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INVESTIGATION (2)

Coronavirus is the killer, PPE shortage is the catalyst TEMITAYO AYETOTO At EKSUTH, no PPE, no rescue

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n other hospitals, critically troubled patients were not even dignified with temporary admission because a holding bay did not exist. When Deborah Oluwadero was rushed to the accident and emergency department of the Ekiti State University Teaching Hospital (EKSUTH) as a diabetic emergency on April 21, she was stuck at a car park for roughly 73 minContinues on page 30

Inside

InfraCos await NCC’s N65bn subsidy after RoW reduction from seven states P. 2

Zainab Ahmed (m), minister of finance, budget and national planning, during the Virtual Public Consultative Forum presentation of the MTEF 20212023. On her left is Ben Akabueze, director, Budget Office of the Federation, and other members of the minister’s team.

CBN taps cash reserve ratio debits as backdoor of piling OMO costs N LOLADE AKINMURELE

igeria’s central bank is using discretionary Cash Reserve Ratio (CRR) debits as a backdoor of mopping liquidity in the bank-

ing sector following the balance sheet damage done by issuing Open Market Operations (OMO) bills at high interest rates over the past three years, according to sources familiar with the matter.

By debiting banks over CRR breaches, the Central Bank of

Nigeria (CBN) is able to mop up liquidity in the system at zero expense, marking a subtle departure from years of paying high interest rates issuing OMO bills to achieve the same purpose of liquidity mopping, while straining its balance sheet.

The CBN spent N1 trillion in interest payments on OMO bills in 2019, more than the federal budget for education and health combined.

In 2018, the CBN spent close to N2 trillion in interest payContinues on page 29

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news As food crisis looms, farmers deny receiving government palliatives Cynthia Egboboh, Abuja

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igerian farmers have decried government’s poor response to mitigate the impact of COVID-19 pandemic on agricultural production as food crisis looms across the country.

Describing government poor response so far to mitigate an obvious food shortage, stakeholders fear Nigerians who are already looking for a way to survive the impact of the coronavirus on the economy may soon be faced with food crisis, as food shortage gradually creeps in.

The government through the Ministry of Agriculture and Rural Development recently flagged off the distribution of agricultural inputs to Nigerian farmers as mitigate effects of the pandemic and boost agricultural production, and avert food scarcity in 2021.

BusinessDay findings however reveal that the programme may not yield the desired result as farmers deny receiving government’s palliative.

Daniel Okafor, vice national chairman, All Farmers Association of Nigeria (AFAN), speaking with BusinessDay, notes that Nigeria may not be able to escape food shortage

as farmers are still struggling to meet up with the farming season, which is at its peak already.

Okafor, expressing disappointment, describes the programme of the government that targets distribution of seeds and other farm inputs to farmers as “’just another propaganda,’ as the items that are being shared are too small, and most farmers have not received anything.

“What the government is doing is bad; we are already at the peak of farming season, and most farmers are yet to even begin farming. Farmers need support.

“The palliative they say they are sharing are all lies. We are at the rural areas; we are yet to see anything from them.

“We will soon have a huge problem arising from food shortage; we will soon begin to see people dying of hunger than the pandemic itself.”

According to the Ministry of Agriculture, farmers in Kano, Kaduna, Oyo and Kogi states have benefitted from the programme.

“The programme is a distribution of variety of improved seeds and seedlings of yam, maize, oil palm, cocoa, sorghum, millet, cowpea, rice and kenaf, among others to the beneficiaries nationwide.

InfraCos await NCC’s N65bn subsidy after RoW reduction from seven states FRANK ELEANYA

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ince May 2020, about seven Nigerian state governors have signed to reduce the right of way (RoW) fee for laying of fibre cables across their states, seen as a necessary first step to ubiquitous broadband deployment in Nigeria.

However, unless the Nigerian Communications Commission (NCC) fulfils its promise of releasing N65 billion before the end of the year, infrastructure companies (InfraCos) will likely struggle in deploying fibre in the 774 local government areas of Nigeria, stakeholders say.

This is because, like other

sectors, the telecoms sector is also adversely impacted by the COVID-19 pandemic.

Unfortunately, the sector is excluded from the N50 billion financial stimulus declared by the Central Bank of Nigeria (CBN) to aid sectors badly affected by the coronavirus.

The N65 billion subsidy is part of the counterpart funding proposed by the NCC to mitigate the cost burden on telecoms operators. The decision was made by the National Executive Council (NEC) and contained in the National Broadband Plan 2020-2025.

The plan ensures that the NCC supports the infrastructure companies responsible for deploying broadband, with a subsidy of N65 billion

counterparts funding. It is also part of a larger plan to raise N265 billion, which falls under the State Accelerated Broadband Initiative designed to address the infrastructural deficits in the telecoms sector.

The infrastructure companies would raise the balance of the N200 billion.

The plan also gives priority to the 774 local government authorities across the country.

The Federal Government is expected to release this fund by the third quarter of 2020 to InfraCos depending on their physical broadband rollout plan.

Last Tuesday, Akin Oyebode, special adviser on trade and investment to Ekiti State governor, announced that

a major telecoms operator was seeking approval to lay 160km of fibre infrastructure across the state. Ekiti was the first state to announce it has reduced its RoW fee to N145 from N4,500.

Funke Opeke, CEO of MainOne, told BusinessDay in May that it was considering areas of partnership with the Ekiti State government.

“MainOne continues to engage various governments to explore potential areas of partnership and investment, but at this time, we are still assessing opportunities available to us in the state,” she said via email.

Continues on page 28

Nigeria can earn over $20bn annually from creative industry

. . As FG hands over National Theatre to CBN, Bankers’ Commit ee HOPE MOSES-ASHIKE

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igeria has the potential to earn over $20 billion annually from the creative industry, according to Godwin Emefiele, Central Bank of Nigeria (CBN) governor.

Emefiele said this at the official handover of the National Theatre, Iganmu, Lagos to the CBN and the Bankers’ Committee.

Lai Mohammed, minister of information and culture, officially transferred the monument to the Central Bank of Nigeria (CBN) and Bankers’ Committee for regeneration.

The Bankers’ Committee had in December 2018 set up the Creative Industries and Financing Initiative (CIFI) with a major focus on four pillars: music, movies, fashion and Information Technology.

Towards the realisation of its objective, the Bankers’ Committee intends to support this creative venture with about N25 billion of initial funding.

The National Theatre is expected to serve as the initial pilot for the Nigeria Creative Industries Centre.

The Creative Industries Centre, which comprises music, movies, fashion and ICT and is expected to be com-

pleted in 18 months, could be a key source of growth for the economy, creating up to 1 million jobs for the country’s teeming youths, Emefiele said.

“Our goal for the National Theatre is to create an environment where startups and existing businesses are rewarded for their creativity.

The National Theatre, when fully renovated, will be able to support skills acquisition and job creation for over 1 million Nigerians over the next five years. These Nigerians will be empowered with funds at single-digit interest rate, high level training using state-of-the-art tools, and networks that will enable them to turn their ideas into a reality,” Emefiele said.

“It will also aid our objective of reducing our dependence on revenues from crude oil. India, for example, in 2018, generated over $240bn from exports of IT, movies, music and fashion-related goods and services. This amount is over five times our annual earnings from the sale of crude oil.

“With our human capital resources and an enabling environment that will help harness the creative talents of our youths, Nigeria has the potential to earn over $20bn annually from the creative industry,” he said. www.businessday.ng

L-R: Dupe Olusola, MD/CEO, Transcorp Hotels plc; Islam El’Maddah, director, commercial, Transcorp Hilton Abuja; Ijeoma Osuji, public relations and marketing, Transcorp Hilton Abuja; Helen Iwuchukwu, ED/COO, Transcorp Hotels plc, and Kevin Brett, GM, Transcorp Hilton Abuja, during a media cocktail showcasing the enhanced safety measures of covid-19 guidelines compliance at Transcorp Hilton in Abuja. Pic by Tunde Adeniyi

Hard times ahead for real estate as COVID-19 leaves sector with more losers … hospitality, retail, events centre sub-sectors dominate losers’ table CHUKA UROKO & ENDURANCE OKAFOR

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here are strong indications that hard times lie ahead for the real estate sector in Nigeria as a result of the hash and crippling impact of coronavirus (COVID-19) pandemic on local and global economy.

