recognised in the law. E-fillings, electronic share transfers and e-meetings for private companies are now recognised. The use of a common seal is no longer mandatory.

I have read about the views of some religious leaders and professional government critics on some of the sections of the CAMA and I believe that those views, at best, are unconscious distortions of the CAMA and the spirit behind the law. Some of the views, however, are baseless sensational distortions of facts and can be likened to those uninhibited and thrash debates that is usually seen at the beer parlour. I am going to make an attempt to share my views on some of the key contributions and issues raised by those leaders.

There is this spurious allegation that CAMA 2020 has exempted Chinese companies from registering in Nigeria, while all other foreign companies are required to register. Sections 78 and 79 of CAMA 2020 are almost the same text with the Sections 54 and 55 of the CAMA 1990. I have searched for the word “Chinese” or “China” in the entire 870 sections without any such finding. Section 78 of CAMA expects all foreign companies intending to do business in Nigeria to register. Therefore, this allegation about Chinese companies is a fake uproar and only came from the imagination of the person that started it.

There is also the allegation that suggests that section 863 of CAMA 2020 is indirectly criminalising about 21 million people in the informal sector. I am not a lawyer, but my interpretation and understanding of section 863 is totally different. Section 863 provides that a person or association of persons “shall not carry a business in Nigeria as a company, limited liability partnership, limited partnership or under a business name without being registered under the Act”. From my understanding, this section does not suggest that an individual cannot carry on a business in their individual capacity using their real legal names. Therefore, players in the informal sector are allowed to carry on business without registration provided that certain conditions contained in the CAMA (including the old 1990 version) are satisfied. www.businessday.ng

As mentioned above, my understanding of Section 814 suggests that you do not require any registration with CAC if anyone is doing business in their true names. For example, I don’t need any registration if I choose to do business as Oluwole Oluyemi, but if I am desirous of naming my business as Triple-O, then I am required to register. Section 19 also does not require any partnership of less than 20 people that are formed for the purpose of carrying on a business for profit or gain to mandatorily register such organisation.

As a chartered accountant and member of the Institute of Chartered Accountants of Nigeria (ICAN), I felt personally insulted with the insertion of Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) in the CAMA 2020. Section 705 was enumerating the requirements for operating an insolvency consultancy practice and specifically mentioned BRIPAN while embedding other professional organisations such as ICAN and the Nigerian Bar Association as “any other professional body” that may be recognised by the Corporate Affairs Commission (CAC). I believe that this insertion was unnecessary and was only a result of unnecessary cronyism.

There have also been several wrong interpretations of the governance of the not-forprofit organisations. I heard of the Bishop that suggested that the new CAMA abrogates too many powers to the CAC that enables CAC to casually (without any cause) replace the Trustees of the not-for-profit organisations, including churches. It must be noted that section 608 of the old CAMA of 1990 provides for the dissolution of any NGO by the court based on the petition raised by the trustees, members or CAC on certain grounds.

Section 593 of the old CAMA also requires that the financial statements must be audited and published where contributions are collected. These same governance mechanisms are now embedded in the new CAMA 2020, especially through section 839 which empowers the CAC to suspend the Trustees of an association and appoint interim managers, but based on an order of the court.

The above powers, however, can only

https://www.facebook.com/businessdayng

who just started working nearby to live with me, share in the rent and other household costs. I used part of the money I saved to pay for an important certificate course.

If you live with family, you may not be able to share your apartment but there are responsibilities you can delegate to others. You can carpool with a colleague, you and a friend can get on the same HMO to make hospital bills cheaper, get creative and you’ll find a way.

How about you? What habits are preventing you from doing more with your money or simply having more money? Decrease your expenses like I did! If you want to see how you’re currently spending money so that you know what to fix. You’ll find that in just one year, those habits you thought you couldn’t live without will become a part of your past you struggle to remember.

Kanu holds an MBA from Stanford University, a master’s in Journalism from NYU and a bachelor’s in Engineering from Calvin College. His career has included time at Konga, Amazon, The United Nations, Esquire, CNN, and Black Enterprise magazine. Armed with a strong conviction that you can live a great life no matter how much money you have, JR founded REACH Technologies, www.reach.africa. His company builds software to help young people and companies to manage and grow their money.

WOLE OLUYEMI be exercised in situations where the CAC believes that there has been any misconduct or mismanagement, or it is necessary or desirable to protect the property of the NGO, or to secure proper application of the property towards achieving its objects, or in the case of fraudulent activities or where the dissolution is in the public interest. Based on CAMA 2020, the CAC and/or the petitioners shall present all reasonable evidence or such evidence as required by the Court in respect of the petition.

It is worthy to note that the above powers given to the CAC is similar to the role of the Charity Commission in the United Kingdom, where some branches of Christ Embassy Church and MFM Church have been under “interim management” appointed by the Charity Commission based on some alleged financial infractions. The Charities Directorate, an arm of the Canada Revenue Agency, operates with similar powers in Canada. Of course, the improved governance requirements offered by CAMA 2020 tend to tame some of the religious entrepreneurs in Nigeria, and hence, the “noise” is not unexpected.

I have noticed that the old and more established churches are not part of those leading the complaints and resistance to the improved governance clauses introduced in the CAMA 2020. Church organisations such as the Catholics, Anglicans, Methodist, Baptist and FourSquare were built on the foundations of governance transparency and accountability. CAMA 2020 would help to enhance the necessary corporate governance structures in the Nigerian Pentecostal churches as they learn from these organisations.

Note: the rest of this article continues in the online edition of Business Day @https:// businessday.ng Oluyemi is a chartered accountant, management thinker, writer, public speaker, impact investor and, investment and strategy advisor to high net worth individuals, business leaders and senior executives of ambitious and forward-leaning organisations.

@Businessdayng

16

Monday 31 August 2020

BUSINESS DAY

Monday 31 August 2020

BUSINESS DAY

INTERVIEW

17

INTERVIEW

Ekhaguosa Aisien: Standing tall at 90 EKHAGUOSA AISIEN, a British-trained Surgeon, has demonstrated over 30 years’ experience in medical practice in both home and abroad. He is one of the old Bendel State’s oldest living medical doctors and has authored several books on Edo culture. Aisien, in this interview with CHURCHILL OKORO in Benin City, shares his exemplary life story, written records of Edo history and rewarding career. Excerpt:

C

an you give a brief account of your personal background?

My name is Dr. Ekhaguosa Aisien. I was born on August 31, 1930. In less than a month I would have clocked 90 years (this interview was conducted August 5). I was born in my grandmother’s village in Ovia territory but my father is a Benin man, even though our village is Oben. My dad was a court clerk in the colonial Benin native administration judiciary. So, I grew up here in Benin City and our family house is along Sapele Road, exactly opposite the secretariat building, which is commonly known as Palm House.

I started school in 1936 at the Church Missionary Society (CMS), Anglican School in Urhonigbe and later moved to the St. Matthews CMS School in the premises of St. Matthews Cathedral along Sokponba Road in 1937. I spent two years at UNA School at Oza between 1938 and 1939. In 1940, my dad farmed me out to one of his friends, an Ika man who was the headmaster of the CMS School at Oza. From Oza, he was transferred to another place after Issele-Uku, Delta State. In 1942 my dad came for me and then I got into St. Peters CMS School where I finished my elementary education in 1945. During that year, I passed the entrance examination to the CMS Grammar School in Lagos, the oldest Grammar School in Nigeria. By the time I started in January 1946, the school was more than 86 years old. It was that school many prominent Nigerians passed through such as judges and doctors.

In fact, the school was founded by the father of Herbert Macaulay who was the father of Nigerian Nationalism. Herbert was also an old boy of that school. I left school in 1951 and got admission to University College Ibadan in October 1952. The University College was only three years old and it was the only university in Nigeria in those days.

I was to study Agriculture at the university. I only spent two years and collected what they call the Inter B.Sc in those days.

Thereafter, I left Ibadan University because I didn’t want to do

agriculture anymore, and the Federal Government refused to change the scholarship to a medical scholarship. I had no choice than to throw away the scholarship and left for Lagos.

I began to teach Sciences in my old school, CMS Grammar School in Lagos, and then in 1957 I got another scholarship from the new Western Region headed by Obafemi Awolowo.

The scholarship took me to England where I got admission to the medical school of Kings College in London. In London, I qualified as a medical doctor, did my houseman-ship in England, and came back as a young medical doctor to Nigeria in September 1963.

As a surgeon, what prompted you to study medicine?

We were in class six in 1951, and then a career officer came from one of the ministries in Lagos.

And he gave a pep talk to the senior students in all the secondary schools in Nigeria. When he got to our school, he gathered our class, which was the outgoing class, and told us to adopt agriculture in higher studies because Nigeria was an agrarian society and the future rested on Nigeria developing her agriculture. Most of the money that came in with which to run the government of Nigeria came from agricultural produce such as groundnuts and oil palm.

So, this career officer went round the schools in Lagos telling us to adopt agriculture as our future course of study because he knew many of the boys wanted to study law and medicine. So, I was impressed by the lecture of that career officer, and said I would do agriculture.

We did the entrance examination to Ibadan University and I was among the 10 scholars in the whole of Nigeria to be awarded scholarship to study agriculture. When I got admitted I noticed that my fellow agricultural students were not happy with themselves and the course they were studying, probably if they had been good enough they would have been doing medicine not agriculture; and I was in their midst and couldn’t withstand it.

I regarded myself not inferior to any other students in the uni-

Uromi, looking after the rear of the Second Division of the Nigerian Army.

In 1969, before the civil war ended, I went back to Edinburgh, Scotland, to specialise in surgery. I worked all over England and Scotland before I finally returned to Nigeria with my wife and children.

When I got home, I was posted to Warri General Hospital as the consultant surgeon in charge. I worked there for two years before I was transferred to Benin City as the most senior surgeon in the whole of Bendel State. My base was at the Central Hospital Benin City, and I retired in 1978 with two of my colleagues, Dr. Igbinovia and Dr. Idehen. Afterwards, we established a private hospital called Azuwa Hospital; I was the surgeon there, Igbinovia was the physician while Idehen was the eye surgeon. We ran the hospital for many years until we became too old to practice medicine and then stopped practice.

What have you been doing since you retired from practice?

I started writing before I retired from practice. I am well known in Benin City as a writer and specialist in Benin History.

versity. Some of my classmates that year, the most famous was Wole Soyinka, Guobadia, among others.

So, I wrote to the Central Government, now Federal Government, to change the scholarship to medicine that I do not want to continue with agriculture anymore. Unfortunately, they replied that they would not change it.

Your career has taken you to many places. How was your professional journey like?

I became a civil servant as a medical officer in Central Hospital Benin City, and Asaba, as well as the General Hospital in Forcados where I looked after the Western Ijaw people. Thereafter, I was transferred to Uromi in Esanland, and I was the only doctor looking after the whole of Esanland from my hospital in Uromi. The Nigerian Civil War met me there and as the war went on, I became a doctor to the Biafra soldiers who were wounded in the Midwest.

When the federal troops were driving Biafra out of the Midwest,

those who were wounded at Sabongida Ora, Iruekpen, Irrua were brought to my hospital at Uromi, and I looked after them. When it was time for the federal troops to capture Uromi, the Biafrans came with a big lorry, put all my patients in that lorry, and then drove them to Agbor.

Subsequently, the federal troops came in, took over Uromi, the whole of Esan, and within two days I started receiving federal soldiers; I placed them in the same bed I put Biafran soldiers. Thereafter, I was given a field commission and I became a Major in the Nigerian Army, and was made commander of the Base Hospital in

What are those memories of your early age you would like to talk about?

I remember very well in 1942, my dad backed me on his bicycle and we rode all the way from Benin City to today’s Aniocha after Issele-Uku. When we got there he also backed me up on his bicycle accompanied by his younger cousin who had his own bicycle, and we rode back to Benin City. In those days, there was no much tarred road.

That journey took us about a day and half because we slept in a village close to Okhuahe stream.

In those days, journey between Benin City and Lagos took two days; you will leave in the morning, get to Osogbo at dusk, and sleep at a railway station. The following morning a train will stop at Osogbo and it will travel to Ibadan, Abeokuta and then arrive in Lagos at dusk.

The second experience was my school days at St. Peters. We had a great teacher in Standard Six who made us who we are today. He was such a great teacher that produced excellent students. The Primary Five School Leaving Certificate in the whole of Benin Province (that included Edo State and Anioma), there were 12 distinctions to be won by all primary schools. St. Peters got six of the 12 distinctions, and I think that demonstrates the quality of

the history of old Benin Empire and he told us interesting stories of the Benin Kingdom. And I felt that these stories should not get lost.

When I got to England in 1957, I went to the London Museum just as any tourists would do; I was surprised to see Benin artefacts such as the Benin bronze works. I was amazed at the attention the British people give to the Benin Culture in their capital city, London. It struck me that there must be something important about the history of Benin, and I decided to delve deeply in Benin History.

I came back home, in addition to practicing medicine and surgery, I began to put pen to paper only on history of Benin people. So far, I have put out about 13 publications.

titled IWU? The most important book that gives me plenty of pleasure is the “IWU,” meaning the body markings of the Edo people. I was the one who conceptualise the Iwu dress that the Benin people are now wearing, particularly during marriages. I designed it and took it to the Palace in 1986 during the reign of Oba Erediauwa.

The Omo N’Oba after his coronation in 1979, he paid thank you visits to the different rulers in Nigeria who came to grace his occasion. When he arrived back home, I was with him one evening, the Oba told us a story that wherever he went to all the Edo people in that area will come to pay homage to him. He said one of the questions that they never failed to ask him was that the Benin people do not have anything that they can wear to tell other people looking on that they are Edo people.

After he finished the story, I thought about how the Edo man look like years ago. We know the Yoruba have their different tribal marks on their faces, while the Edo people had the Iwu on our bodies. Many years ago, a man who doesn’t have the Iwu on his body is not an Edo person. Then I thought we can no longer put the Iwu on our bodies, why don’t we put it on the dress we wear.

Later, I designed it and took it to the palace, and the Omo N’Oba accepted it and we celebrated it in a form of a ceremony. Oba Erediauwa who sewed his own dress declared that the Edo man will be known by the dress.