The sector in Nigeria, still smarting from its fragile recovery from 16 straight quarters of recession, has been hard hit by the deadly virus, leaving it with more sub-sectors on the losers table than gainers.

A survey by BusinessDay shows that retail, hospitality and conference/event centres are top on the list of sub-sectors that have been affected the most since February 2020, when Nigeria reported its first case of coronavirus. The gainers are few and they include

logistics or warehousing, land banks, small-unit apartments, home buyers with cash, especially foreign currency.

The implication of this worrying situation is that, short to medium term, supply will shrink as new investment in the sector may be little, if at all people are going to commit money into the sector, especially in the sub-sectors that have been badly hit by the pandemic.

Investors are going to hold back, as many have already started doing, and those of them who took bank loan to do developments may be under pressure by their creditors to pay back. This may lead to distress-sales that will leave them worse off, just as it will affect market stability and profitability.

Our findings show that the extremely low occupancy rate and reduced revenue from

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events and conferences, and zero revenue from business travels due to movement restrictions have combined to make the global and Nigerian hospitality industry a shadow of its former self.

It was also discovered that, while grocery shops and food supermarkets have not been largely affected by COVID-19 due to their exemption from the five-week lockdown that ended May 4, 2020, the retail market has suffered from the pandemic as retail outlets report a significant reduction in footfall, pushing retailers to request for rent relief and incentives, and to downsize their space.

“Retail has taken a hit. It is one of the big losers, followed by the hospitality industry.

Whereas the social distancing rule has reduced occupancy rate to 60 percent of the full mall capacity, footfall (shop@Businessdayng

pers’ traffic) has also gone down because consumer purchasing power has also dropped,” Gbenga Olaniyan, CEO, Estate Links, confirms.

Olaniyan notes that some retailers are closing shop while those, still resilient enough to tag along, are reducing their space such that those that had been occupying 1000 square metres have downsized to 500 square metres, taking the rest of their stock to warehouses.

Fabian Ajogwu, chairman, Novare Africa Real Estate, developer of the Novare Lekki Mall, affirms, pointing out, however, that the problem is not of Covid-19 per se, but what he calls “the reactionary measures that has come from governments across states and regions” on commercial real estate.

Ajogwu, a professor and senior advocate of Nigeria,

Continues on page 28

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NEWS

Bag of Goodies Promo: Past winners speak as season 2 kicks-off July

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ast winners of star prizes in the Bag of Goodies national consumer promo Season 1 undertaken by Dangote Cement Plc in 2019 have expressed excitement over the approaching Season 2, which kicks-off nationwide this July.

The star winners, among the 40 lucky individuals across Nigeria who were each presented with a brand new saloon car for their wins in the Season 1 promo, also commended the cement manufacturing giant and its chairman, Aliko Dangote for transforming their lives via the promo targeted at improving the lives of 21 million citizens through its various prizes.

Some of the past winners, who were contacted by telephone, recalled how their wins in the past promo enhanced their good fortunes and commended the company just as they and urged Nigerians to participate in the Season 2 promo.

They noted that the 2019 consumer promo was a lifechanging experience, and expressed willingness to participate in the new Bag of Goodies 2020 Season 2 promo.

The first star (car) prize winner in Season 1 promo, Abraka, Delta State-based cement retailer, Benjamin Igherighe in a phone interview endorsed the BOG2 promo, saying it is real and credible.

The cement dealer urged the public to take advantage of the promo to buy cement for their building projects and at the same time stand a chance of winning life-changing prizes from Dangote Cement.

Benjamin said the car has changed his life and business.

“People stop me on the road to make inquiries about cement supply and then place orders.

It has become a marketing tool which attracts attention and increased sales for me. The branded car has made me an ambassador of Dangote Cement and I keep telling people that the company stands for quality, durability and trust”, he added.

Commending Dangote Cement, he stated that the company is known for doing great things such as giving out trucks to customers, therefor, customers and consumers of cement products should be confident that the promo is real and take advantage of the season to win prizes.

Elated 64-year-old bricklayer, Iyowun Ezekiel from Ijebu-Ode, Ogun State, who also won a star prize of a GAC saloon car in Season 1, expressed joy at the phone call, and narrated how his prize has raised the quality his life.

The artisan, who said his status, has been elevated with the win, Nigerians to participate in the new Season 2. He said many of his clients have switched to Dangote Cement

product, which he said is the brand he uses at his various project sites.

He also thanked Aliko Dangote, who he described as a humane person with the welfare of Nigerians in his heart. Iyowun, who proudly described himself as a Dangote Cement ambassador, pledged to participate in the Season 2 promo to enable him win another star prize among other prizes.

Another Season 1 star-prize winner from Onitsha, Anambra State, Ugochukwu Joy was ecstatic when called on phone and kept asking when is Season 2 kicking off. She said the promo is real, adding that by God’s grace she is expecting to emerge as star prize winner again. According to her, the promo is real and transparent as Dangote Cement ensured that the prizes got to the real winners.

She added that the car prize has changed her life and status as people see her as a brand ambassador of Dangote Cement which opens doors and attracts favour towards her.

According to her, the car has made movement easy and aided her family’s daily activities. She endorsed the promo, asking the public not to relent but purchase Dangote Cement for their projects while at the same time getting the chance of winning life changing prizes.

A contractor in Ilorin, Kwara State, Awojobi Olusegun, who also won a star prize in Season 1 said the car has added 100 per cent value to his life, business, and his family, and brought more clients to his business. He said since he won the car he has become well respected in his society.

“People who were not interested in transacting business with me are now doing so because of the branded Dangote Cement car prize.

God has used Dangote to save me and family. I want to use this opportunity to thank Aliko Dangote and the entire management of Dangote Cement for giving me opportunity to own a car. I will like to participate in any of their promo in the future.”

He encouraged people to continue to patronise Dangote Cement, describing it as one of the best brands in Africa.

“Dangote Cement is the best in the country. The product is second to none in the country.

The company takes care of its consumers and ensure they benefit from its generosity all the time. Dangote products remain the best,” he added.

Under the new promo tagged Dangote Bag of Goodies Season 2, 1,000 Nigerians are expected to win a star prize of one million naira each over a promo period of 16 weeks, among other available prizes of tricycles, refrigerators, television sets, generators, Goodies packs, smaller monetary prizes and airtime. www.businessday.ng

L-R: Sunday Dare, minister, Youth and Sports, Lai Muhammed, minister, Information and Culture, Godwin Emefiele, governor, Central Bank of Nigeria, Lagos State governor, Babajide Sanwo-Olu at the formal handing over of the National Arts Theatre, Iganmu, Lagos to Bankers’ Committee for renovations and transformation in Lagos, on Sunday.

FX unification seen addressing concerns in fuel importation HARRISON EDEH, Abuja

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here is hope that the unification of foreign exchange market being pursued by the Central Bank of Nigeria (CBN) will address concerns occasioned by preferential premium rate and forestall arbitrary access for petroleum product import, oil marketers have said.

Major oil marketers in the country have always complained against multiple foreign exchange rates which is hurting importation especially as Federal Government insists on total removal of subsidy.

Adetunji Oyebanji, chairman of Major Oil Marketers Association of Nigeria (MOMAN) said the forex unification is a step in the right

direction as it will place every importer on equal pedestal to compete in a free market system.

The CBN has technically devalued the naira at the secondary market interventions.

The apex bank had asked for bids for foreign exchange at N380 per dollar against the N360 in the previous sessions, representing 5.5 per cent weakening of the naira.

“With this development, everybody has a singular market to operate in, and without some people getting dollar at a premium price and accessing dollar not becoming part of business,” Oyebanji said, while declaring oil marketers’ support for this development.

“It would also stop distortions, because once some people can access dollars at a premium rate or preferential

rate, they can’t distort the market, which the unification naturally puts to an end,” he further told BusinessDay. According to him, the implication pre supposes availability of dollars against what has been the case in the past, although, he noted the price could push up further while possibly affecting the new no-subsidy regime of the government.

“This means more money for importers because those channelling their money to black market and getting perhaps at premium price won’t have such opportunity again.

“If some people get dollar at preferential or premium rates, there could be tendency to distort the market. For instance, if I get my own at N380 per dollar and another marketer gets at N450, the

man who gets at 380 could sell his own cheaper.”

Affirming oil marketers’ position regarding a free market system, Oyebanji said: “We are always in support of free market and level playing field for everyone. Yes, it could mean that the exchange rate could worsen, but in all honesty, this is the true value of the dollar to naira since we are largely import dependent country,” adding that without the distortions, importers could play effectively.

Adeola Adenikinju, a professor of the energy economics and oil sector governance expert, told BusinessDay that the Federal Government must continuously ensure that the market is open for everyone to operate in without any dominant force or monopoly.

IHS Nigeria, TechQuest partner to bring STEM Fayemi launches Ekiti health insurance scheme kiti State Governor, or prepared for future untraining to 1000 teachers, students Kayode Fayemi has foreseen happenstances, that FRANK ELEANYA

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HS Nigeria, a mobile telecommunication infrastructure provider, has partnered with TechQuest STEM Academy to facilitate the training of 1000 teachers and students across Nigeria in July as part of its Covid-19 initiatives.

The training is a part of the Mission-T Programme commissioned by IHS Nigeria in 2019. The programme’s objective is to improve ICT education and empowerment in Nigerian schools and communities.

The Mission-T Programme is especially aimed at improving, Science, Technology, Engineering and Mathematics (STEM) education and help stimulate interest and participation of teachers and students in STEM fields across the country.

During the programme in July, participants will be equipped with requisite

knowledge and skills to develop projects that can improve human existence in a post-Covid-19 era leveraging digital tools like the internet, software, and computers. The teachers would also receive the relevant skills they need to deliver effective teaching over the internet.

“This initiative will increase the level of digital literacy and STEM capabilities which have been identified as essential skills needed to function in a rapidly changing technological age,” said Itoro Emembolu, director, TechQuest STEM Academy. “Programs such as the Mission-T initiative makes this possible through the far-sighted support of firms such as IHS Nigeria.”

TechQuest STEM Academy is a non-profit STEM organisation that has delivered STEM and digital literacy education to nearly 30,000 young people across 16 Nigeria states since 2015.

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inaugurated the state’s health insurance scheme aimed at ensuring that all residents of the state have access to quality and affordable health care services.

Speaking at the official launch of the scheme in AdoEkiti on Friday, Fayemi said his administration would continue to ensure that all residents of the state have direct and unbridled access to quality healthcare at an affordable price.

The governor also disclosed that his administration had commenced renovation of 16 primary healthcare facilities across the state in order to ensure effectiveness of the insurance scheme.

He urged Ekiti indigenes to prepare for the future by keying into the programme saying “the act of insurance simply implies getting ready @Businessdayng

is saving in readiness for unforeseen losses even though nobody prays for one” Fayemi said he was confident that the programme will ensure protection of Ekiti families from financial hardships of huge medical bills with the aim to ensure sound health of children and safe delivery of pregnant mothers.

He assured that nobody would be turned away from any of the health services on account of poverty, adding that money has been released to take care of specific vulnerable group especially pregnant mothers and children under five years to participate in the scheme at the point of care.

The governor stated further that the other groups would be gradually incorporated into the scheme as they register and fulfil the requirements.

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Buhari’s arbitrary use of executive powers undermines good governance global Perspectives

OLU FASAN

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ince assuming office in 2015, President Muhammadu Buhari has issued ten executive orders, a practice alien to his civilian predecessors. Yet, so proud is he of using such instruments that the presidency said in a document marking his administration’s fifth anniversary: “The Buhari administration has, since 2017, issued a number of landmark Executive Orders.”

But are executive orders intended for “landmark” actions? Are they designed to take the form of law-making by the executive? Or to usurp the functions of other arms of government? The answer is no! Which is why Buhari’s arbitrary use of executive orders poses a threat to good governance.

According to Black’s Law Dictionary, Executive Orders are designed “to direct or instruct actions of executive agencies or government officials.” As one scholar also puts it, an executive order “is a type of written instructions that presidents use to work their will through the executive branch of government”. They are, thus, administrative directives.

In the US, where the instrument was invented, its reach is so limited that Congress and Federal Courts have struck down several executive orders for exceeding the scope of the president’s authority. Recently, the US Supreme Court voided President Trump’s executive order seeking to deport young immigrants because it violated the Administrative Procedure Act, which says that a government action cannot make policy that is “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law.”

The Nigerian Constitution doesn’t expressly refer to the use of executive orders.

Those who justify its use do so on the basis that Section 5 of the Constitution says that

“the executive powers of the Federation … shall be vested in the President”. But the same Section 5 also says that the exercise of the “executive powers” is “subject to the provisions of this Constitution” and “to the provisions of any laws made by the National Assembly.” So, no executive order purportedly issued pursuant to the so-called Section 5 power can directly or indirectly add to, or subtract from, the Constitution or any existing statute.

Yet, recently, in justifying President Buhari’s use of executive orders, the attorneygeneral and minister of justice, Abubakar Malami, said they were being used to “complement existing legislation” and “ensure constitutional compliance”. The dictionary defines “complement” as “to contribute extra features to (something) in such a way as to improve or emphasise their qualities.” But an executive order can’t embellish the Constitution or any statute without explicit enabling power or legislative scrutiny.

In the UK, ministers issue hundreds of statutory instruments or statutory guidance every year to implement provisions of primary statutes. But such instruments must be scrutinised and approved by parliament before they can become law.

Surely, if the remit of executive orders goes beyond mere administrative directives but have implications for individual rights, separation of powers, federalism etc, then they must be subject to legislative oversight or capable of being struck down by the courts. But, in Nigeria, executive orders are never scrutinised by the legislature and hardly ever challenged in court. Yet, the increasingly pervasive use of executive orders and, more importantly, their insidious threat to constitutional democracy call for vigilance.

Of course, not all of President Buhari’s executive orders are outside the normal scope of such instruments. For instance, Executive Order 1 of 2017, which requires Ministries, Departments and Agencies (MDAs) of the Federal Government to act transparently and orders “all related MDAs at the airports” and “all agencies currently physically present in Nigerian ports” to merge or harmonise their operations, is a proper executive order: a policy directive by the Federal Government to its MDAs on how to carry out their functions.

But most of Buhari’s executive orders are not just administrative directives; they

have far-reaching constitutional implications and either trample on individual rights or undermine separation of powers or federalism. Let’s consider just three of such controversial orders: Executive Order 6 of 2018, Executive Order 7 of 2019 and the latest Executive Order 10 of 2020.

Let’s start with Executive Order 7 because it’s the least controversial of the three. In 2019, President Buhari issued Executive Order 7, entitled “Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme”. Essentially, the executive order allows private sector companies to construct and repair roads with their own money and to recover their costs by paying reduced taxes over a period of time. But this complex fiscal arrangement raises serious transparency and credible commitment concerns and shouldn’t have been done through an executive order.

First, given the transparency issues raised by such an arrangement, including its potential abuse, the scheme should have been introduced through a statute, with proper legislative scrutiny and oversight. Secondly, an executive order is the wrong instrument for introducing an investment tax credit scheme with a life span of 10 years. This is because an executive order can’t bind a future government, whereas a statute can until it is amended by the legislature. Thus, as one lawyer said, “the preparedness of the government of the day to respect the letter and spirit of the EO7 of 2019 is critical to the success of the intervention”.

Truth is, no serious government will introduce such an investment tax credit scheme, and no serious private sector company would embrace it, without strong statutory backing. Which is partly why Executive Order 7 has failed to deliver its desired outcome. It’s not fit for purpose!

Now, let’s turn to the more egregious executive orders, starting with Executive Order 6. In 2018, President Buhari issued Executive Order 6 freezing assets of individuals facing corruption allegations or charges. Reacting to the order, the Nigerian Bar Association said Buhari’s use of executive orders in criminal matters amounted to “decree-making”!

Later, a Federal High Court held that the president had the power to issue Executive Orders “on routine administrative matters”, provided such orders “do not step on the

‘

Surely, if the remit of executive orders goes beyond mere administrative directives but have implications for individual rights, separation of powers, federalism etc, then they must be subject to legislative oversight or capable of being struck down by the courts

toes of legislative and judicial powers under the constitution.” But that’s precisely what Executive Order 6 did by seeking to freeze “looters’ assets” without a court order. So, the court modified the executive order and directed that those tasked with enforcing it “must, at all times, obtain a court order before seizing any asset.” But the fact that Buhari could contemplate using an executive order to seize assets without a court order shows his administration’s authoritarian streak!