Since 1986, we the Edo people now have our own dress. I saw that the people were now forgetting what the Iwu was to the Edo of old so I decided to write on it so the Edo people will not forget.

The book is titled, Iwu, the body markings of Edo people. Some of the other published books are, Erediauwa: Prince of Benin; Benin City: The Edo State capital; the Benin City pilgrimage stations; Christianity and Edo State; The Edo man of the 20th Century; Elegbe: The Prince of Benin; Ughoton; Benin Traditional Marriage Ceremony, and Ewuare II: The Oba of Benin.

What influenced your decision to write your first book

Are you fulfilled at 90?

I am really fulfilled. I had a good

our school teacher. The teacher was a Yoruba man. He later left the Anglican Mission, and he was the one who started the Western Boy High School.

As an accomplished physician, what more would you like to achieve?

I regard myself as self-sufficient.

One of the things I wanted to do after I became a doctor was to give exposure to the history of Benin. My dad knew a lot about

‘

So, it was the refusal of University of Ibadan to give me second admission that sent me off to England to study medicine, and then I became a British medical doctor

professional life as a doctor and as a surgeon, and that is the ordinary type of life a professional would like to have. But the thing that has given me plenty of pleasure is the fact that I became a writer and historian. So, I became more than what I learnt in university because I didn’t learn how to be a writer or historian in the university. I came back and then people now know me as a writer and historian; this was something over and above what I was trained for.

I have had many joyful moments. After I left Ibadan University, I started teaching sciences.

One of the most prestigious

students I thought in CMS Grammar School in Lagos is Ernest Shonekan, former head of state.

The most joyful moment was when I was given a scholarship because my parents didn’t have the means to send me abroad to study. As God would have it, I got a scholarship to study medicine. I never thought I would get the opportunity of travelling to England for studies because my parents wouldn’t have been able to send me there. So, it was the refusal of University of Ibadan to give me second admission that sent me off to England to study medicine, and then I became a British medical doctor.

18

Monday 31 August 2020

BUSINESS DAY

In Association With

What Putin fears

Russians and Belarusians are tired of backwards-looking autocrats The old tools of truncheon and syringe may keep them in power. But for how long?

N

OTHING IS AS inspiring as seeing people take to the streets to demand their freedoms—and nothing is as terrifying for the dictators they are defying. In Belarus, among scenes that recall the revolts of 1989, people are turning out in their hundreds of thousands after a blatantly rigged election, heedless of the threat of state violence. In the Russian city of Khabarovsk tens of thousands march week after week to protest against the arrest of the local governor and the imposition of Moscow’s rules. Vladimir Putin is rattled. Why else is Alexei Navalny, an anti-corruption crusader and Mr Putin’s greatest popular rival for the Russian presidency, lying poisoned in a Berlin hospital bed?

Regimes that rule by fear, live in fear. They fear that one day the people will no longer tolerate their lies, thieving and brutality.

They try to hang on with propaganda, persecution and patronage. But it looks increasingly as if Mr Putin is running out of tricks, and as if Alexander Lukashenko, his troublesome ally in Minsk, is running out of road (see article).

That is why, despite the Kremlin’s denials, they are falling back on the truncheon and the syringe. And it is why, as the protests roll on, they must be wondering whether state violence can secure their regimes.

Both leaders came to power promising relief from the chaos that followed the collapse of the Soviet Union. Mr Putin offered his citizens a deal: stay out of politics and you will get order and better wages. Mr Lukashenko promised Soviet-style continuity.

Mr Putin was lucky that oil prices soared after he took over. Ordinary Russians benefited (though not nearly as much as the regime’s cronies). Mr Putin built a mafia state; Mr Lukashenko, an oldfashioned dictatorship. Both men seek to project an image of strength through tame media—Mr Lukashenko had himself filmed this week whizzing around in a helicopter

AA pandemic Balkan betrayal of psychological pain

How to reduce the mental trauma of covid-19 A few cheap steps can make a big difference

I

N ECUADOR PEOPLE are still searching for the bodies of relatives who died of covid-19 four months ago. In Italy a boy begged a priest to forgive the “sin” of lowering his face mask outdoors. Not since the second world war have so many people in so many places been traumatised at once (see article). Even after the disease itself is brought under control, the mental scars will linger.

For many, the pandemic is merely an annoyance. But some groups face a particular risk of posttraumatic stress disorder (PTSD), the symptoms of which include nightmares, flashbacks and feelings of guilt, anxiety or isolation.

The most vulnerable are those who have been very ill, or lost relatives, as well as victims of previous traumas

and brandishing an AK-47 to face down the supposed Western plot to overthrow him. However, neither regime can reform itself. They may use state television to proclaim virtual change, but they struggle when it comes to the real thing.

Start with the economy. Belarus retains a theme-park version of the old Soviet system. When Mr Lukashenko went to gather support among the workers, he flew off to a state-owned tractor factory like some latter-day Lenin.

The country’s exports largely consist of potash and petroleum products refined from Russian oil that used to be discounted. Russia is different from Belarus. Its economy is more open and less monolithic. Yet the commanding heights of industry and finance are in the hands of the oligarchs in the Kremlin’s trusted circle. Mr Putin has thus been unable to unleash competition and dynamism without upsetting the relationships that keep him in power. He has failed to diversify away from hydrocarbons, so the recent double shock of low oil prices and covid-19 has sent the economy reeling. As belts tighten, he has nothing to offer but nationalism and nostalgia.

That cocktail is losing its po-

tency. For two decades Mr Putin has invoked an imaginary past of glory, plenty and certainty in the days of the Soviet and tsarist empires. His regime is a pioneer of disinformation. It invented the troll factory, and has created a media environment where, as one commentator put it, “nothing is true and everything is possible”. Yet Mr Putin’s offering looks tired next to that of Mr Navalny, whose popular YouTube videos are as skilful as the regime’s, but resonate with a growing sense of frustration. They are also grounded in exhaustive research into the regime’s corruption—and thus, in reality.

As well as failing to bring about economic and cultural renewal, both Mr Putin and Mr Lukashenko have failed to renew their regimes.

Neither has a plausible successor.

Mr Lukashenko has taken to trotting out his 15-year-old son, most recently in combat gear. Mr Putin cannot easily groom a successor lest it upset the factions he must keep sweet. This year he attempted to solve the problem by changing the constitution to allow himself to stay in power until 2036, when he will be 84. But that, too, was a sign of exhaustion. Mr Navalny, by contrast, has been busy organis-

ing opposition votes for regional elections to be held on September 13th. He may have been removed from the stage because if Russia had seen a popular movement like that in Belarus, he would have been its most plausible leader.

Mr Navalny’s poisoning is evidence that when these regimes run out of ideas, they resort to violence. And yet Belarus shows how hard a tool violence is to wield. Mr Lukashenko tried savage repression by arresting and torturing protesters but, so far, it has emboldened them and further undermined him. Sunday’s huge protests overwhelmed his threat to use force against them. He might have been willing to kill people in their hundreds or thousands, but he cannot afford to lose the loyalty of his security forces. Mr Putin recognises that blunt force used against the people could fuel further protests—it is why the Kremlin has largely left the demonstrators in Khabarovsk untouched in the hope that they will lose interest.

But were the protests to start to spread from the far east, Mr Putin would face a similar calculus. He can arrest and intimidate the elites all he likes. The people, in sufficient numbers, are less easy to control.

(such as refugees), and those with front-line jobs, such as doctors and nurses. In Spain nearly a sixth of those infected are health-care workers, and most of them show signs of PTSD. In Bangladesh, where the incomes of poor people briefly fell by 80% when lockdowns were tight, 86% of people in one poll reported covid-19-related stress.

Humans are resilient. Those who experience trauma mostly cope.

When their homes are destroyed by earthquakes, they rebuild them and carry on. Even the mass bombing of cities in the second world war did not break civilian morale.

Nonetheless, the world should take the collective mental damage of covid-19 seriously. Steps to reduce it cost little, and can benefit not only individuals but also society more broadly.

Research into previous disasters suggests that survivors’ long-term mental health depends more on “perceived support” than “received support”. In other words, donations Continues on page 19

Monday 31 August 2020

BUSINESS DAY

19

In Association With

The conflict in Mozambique is getting worse

How to reduce the mental trauma of covid-19

An overwhelmed government is worrying others in southern Africa—and beyond

Continued from page 18

More misery, few answers

C

ABO DELGADO, the northernmost province of Mozambique, is known to some as cabo esquecido or “forgotten cape”. It has been an apt name. A Portuguese colony until 1975, Mozambique developed as two separate entities divided by the Zambezi river, explains Alex Vines of Chatham House, a think-tank in London. The north relied on agriculture and, along the coast, was influenced by Swahili culture. The south depended on South Africa and the gold trade. Many in Maputo have little grasp of what life is like in the poorer northern provinces. Mozambique’s capital is about 1,700km from Pemba, the capital of Cabo Delgado—farther than London is from Lisbon (see map).

But Cabo Delgado is no longer forgettable. A smouldering Islamist insurgency has set the province ablaze. There were almost as many attacks by the jihadists in the first half of 2020 as in all of 2019, which was bloodier than 2018, the first full year of the conflict. More than 1,500 people have been killed. At least 210,000 have had to leave their homes.

On August 5th the insurgents launched their latest assault on Mocímboa da Praia, a strategic port (and site of their first attack,

in October 2017). They killed more than 50 soldiers in a single ambush and sank a small naval ship with a rocket-propelled grenade. On August 11th they took the port.

The sophistication of the attack has raised concerns in Maputo and other capitals that the insurgency will spread to other parts of the country and perhaps beyond.

Much remains murky about the uprising. Ansar al-Sunna, the name analysts use to refer to the fighters, grew out of a sect that had grievances with local Sufi Muslims and links to extremists in east Africa. It recruits young people frustrated by the lack of opportunities in the licit or illicit economies. Few locals believe the discovery of huge amounts of natural gas off the coast

of Cabo Delgado will benefit them, as opposed to the elites in and around the ruling party, FRELIMO. In 2019 the insurgents were depicted in a video pledging allegiance to Islamic State (IS). The strength of the connection is debatable, however. The insurgents seldom refer to themselves as being members of IS. Their attacks tend to be on state institutions. They rarely issue propaganda and have no clearly stated aims. All of this suggests Ansar al-Sunna remains a mostly local affair. But it is launching more daring and complex operations.

At first the state dismissed the group as bandits. Now President Filipe Nyusi admits there is a problem, but his government is

overwhelmed. Fighting within FRELIMO over the spoils of a war economy is intensifying. The country’s best soldiers are guarding facilities to liquefy and ship the gas.

The rest are undertrained, underpaid and accused of human-rights abuses, which could worsen as the government begins to arm local militias. Most soldiers are not from Cabo Delgado and do not speak the local languages. Often they flee when insurgents attack.

So the government has turned to outsiders. Together they could be a cast of characters in a novel cowritten by Tom Clancy and Wilbur Smith. First there was the aborted involvement of Erik Prince, who founded Blackwater, a controversial American security firm. Then, in 2019, came the Wagner Group, Russian mercenaries close to the Kremlin. It lost battles and retreated. In its wake came Dyck Advisory Group (DAG), a South Africa-based outfit led by Lionel Dyck, a former Rhodesian officer who became a commander in Robert Mugabe’s Zimbabwean army. Mr Dyck is admired in FRELIMO circles for leading a Zimbabwean assault on the party’s arch-enemy, RENAMO, in 1985. Now DAG’s helicopters, with machineguns welded to the side, are trying to stop insurgent attacks.

The memory hole

The rising prevalence of dementia is a global emergency It requires more research, better provision for long-term care and changes in individual behaviour

O

F ALL THE troubles facing the world, the rising prevalence of dementia might seem among the less pressing. The reason behind it—longer lifespans—is to be cheered; it does not advance at the speed of a viral infection but with the ponderous inevitability of demographic change; and its full effects will not be felt until far into the future.

But the reality is very different.

As our special report this week makes clear, dementia is already a global emergency. Even now, more people live with it than can be looked after humanely. No cure is in the offing. And no society has devised a sustainable way to provide and pay for the care that people with it will need.

“Dementia” is an umbrella term for a range of conditions, with a variety of causes, of which the most common is Alzheimer’s disease, accounting for 60-80% of cases. It usually starts with forgetfulness and a mild loss of cognitive functioning. But as it advances, people lose the ability to look after themselves. Many require round-the-clock care long before they die. It does not just affect the elderly, but they are much more likely to have it—and life expectancy glob-

ally has climbed from not much more than 30 a century ago to over 70 now, and over 80 in rich countries. By some estimates, 1.7% of 65- to 69-year-olds have dementia and the risk of developing it doubles every five years after that. At present, about 50m people around the world have the condition, a number expected to rise to 82m by 2030 and 150m by 2050. Most of the new cases are in the developing world, where populations are rising and ageing.

The problems these numbers will bring everywhere have already been felt in countries where people are older, and especially acutely during lockdowns—witness the difficulty of looking after

people with dementia in their own homes, and the large numbers in overstretched care homes who receive little individual attention.

As families shrink, single children and grandchildren will struggle to cope with their old folk. Already, dementia care has had a knockon effect on general health care.

Before the pandemic as many as a quarter of beds in British hospitals were occupied by people with dementia. There was nowhere else for them to go.

Not all the news is bad. Recent research has shown that behaviour such as smoking less, exercising more and losing weight in middle age has reduced the risk of dementia among old people

in some Western countries in the past 30 years. And America’s Food and Drug Administration has promised to decide by March 2021 whether to license a drug said to be the first to stem cognitive decline in Alzheimer’s patients. But the risk of dementia still seems to be rising in much of the world and any new therapy in the foreseeable future is likely to benefit only some patients partially.

That is why governments should act now to lessen the social and economic harm from the growing prevalence of dementia. The first step is to recall the urgency with which many were promising to tackle the problem just a few years ago—in 2013, for example, when David Cameron, then Britain’s prime minister, used the rotating chairmanship of the G8 to convene a “dementia summit”, which promised to fund research with the goal of finding a “disease-modifying treatment” by 2025. Instead, funding for work on dementia has lagged far behind that for cancer or coronary heart disease. And as the pandemic hampers or prevents clinical trials and research, and sucks resources away from other areas, dementia risks again being left behind.

of money or food matter less than the feeling that you can turn to your neighbours for help. Such help is typically offered spontaneously, but governments can also chip in.

France, for example, sets up “medical and psychological emergency units” after terrorist attacks and other disasters. These try to minimise the long-term mental-health consequences of such events by offering immediate walk-in psychological support near the site of the disaster.

Several cities in France have reactivated this “two-tent model”, one for medical care and the other for mental care, to help people cope with the toll of the virus.

Some people draw comfort from the fact that they are not alone— millions are facing the same tribulations at the same time. But the pandemic also presents unusual challenges. No one knows when it will end. Social distancing makes it harder to reconnect with others, a step in recovering from trauma. And the economic shock of covid-19 has undermined mental-health services everywhere, but especially in poor countries.

The most important measures will be local. A priority should be bringing people together by, say, expanding internet access. Mutualaid networks (eg, WhatsApp groups to deliver groceries to the elderly), which tend to peter out once the initial disaster subsides, should instead be formalised and focused on the most vulnerable. Mental-health professionals should connect patients to such services, and train more lay folk as counsellors. In Zimbabwe, well before the pandemic, hundreds of grandmothers were taught how to provide talk therapy on village benches to depressed neighbours who could not afford to visit a distant clinic. Such innovations can work elsewhere, too.

Religious services and sporting events can provide a physical or virtual space for mourning. The story of the pandemic can be taught in schools, helping those for whom it was a hassle empathise with those for whom it was life-changing. The mental trauma of covid-19 cannot be erased, but it can be eased.

20

Monday 31 August 2020

BUSINESS DAY

Government Enterprise & Empowerment Program

Brought to you by

GEEP: Integrating Nigeria’s bottom of the pyramid into mainstream economy ‘

B

ottom of the pyramid’ is a common expression in global economics. It refers to the largest but poorest socio-economic group in a society, according to the Business Dictionary. It was first used by Franklin Roosevelt, a former president of the United States, in his radio address entitled ‘The Forgotten Man.’ He used the phrase to describe a group of forgotten, unorganised but the indispensable units of economic power.

This group is often forgotten by the society, but it is an unexploited emerging market worth trillions of dollars, according to Fasiha Subhan and Amira Khattak, in their work entitled ‘What Constitutes the Bottom of the Pyramid (BOP) Market?’

In Nigeria, which is Africa’s most populous country, the people earn less than $1.90 per day, putting them in the category of low income earners and the poor. They are ignored and neglected, even though they have the capacity to create millions of jobs.

A 2019 report by the National Bureau of Statistics and the Small and Medium Enterprises Development Agency (SMEDAN) said that the number of micro, small and medium, enterprises (MSMEs) grew from 37million in 2013 to 41.5million in 2017.

However, micro enterprises were responsible for this growth, with the number hitting 41.469 million (99.8 percent). Small

enterprises were 71,288 (0.2 percent), but medium-scale businesses were only 1,793 (0.004 percent) from 4,670 before 2013.

The data said that MSMEs contributed 50 percent to Nigeria’s GDP, accounting for 86.3 percent of jobs (59.6million jobs) as of 2017. With micro businesses making up 99.8 percent, it follows that the majority of these jobs were created by them.

In spite of their contributions, the bottom of the pyramid is often ignored in the economy, with deposit money banks reluctant to provide them with loans needed to grow.

“Nigerian commercial banks are risk-averse. They put so many bottlenecks on the way when you want to access funds,” Ibrahim Maigari Ahmadu, chief executive of Liverstock247.com, Nigeria’s first livestock online marketing and listing platform,

‘

Yemi Osinbajo

GEEP was set up to start the economic revival from the bottom of the pyramid by providing access to credit for Nigerians who contribute to the economy but have been neglected over the years

‘

odinaka Anudu

www.businessday.ng

said recently.

“Interest rate is very high, which is a major inhibiting factor. Collaterisation is structured to knock you out,” he further said.

He explained that the risk averseness of banks prevents them from funding small and micro as they are not certain about what to get.

According to the NBS and SMEDAN report, 85 percent of businesses could not have access to external financing from 2013 to 2017.

In fact, only 5.3 percent of SMEs had access to bank credit, even with 40 percent of them

https://www.facebook.com/businessdayng

having relationships with banks.

“Both access to funds and costs are big issues,” said Attah Anzaku, CEO of AgroEknor, exporter to Europe, Asia and the Americas.

“Even if you have the access, cost is crippling,” he added.

The Federal Government is aware of these challenges, which is why it established the Government Enterprise & Empowerment Program (GEEP) to integrate the botton of the pyramid into the economy using soft loans.

GEEP was set up to start the economic revival from the bottom of the pyramid by providing

@Businessdayng

access to credit for Nigerians who contribute to the economy but have been neglected over the years. In four years, Tradermoni, Marketmoni & Farmermoni have provided loans ranging from N10,000 to N300,000 to petty traders, artisans, small businesses and farmers. This has seen over two million Nigerians significantly receive boosts to their businesses. GEEP has been implemented in 36 states of the federation and the FCT with a spread of over 2,600 market clusters.

These loans are not given out at random. Instead, they are done through existing clusters and associations in various markets across the country.

This helps in proper tracking of the loans and provision of easy repayment options for the beneficiaries.

GEEP has also been able to provide this access to credit to IDPs in the North East. This has provided the IDPs with a viable way to get back on their feet while also contributing to economic development. To ensure that these loans get to the target audience, market visits are done across the country to engage with beneficiaries as they go through the process.

The programme has become critical due to the prevailing economic situation worsened

by COVID-19. Today, 82 million Nigerians live on less than $1 per day, representing 40 percent of the population, according to a recent report done by the NBS. Unemployment rate is estimated at 27.1 percent, meaning that over one out of every four Nigerians is unemployed.

Monday 31 August 2020

BUSINESS DAY

21

real sector watch How FX, pandemic impact Nigeria’s manufacturers Gbemi Faminu

T

he foreign exchange crisis is hurting many manufacturing firms today as many cannot get dollars to import

inputs.

A lot of factories are empty because manufacturers only get two to 10 percent of dollars needs.

Nigeria manufacturers imported 40 percent of their raw materials in 2019, according to the Manufacturers Association of Nigeria (MAN), with the exchange rate standing at N360/$ last year as against N470/$ at the parallel market today. This means it costs Nigerian manufacturers more to import inputs today than in 2019.

The scarcity of dollars is down to the pandemic, which has cut crude oil demand and then price.

Crude oil and minerals provide over 90 percent of Nigeria’s FX. “We are really struggling to import our inputs because there is no dollar anywhere,” a chief executive of a manufacturing firm said on anonymity.

The COVID-19 pandemic has been a sore in manufacturers’ throats.

The manufacturing sector experienced its worst contraction in five years, declining to -8.78 percent, from the 0.43 percent

recorded in the previous quarter and the -0.13 recorded in the corresponding period of 2019, a GDP report by the National Bureau of Statistics (NBS) released last week said.

Real manufacturing contribution to the economy in the second quarter of 2020 was 8.82 percent, lower than the 9.08 percent recorded in second quarter (Q2) of 2019 and the 9.65 percent recorded in the first quarter (Q1) of 2020,” the report stated.

Vincent Nwani, a Lagos-based economic consultant, said the

contraction the sector witnessed generated from the GDP figure itself, which was the lowest in 15 years from 2005. He further said that recovery will not be swift, though further decline is not to be expected.

“Looking at the GDP figures itself, the figures represent the lowest in 15 years since 2005.

The manufacturing sector was seriously hit by the impact of the pandemic which reflected in the contraction. The economy was shut down and is still being reopened gradually, due to the underlining challenges of the

economy and the impact of the pandemic,” he noted.

Israel Odubola, a senior research analyst at the Lagos Chamber of Commerce and Industry (LCCI), said the contraction highlights the struggles of the manufacturing sector prior to the outbreak of the pandemic, adding that it already showed traces in Q1 and the PMI figures.

“The nine percent contraction was driven by the supply chain disruption and lockdowns measures, particularly in Asian region, which is a strategic import hub for

Nigerian manufacturers,’ he said.

In addition to this, the underwhelming performance was equally driven by FX crisis, in which most manufacturers could not access FX to source critical import needs,” Odubola further said.

He added that activities in the sector are still weak, evidenced by manufacturing PMI still in contractionary region, saying that when the various challenges in the sector are considered, there is a possibility that the sector will most likely contract in the next two quarters.

Akinloye Ayorinde, equity research analyst at CSL Stockbrokers Limited, said the steep decline in the manufacturing sector was primarily down to weaker domestic and international economic activities in Q2 due to the lockdown measures enforced to contain the spread of coronavirus.

As a recommendation, he said that “to revive the sector, significant amount of stimulus would be required. Particularly, vulnerable sub-sectors in the manufacturing space should be provided with funds at low cost to sustain operations and encourage capital expenditure (CAPEX) spending. In addition, solving the FX challenges faced by these manufacturers would be an important factor to kick-start growth.”Ayorinde said.

Guinness Nigeria eyes rebound after COVID-19 impact Odinaka Anudu

T

he closure of bars, lounges and social gatherings has impacted Guinness Nigeria’s revenue and profits for the period ended 30 June, 2020.

But the brewer is eyeing a rebound post-coronavirus, with focus fixed on optimising route to consumer, reduction of credit risk and management of cost control.

Its revenue dropped 21 percent to N104.37 billion for the period, from NN131.49 billion reported in the same period of 2019. The brewer incurred a loss after tax of N12.7 billion, according to audited results released to the Nigerian Stock Exchange (NSE) on Friday.

Baker Magunda, managing director/CEO, Guinness Nigeria plc, said the last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment.

“Closures of on-trade premises (bars, lounges, clubs and dine-in restaurants) which represent the major part of the consumption occasion for our products; and bans on celebratory occasions impacted sales,” Magunda said.

He explained that demand was

also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.

“Distribution was further impacted by the ban of inter-state, and in some cases intra-state travel. Although management worked diligently with regulatory

authorities to minimise the impact, this hampered our distributors’ ability to restock and have our brands available for purchase,” he further said.

The brewer, however, said that its reaction to the challenges presented by theCOVID-19 lockdown was centered around reducing risk to the business by focusing on cash delivery, distributor inventories

reduction, and fast-tracking of the ongoing distribution transformation project for efficient sales operations.

“This focus ensured a reduction of trade receivables by 88 percent over same period last year,” he stated.

“We also focused on cost management by reacting to the drop in demand by reducing operations

Baker Magunda www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

for a month. Agile actions taken in the period impacted by COVID-19 complemented the work already undertaken throughout the year to reduce cost of sales by year end,” he explained.

He said going into the new fiscal year, the company is conscious of the continued challenging operating environment with double-digit inflation and pressured consumer income spending. However, he believes the focus put in optimising route to consumer, credit risk reduction and managing cost control would position the brewer to emerge even stronger from the current crisis.

“We remain confident about the execution and resilience of our Total Beverage Alcohol strategy as a key driver of sustainable growth in the market,” he added.

In a similar fashion, Nigerian Breweries experienced revenue decline of 11 percent to N151 billion in H1 of 2020. Profit after tax declined by 58 percent, from N13 billion in the first half of 2019 to N5.5 billion in the same period of 2020.

Also, International Breweries experienced revenue decline of 12 percent, recording N60 billion in the first half of 2020 as against the N68 billion in the previous year.

It further recorded N9.3 billion in its loss after tax, representing a 37 percent increase in its loss profile.

22

Monday 31 August 2020

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

The Big Idea: what is an office for?

SCOTT BERINATO

O

ffices are changing in response to COVID-19. But many of these shifts aren’t necessarily new, says Jennifer Magnolfi Astill, one of the leading researchers on the evolution of workspaces, and not all will stick. What is increasingly clear, however, is that the pandemic has accelerated the natural evolution of the office away from a productivity space to something else — both a learning space and a space to solve complex problems.

Magnolfi Astill, who largely focuses her work on tech offices that involve human-machine collaboration, has consulted on workspace with dozens of companies, from Google to PepsiCo to the BBC. HBR spoke with her recently to understand how the COVID-19 pandemic would affect the future of offices. The following conversation is edited for clarity.

Q: When it comes to how the pandemic will affect offices, it seems that people have gone through a whole cycle of feelings about it. First, there was adoption of remote work and a sense that it was exciting and pointed to a new future. Then Zoom fatigue set in.

Then people started going in different directions about whether or not they ever wanted to return to the office. A lot has changed, but what change will stick?

A: From the workers’ perspective, this hasn’t been a linear transformation. It’s not just a change happening faster. It’s an emergency. This has to be called out. Thousands are literally working under duress.

So, that being said, we ask what will stick and what’s important to take from this forced experiment.

For work itself, the net out is that the sudden shift to remote work has gone better than expected by most accounts. These are early numbers in the life cycle of this pandemic, but data based on a recent survey of 50,000 workers suggests that 75% are able to focus effectively on team and individual activities in the current context.

On the flip side, people are working more hours a day, blurring the boundary between work time and personal time, a predictable outcome in an emergency but unsustainable in normal times.

Some effects of our work experience during the pandemic will remain. This event will mark a permanent change in our perception of workspace in terms of the four primary work modes of an office: focus, socialization, collaboration and learning. Most of what’s been discussed, especially early on in the lockdown, is focus work. The collaboration aspect of work has

been redefined, and companies outside of tech are learning very quickly how to do that. But lately we are hearing more about the socialization aspect of work. As time wears on, people are realizing that they miss things about their workspace that have little to do with production.

Q: You’ve talked in the past on the importance of that socialization aspect on things like innovation and expanding networks.

“Collisions” between people and groups make for better, more creative output. And that’s what many have started to miss?

A: Yes. It is harder to quantify than productivity output, but the pandemic has made the absence of socialization extremely clear to most workers. Whether it’s those casual conversations, serendipitous encounters or drinks after work — these have real value to a company and impact its ability to innovate and solve problems.

They also have real value to employee engagement and happiness.