Which brings us to Executive Order 10 that purports to implement Section 121(3) of the Constitution on financial autonomy to the state legislature and state judiciary but does so in a way that utterly undermines the principles of federalism.

Essentially, with Executive Order 10, the Federal Government places obligations on state governments and turns its agencies and officials – Attorney-General and Accountant-General – into sheriffs against them! And it does so not through a statute or a constitutional amendment, but an Executive Order!

It was recently reported that after state governors pointed out the constitutional anomalies in the executive order, President Buhari suspended its implementation “pending further consultations.” But who advised him to issue such a perverse order in the first place?

In a recent piece, Sam Amadi, lawyer and former chair of the Nigerian Electricity Regulatory Commission, wrote: “Nigerian presidents don’t have a history of issuing executive orders”, adding that “President Buhari was the first president to issue real executive orders.” But although Buhari is using the American invention called Executive Order with gusto, he has shown little regard for the US Supreme Court’s view that such orders cannot be used to make policy that is “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law.”

To be sure, President Buhari’s capricious use of executive orders is an abuse of executive powers and a threat to constitutional democracy and good governance. He must toe the path of legality and constitutionality!

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

COVID-19 & reopening for business – key considerations for the Board (2)

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s this crisis has unfolded, many companies have put the health and safety of their employees, customers, and communities first. Unfortunately, due to the unforeseen magnitude of the pandemic, essential employees were often put in the position of working without the appropriate personal protective equipment (PPE) and without adequate prevention standards in place.

There is an assumption that only healthcare workers in the frontline of the COVID-19 battle require PPE (which for the most part they don’t get enough of). However, essential workers include those providing services that are critical to the very survival and peaceable living of the rest of us. There is a need to ensure that essential employees will be well protected going forward.

For the reopening to be successful and sustainable, the health and safety of nonessential employees, customers, and communities must also be addressed effectively. Ultimately, this protection will be built upon the foundation of widespread testing and monitoring of individuals, which presently is not available.

In the interim, guidance from the Nigeria Center for Disease Control (NCDC) with respect to social distancing, the use of face masks, restriction on gatherings, handwashing, temperature checks and other individual practices to prevent the spread of COVID-19 should be

implemented.

In this regard the National Association of Corporate Directors (NASD) recommends that the Board should ask the following questions – How has the company’s workforce been impacted by COVID-19? How has the company responded to the crisis with respect to employees, customers, and the community? Are there corrections that need to be effected to address existing issues?

To what extent is the company able to enforce social distancing? Does the company have an adequate supply of PPE? How long will the current supplies last? Does the company plan to test and monitor employees’ health? What plan does the company have to address the emotional well-being of employees? What is the company’s emergency response plan should there be an outbreak of COVID-19 in the workplace?

The question of whether it is safe to return to the office, store, or factory follows an equally important question - who sets the standards and is responsible for defining “safe” in a COVID-19 world? Expectedly, one would look to the government for clear guidelines. These have for the most part been inconsistent – understandably so as no one has travelled this path before. In addition to whatever guidance is provided by the government, companies will need to ensure that additional attention is paid to the ethical and legal considerations raised by reopening. www.businessday.ng

Of concern to the Board is to what extent does the company want to and is able to monitor employee health and whether or not there are privacy and compliance considerations in this regard. The Board will also need to require periodic reporting by Management of the reopening procedures.

Another consideration would be how to restart the company and adapt the workforce to operate effectively in an uncertain environment.

NASD recommends that the Board should ask the following questions of Management are COVID-19 related events covered under the company’s insurance? Has the company updated its contracts to protect itself and its customers? Has the company reviewed its supply chain and other vendor/customer relationships for adherence to applicable government guidelines? What is the company’s plan to accommodate employees who do not feel safe returning to work?

Companies have an opportunity to significantly affect the public’s sentiment regarding exposure to the virus through clear communication and refreshed policies and procedures that put employees, customers, and vendors at the heart of company operations.

A significant first step is to understand the current sentiment among employees, customers, and suppliers. Understand what their

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Bisi Adeyemi expectations, abilities, and concerns are, and communicate clearly about how the company is addressing or plans to address those areas. Consideration will need to be given to the broader infrastructure questions that employees face, such as commuting and childcare (given that schools are still closed). The Board will need to consider if and to what extent the Covid-19 crisis has affected employee morale and company culture. It will also need to review what Management has done with regards to redesigning the workspace to facilitate a safe working environment.

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

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The resilience fund against the coronavirus Bashorun J.K Randle

Dear Mr Governor,

W

hen the alar m was raised that as many as one million Lagosians (and close to ten million Nigerians) may be

vulnerable to the Coronavirus, we instinctly responded by challenging the computer modelling.

Now, it turns out we are ALL vulnerable and we are at the mercy of a ruthless invader which has scant respect for age, gender, religion or ethnicity/tribe.

Hence, we are now faced with the ugly prospects and monumental challenge of grappling with a SECOND WAVE of the monstrous pandemic which appears inevitable. Our strategy must be proactive, agile, quick, responsive and ROBUST. What is urgently required is a joint Government (Public)/ Private Sector Initiative to raise funds under the aegis of WHO and other critical stakeholders such as Committee of former Presidents of various countries (chaired by UK’s Mr Gordon Brown); Bill Gates Foundation; McCarthur Foundation; G-20; World Bank ; United Nations ; IMF; African Development Bank;

Afrexim Bank; IFAD etc in order to acquire in the shortest time possible the additional / new hospitals dedicated to victims of the CoronaVirus.

China was able to accomplish it within two weeks. So also did the United States of America and Britain. These spectacular achievements are worthy of emulation and replication in Lagos State. Towards this objective, we envisage rewarding every donor with a Hall of Fame plaque/badge.

This formidable challenge will also involve huge investment in Information Technology and provide vast opportunities for our fledgling tech entrepreneurs.

Regarding the structure, we need to ensure that the private sector is in the driving seat and international agencies/donors are represented at the Management level as well as the Board of Trustees. Accountability, transparency and world class corporate governance are of utmost importance.

‘

Regarding the structure, we need to ensure that the private sector is in the driving seat and international agencies/donors are represented at the management level as well as the Board of Trustees

As regards logistics and accommodation, the former Presidential Guest House and the former residence of the Governor of Lagos State, both on the Marina appear to be under-utilised.

We have not more than one hundred (perhaps two hundred days at most) to put everything (including legal backing and public enlightenment) in place. The clock is already ticking as we seek to remain cautiously optimistic – vigorous data gathering as the basis for a new dose of optimism as we struggle to isolate/ mitigate/ prevent. It is self -evident that our mortality is directly linked with what we do or fail to do. In any case, it is always the poor who pay the highest price.

Warmest regards.

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

Raising finance to acquire a marginal field? Key issues to consider

O

n the 1st of June 2020, the Federal Government of Nigeria (“FGN”) via the Department of Petroleum Resources (“DPR”) formally announced the commencement of the long-awaited marginal field bid round. According to the guidelines published by the DPR, a marginal field is defined as a field that has been discovered and left unattended for a period of not less than 10 years from the date of first discovery or such field as the President may from time to time, identify as a marginal field.

The first marginal field bid process occurred in 2001 and resulted in the award of 24 marginal fields to 32 companies.

Another bid round was scheduled to take place in 2013 but was subsequently suspended. In this latest bid round, a total of 57 fields located on a combination of land, swamp and shallow terrains are on offer and there has been significant interest from investors in the process thus far.

Innovative financing will be critical particularly in the context of the current low oil price environment and economic impacts of the COVID-19 pandemic. It is therefore important that preferred bidders understand the need to structure optimal and bankable financings for the development of the asset post acquisition.

Robust financing structures This encompasses the source of financing, framework and the various contracts that underpin how the financing will be availed. Reserve based lending structures, contractor financing and forward sale/ prepayment structures are some forms that are likely to be utilised by prospective financers. A critical element in all possible financing structures and indeed most project financing type transactions is the offtake agreement.

In the oil and gas industry, an off-take

agreement establishes the contractual framework for the purchase and sale of oil and or gas between the seller and the off taker. The terms of the agreements are typically negotiated before field development and will become effective upon completion of the project and production from the field commences. This project document is quite key in ensuring the financing is secured for the project as it provides evidence that validates the financial model and cash flow projections that will underpin the asset cash flows.

Offtake agreements have also become increasingly important for financing structures that involve some form of forward sale or prepayment. Lenders will seek to review the terms of the agreements as well as the credit worthiness of potential off taker(s) and will often require that these parties either be of a specified credit rating and if not, be able to provide additional credit support (letter of credit/ guarantees) to assure performance of their obligations under the agreement.

Given that this document (amongst others) contributes towards the bankability of the transaction, it is generally and, in most cases, made a condition precedent to the financing and will be expected to be in place prior to the disbursement of funds. Other aspects of the financing structure which needs to be considered by prospective bidders include validation of reserves and escrow accounts, hedging requirements, defined cash waterfalls, credit enhancements from the sponsors and the inclusion of parties such as security trustee, facility agent and a technical consultant to validate the technical and operating assumptions in the financial models.

Independent due diligence In the oil and gas industry, due diligence www.businessday.ng

is critical in view of the significant quantum of investment, as well as the technical, commercial and environmental complexities which can expose parties to significant risks. Due diligence is sure to be undertaken by prospective financiers however, the level of due diligence will largely be dependent on the type of financing that the bidder is seeking to raise, with project finance structures requiring extensive levels of due diligence. Bidders should note that although internal due diligence may have been undertaken on the intended assets, financiers will still seek to independently validate the due diligence results provided by the client.

Typically, financiers will require the services of specialists in various fields such as Technical (Surface and Subsurface), Legal, Environmental, Insurance and a Financial Model, Accounting and Tax Auditor. Due diligence in the aforementioned areas are key for project finance transactions and even more so in an upstream oil and gas deal where cash flows and repayments are based on oil and or gas reserves.

Risk mitigation Based on the independent due diligence results, prospective financiers will seek to ensure that transaction risks have been allocated to the parties best placed to handle such risks. As a bidder, it is advisable to have thought through all possible risks of the proposed transaction and work towards ensuring that risks such as geological, operational, environmental, price, regulatory risks and others are suitably mitigated. Extensive due diligence is therefore required particularly in Technical (Reserves and Associated Infrastructure) and Environmental areas.

In addition, other critical requirements set out in the existing guidelines

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IFEOMA FINNIH

such as, evidence of technical capabilities of the management and operational teams, proposed field development plans, evacuation infrastructure etc are essential aspects of the deal which need to be taken into consideration and will be critically reviewed by prospective lenders. In spite of the current macro-economic environment, significant interest from numerous prospective investors shows that industry participants believe the process is long overdue irrespective of timing. The energy sector, and in particular, upstream oil and gas, remains a critical sector for Nigeria.

It is therefore in the interest of all industry participants that the marginal field bid round process is transparent and that bids are carefully evaluated against stringent criteria to ensure that these marginal fields are ultimately awarded to firms and or consortiums with the technical capacity and financial backing required to develop and operate these assets. Finance will be a critical aspect of this process and to ensure that industry players are able to successfully attract the funding required, the above items should be carefully considered as the bid round progresses.

Finnih is Head Oil, Gas & Infrastructure, Debt Solutions, FBNQuest.

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BUSINESS DAY

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A practical guide to employee appraisal and performance evaluation

EIZU UWAOMA

A

wealthy farm owner once employed four young farm managers to work on his farmlands located in Ikorodu, Epe, Sango and Mile 2. The expectations at the end of the last 3 years were for the farmlands to yield 6500 tubers of yam. 1000 was the minimum value they expected from each farmland. However, at each harvest time, the farm produce was consistently around 1250, 800, 2300, 2000 tubers of yam respectively.

Majority of performance issues are management and people based. When things go wrong, find the root cause and treat it from the person in charge.

From the findings, it was a competency issue that is unlikely to change irrespective of an improvement plan.

Some hires are just wrong. In line with this, the wealthy farmer laid off the farm manager at the Epe farm. Besides his bad performance, there were other environmental factors the farm had no control over.

So, the farm owner after a series of audits eventually shut down that location and divided all remaining resources between the workers at Ikorodu and Mile 2. Then, he provided more tools for the workers at Ikorodu with the expectations that they would meet the upgraded target of 1500 tubers of yam in the coming year. This is called Resource Levelling. And it can only be done from appraisals, assessment and evaluation.

Appraisal refers to a review instance or an even formal opportunity to analyse one’s performance at work.

It is the iterative process of evaluating a person’s performance, product or services. It is usually scientific with steps that may include assessments and experiential profiling against predefined metrics. It is best when it is integrated using assessments, inspections, comparison, field-testing and feedback. Appraisals can be used as a basis for us to justify or evaluate a need for pay increases, bonuses or a performance improvement plan.

Beyond getting the best hands on the job in an organisation, there is a need to carry out periodic examinations of the challenges and progress made so far. Progress is always relative (it is relative to a frame of reference in comparison to either a target, or other peers or even a scale. Whatever the reference is, it has to be via a time series or timeline).

Every organisation has its short and long terms goals and objectives to achieve. And in the middle of that are the employees. Employers need to measure the extent to which employees have been able to achieve these organisational goals. Just like the recruitment and selection process, employee evaluation also induces huge cost and effort. Hence, there is a need to execute the process carefully to avoid wastage of organisational resources.

Traditionally, employee evaluation is a top-down process; starting from the top-level management and cascaded down to the lower level.

Over time, there have been different approaches to employee evaluation such as: Self-assessment: Here, the employee measures his/her performance.

This may be subjective, as no rational employee will conduct a poor evaluation of himself/herself.

Peer appraisal: Colleagues and team members are allowed to evaluate the performance of an employee.

Emphasis is placed on team spirit and group cohesiveness. This approach is more preferable to the self-assessment because it covers a wider scope of evaluation.

Superior appraisal: In this approach to performance appraisal, pre-

rogative centres on supervisors, heads of units and departments to measure the performance of their immediate subordinates.

360 degrees feedback: This is an allround evaluation process. It encompasses self-assessment, peer appraisal as well as evaluation from supervisors and heads of departments.

Essential to the performance appraisal process is a standard feedback mechanism. This allows for employees to know their ratings and also to figure out how consistent their efforts have been with the overall organisational goals and objectives.

Employee appraisal is usually time and cost inducing, but its numerous benefits are pivotal to the success of any organisation. Appraisal serves as a guide to human resource management decisions, such as training, rewards, promotion or even dismissal. It also helps for resource allocation or levelling to justify equity.

Despite all the benefits extolled above, performance appraisal also has its shortcomings if not properly conducted which may affect the validity of the exercise. One of such errors is Halo Effect, which is the tendency for the appraiser to focus on one or more peculiar characteristics as a basis for assessment. In other words, it is the tendency for an impression created in one area to influence opinion in another area. Oftentimes, the concentration on these characteristics may adversely influence the overall performance appraisal process. Another error is the error of Central Tendency where the rater tries to rate all the subjects on the same subjective average.

It’s like measuring all the strength of animals by how fast they are. This error will pose a problem to employees, as they may not be able to ascertain their actual or realistic performance on the job.

One of the first things to do when doing an appraisal is to define the metric and Scoring Model to apply.

Take for example, for us at Hexavia and the clients we consult for, we usually ensure that appraisals are broken down into three sections: Competence/Functionality of

‘

Appraisal is a major part of Human Resources, especially in managing team members’ in line with organisational goals. It’s one of the uneasy parts of the work. So always bear in mind that it’s just a job you have to do

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Uwaoma is a start-up, corporate restructuring and strategy consultant. contacteizu@gmail.com

Four things employers want to hear you say at your job interview

I

t’s never been harder to stand out from the pack and land a job than it is right now. At the same time, employers complain that it’s hard to find great people to join their teams. So, what’s the matter? We know all too well that job hunting is quite the experience - preparing a resume, sending out applications, crafting a cover letter, attending multiple interviews, the works.

A great resume usually gets you a spot in front in the interview room, but that’s where the real work begins. Everybody else in that room has a resume that impressed the recruiters, so how will you make yourself stand out?