From my research and others’, we know that remote teams benefit from physical interaction by coming together at least once a year to solidify social bonds that then improve teamwork. We know that if people are more than 90 feet away, they are effectively not in the same space, so we can design a workspace to get those people to collide and interact more. We humans naturally absorb a great amount of information about our environment and each other, including nonverbal cues, when we are interacting in the physical world. This improves communication, trust and performance with team members and allows us to establish and cultivate richer working relationships, increasing the value of human work altogether.

I continue to believe that the www.businessday.ng

pandemic is distilling for us the value of workspace. It’s given us a meaningful perspective on what we do and what we value in an office.

Q: Ultimately, that’s the big question: What is an office for?

A: There are two parts to this question. One has to do with somewhat objective aspects of the evolution of work. The other is based on organizational culture and core values. Once you answer these, how you design the workspace will likely change.

Q: And productivity may not be the best application for an office?

In fact, businesses might increase productivity by making less of it happen in an office?

A: It’s possible. It depends on what drives productivity. Those who gathered qualitative and quantitative information during this time will be able to mine insights and model scenarios for how much and what type of work should happen in their workspaces and what would be better performed remotely. Specifically, large companies that occupy millions of square feet of space will want to optimize. Beyond cost considerations, many workers have now experienced newfound flexibility and autonomy in how they manage their work, something that’s usually only associated with startups. This aspect has been beneficial on the whole, so I believe it will represent a new baseline. Companies and employees have made the transition and will want to retain some of that flexibility.

Q: So the job an office does for workers is changing?

A: Exactly. It has been for some time. Think of a workspace as a bundle. An offering. Like a conference, or a travel experience, or your cable TV package. The of-

https://www.facebook.com/businessdayng

fering includes many things. At a conference you get keynotes, breakout sessions, networking parties, and so on. A travel bundle includes tours, hotels and so forth.

Cable includes channels.

With bundles, we tend to purchase the entire thing but use only parts. And the parts we use tend to address specific needs, which change and evolve. So the office bundle includes, let’s call them “space applications”: individual focus work, meetings, working lunches, team collaboration, creative play space, operations support, etc.

When a structural shift in work happens or, as in our context, a systemic disruption of work, our requirements of a workspace change. Basically, you need different channels.

Q: In other words, the pandemic has been a forcing function, making people look critically at their office bundle, like someone saying, “Why am I paying for those TV channels I never watch?”

A: It has been like a magnifying glass. We are aware that this is a bundle, and that has made us question the need for some of what comes with it — like commuting, to cite an obvious one. We now know we can perform many work functions without an office, provided there’s a social contract that allows it. This is a point of no return. Even companies historically very skeptical of mobility, like banks, are surprised that they have performed at their own productivity standards given such a sudden and radical shift to a remote workforce.

To use our analogy, this moment has given many organizations the ability to sit back and think, “Which components of the workspace bundle will we want to come back and which ones can we do without?” For example, individual focus work might not be @Businessdayng

a useful part of the office moving forward, because now that people are technically set up, they can perform better at home. At the same time, companies will still need physical workspaces for certain functions that require interaction in the real world.

We’re still too deep in the anomalous moment to know which applications will remain and which will evolve away from the office. However, the key is that our sense of what’s possible has changed. This experience has given us significant new insights about things we value when it comes to our work and our time. This suggests to me that new ways of working together will emerge, at first in the form of innovation in digital work tools, and later in innovation in physical space. In tech workspaces, my research indicates that spaces designed for complex problem-solving and for specialized-learning functions are applications that will be amplified in the future office while others will be diminished.

The exact mix will depend on company culture and specific needs.

Q: Companies may want to start altering their workspace, but there’s a problem: They’re in leases. The time frame of real estate is different.

A: True, but as we said earlier, the pandemic has marked a point of no return. As our experience of work in recent months has shown us, the real work of envisioning our future workspaces starts from acknowledging that “workspace” is no longer just the physical office building but also the digital/virtual space where work happens. This means that future workspace offerings will come with some physical-space applications and some digitalspace ones.

If until recently real estate executives managed most aspects of workspace facilities, working during the pandemic has taught us that more expertise will be involved in envisioning future workspaces, from CTOs, CHROs, to internal communications, etc.

And this will change how leases are done. In corporate real estate, we’ll start to see the implications of the acceleration caused by the pandemic in 12 to 18 months.

Much will be revealed about our workspaces in this time. In the end, numbers don’t lie. In the long term, it simply won’t be feasible to have the sunk costs of large office portfolios operating at 10% to 30% capacity. There’s money to be saved, and space to be transformed.

Scott Berinato is a senior editor at Harvard Business Review.

Monday 31 August 2020

BUSINESS DAY

FT

23

ANALYSIS

Thailand: youthful protesters break the kingdom’s biggest political taboo New wave of activists is risking a crackdown by adding reform of the monarchy to list of demands JOHN REED

A

s darkness fell on August 10, a 21-yearold student stood in front of a crowd of up to 10,000 pro-democracy protesters at Thammasat University’s Rangsit campus outside Bangkok and — say some observers — changed Thailand forever.

It was not the biggest rally the Thai capital has ever seen, even in the latest bout of protests. But Panusaya Sithijirawattanakul provided the most electrifying moment so far in a growing movement that is taking on something which the Thai people rarely challenge publicly: the monarchy.

Wearing a red blouse — a colour Thais associate with leftist and populist dissent — the third-year sociology student read out a list of 10 demands to reform the institution at the pinnacle of Thailand’s political order, which normally sits above criticism of any kind.

The demands, inspired by the writings of Paris-based exile and ex-Thammasat lecturer Somsak Jeamteerasakul, would have been familiar to hardcore democracy activists but were now getting an unprecedented public airing. They included cutting the budget allocated to the king and the Palace, ending education that “excessively and onesidedly” glorifies the monarchy, and investigating the murders of dissidents who criticised the institution. The 10th demand was: “The king must not endorse any further coups.”

Ms Panusaya’s public reading of the demands was an extraordinary moment in a country whose lèse majesté law carries a prison term of up to 15 years for insulting King Maha Vajiralongkorn or his immediate family, and where exiles who spoke out have been abducted or killed.

The government of Prayuth Chan-ocha, the prime minister who came to power in a military coup in 2014, filed a court order demanding social media groups take down posts from the rally.

Conventional Thai media agonised over how to cover what was undeniably big news.

Progressive Thais are now watching events with a mixture of hope and fear similar to those following the stand-off between young protesters and government authorities in Hong Kong.

Past protest movements in Thailand have been repressed violently by authorities, and many Thais fear this one will be too. But whatever happens, the Thammasat students appear to have shifted the parameters of debate for good. Thai and foreign media and the international

community are scrambling to keep up. At stake is the future of Thai democracy and south-east Asia’s second-largest economy, which has been blown off course badly by past political unrest.

‘Take the issue up later’ The near-daily protests began in July, embracing three core demands: the resignation of the Prayuth government, a rewriting of Thailand’s constitution and an end to the harassment of dissidents. But over the past month the protests have strayed into forbidden territory, as a faction some Thais call the “Thammasat group” demanded reform of the monarchy, an institution shielded from criticism by both law and tradition in this intensely hierarchical society.

As in Hong Kong or the Black Lives Matters protests in the US, the Thai youths’ confrontational style and demands are viewed as extreme by many of their elders, including some who share their progressive views.

“I believe that most of the kids support this,” Netiwit Chotiphatphaisal, a veteran student activist says of the demands for reform of the monarchy. “But many core members believe that this should be raised after they get more people — that they should stick to the three demands and the king issue should be taken up later, or that they should take a more moderate tone.”

Thailand’s government has hinted it may engage with the protesters on elements of their three core demands, such as constitutional reform. But they have flatly rejected calls for any reform of the monarchy.

“Don’t touch the monarchy issue, as it’s respected by all the Thai people,” Mr Prayuth recently warned. General Apirat Kongsompong, the powerful military chief, more bluntly compared the protesters to Covid-19 in a recent speech, that many Thais interpreted as suggesting they should be snuffed out. “Covid is a curable disease, but hating the nation, hating one’s own www.businessday.ng

country, that is a disease that’s not curable,” he said.

Thailand’s security forces have a history of staging coups and murdering protesters to protect the royalist status quo.

A bloodbath at Thammasat’s Bangkok campus killed scores of people protesting against a royalist military government in October 1976. For now, authorities are treading cautiously, arresting or issuing warrants against several people, including Ms Panusaya, on sedition charges or violating the emergency decree in place to fight coronavirus.

Her friends have voiced concern for her safety, and are standing by to film her arrest on a Facebook livestream when the time comes.

Ms Panusaya says she was drawn to politics at Thammasat, joining the “Dome Revolution”, a student union political party that has produced several other leaders of the current protests.

In discussion with friends, she concluded “the monarchy was the root of every trouble in Thailand” — an inflammatory view for most Thais.

“I have prepared mentally if I have to go to jail, or if I have to die — I’m prepared for anything,” she told the FT in an interview near her dormitory in Rangsit, which she has been sticking to after being stalked by plainclothes police. “I know I’m doing the right thing to say the monarchy should reform, and people should agree with me.”

‘They are too brave’ Thailand has seen protests in the past, most notably those involving “Red Shirt” supporters of populist Prime Minister Thaksin Shinawatra, who set up protest camps and battled “Yellow Shirt” royalists in Bangkok a decade ago. But the topic of the monarchy has until now been left out of the fray.

No longer. The protests have a different demographic. Although there is no single leader, the organisers are young activists, with women and people from the

https://www.facebook.com/businessdayng

LGBT+ community playing highprofile roles and advancing their issues too. Many are children of Yellow Shirt conservatives who run Thailand’s government and institutions, making their demands — and any potential official crackdown — more sensitive.

But raised on the anonymity and frank exchanges of social media, they are showing a fearlessness that surprises and worries their elders.

“I think they are too brave,” says Viengrat Nethipo, assistant professor of political science at Chulalongkorn University in Bangkok, which has also seen recent protests. “But they feel able to shout in front of the puuyai [grown-ups], the respected people, the people who have power.”

The protesters’ visual emblem is the three-fingered salute raised by the teenage warriors of The Hunger Games, the dystopian young adult franchise. More recently children have taken to raising the salute during flagraising ceremonies at schools.

While the protests have their roots in philosophical and generational grievances against the older men who run Thailand, economic and other factors are also at play. The economy was underperforming relative to regional rivals before Covid-19, and is now contracting at its fastest rate since the Asian financial crisis in 1997-98. The health system has managed to contain coronavirus, but the pandemic has sealed off the economy to the inbound tourists on whom it heavily relies.

The protests began in smaller form in late 2019. Future Forward, an opposition party calling for a removal of the military from politics and a shake-up of the kingdom’s gerontocracy, had galvanised young voters before last year’s general election. It became the third largest party in parliament even though the vote was held under a constitution engineered to keep the military in charge of government.

Future Forward supported a large “Run Against Dictatorship” @Businessdayng

organised by young activists, as well as smaller “flash mob” events in Bangkok that illustrated how to use social media to stay ahead of the authorities.

Police and prosecutors began a campaign of harassment against Future Forward, then Thailand’s constitutional court banned it in February, on the eve of Thailand’s coronavirus lockdown, angering its young supporters.

“The vote that they cast for the first time was stolen from them in an unjust, unfair way,” says Sunai Phasuk, a researcher with Human Rights Watch. “They saw flaws in the constitution as the reason this happened.”

‘Too angry to be afraid’ During lockdown, elite students were cooped up at home and living entirely online. Some of their discontent coalesced around the Milk Tea Alliance.

Named after Taiwan’s signature drink, it is an impromptu grouping of young people in Thailand, Hong Kong and Taiwan who voiced mutual support for activism and criticism of China.

Twitter in particular took off in Thailand, where forbidden topics like the monarchy could be broached in a safe space under once unthinkable hashtags like “#Whydoweneedaking”.

The king has concentrated power and wealth since the death of his father Bhumibol Adulyadej in 2016, amassing control over tens of billions of dollars’ worth of crown property and direct command of two military regiments. The palace is restoring pomp and traditionalism around the monarchy in Thailand, even as the king spends most of his time in Germany. Thai media have tiptoed around these topics.

But on social media, users have plunged in to the debate with online news and gossip like that seen on Royalist Marketplace, a hugely popular Facebook page.

The Thai authorities forced Facebook to block the page this week, although the US group is challenging the court order.

24

BUSINESS DAY

Monday 31 August 2020

Monday 31 August 2020

BUSINESS DAY

Start-Up Digest

25

In association with

Meet Abraham Ojes, entrepreneur digitising Nigeria’s supply chain Josephine Okojie

A

braham Ojes, cofounder of Saya, is on a mission to revamp the Nigerian supply chain for informal retailers across the country.

Abraham, who co-founded the business with Mcleroy Ibe, has created a platform that connects resellers (those who resell what they buy) directly to small FMCGs. “The Saya platform provides resellers access to premium tools for payments, inventory, and shipping,” the young entrepreneur says.

He explains that his platform can transform and formalise Nigeria’s informal supply chain by bringing more distributors and retailers online.

“It is a direct-to-retailer (DTR) channel that can be vital to small scale FMCGs trying to bypass big shot

distributors who would not move their products,” he says.

Abraham was inspired to establish Saya out of a desire to create a unique product for a particular segment of its logistic business in March -during the peak of the COVID-19 disruption on the food supply chain.

Since starting, the platform has continued to get orders from resellers across the country.

The business is a bootstrapped start-up and currently has 10 full-time employees including the two co-founders. The agriculturalist says the business plans to continuously scale its activities.

He notes that the pandemic affected the launch of the Saya platform as the business was unable to onboard for some suppliers who had closed their warehouses due to the lockdown.

Speaking on how the business is re-strategising to sur-

Abraham Ojes

vive the pandemic, Abraham notes that the business is mainly focusing on essential items owing to its huge demand.

“The pandemic caused us to rethink our plans. There was a high demand for essential items during the pandemic, so we responded by

listing items like face masks and hand sanitizers,” he says.

“COVID has taught us to listen to the market closely and be quick to jump on trends when they arise,” he adds.