You’re just as qualified on paper, maybe even less, than the others who made the cut. So, what else can you offer? Show the recruiters that you have these four things: Capability Sure, your resume demonstrates your skill and experience, but recruiters want to verify that you understand what is required of you. So, your recruiter might describe the responsibilities of the position. Do you know what those responsibilities require? Make that clear. They want to hear you say “I’m familiar with that. I performed a similar role in…, this

is how that turned out…”

Enthusiasm In addition, you need to seem interested in the opportunity. Being unemployed for long can be frustrating, and before long, you’re willing to take any job that’s offered. This desperation is a bad sign and interviewers can pick up on it. Show how excited you are to work for that company or in that role. Demonstrate specific interest. Do your research about the team before the interview. That way you can honestly say “this is my dream opportunity; I’ve been following your company since you did… I’ve prepared to take this role by…”

Teachability This quality manifests itself in two ways: in your willingness to learn and your ability to work effectively in a team. It also helps to demonstrate the ability to lead. Leaders are learners after all. Most roles require on-thejob learning and recruiters want to see that you’re a fast learner. Moreover, company culture is different in every setting, so you should be able to adapt to new practices and traditions. You can highlight your teachability by saying “At my previous job, I learnt how to use… and it took me… Also, I was unfamiliar www.businessday.ng

with… but with the help of (names), I got used to…”

Impact Everything is quantifiable. The number of meetings you booked. The number of people you welcomed. The amount of new business you created. The increase in the value of the company or its share price while you were a part of the company. Talk about the new customers you brought in, the number of reports you wrote, the number of articles you wrote, the number of products you launched and the users you acquired.

Interviews can be nerve-wracking, definitely. It’s important to remain confident in your abilities. The coronavirus has made it no less easy so speak up, answer questions clearly, also ask questions of your own. Show the recruiters that you’re interested and give them a glimpse into just how much you devote to tasks you consider important, your ability to learn and unlearn. Stay safe and happy job hunting!

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,

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roles (this usually makes about 70 percent of the total appraisal): This refers to the main reason why the subject was employed. This is benchmarked against his/her JDs and KPIs. In this section, the subject is to be appraised by three individuals; the subject, his/ her supervisor and the person’s corresponding Unit head, and HR. Culture Fit – alignment with the firm’s corporate values and visions (this usually makes about 15 percent of the total appraisal). In this section, the subject’s direct boss/unit head appraises the subject and one other person selected via a grid.

Interpersonal relationship and leadership, which includes team spirit, relationships with colleagues, customers, and brand. This usually makes up about 15 percent of the entire appraisal. For us, this appraisal is usually delivered quarterly alongside a questionnaire, which makes inputs to the appraisals.

We also have in parallel a penalty grid that is also measured within the same timeline. The total score of each staff during computation is subject to if the staff has any outstanding point deductions from the penalty grid. Each penalty according to the grid in relation to the offense is assigned a point grade. The outstanding point is to be deduced from the appraisal points to get the total appraisal score.

Another thing you may need to consider is your benchmark score.

For us at Hexavia and our clients for example, the benchmark score for an appraisal is 80 percent. Our score grades are 90 percent – A’, 80 percent – A, 70 percent – B, 60 percent – C, 50 percent – D. Also, I will suggest that the appraisal should be done quarterly. 50 percent for us is usually the cut off. So, what you may want to define is what happens if an employee does not score above 50 percent?

Money Brain with JR

JR Kanu

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.

Kanu is the creator of the app, REACH: Expense & Money Manager - www.reach.africa. He is also the author of the book, Money Brain: Career & Money Management in Your 20s and 30s - moneybrain.reach.africa. jrkanu on Instagram or email stories@reach.africa

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BUSINESS DAY

Monday 13 July 2020

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun

Nigeria’s AKK-Pipeline project lacks economic viability Warren Buffett’s Dominion Energy deal demonstrates private sector’s capacity to finance big-ticket investments

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

Bashir Ibrahim Hassan

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

N

igeria is committing $2.8 billion it does not have to build an expensive gas pipeline where it could have been cheaper to use rail and in a region without the industrial capacity to use the gas, this is the sum of the country’s latest project.

On June 30, President Muhammadu Buhari officially launched the construction of the 40-inch x 614km Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline project, a section of the Trans-Nigeria Gas Pipeline (TNGP) with a capacity to transport about 2.2 billion cubic feet of gas per day, expected to be completed in 24 months.

According to the federal government, the project will be financed through 85 percent debt and 15 percent equity with loan facility from the China Export & Credit Insurance Corporation (Sinosure) at London Interbank Offered Rate (LIBOR) interest rate plus 3.7 percent with a 12-year repayment period, while NNPC will cover the remaining 15 percent of the project’s cost.

Nigeria’s finance minister Zainab Ahmed had earlier said the government has done an extensive review of the project and is satisfied

that the cash flows from it will repay the facility.

The AKK-Pipelines is hardly a new idea but could not be executed largely because of concerns about its viability. Firstly, northern Nigeria with over 80 percent of Nigeria’s poor lacks the industrial capacity to offtake the gas. Citing a multi-billion-dollar gas project in the least developed and poorest region and betting that industries would follow is like betting the house on the lottery.

According to the federal government, the economic benefits of the AKK pipeline which would originate from Ajaokuta, in Kogi State and traverse Abuja (FCT), Niger, Kaduna, and terminate at Kano, would boost domestic utilisation of natural gas for Nigeria’s social-economic development, when completed. It would also unlock 2.2 billion cubic feet of gas to the domestic market, support the addition of 3,600 megawatts of power to the national grid and revitalise textile industries which alone boasts of over 3 million jobs in parts of the country.

These touted benefits ignore the underlying challenges in the economy. Take for example the national grid, it does not require more power, considering that it cannot even move all the 8,000MW GenCos now gen-

erate but can do at most 5,000MW or it shuts down. Hoping it can take an additional 3,600MW, without massive investments to retool it, is wishful thinking.

Worse still, the 614km AKK pipeline is part of the Trans-Nigeria Gas Pipeline which will ultimately pipe Nigeria’s gas into Europe through unsecured routes prone to attacks by insurgents.

In an economy where over 90 percent of government revenue goes to servicing debt, it seems rather pragmatic to make use of existing rail infrastructure to ship gas to the north.

This government is making huge investments in reviving rail lines across the country, it would have been more economical to move gas along rails rather than spending over $2.8 billion on this venture - except the objective is just a contract bazaar.

For a government with an unhealthy balance sheet, it makes more sense to use private-sector funds to build a gas pipeline in areas where industries are and guarantee access to markets for products from the north through other means. The FG can deploy such funds into other economically stimulating endeavours.

American billionaire investor, Warren Buffet’s company, Berkshire

Hathaway Inc. purchased Dominion Energy Inc.’s natural gas pipeline and storage assets for an enterprise value of $9.7 billion demonstrating the capacity of the private sector to finance big-ticket investments. The Buhari government’s distrust for private capital continues to be its albatross and miring future generations neckdeep into unconscionable debts. The private sector only needs an enabling environment including a government that respects contracts.

Making economic decisions based on political considerations always leads to waste and inefficiencies.

This is true of the National Independent Power Projects (NIPPs), thermal plants built far away from gas feedstocks to satisfy political interests. Today, they rot away while the country lacks power.

We commend the pivot towards gas after years of inordinate attention to oil. This year Timipre Sylva, minister of state for Petroleum Resources, said 2020 was Nigeria’s year of gas.

Last year, the final investment decision on NLNG Train 7 project was reached, and the NNPC/Chevron Nigeria Limited signed agreements over the multi-billion dollars Escravos Gas-to-Liquid (EGTL) project. We only ask the government to become strategic in its thinking.

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

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BUSINESS DAY

COMPANIES&MARKETS Big Four accounting firms to separate auditing from consulting in industry shakeup OLUFIKAYO OWOEYE

T

he Financial Reporting Council has issued a 22-point plan for the operational separation of the audit units o PwC, Deloitte, KPMG, and Ernst & Young-The Big Four Accounting firms. In what could be termed the biggest shake-up of the industry in decades, the Big Four Firms must outline how they will implement this new directive by end of October and have until June 2024 to effect such changes.

The Big Four have come under intense scrutiny following the collapse of high-profile corporates and recently the German Payment processor, Wirecard where $2billion have been declared missing, while Ernst & Young, its auditor is accused of missing the alleged Wirecard Fraud.

The new FRC’s plan seeks to ensure that firms pay auditors in line with the profits of their audits, shielding the finances of

the audit division with a separate profit and loss account and introduce an independent audit board to oversee the practice.

As at 2019, the Big Four generate about a fifth of their revenues from the audit practices which have been dwarfed by the rapid expansion of their advisory division in recent years. Analysis of audit fees of Nigeria’s most capitalized firms on the nation’s bourse show that the Big Four earned the sum of N7.53billion as audit fees in 2019.