He says despite that he operates in an industry that has been badly hit by the virus outbreak, he is yet to receive any form of support from the government.

In evaluating Nigeria’s supply chain and logistics industry, he says that the sector is highly fragmented, resulting in inefficiencies that have made FMCGs record losses owing to the country’s huge infrastructure gaps.

“The logistics industry is vital to the survival of companies in the FMCG sector whose products have short shelf lives and need to reach the final consumer in ample time,” he says.

“Startups are bringing innovation to the upstream, where it is less capital inten-

sive and not prone to policy flip-flop,” he adds.

He further says that Saya is focused on developing the right technology needed to make the industry very efficient.

He explains that foreign exchange (FX) volatility remains the major challenge affecting his business since starting in March this year as it continues to change the prices of imported items on the platform.

He urges the government to bridge the huge infrastructural gaps in the country, saying it has deterred lots of investments into the industry.

He says the business has got a grant under the Lagos State government.

On his advice to other entrepreneurs, he says, “Get your product into the hands of many customers as early as possible, measure what’s working and what’s not, listen to your customers, take feedback and iterate fast.”

Meet accountant who transformed event firm into multi-million naira outfit Odinaka Anudu

D

unnice Catering is a multi-million naira event company founded by an upwardly-mobile entrepreneur, Ibidunni Layade.

Layade’s journey started in 2005 when she began event decoration. Fifteen years down the line, she has become a successful event entrepreneur— providing an example for young Nigerians that success is possible with determination, right education and courage.

“My first job came from a desire to decorate my church for Christmas shortly after I got married. I observed there were no signs of any church decorations coming up. Being new to the church, I told my husband, who informed the pastor and secured his approval for me to do some-

thing about it - at no cost. I didn’t have the skill then, but my hubby connected me with the vendor who decorated our wedding reception venue for a time of tutorship and training. Thereafter, I got a few of the church youths and the decorations were up,” she explains.

She says that that the probono decoration work paved the way for other commercial jobs that she got paid for.

The chartered accountantturned-entrepreneur recalls that her educational background gave her a soft landing in business, having studied accounting and graduating with an upper credit, making her one of the best students in class. “Never think you can go far without education,” she says.

“Whether formal, informal or on-the-job-training, endeavour to learn. I paid to attend seminars, courses,

www.businessday.ng

Ibidunni Layade

trainings, masterclasses from bridal accessories to bead making, to flower arrangements, to table-settings and hanging balloons. I still do.

Learning, for me, is continuous” she says.

The Dunnice boss notes that she believes in research and development, prompted by listening to clients’ feedback and following trends

from the streets of social media. She says she spends a considerable amount on data just to keep informed and ensure that she’s always abreast of what is fashionable and current.

According to Layade, she spares nothing to make her next event experience memorably different from the last.

“I remember an event decoration job we did some time ago where we went the extra mile to provide live parrots and rabbits as part of our props, because the job was a jungle themed party,” she says.

T h e c at e r i n g a r m o f Dunnice has also created various product categories ranging from Corporate Cafeteria Management Services, Soups’n’Stews-in-Bowls, Appreciation Trays, Take away Packs, Celebration Boxes, Intimate Catering Dining, Homemade Foods-in-Bowls,

https://www.facebook.com/businessdayng

and Owambe Dishes, the entrepreneur says.

Earlier this year, the Association of Event Vendors of Nigeria (ASSEV Nigeria) recognised the dedication of the Dunnice brand and awarding it the Event Catering Company of the Year 2019.

The event and catering expert affirms that collaboration contributed to her success.

“If you want to go fast, go alone. But if you want to go far, go together,” she quotes a popular adage.

“In life, I learnt that you can’t go far alone. In Dunnice, we never walk alone. I have learnt that collaboration is more formidable than competition. I have teamed up with other members of the events industry. I’m a member of the Association of Professional Party Organisers and Event Managers of Nigeria (APPOEMN). I belong to the Busy Bee Tribe as well as the

@Businessdayng

United Caterers’ Forum. I have gained so much being associated with these professionals.

She recalls that there were times she felt like giving up because the business terrain was tough.

“Sincerely, there were times I felt like giving up, but I couldn’t think of going back to paid employment, as the corporate environment didn’t fire any passion in me. I had worked briefly with one of the top audit and accounting firms in Nigeria, and further worked as a resident control officer of one of Nigeria’s foremost banks.

After sitting down in front of laptops and computers, I knew early enough that this wasn’t the life for me. Again, more importantly, I hated the drab dressing bankers and auditors of that time wore. I preferred bright and happy colours like yellow, pink, lime, red,” she says.

26

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

27

28

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

29

News Nigerian banks generate more returns to shareholders than peers BALA AUGIE

D

espite stringent regulatory environment and the unprecedented macroeconomic uncertainties caused by the coronavirus pandemic, Nigerian banks have generated more returns for their shareholders than most of their peers in emerging and frontier markets.

According to recent report by Chapel Hill Denham Limited, GTBank’s return on equity (ROE) of 27.1 percent is materially higher than the emerging/frontier market (EFM) average of 15.3 percent.

GTBank’s ROE is even higher than the returns of CIB of Egypt, (24.30%); First Rand (South Africa ) 24.10 percent; Equity (Kenya) 21.90 percent; Banca (Romania), 21.70 percent; KCB (Kenya),) 20.70 percent; VTB (Russia) 20.30 percent; ITAU (Brazil) 19.90 percent; QNB (Quarter )19.0 percent, and Malayan (Malaysia) 10.40 percent.

According to the report, Zenith Bank, Stanbic IBTC Holdings, Access Bank, and United Bank for Africa, have ROEs of 23.80 percent, 23.30 percent, 17.80 percent, and 16.20 percent, respectively, which exceeds EFM average ROE of 15.30 percent.

Return on equity (ROE) measures how effectively management is using a company’s assets to create profits.

As a shortcut, investors can consider a ROE near the long-term average of the S&P

500 (14%) as an acceptable ratio, and anything less than 10 percent as poor.

In the last six years, Nigerian largest banks have consistently magnified earnings even amid macroeconomic headwinds that plunge the economy in a tailspin.

For instance, currency devaluations created dollar denominated assets that earned them foreign exchange gains.

Also, they packed their money in short-term government securities when yields were high to realise income from treasury bills that underpinned earnings.

Analysts are of the belief that the adoption of a holding company structure such as asset management and insurance business combined with an excellent risk management strategy would continue to be major drivers of earnings.

In 2019, Access Bank acquired beleaguered Diamond Bank to emerge the largest lender by total assets and customers, paving the way for it to compete in the retail market.

“Notably, the retail digital lending has continued to gain momentum, with 107 percent and 129 percent growth in transaction count and volume, respectively, achieved in full year (FY-19),” note analysts at Chapel Hill Denham.

“We believe a bank with this strong retail play has a robust growth outlook and should be appropriately priced by the market,” ac-

Continues on page 31

Nigeria, others share $19.2bn travel insurance losses over COVID-19 Modestus Anaesoronye

G

lobal annual market volume for travel insurance product earlier predicted to grow higher in 2020 would be badly affected by the lockdown and ban on international travels over Covid-19 pandemic.

The industry worth about $19.2 billion in 2019 with Nigeria as beneficiary would have lost some volume since the wake of Covid-19 in the first quarter of this year, when many business and tourist travels were suspended worldwide to contain the spread of coronavirus.

Travel insurance covers the expenses incurred and minimises the risks during travel. It acts as a cushion in situations such as trip cancellation due to medical emergencies, loss of baggage, evacuation due to medical condition or hijack and loss of travel documents, among others.

Allied Market Research in a statement released on its

website states that the global insurance market size was $19.2 billion in 2019 and is projected to reach $39.3 billion by 2027, growing at an average rate of 17.4 percent from 2020 to 2027.

However, industry analysts believe that this volume is doubtful this year, as there would be limited international travels except for emergencies, until the Covid-19 pandemic is over in China, European and American countries.

Analysts in the Nigerian market express concern over the development. According to them, the product is still yet to assume prominence in the country as awareness is beginning to increase with operators sealing partnerships with foreign partners to drive the product.

Funmi Babington-Ashaye, managing director/CEO, Analysts Insurance Brokers Limited, explaining the impact of the pandemic on the industry, notes that aviation industry

Continues on page 31 www.businessday.ng

L-R: Francis Wale Oke, president, The Sword of the Spirit Ministries; Seyi Makinde, governor, Oyo State, his wife, Tamunominini; Pastor Enoch Adeboye, general overseer, Redeemed Christian Church of God, his wife, Folu; Victoria Oke, and Udom Emmanuel, governor, Akwa Ibom State, during the commissioning of Pastor Enoch Adejare Adeboye Global Mission Centre, Ibadan.

In 6 numbers, insights from survey on 100 Nigerian CEOs LOLADE AKINMURELE

A

survey by Lagos-based firm, Phillips Consulting Limited (PCL), on 100 business leaders in Nigeria offers unique insight into the evolving dynamics of the business landscape in Africa’s largest economy amid a global health pandemic that has upended business activity.

Half of the CEOs surveyed are in professional services, construction/ real estate, manufacturing and oil and gas. Financial services, public service, ICT, aviation, agribusiness, healthcare, education and consumer goods form the

remaining half of the sectors of the surveyed CEOs. In six numbers, here are the top insights from the survey that will support organisations in making informed management decisions.

55% More than half (55%) of businesses in Nigeria are currently operating at less than half capacity due to disruptions caused by the pandemic. That means one in every two businesses is operating below 50 percent capacity. When businesses operate below capacity, it impedes economic growth and leads to job losses.

The recent Q2 GDP and unemployment report published by the National

Bureau of Statistics (NBS) best reflect this reality.

The economy fell 6.1 percent in the second quarter of 2020, the biggest contraction in 16 years, while unemployment rate quickened to 27 percent in the same period, the highest in at least seven years. If the underemployment rate is factored in, one in every two Nigerians in the labour force is either unemployed or underemployed.

72% Travel restriction is the single biggest factor impacting businesses, according to 72 percent of the CEOs. Finance and liquidity (69%), Foreign exchange rate (65%) and inflation (56%) were other high ranking factors im-

pacting businesses.

Also on that list are social distancing (52%), operations and supply chain (52%), government spending (28%) and credit defaulters (24%).

Of less impact to their business are the international oil price (19%) and legal framework (7%).

22% As much as 22 percent of the CEOs said they laid off workers as a result of the pandemic, although they were in the minority with 78 percent saying they hung on to their staff.

In addition, 54 percent said their organisations did not cut compensation as a result of the pandemic Continues on page 30

Nigeria’s contracting economy shows time running out on subsidy regimes STEPHEN ONYEKWELU

T

hat Nigeria’s ailing economy would contract in the three-month ending June was expected, but it cuts deeper than forecasts and experts have recommended aggressive reforms to include exiting all subsidy regimes.

Africa’s biggest economy contracted 6 percent, the deepest in 10 years, second-quarter gross domestic products (GDP) data from the National Bureau of Statistics (NBS) show. In this vein, the International Monetary Fund (IMF) has revised downwards its projection for Nigeria to -5.4 percent from a -3.4 percent projection in April 2020. This reinforces the necessity for Nigeria to block leakages in its public finance.

Three consumption subsidies burden Nigeria’s economy with an inefficient allocation of resources.

The subsidy on foreign exchange, petrol and power are some of the conduits through which Nigeria loses resources that could have been put to productive uses in developing social and physical infrastructure. Nigeria spends close to $3 billion yearly subsidising each of these three items.

President Muhammadu Buhari’s administration alone has paid up to N1.7 trillion in the last three years and about N380 billion so far this year to subsidise electricity consumption. The service reflective tariff that failed to take effect from July 1 was designed to remove the subsidy the Federal Government pays on electricity consumption.

https://www.facebook.com/businessdayng

“We require cost-reflective tariffs on electricity consumption. This will drive new investment inflows to the sector and promote economic activities at both small and big scales. Without power, we are going nowhere,” Bismark Rewane, CEO, Financial Derivatives Company, said on Channels TV’s Business Morning.

In the last five years, Nigeria has spent about $10 billion subsidising premium motor spirit (PMS) - petrol.

Critics have said petrol consumption subsidy like power subsidy favours middle class and rich Nigerians who are more likely to enjoy more hours of electricity and own at least two cars.

The Central Bank of Nigeria (CBN) has also become obsessed with defending the Nigerian currency and intervening in the foreign @Businessdayng

exchange market through its Open Market Operations (OMO). The official naira to dollar rate is N379.50 per dollar. But the parallel market rate is $/N477. This means the CBN subsidises the dollar by N97.50. To do this, the apex bank dips into the foreign reserves, which has been depleting. The foreign reserves have hovered around $35 billion in August down from $36 billion in previous months.

“Accretions to Nigeria’s foreign reserves come from two main sources, borrowing and crude oil sales. Half of the palliatives promised by the government against economic fallouts from COVID-19 have not been delivered because there is no revenue to do so,” said Henry Adigun, team lead at Continues on page 31

30

Monday 31 August 2020

BUSINESS DAY

news BUSINESSDAY JOBS & GROWTH SERIES

Nigerian economy needs industrial...

Continued from page 1

India, an emerging

Asian market, has proved that it is possible to attract many Dangotes to an economy— albeit with market-based reforms expanding the role of the private sector and investment since 1991.

With economic liberalisation and enabling business environment, the South Asian country today has over 12 petrochemical companies worth $163 billion.

Its biggest petrochemical firm - Reliance Industries became the first Indian company to exceed $150 billion in market capitalisation in June 2020, creating 187,729 jobs for the economy. Today, over 120 drug makers in Nigeria rely on India for more than 60 percent of their input needs.

In 2013, the firm earned $44.1 billion from exports— almost 15 times what Africa’s biggest economy earned from its non-oil exports that year ($2.9bn). Its earnings have since risen.

More than 2,000 members of the Manufacturers Association of Nigeria (MAN) created only 78,623 new jobs between 2016 and 2019, according to the association’s data, but unemployment rate in the country has risen more than threefold from 6.75 percent reported since 2014.

The best bet for Nigeria is to attract some of the manufacturing jobs that will be leaving China, as the world’s second largest economy becomes pivot to pushing domestic consumption to drive growth.

Chinese President Xi Jinping is accelerating his push for a China that can stand on its own feet amid mounting pressure from the United States that exposes the vulnerability of Beijing’s economic model.

In a series of remarks over the past few months he is touted to have initiated the so-called “dual circulation” development model, in which a more self-reliant domestic economy serves as the main growth driver, supplemented by certain high tech foreign technologies and investment.

Vietnam has been one

major winner in the trade war between the US and China.

With market-based reforms and skills-based education, Vietnam has boosted its factories’ revenues, adding 1.5 million new jobs in 2019 to the economy and sending 147,000 people to work overseas.

With oil price lows, Nigeria has failed to industrialise as Ajaokuta Steel dragged after gulping $8 billion from government coffers. The government has an annual budget for the plant, even though it is unproductive.

Over 2,000 Nigerian manufacturers (except Dangote) made N3.353 trillion ($9.31bn) worth of investments between 2014 and 2019, but this is less than $10 billion investments made by manufacturers ($6bn) and Bac Lieu LNG ($4bn) in Vietnam between January and April 2020.

Attracting manufacturing investors like Dangote and Reliance to Nigeria requires certain steps.

The foreign exchange crunch in Africa’s most populous country must be addressed.

The FX crisis has come to a head with manufacturers saying they get two to 10 percent of their dollar needs from the market even after waiting for 30-90 days.

“We wanted $60,000, but we could only get $5,000 from one of our banks. It is now much worse than the 2016/17 situation, and some of our members are thinking of moving to ECOWAS in January when the continental free trade starts,” a director at a manufacturing firm told BusinessDay. MAN says the central bank’s instruction authorising dealers to desist from opening Forms M, whose payments are routed through a buying company, would be detrimental to factories and cause shutdowns.

“Exchange rate unification is critical,” Jesmin Rahman, IMF mission chief for Nigeria, said at a recent virtual fireside interview participated by BusinessDay.

In 6 numbers, insights from survey on...

Continued from page 29

but 46 percent did.

The key themes emerging from the pandemicinduced depressed business landscape is the acceleration in technology adoption, a rethinking of office space and the consideration of employees as business stakeholders, according to the CEOs interviewed.

57% 57 percent of the CEOs expect business recovery in August 2021 at the earliest.

The majority of surveyed CEOs (21%) expect it will take at least 18 months before business returns to normal in Nigeria. Only 5 percent expects the current business landscape to stay the same beyond 24 months.

The International Monetary Fund expects global and sub-Saharan Africa growth to recover next year and Nigeria is expected to grow 2.6 percent next year after contracting by a record 5.4 percent this www.businessday.ng

L-R: AbdulWasiu Sowami, chairman, AP Ardova plc.; Olumide Adeosun, CEO, and Moshood Olajide, chief financial officer, during the 41st Annual General Meeting of the compamy in Lagos, at the weekend.

“Improve certainty and regulatory regime to help diversification, and turn a growing population into human capital,” she further said.

Much has been said about tailoring Nigeria’s education system towards skills to ensure that 500,000 graduates churned by higher institutions every year can work in chemical, laboratory and other technical departments in manufacturing companies without fuss, or at least become confident entrepreneurs on their own.

A recent ITF-UNIDO Skills Gap Assessment report carried out by the Industrial Training Fund (ITF) and the United Nations Industrial Development Organisation (UNIDO) identified lack of requisite skills, absence of

labour market information (LMI) in any useful form, lack of tracking of the performance of polytechnics, colleges of education and university graduates by the National Board for Technical Education (NBTE), the National Commission for Colleges of Education (NCCE) and the National Universities omission (NUC), as major reasons for the skills gaps.

Also, manufacturers are faced with an energy crisis, with power supply inconsistent and gas supply irregular, according to Michael Ola Adebayo, chairman of MAN Gas Users.

Roads are decrepit and many firms investing in backward integration are facing a communal crisis and lack of funds due to economic slump and COVID-19 pandemic.

year, the worst contraction since 1987.

68% Travel and tours ranked the highest on a list of costs that the surveyed CEOs said they were looking to cut. 68 percent of companies plan to cut travel costs to deal with the disruption caused by the pandemic.

This confirms fears that the hospitality industry will be the worst hit from the changing business landscape.

Staff allowances and salaries ranked second and third highest on the costs companies will be looking

to cut at 55 percent and 45 percent, respectively.

Rental fees (40%), CSR (35%), consultancy (30%) and staff training (30%) also made the list of costs to be cut.

6% Only 6 percent of organisations were prepared for the pandemic. 51 percent said they were partially prepared and 43 percent said they were not prepared.

The key to preparedness was a strong leadership team, followed closely by the business strategy, the survey results showed.

https://www.facebook.com/businessdayng

Nigeria will need to pump $100 billion over the next six years to plug infrastructure holes, according to Chidi Izuwah, director-general, Infrastructure Concession Regulatory Commission (ICRC).

Izuwah estimates that while about $60 billion would be required for the oil and gas sector, $20 billion is needed to revive the power sector; $14 billion for roads, and between $8 billion and $17 billion for rail tracks.

The country’s low fiscal space may not allow this to happen, even with humongous borrowings.

Rails are coming up, but are not connected to the nation’s seaports.

Access roads to premier seaports in Apapa and Tin Can, Lagos, is plagued by gridlocks, hurting export and import, in addition to lack of functional scanners by the Nigeria Customs Service, which causes untold delays of raw materials to factories and exports to destination countries.

In Q2, real GDP growth in the manufacturing sector was –8.78 percent (year-on-year), lower than the same quarter of 2019 by 8.64 percent and the preceding quarter by –9.21 percent points, respectively.

Growth rate of the sector on a quarter-on-quarter basis stood at –13.17 percent, lower than the quarter-on-quarter

growth rate recorded in the preceding quarter of 2020.

Real manufacturing contribution to GDP in Q2 2020 was 8.82 percent, lower than the 9.08 percent recorded in the second quarter of 2019 and the 9.65 percent recorded in the first quarter of 2020.

The closure of NigeriaBenin Republic orders is also a major complication, having an untold impact on trade and exports, especially as the AfCFTA begins in January 2021.

Nigeria earned $823.06 million (N296.3bn) from export to ECOWAS countries and $2.72 billion (N978.21bn) from shipping out products to Africa in the first quarter of 2020. The FX earnings are already threatened.

Jobs are mainly driven by manufacturers and exporters, but their margins are now badly hit by border closure, COVID-19 and inflation rate, which was 12.56 percent in June 2020.

“Initially, the closure was supposed to last for one month, but till now it still remains closed. The resultant effect of this is the decline in export to these countries and significant losses for many exporters, as many have closed down some of their production lines since then,” Ede Dafinone, chairman, Manufacturers Association of Nigeria Export Group (MANEG), told BusinessDay at the weekend.

Government support and a robust business continuity plan were also fingered by the CEOs as part of what prepared them for the pandemic.

83% Majority of the CEOs, 83 percent, said they were adopting remote work, whereby staff work from home, as a business continuity strategy option amid the pandemic.

55 percent said they adopted the stand-by model, whereby staff stay at home until their services are required, while 43 percent said they were adopting

split operations where business functions are separated to work at different locations.

14 percent said staff members were resuming work in the safest and closest branch to their residence while 7 percent said they moved all business operations to a central location. 5 percent said they relocated business operations to a temporary location that they operate while 2 percent said they moved business operations to a subsidiary, making it the least preferred option.

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

31

News Nigerian banks generate more returns ...

Continued from page 29

cording to the analysts.

Nigeria banks have cheaper valuation and better with returns relative to global peers, which means this is the time for investors to buy these stocks and make money in a period of economic recovery.

Kenyan banks for instance are trading on a P/B of 1.6x vs.

0.7x for Nigeria, according to Chapel Hill Denham.

Nigerian banks have more to worry about at the moment as the coronavirus pandemic and collapse of global oil price triggered currency devaluation, thus exposing them to more risk.

The World Bank disclosed in its latest World Bank Nigeria Development Update that Nigerian banks are now faced with serious risks of destabilisation, no thanks to what was aptly described as “the COVID-19 shock.”

The World Bank stated in the report that the pandemic could erode the generally positive performance recorded by the banks in 2019.

The Bank added that in specific terms, there was the risk of resurgence in banks’ n o n -p e r f o r m i ng loa n s (NPLs), especially as it pertained to loan exposure to the country’s gas sector.

Nigeria, others share $19.2bn travel...

Continued from page 29 Olumide Akpata (l), president, Nigerian Bar Association (NBA), with Paul Usoro, immediate past president, NBA, during the inauguration of Olumide Akpata as the 30th president of the association in Abuja, at the weekend.

Planned reform of container regime to...

Continued from page 1

releasing the containerised cargo to the consignee to serve as risk mitigation for eventual loss, damage, abandonment or detention of the container beyond agreed period.

With this development, the Federal Government through the Nigerian Shippers’ Council (NSC), the port economic regulator, would remove the practice of payment of container deposit by cargo owners, and replace it with insurance cover, a standard practice in developed nations.

A study by Shippers’ Council shows that efforts to return empty containers to the port have devastating effect on traffic management within Apapa and Tin-Can Island ports in Lagos. This is because almost every shipper wants to come to the port at the same time to return the container in order to retrieve the deposit, and this is why there is always chaos on Apapa roads.

By estimation, over N1.7 billion is paid by shippers annually to shipping companies as container deposit, and this comes with additional cost implication on companies doing business at the ports and consumers of the finished products.

In Nigeria, shipping companies charge container deposit of N100,000 for 20-foot container going to warehouses in Lagos and N200,000 for those g o i ng t o wa re h ou s e s outside Lagos. They collect N200,000 for 40-foot container designated for warehouses in Lagos and

N400,000 for those going to warehouses outside Lagos.

Deposit for refrigerated containers cost N525,000 for 20-foot and N900,000 for 40-foot, while refunds take longer despite Shippers’ Council four-day policy.

Giving insight into the plan, Hassan Bello, executive secretary, NSC, states that the Council wants to stop the collection of container deposit and replace it with insurance cover, because Nigerian shippers spend a lot of money on the payment of container deposit.

“We have initiated discussion with the regulator of the insurance industry, which is the National Insurance Commission (NAICOM), and have set up a committee that is looking at all these issues.

If the Council receives the support of stakeholders container deposit would be abolish by the end of first quarter of 2021,” Bello says.

According to Bello, it has been near impossible for cargo owners to retrieve the deposit because the shipping companies have no holding-bay and roads leading to the ports are clogged, and all these make it near impossible for the importer to be able to return the container in good time.

“Collection of container deposit affects the cash flow of businesses, particularly the smaller businesses. In other countries such as China, Bangladesh, Hong Kong and Singapore, container deposit is done through insurance where the risk would not be allotted to the shipwww.businessday.ng

per. For instance, a shipper that pays N200,000 as container deposit can pay between N20,000 and N50,000 as container insurance cover,” he says.

“In some countries, no deposit is required rather letter of indemnity or guarantee is collected, while in Sri Lanka about $50 and $100 are collected for 20-foot containers and 40-foot respectively. In Cambodia $100 and $200 serves as deposit on containers,” he notes.

Tony Anakebe, managing director of GoldLink Investment Limited, a Lagos-based clearing and forwarding company, who confirms that shipping companies collect advance demurrage from cargo owners before releasing the container to importers, attributes such to lack of trust on Nigerians to stick to the agreement of returning the empty container in due time.

“The bottlenecks in Nigerian ports create opportunity for shipping liners to milk Nigerians. For instance, the bad road situation makes it difficult for truck to have timely access in and out of the ports without delay. This deposit is supposed to be refunded to the cargo owner at the return of the empty container, but if the container over stays, the number of days would be deducted from it while the balance would be refunded,” Anakebe states.

He however notes that the situation has continued to increase cost of doing business for importers, who in most cases take bank loan to import, pay charges and duties on imports within a very little profit margin.

“Consumers are the

most hit because these charges reflect the continued increase in the market prices of both locally manufactured and imported items,” he says.

Jonathan Nicol, president of Shippers Association of Lagos State, said in a recent presentation tagged ‘the Menace of Empty Containers in Nigeria,’ that maritime stakeholders were waiting anxiously for government’s firm and decisive action towards ridding our communities of empty containers, and banishing unholy traffic gridlock caused by containers littered on the streets.

“It is a threat to the port to accommodate over 2,000 loaded containers by the ship side.

The combined weight can cause a deluge. The refusal of liners to export empty containers is a threat to Nigeria’s shipping trade.

And when there is scanty space left due to deliberate refusal to evacuate their empty containers, the shipping lines will introduce ‘congestion’ charges against shippers,” he said.

According to Nicol, our communities are littered with empty containers, making life difficult for the communities and enabling the breeding of area boys and touts across our cities.

On the new regime, the Council is proposing that freight forwarders and logistics service providers could come together to set up a collective fund that would service as deposit for shipping liners. Under this scheme, Shippers’ Council could act as guarantor to all participants, and liners would no longer collect deposit from individuals.

https://www.facebook.com/businessdayng

has been hugely affected, with ban on international travels as a result of the Covid-19 pandemic.

All aspect of aviation business is affected, including travel insurance that is still at a growing level in our market, she states.

Austin Ebose, managing director/CEO, Anchor Insurance Company Limited, says travel insurance will be hugely affected.

Ebose, whose company has recently signed a partnership deal for travel insurance with a foreign partner, states that everything has to be put on hold until international travels begin again.

According to Ebose, the product is being run under an agreement with Mapfre Asistencia, based in Spain, and it comes with different features and benefits.

Some other companies offering travel insurance in-

clude Allianz Nigeria in partnership with Allianz Global Assistance; AIICO Insurance in partnership with AIG South Africa; Niger Insurance; Prestige Assurance; Consolidated Hallmark Insurance; Leadway Assurance; Mutual Benefits Assurance, and AXA Mansard Insurance.

CHI Travel Insurance covers the Schengen and other European countries, Asian, African countries and America, and has since been approved by the National Insurance Commission (NAICOM).

It provides the required cover for travellers who go abroad for tourism, business trips or educational pursuit.