By the time the operational separation officially takes ef-

fect starting from June 2024, FRC said it would be expect that audit practice governance would prioritise audit quality and protect auditors from influences from the rest of the firm that may try to divert their focus away from audit quality; the total amount of profits distributed to the partners in the audit practice does not persistently exceed the contribution to profits of the audit practice; the culture of the audit practice which prioritises high-quality audit by encouraging ethical behaviour, openness, teamwork, challenge and professional skepticism/

judgment; auditors act in the public interest and work for the benefit of shareholders of audited entities and wider society.

While commenting on this development, FRC’s Chief Executive Officer, Jon Thompson, said the FRC is committed to reforms on how corporate finances are reported. Further aspects of the reform package will be introduced over time, he said.

“Operational separation of audit practices is one element of the FRC’s strategy to improve the quality and effectiveness of corporate reporting and audit in the United Kingdom following the Kingman, CMA and Brydon reviews. Today the FRC has delivered a major step in the reform of the audit sector by setting principles for operational separation of audit practices from the rest of the firm. The FRC remains fully committed to the broad suite of reform measures on corporate reporting and audit reform and will introduce further aspects of the reform package over time,” Thompson said.

COMPANY RELEASE

AIG partners NESG on incidence & response tracker dashboard in fight against COVID-19

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frica Initiative for Governance (AIG) is partnering with the Nigerian Economic Summit Group (NESG) and the Federal Government by funding the building of an Nigeria COVID-19 Incidence and Resource Tracker, Dashboard and Predictive Analytic Platform (Systems Platform) to assist the containment of the COVID-19 pandemic in Nigeria.

The Systems Platform solution is expected to provide a robust, up-to-date database of Federal and Sub-National resource and availability requirements for the COVID-19 response, based on the World Health Organisation (WHO) recommended resource specifications on packages for COVID-19.

“Once deployed, the Systems Platform will provide a National and Sub-National Inventory Management System that gives national visibility of what is procured, in-stock and out-of-stock across the Federal

and State Testing, Treatment and Isolation Centres” said ‘Laoye Jaiyeola, Chief Executive Officer of the NESG. “The realtime data provided will enable government, the private sector, international organisations

and other donors to mobilise more effectively in providing the critical human and material resources needed to support the country’s response to the pandemic”.

On May 19 2020, the Presidential Task Force on COVID-19, which is constituted by heads of the Federal Ministry of Health, the Nigeria Centre for Disease Control (“NCDC”) and other Ministries, Departments and Agencies of government endorsed the partnership between Africa Initiative for Governance and The Nigerian Economic Summit Group for the development of the Systems Platform. The Systems Platform is equally deployed in collaboration with the Nigeria Governors’ Forum.

Ibadan Disco cautions customers as the rains begin urges them to report faults promptly OLUSOLA BELLO

I

badan Electricity Distribution Company (IBEDC) Plc has called on its esteemed customers and the public to be very cautious around electrical installations within its network as the rainy season begins to gather momentum.

The Chief Operating Officer of the Company John Ayodele said that the rainy seasons often witness the highest levels of incidents within the electricity distribution sector because of heavy rainfall, windstorms, and floods.

Ayodele therefore, urged

members of the public to be on their guards to avoid falling victims of any accident that could easily occur during the rains.

Speaking on the need to observe all safety regulations especially during the rainy season, Engr. Ayodele said that IBEDC is concerned about the safety of its customers and staff, hence, the need for more sensitization and education now.

“There is need to create awareness on safety measures during the rainy season because of the hazards that electricity and water can cause. Avoid conditions that can compromise your safety

around electricity, such as using wet electrical appliances or handling them with wet hands; stepping in puddles of water that could potentially be charged. You should also guard against exposed electrical wires, and ensure your houses are well earthed.

John Ayodele furthermore, called on customers within IBEDC’s network to stay clear of snapped power wires and cables, sagging lines and fallen poles. He said if there is any such incident, customers should call the Customer Care 0700123 9999 or report through

www.businessday.ng

the company’s social media handles immediately, while maintaining a safe distance from the point of the accident. He warned against the practice of conducting commercial activities under power lines and cables, noting that the cables could easily snap due to strong winds.

He further advised customers not to engage quack electricians to wire their houses or carry out repairs as errors and deviation from sound technical practice and poor workmanship may lead to fires, loss of properties and even loss of life in some cases.

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Palton Morgan appoints EMAAR executive as COO in race to expand Nigeria’s property industry TEMITAYO AYETOTO

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a l t o n Mo r g a n , Nigeria’s foremost property development holding company, in its quest to deliver real estate projects and drive the exponential growth of Nigeria’s property industry has appointed former Emaar Pakistan Chief Executive Officer, Nidal Turjman as its new Group Chief Operating Officer.

Emaar Properties is one of the world’s most valuable and admired real estate development companies with diversified interests in real estate covering both commercial and residential property development. Emaar has a collective presence in 36 markets across the Middle East, North Africa, Pan-Asia, Europe and North America; where Mr. Turjman served almost 12 years in multiple leadership roles including CEO for multiple entities and developments regionally and internationally and led the growth and positioning of Emaar in several international markets.

Coming to the job with over 25 years of global experience and proven achievements in real estate development, property management, assets management, and diversified industries, which got him engaged in real estate investments in the Gulf

Cooperation Council (GCC) region, Pakistan, Egypt, Tunisia, Syria, and Morocco, with key roles, which played in the decision to bring him on board Palton Morgan Holdings at this crucial time.

Mr. Turjman, will lead the new strategies and push policies that will sustain the growth of Palton Morgan as the market leader in the largest African economy and fuel great innovation within the Nigerian property market.

He holds a BSc in Economics, Diploma of International Commercial Arbitration from Equity College, UK, and multiple executive development certificates in Project Management, FIDIC and Contract Management, among others.

Speaking on the appointment, Palton Morgan Holdings CEO, Adeyinka Adesope said the Group is pleased to welcome Turjman to the team as his career experiences bring further depth to the Palton Morgan workforce and supports the continued push for excellence, enhanced customers’ experience and improved performance across all its real estate portfolios. Adesope said with the new COO having worked under different environments, markets and challenges, which has empowered him to meet up with different business objectives, the Nigerian sector will be lifted adequately.

FirstBank honours 28 successful graduands at maiden management programme MICHAEL ANI

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irst Bank, one of Nigeria’s biggest lenders has completed its first-ever management program, celebrating 28 successful candidates.

Known as the FirstBank Management Associates Programme (FMAP), the program is part of the Bank’s way of showing its commitment towards promoting human capital development by training and retraining staff to deliver customer-centric services that will position the firm on the path of higher growth.

Speaking at the graduation ceremony which happened virtually, Adesola Adeduntan, CEO of the bank, said the programme was born out of the bank’s quest to groom young Nigerians, hungry for knowledge, that will take on the bank’s succession plan.

For him, the programme was intended to consciously integrate leadership into the bank’s culture and build a pipeline of highly resourceful and talented individuals. @Businessdayng

“As an institution, we have a lot of things undone and the only way for us to achieve that is to continue to do things two to three times better than our competitors,” he said.

According to him, the FMAP is part of the Bank’s strategic objectives of infusing and developing leadership at requisite levels across its staff hierarchy, aimed at building the next generation of leaders who will be groomed to drive the Bank’s vision of being Africa’s Bank of first choice.”

He urged the graduands to invest in relationship as well as work harder and smarter than their competitors by employing a combination of Intelligent Quotient (IQ), Emotional Quotient (EQ), Physical Quotient (PQ), and Social Quotient (SQ) skills that were learnt in the cause of the program. Adeduntan also charged them on the need to uphold integrity at all times, saying that banking was all about trust and confidentiality.

“In whatever you do, always strive to leave a positive footprint that will stand as a legacy for others to follow,” he said.

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Monday 13 July 2020

BUSINESS DAY

COMPANIES&MARKETS NSIA Insurance rewards shareholders with 1.45 kobo dividend MODESTUS ANAESORONYE

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nderwriting firm, NSIA Insurance Limited (Nigeria) has rewarded its shareholders with a dividend payout of 1.45k (N0.0145k) per share for the 2019 financial year.

The Company’s Gross premium income increased by 32.9 percent from N6.91 billion in 2018 to N9.19 billion in 2019, while the Net Premium Income improved by 25 percent from N3.16 billion for the year ended December 31, 2018, to N5.06bn in 2019.