Duration of cover is available for short trip and up to a period of 12 months, renewable thereafter, and special plans have been put in place under the plan to cater to the needs of pilgrims during trips to the holy lands (Pilgrimage Protection), and Students special Travel Plan.

Nigeria’s contracting economy shows...

Continued from page 29

Facility for Oil Sector Transformation, “Yet the government goes on subsidising petrol, power and foreign exchange.”

With 86.90 million Nigerians living in extreme poverty, according to a World Poverty Clock report, experts say Nigeria requires investments in education, health and physical infrastructure to lift its citizens out of poverty rather than subsidise the consumption of petrol, foreign exchange and electricity for a small percentage of its population. But the government has not used oil and gas earnings to diversify the economy.

Some economists and investment analysts say thirdquarter GDP figures would come in negative after the contraction of by 6 percent in the second quarter. This means the odds of Nigeria entering another recession in four years are high. A @Businessdayng

recession for Nigeria amid accelerating inflation means more job losses. Companies would downsize and the naira would further weaken.

Operators in Nigeria’s downstream oil and gas sector have constantly recommended the removal of subsidy on petrol. This, they say, will attract investments into crude oil refining, which will lead to the export of finished petroleum products to African countries and earn Nigeria sustainable foreign exchange as it creates jobs.

“Investors avoid uncertainties but Nigeria’s downstream oil and gas sector is still murky. No investor will put money down to build refineries until it is clear that the government has stopped interfering with retail pricing of petroleum products,” Clement Isong, executive secretary/CEO, Major Oil Marketers Association of Nigeria, told BusinessDay.

32

Monday 31 August 2020

BUSINESS DAY

NEWS

Without subsidy, petrol price to reach N157.55 for September

W

ith a new m o n t h beginning tomorrow, the pump price for petrol for September could be set at around N157.55 per litre using the pricing template designed by the petroleum products pricing regulatory agency (PPPRA), and adopting an FX rate of N387.

As government revenues collapsed, the minister of state for petroleum, Timipre Silva had assured that the government will no longer subsidise petroleum products as had been the case for decades.

The price which is set for PMS at the petrol stations will be the real test of whether the government is firm about its desire to quit the wasteful subsidy regime. From tomorrow, any PMS price significantly below N157 per litre will mean that subsidy has not gone away and the government will then be required to explain who is funding this subsidy if that becomes the case.

At the beginning of August, the sole importer of petroleum products, PPMC set an ex-depot price of N138.62 per litre for PMS and after adding their margins, marketers and retailers have been selling at between N145 per litre for NNPC gas stations and N150 at most other stations.

According to the PPPRA template which uses the average Platts FOB Rotterdam including freight as basis, coastal price for September should be N121.68.

Then you have to add a plethora of other endless charges many of which do not make sense to the ordinary eye.

For the very first time, BusinessDay reporters have now gone behind the scene to unveil for readers the mindboggling and sometimes inexplicable levies maintained by various groups including government agencies and which have been encouraged by decades of an opaque subsidy regime.

The charges per litre include insurance cost

www.businessday.ng

of N0.17, lightering expenses of N4.57, NPA of N2.38, NIMASA of N0.23, Jetty throughput of N1.61, Storage charge of N2.58, Finance cost of N1.33, maritime transport average N0.15; PEF(equalisation) N7.51; PPPRA admin charge N1.23; national transporters allowance N3.89; wholesale margin N4.03 and retailers margin N6.19.

It would seem that the government is hoping that prices could be kept around the N145 a litre price which is considered as a watershed.

Using average Platts for July and adding on the template established charges, the pump price for petrol in August should have been around N154 a litre so there was already an element of subsidy.

However, because the PPPRA deliberately dodged its role of setting price for August, it is not clear as yet who is paying for this subsidy given that the PPMC set an ex-depot price of N138.62 for the current month.

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

33

34

Monday 31 August 2020

BUSINESS DAY

NEWS What arriving air passengers must do as international flight resumes September 5 IFEOMA OKEKE

F

ollowing the resumption of international flights from September 5; the Presidential Task Force (PTF) on Covid-19 has issued a provisional quarantine protocol for travellers arriving Nigeria from any country.

With this protocol, travellers can know what they need to do before arriving the country.

The document dated August 21, 2020, states that all intending travellers to Nigeria must have tested negative for Covid-19 by PCR in the country of departure pre-boarding and PCR test must be within seven days before departure and preferably within 72 hours preboarding.

According to the document, for certain countries, Covid-19 PCR tests will only be acceptable from specified laboratories and tests done more than seven days before departure are not valid and persons will not be allowed to board; but for the 72 hours minimum, this is advisory and will not preclude boarding.

“All intending passengers are required to register via a national payment portal online (details to be made available) and pay for a repeat (second) PCR test will be done upon arrival in Nigeria. This payment portal will provide passengers with the options of where

and when to carry out the PCR test.

“Passengers will be given an appointment time and date to present themselves at the sample collection centres located in their states of residence for a repeat Covid-19 PCR test on the 7th day after arrival.

A list of accredited private laboratory providers and sample collection centres across the country will be available on the payment platform and the NCDC website.

“Passengers will also fill in the online Health Declaration/Self Reporting Form co-located on the same national payment platform and submit online or print out for presentation on arrival. They should ensure that the information/ contact details provided on the form are correct, verifiable and that they can be reached on the phone number and address provided. “Passengers must inform port health officials on arrival of any change in their health circumstances since completion of the Health Declaration/SelfReporting Form,” the document reads.

The document further states that prior to boarding, passengers are requested to upload their Covid-19 PCR negative results onto the national payment portal and bring along an electronic or hardcopy of the result for presentation at the airport.

At the time of boarding, all travellers will undergo thermal screening for fever and questioned for symptoms of Covid-19. Passengers with Covid-19 related signs and symptoms will not be allowed to board the flight.

The PTF requests that airlines must only board passengers with test results showing that the tests were done within the stipulated seven days before boarding and airlines that board passengers without a negative Covid-19 PCR test or test result of more than seven days prior to boarding will be sanctioned.

“Non-Nigerians may be refused entry and returned to the point of embarkation at cost to the airlines. Nigerians will be allowed entry but subjected to 14 days of mandatory quarantine at a facility approved by government and at cost to the passenger.

“Airlines will be fined $3,500 per passenger for failure to comply with the pre-boarding requirements,” the document reads.

For passengers/persons arriving in Nigeria, PTF states that they will be required on arrival at the airport, to go through the routine port health screening and present electronic or print-out evidence of preboarding PCR test results and evidence of payment/ appointment for a repeat PCR test in-country.

Lagos goes tough on illegal slaughter slaps SEYI JOHN SALAU

... re-inaugurates MEC taskforce

n keeping with the Covid-19 protocol of ensuring the safety of all wet market across Lagos, the Lagos State government through the ministry of agriculture has re-inaugurated the Monitoring, Enforcement and Compliance (MEC) taskforce with the mandate to go tough on illegal slaughter slaps.

The aim of the re-inauguration of the taskforce is to sanitise the red meat value-chain and improve the quality of meat consumed

by Lagosians.

Abisola Olusanya, the state acting commissioner for agriculture said the need for continuity and sustained effort against perpetrators of illegalities in the state informed the re-inauguration of the MEC team.

According to Olusanya, the MEC team will take effect from Tuesday, September 1, and will ensure

that the dislodgment of illegal slaughter slabs, abattoirs and animal markets.

The taskforce will also be empowered to seize and confiscate any stray animal within the state.

The MEC team which includes all stakeholders along the value chain of the wet market in Lagos will therefore monitor and effect zero-tolerance to the existence of illegal slaughter slabs across the state.

“Besides closing and uprooting illegal slaughter slabs, the team would also ensure proper regulation of veterinary activities in conjunction with Lagos state private Veterinary Premises Registration Authority,” said Olusanya.

According to her, the MEC team is also expected to monitor the standards of operations of all approved slaughter houses in order to ensure compliance with

I

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

professional best practices.

Olusanya opined that the activities of the re-inaugurated MEC team will up scale and help sustained the standard of veterinary regulation and service delivery across Lagos.

“All illegal and unapproved modes of meat transportation and live animals’ transportation would be dully curtailed as only approved modes would be allowed,” Olusanya said.

Hamzat A’Kareem, the general secretary, Abattoir Concessionaire Forum said activities of illegal abattoirs in Lagos have negatively affected businesses of the concessionaires who currently find it difficult to service loans taken from the bank to run the business.

According to him, a better regulated abattoir will provide more revenue for the government and ensure that meat delivered to the public are well monitored.

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

35

36

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

37

38

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

39

40

Monday 31 August 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 31 August 2020

BUSINESS DAY

NEWS Wigwe named African Banker of the Year JOSHUA BASSEY

H

erbert Wigwe, group managing director/CEO of Access Bank Plc, has been named the ‘African Banker of the Year’ at the 2020 African Banker Awards.

Wigwe was recognised for several socio-economic efforts, including leading Nigeria’s private sector Covid-19 response.

Under his leadership, Access Bank donated over $2.7 million to support the government in fighting the virus while championing the Coalition Against COVID-19 (CACOVID) initiative in Nigeria.

Additionally, he has advocated other corporate climate change conscious business entities across the country to support the Federal Government of Nigeria towards the achievement of 25 percent unconditional and 40 percent conditional carbon emission reduction as agreed at the 24th conference of the Parties to the United Nations Framework Convention on Climate Change.

Receiving the award, Wigwe spoke of the need for organisations to embrace the institutionalisation and practice of sustainable banking, saying, “Financing and facilitating a sustainable future for Africa, and indeed the world is something I am most passionate about.

Speaking further, Wigwe said “more than ever, Africa needs us to unite as we seek to improve access to health care, sustainable energy, finance, and improve the standard of living in our communities. I enjoin all stakeholders to be a part of the facilitation of a truly sustainable future for Africa.

The future of our respective organisations and

www.businessday.ng

the future of generations to come depend on the alliances we form and the actions we take.”

The Access Bank CEO explained that the bank has taken steps towards facilitating the future, issuing the first-ever Climate Bonds Initiative (CBI) certified Green Bond in Nigeria, being a focal point in Nigeria’s fight against the novel coronavirus through CACOVID, among others.

He said through innovative banking initiatives and its underlying sustainability drive, Access Bank would continue to create shared value for all its stakeholders, and strike a balance between competitive advantage and corporate social responsibility.

https://www.facebook.com/businessdayng

@Businessdayng

37

42

Monday 31 August 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Friday 28 August 2020

Top Gainers/Losers as at Friday 28 August 2020 LOSERS

GAINERS Company CAP

Opening

Closing

Change

Company

Opening

Closing

Change

N16.15

N16.7

0.55

GUINNESS

N15.6

N14.15

-1.45

N25.2

N25.4

0.2

FBNH

N5.05

N4.95

-0.1

N0.63

N0.58

-0.05

N3.9

N3.85

-0.05

N5.75

N5.7

-0.05

GUARANTY

ACCESS

N6.25

N6.4

0.15

JAIZBANK

FCMB

N2.1

N2.15

0.05

REDSTAREX

UCAP

N3.05

N3.1

0.05

UACN

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

25,309.37 2,869.00 137,054,655.00 920.5

Global market indicators FTSE 100 Index 5,963.57GBP -36.42-0.61%

Nikkei 225 22,882.65JPY -326.21-1.41%

S&P 500 Index 3,498.09USD +13.54+0.39%

Deutsche Boerse AG German Stock Index DAX 13,033.20EUR -63.16-0.48%

Generic 1st ‘DM’ Future 28,575.00USD +107.00+0.38%

13.203

Shanghai Stock Exchange Composite Index 3,403.81CNY +53.69+1.60%

Nigeria’s bourse gains N45bn to extend weekly bullish run Iheanyi Nwachukwu

N

igeria’s stock market extended its weekly bullish run by +0.35 percent as investors continued to cherry pick attractive counters amid low trading turnover.

Equity investors booked about N45billion gain at the close of trading week ended Friday August 28, thanks to insurance and consumer goods stocks which saw increased bargain despite profit taking in banking counters.

The stock market’s negative return year-todate (YtD) decreased to -5.71percent, while its month-to-date (MtD) return increased by -2.49

L-R: Otunba Abimbola Ogunbanjo, president, Nigerian Stock Exchange; Lamido Yuguda, director general, SEC; Barr Abubakar Mahmoud, vice President NSE and Dayo Obisan, executive commissioner operations SEC during a Meeting in Abuja.

percent.

Week-on-week (WoW), the Nigerian Stock Ex-

change (NSE) All-Share Index and Market Capitalisation increased

NSE appoints new product advisory committees

T

he Nigerian Stock Exchange (NSE) has appointed its cycle two Product Advisory Committees (Committees) across different product lines – Equities, Fixed Income, Exchange Traded Funds (ETFs) and Derivatives.

The Committees are made up of renowned professionals with expertise, experience and footprint in local and global financial markets who will support and advise The Exchange on emerging trends in the areas of product development and market structure.

They will also be tasked with the responsibility of recommending strategic initiatives that will boost market liquidity, deepen and develop the Nigerian capital market.

Speaking on the development, the Chief Executive Officer, NSE, Oscar N. Onyema, noted that, “The Exchange is resolute in its

ambition to become Africa’s preferred multi-asset securities exchange. We have, therefore, constituted these Product Advisory Committees to leverage the vast experience, diverse viewpoints and extensive networks of financial market technocrats to further strengthen and deepen our market. We are confident that the Committees will discharge their duties excellently to help us meet the needs of both local and international stakeholders while making The Exchange globally competitive.”

Members of the Product Advisory Committees who will serve for a two-year term are as follows: Fixed Income: Hajara Adeola – MD/CEO, Lotus Capital Limited (Chairperson); Patience Oniha – Director General, Debt Management Office; Titi Ogungbesan – Chief Executive, Stanbic IBTC Stockbrokers Limited; Oluseye Olusoga – MD, Parthian Partners Limited; www.businessday.ng

Nkoli Edoka – MD/CEO, Cowry Securities Limited; Esohe Denise Odaro – Head of Investor Relations, International Finance Corporation (IFC); Iyobosa Sorae – Group Head, Securities Dealing, Coronation Merchant Bank; and Akin Adigun – Senior Investment Officer, African Development Bank (AfDB).

Equities: Wale Agbeyangi – MD, Cordros Capital Limited (Chairperson); Farouk Aminu – Head, Investment Supervision, National Pension Commission (PENCOM); Dave Uduanu, CFA – CEO, Sigma Pensions; Akeem Oyewale – CEO, Stanbic Nominees; Lilian Olubi – MD, EFG Hermes Nigeria Limited; Roy Zimmerhansl – Practice Lead, Pierpoint Financial Consulting; Ziv Okun – Head of African Sales, Investec; Thomas Brown – CEO, J. Streicher & Co. L.L.C; and Odiri Oginni, CFA – MD, United Capital Asset Managers Limited.

from 25,221.87 points and N13.158 trillion to 25,309.37 points and

N13.203trillion respectively.

Twenty-nine (29) equities appreciated in price during the review week, lower than 31 equities in the preceding week. Thirty-six (36) equities depreciated in price, higher than 27 equities in the preceding week, while 98 equities remained unchanged, lower than 105 equities recorded in the preceding trading week.

The market recorded total turnover of 1.072 billion shares worth N7.384 billion traded in 16,684 deals by investors on the floor of the Exchange, in contrast to a total of 950.414 million shares valued at N10.123 billion that exchanged hands preceding week in 16,647 deals.

The Financial Services industry (measured by volume) led the activity chart with 586.761 million shares

valued at N4.022 billion traded in 8,483 deals; thus contributing 54.76percent and 54.47percent to the total equity turnover volume and value respectively.

The Conglomerates industry followed with 307.744 million shares worth N799.159 million in 1,010 deals; and the Consumer Goods industry, with a turnover of 50.170 million shares worth N968.272 million in 3,018 deals.

Trading in the top three equities namely Transnational Corporation of Nigeria Plc, UACN Plc and United Bank for Africa Plc. (measured by volume) accounted for 396.337 million shares worth N1.373 billion in 1,845 deals, contributing 36.99percent and 18.59percent to the total equity turnover volume and value respectively.

Arunma Oteh, Xavie Rolet join SEPLAT’s Board as Independent non-Executive Directors

T

he Board of Directors of Seplat Petroleum Development Company Plc (SEPLAT) has appointed Arunma Oteh, and Xavier Rolet KBE as Independent Non-Executive Directors of the Company, joining the Seplat Board with effect from October 1, 2020.

The announcement of their appointment is being made in accordance with Rule 4 of the Nigerian Stock Exchange Amended Listing Rules and Rule 9.6.11 of the UK Listing Rules.

Arunma Oteh is a seasoned C-suite executive with several years of experience operating at the highest levels at major multilateral agencies, global financial institutions and in Government. She has been an academic scholar at University of Oxford since January 2019 and a mem-

https://www.facebook.com/businessdayng

ber of the London Stock Exchange Africa Advisory Group since January 2020.

Oteh served as Treasurer and Vice President of the World Bank from 2015 to 2018. As Treasurer, she led a global team that managed the World Bank’s $200 billion debt portfolio as well as an asset portfolio of $200 billion for the World Bank Group and several public sector clients including 65 central banks.

She was responsible for a $600 billion derivatives portfolio used for hedging and risk management purposes. She had oversight over a treasury operation with an annual cash flow of $7 trillion and led an extensive public sector financial advisory business, pioneering a number of innovative solutions such as the world’s first ever @Businessdayng

pandemic bond in 2017 and blockchain public bond in 2018. Oteh was the Director General of the Securities and Exchange Commission (SEC) Nigeria from 2010 to 2015.

As Director General of Nigeria’s apex capital market regulator, she was responsible for the regulation of Nigeria’s capital markets, including the Nigerian Stock Exchange and led the rebuilding of the capital markets after the global financial crisis. She also served on Nigeria’s Economic Management team, chaired by the Nigerian President. Previous to SEC Nigeria, she worked at the Africa Development Bank for 17 years in a variety of roles including Group Vice President, Corporate Services (2006 to 2009) and Group Treasurer (2001 to 2006).

Monday 31 August 2020

BUSINESS DAY

MARKETS INTELLIGENCE

43

Supported by Asset Management Corporation of Nigeria (AMCON)

Stocks

Currencies

Commodities

Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

The Sanusis and Soludo were superior managers of Nigeria’s exchange rate

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

…The dollar exchange rate has risen 55,998 percent in the last 38 years IFEANYI JOHN

I

f you were to guess the one economic problem that every Nigerian and business has struggled with regardless of their wealth status in the country is the persistently declining exchange rate. In the last 38 years, the United States Dollar value has soared 55,998 percent against Naira in the official exchange rate market, moving from N0.67 to N379 as at Friday market close. This unequivocally puts Nigerian Naira among the worst performing currencies in the world in the last 4 decades.

One of key mandates of the Central Bank is to ensure exchange rate stability; it’s far too obvious how woefully the apex bank has performed at this task.

Asides suffering annual average devaluation of around 18 percent per annum since 1982, the economy periodically struggles with multiple exchange rate, dollar rationing and delayed foreign transaction payments resulting in huge production losses, weaker purchasing power and huge foreign exchange losses for businesses and individuals.

While the exchange rate has been devalued by every single one of Nigeria’s last 5 CBN Governors between 1982 and today, some Governors have fared far better than others in the management of the foreign exchange under their tenure.

The most superior exchange rate management performance was achieved by Sanusi Lamido Sanusi who under his stewardship the Central Bank managed to keep annual devaluation rate around 1.2 percent during his 5-year tenure as CBN Governor. Lamido Sanusi was CBN Governor between 2009 and 2014, during this period crude oil price rallied 38 percent from $80 to $110, proving the required earnings support to ensure Naira stability. Under Sanusi, dollar exchange rate moved from N148 to N157.

P.E

5

Sanusi

Soludo

Closely behind Sanusi was Charles Soludo who achieved an average annual devaluation of just 2.1 percent during his 5-year tenure between 2004 and 2009. While Soludo is widely remembered for the banking industry recapitalization, he is not given due credit with his impressive management of the Naira despite the crash in crude oil price in 2008. Crude oil price rallied 143 percent between 2004 and 2008 before crashing by 41 percent between 2008 and 2009 during the Global Financial Recession. In 2004, crude oil traded at $37.66, rose to $91.48 in 2008 and fell to $53.48 in 2009. Under Soludo, the dollar exchange rate moved from N133 to N147.

Joseph Oladele Sanusi who also spent 5 years at the helm of CBN between 1999 and 2004 was the third best Exchange rate manager amongst the past 5 CBN Governors. During his tenure, the average annual devaluation rate was just 7 percent although crude oil price grew by 127 percent during his 5 year tenure. Slow devaluation pace of this nature now seems like a lifetime ago considering the rate

at which Naira has been devalued in recent times.

Under the stewardship of Godwin Emefiele, the current CBN governor, average annual devalu-

‘

In the last 6 months alone, Naira has been devalued twice as Nigeria battles to manage its currency pressure due to the oil price crash of 2020

’

ation in his active 6-year tenure is 15.8 percent. In the last 6 months alone, Naira has been devalued twice as Nigeria battles to manage its currency pressure due to the oil price crash of 2020. When Emiefele began his tenure, dollar exchange rate moved from N157.3 to N379 on Friday. Crude oil price has fallen roughly 60 percent since Emefiele took charge of CBN. The worst 2 exchange rate managers were Abdulkadir Ahmed and Paul Agbai Ogwuma who under their tenures, average annual devaluation rates were 37.2 percent and 27.2 percent respectively. Ahmed led the Central Bank between 1982 and 1993, during this period, dollar exchange rate moved from N0.67 to N21.88, marking the worst decade for Nigeria’s Naira. Ogwuma was Governor between 1993 and 1999 and the dollar exchange rate moved from N21.88 to N94.88 at the end of his tenure.

Note: Sarah Alade who was acting CBN Governor for just 4 months between February and June 2014 was excluded from this analysis.

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

https://www.facebook.com/businessdayng

@Businessdayng

Company IN FOCUS

BUSINESS DAY Monday 31 August 2020 www.businessday.ng

May & Baker plc: Prospering amid pandemic, industry headwinds OLUFIKAYO OWOEYE

I

n our last coverage of drug maker, May & Baker plc, “Sustaining the path of profitability amid economic headwinds, cashstrapped consumers” we highlighted some challenges facing healthcare manufacturers and projected that 2020 would be a year of recovery for most players in the sector as the country’s economy gains stability slowly.

Surprisingly, against the run of play, the outbreak of the COVID-19 pandemic introduced a new narrative, plunging the world into a global health crisis.

No doubt, the last few years have been a challenging period for healthcare manufacturers in Nigeria. Some have shut down their operations, others lucky to be alive are still struggling to stay afloat in a challenging macroeconomic environment and cash strapped consumers.

The outbreak of COVID-19 in Afrcia, the last to be ensnared by the ravaging pandemic, raised a health crisis exposing the vulnerable countries with an ageing population and a large number of citizens with underlying ailments, putting pressure on the already dilapidated and in most situation a non-existent health infrastructure in many African countries such as Nigeria.

While the pandemic slowed down activities in several sectors of the economy, major winners have been domestic healthcare manufacturing companies such as May & Baker Plc. The huge deficit of local medical supplies and pharmaceutical products created investment opportunities for the sector players. Also, a substantial amount of intervention by the Central Bank of Nigeria to healthcare companies as part of stimulus package to manage the health crisis, which included access to a N100.0bn fund, as well as lower borrowing rates, came as a boost to most companies in that sector thereby raising investor’s appetite in their stocks.

Stocks of May & Baker gained 48.70percent in the first six months of the year while other healthcare companies also posted double-digit gains during that period.

The May-2020 MPC meeting communique indicated that the CBN has already disbursed N10.15bn under the N100.0bn Healthcare Sector Intervention Fund although names of beneficiaries were not disclosed.

Also, recent policy measures by the Federal Government, as well as fund flows from the private sector to healthcare could well mean that no crisis is a waste as the nation’s healthcare is now getting the attention it had longcraved for.

Financials mirror industry

headwinds The drug-maker was not shielded from the wave of economic contraction that swept the country in 2016 as it plunged the company into a loss of N41.09million. The company however emerged from its loss path in 2017 and maintained it in 2018 recording a net profit of N336.61million and N585.20million.

May & Baker turned the corner in the fourth quarter of 2019 to push its annual profit after tax up by 84 percent, even though sales in the year disappointed.

Audited financial report for the fourth quarter for the period ended 31December shows the company made a profit of N155.3m in the last three months of 2019 compared to a loss of N72.07m in the same period of 2018.

As a result, total profit for the year almost doubled to N628.9m compared to N342.69m from continuing operations in 2018 (total comprehensive income in 2018 was N585.2m following the disposal of food business in the year.)

The improvement in bottom-

line was, however, not owing to improved sales of the drug and beverage maker; full- year revenue declined by 5.52 percent year-on-year to N8.08bn May & Baker noted a decline in its main business segment (the production and sale of human pharmaceuticals and human vaccines) which offset gains from the beverages segment.

The slowdown in revenue weighed on May & Baker’s gross profit which fell by 7.17 percent to N2.94bn notwithstanding a 4.5 percent decline in cost of goods sold.

Consequently, May & Baker made N36.34 from every N100 sales in 2019, slightly lower than N36.99 in the prior year.

Administrative expenses fell almost 25 percent but it was not enough to grow operating income (N1bn vs N1.2bn) as higher selling and general expenses combined with lower ‘other operating income’ worsened the effect of a lower gross profit.

However, the company saw an astronomical increase of over 10,000 percent in interest income on fixed deposits with

‘‘

While the pandemic slowed down activities in several sectors of the economy, major winners have been domestic healthcare manufacturing companies such as May & Baker Plc

commercial banks (N36.98m in 2019). Profit on disposal of property, plant and equipment rose four-folds to N7m in the period.

Finance cost trended lower by 45 percent to N185.69m.

“We successfully concluded recapitalisation exercise in 2018 through a Rights Issue that injected N1.87 billion into the company helping us pay off expensive short-term debts, boost working capital, fund marketing plans and finance equity investment in Biovaccines and a new paracetamol plant,” said Okafor.

May & Baker’s subsidiary company Biovaccines Nigeria Limited has re-started operations and plans to commence construction of a planned vaccines production plant in 2020, it said.

The pharmaceutical company in December last year announced a contract manufacturing agreement to produce four brands of French pharmaceuticals Sanofi.

The deal which was signed with Sanofi Nigeria, the local outlet for the global drug company, would see May & Baker use its World Health Organisation (WHO) certified manufacturing facility to produce four products brands of Sanofi for sales in Nigeria and West. The company’s facility can produce 6billion tablets and 37.5million 60ml liquid medicines annually Reinventing the wheel to meet pandemic challenges The drug maker has re- activated its hand sanitizer production line within 72 hours of announcement of the COVID -19 index case in Nigeria. Also, the National Agency for Food

and Drug Administration and Control, (NAFDAC) contacted May & Baker to mass produce emergency stock of chloroquine for possible clinical trials.

Speaking during the presentation of healthcare products to some security agencies in Lagos and Ogun, Nnamdi Okafor, Managing Director/ CEO, May & Baker said the company has already produced large stock of chloroquine in response to the NAFDAC request. This has already been made available to some health institutions in Nigeria and countries in the Economic Community of West African States (ECOWAS). Chloroquine has long been used for the treatment of malaria. It was a flagship product of May & Baker until some years back when the federal government stopped the use of the drug in treatment of malaria in Nigeria.

May & Baker manufactures and distributes pharmaceutical products, such as vaccines, antibiotics, and sera. The Company also sells diagnostics, medical equipment and bottled water.

The company said it has reposition for sustained growth with ongoing investments in additional production capacity and investment in marketing and promotions among other strategic initiatives would provide impetus for growth in the years ahead. It has also continued to explore opportunities to broaden its products base and top-line including recent investments in vaccine production, new pharmaceutical products, nutraceuticals and herbal products that are expected to further diversify revenue base overtime.

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