Disclosing this during its Annual General Meeting held recently, Ituah Ighodalo, chairman of the Board said Profit After Tax (PAT) improved significantly by 67 percent from N670.45 million in 2018 to

N781.87 million in 2019, while there was also an improvement in the Earnings per share by 75 percent from 7k in 2018 to 9k in 2019.

As a company that places high value on integrity and professionalism, the company during the year under review increase in claims payout by 25.8 percent from N2.28 billion in 2018 to N2.87 billion in 2019.

Total Assets for the year ended 2019 increased by 8.4 percent from N17.92bn reported for the year ended December 31, 2018, to N19.43bn.

Shareholders’ Fund in 2019 grew from N10.9bn to N11.84 billion marking an 8.7 percent year on year growth.

Ighodalo said at the meeting that “NSIA Insurance had made good its promise of maximizing the returns of its shareholders’ investments in

the business, lending credence to the company’s values of Integrity, Care, Innovation and Professionalism”.

Prior to the AGM, NSIA Insurance welcomed Apollos Ikpobe; Hélène Konian, and Mansan Diagou Ehilé as NonExecutive Directors.

According to the MD/ CEO of NSIA Insurance, Ebelechukwu Nwachukwu, “We are pleased to have met the set goals for the financial year of 2019 and we expect to significantly grow our income for better competitive edge. We look forward to growing capacity by 25 percent before the end of 2020 even as we plan for a 30 percent growth in 2021.”

Ebelechukwu Nwachukwu further stated, “Our primary objective is to continually grow our business, satisfy our customers and maximize re-

turn on investments for our stakeholders.”

NSIA Insurance Limited is a first-class composite insurance company driven by Integrity, Care, Innovation and Professionalism, with Head Office in Lagos, strong regional presence in Abuja and a large network in strategic states across the country.

NSIA Insurance offers a wide range of insurance services at competitive rates to meet the changing financial, investment and lifestyle needs of its corporate, commercial and individual customers.

NSIA Insurance Limited (Nigeria) is part of NSIA Participations which is currently present in 12 African countries; Benin, Cameroon, Congo, Côte d’Ivoire, Gabon, Ghana, Guinea, Guinea Bissau, Mali, Nigeria, Senegal and Togo.

L-R: Akinkunmi John, MD/CEO, Laba Foods Limited; Jaiye Kuti, brand ambassador, Laba Foods; Morayo John, executive director, Laba Foods Limited, and Olubunmi Jinadu, marketing consultant, Laba Foods, during the unveiling of Kuti’s as Laba Foods brand ambassador in Lagos, yesterday.

Pic by Olawale Amoo

Covid 19: Dana Air introduces WhatsApp booking IFEOMA OKEKE

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ne of Niger ia’s leading carriers, Dana Air, has Introduced WhatsApp Booking in line with the social/ physical distancing measures of Covid 19 and to create ease of booking, payment and inquiries for its guests.

The WhatsApp booking, payment platform which is the first of its kind in Nigeria, will serve as an additional platform for booking, inquiries, reservation and payment apart from the airline’s website www.flydanaair.com,

the Dana Air Mobile App and the self- service kiosk at MMA2 ikeja, Lagos.

Kingsley Ezenwa, the Media and Communications Manager of Dana Air, while speaking on the initiative said,’’We care about the wellbeing of our guests and we want them to be safe. This is why we are introducing this initiative to keep our guests safe, while still booking and paying the smartest and safest way from anywhere around the world.’’

“This additional booking platform and many others in the months to come are part of our strategies to keep our guests booking safely, and www.businessday.ng

flying safely, without stress.

It is safe, faster and userfriendly.’’

“The WhatsApp booking will be operational from 7am to 6pm daily for a start, while we are working out modalities to make it 24 hours 7 days in a week. All our customers need to do is just send us a chat on 07051190363 (WhatsApp only) and it’s done. So easy.’’

“We are also working on other booking initiatives that will guarantee ease of booking with or without a smartphone for the busy, young and old within Nigeria and beyond.

“As a customer-centric

airline, what we think about daily is to make booking and flying seamless for our guests by introducing the first of its kind of innovative online products. Introducing this initiative at this time only demonstrates our commitment to the safety, well-being and comfort of our guests,’’ Kingsley added Dana Air is one of Nigeria’s leading airlines with a total of nine aircraft in its fleet, a mix of Boeing 737 and McDonnel Douglas.

The airline is reputed for its innovative online products and services, unrivaled inflight service and on-time performance

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Popl Nigeria makes contact-sharing seamless as Scosh debuts in Nigeria DESMOND OKON

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s COVID-19 pandemic keeps driving tech innovations, Popl Nigeria has launched a contact-sharing app whose main feature is to help individuals exchange phone numbers and social media handles such as Facebook, Instagram, Twitters, LinkedIn and others.

The device, launched as ‘Scosh’, is also a game-changer for the business community and professionals as it serves as a digital complementary card which completely eradicates the burden of carrying a stack of cards everywhere.

Speaking at the launch recently in Lagos Tope Sanni, country manager, Popl Nigeria said the app is an innovative product that enables people share their phone numbers and social media handles within seconds.

“The app comes in handy and useful in sharing contacts and social media handles especially in this period of COVID-19, where we are expected to maintain social distance,” Sanni said.

“This app is ground-breaking, innovative and making waves globally,” he added.

He also stated that Nigeria, Ghana and South Africa are the three markets in Africa where the app is gaining penetration, while noting that the app is enjoying usability in South America, Europe, North America and Asia already.

Explaining why the device was launched as ‘Scosh’ in Nigeria, Sanni said it was to create a brand that is targeted for and unique to the Nigerian market; as Popl has presence

in many parts of the world.

He further explained that launching the product at this time was apt because of the increasing need for social interaction among people and especially in the period of COVID-19 where people had to be on lockdown for weeks and maintain social distance.

He said Scosh is the right product to drive social interaction at this time of a pandemic where personal responsibility for safety is critical. “This is basically an innovation card. We intend to break into the Nigeria market by driving huge penetration through social media. We will also use the traditional media such as newspapers and radio to create more awareness for this product,” he said.

BusinessDay learnt that the target market is not restricted and covers both teenagers and adults.

Teenagers can use it to meet new people, get social media handles; “but for business people, it’s a different ball game, it’s a complimentary card as everything on a complimentary card can be stored on this device and can be shared with a tap,” Sanni said.

While Sanni is optimistic of a huge mileage in the market, contact-sharing [which is the first stage of the launch] is not all that the product is built to offer. The second stage is making payment with the app.

“We have opened conversations with Paystack and Quickteller. Presently on the app, we have pay app on it, but it doesn’t work in the Nigeria market, even the Paypal that is working here is not working 100 percent.

MTN Foundation announces the start of 2020 Scholarship Schemes

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TN Foundation has commenced calls for application for its annual scholarship schemes - Science and Technology Scholarship Scheme (STSS) and Scholarship Scheme for Blind Students (SSBS). The call for application commenced June 15, and open to students in accredited public tertiary institutions (universities, colleges of technology and polytechnics) across Nigeria.

Application for STSS is open to all 3rd year Science & Technology students with a minimum CGPA of 3.5 (Second Class Upper/or its equivalent). The SSBS is for visually impaired students in their 2nd and 3rd year, with a minimum CGPA of 2.5 or its equivalent. @Businessdayng

Speaking on the scholarship schemes, Acting Executive Secretary, MTN Foundation, Odunayo Sanya, said, “We understand the importance of education and technology in the development of our nation and this underscores our various interventions in the educational sector. Our youth are the future and fulfilling their dreams is key to this. We look forward to engaging with the newest recipients of the scholarship schemes once the process is completed.

I encourage every eligible student to please apply.”

The sum of N200,000.00 will be awarded annually to cover each awardee’s tuition, book allowance and stipend, till graduation as long as they maintain the required grades.

Monday 13 July 2020

BUSINESS DAY

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15

16

Monday 13 July 2020

BUSINESS DAY

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

Stocks

Currencies

Commodities

Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

Investors unmoved despite gloomier IMF 2020 economic forecast

D

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

5

deeply concerned about the earnings performance of companies this year as the world battles with the global health pandemic which as triggered city lockdown and negatively disrupted economic activities all over the word

However, Zainab Ahmad Nigeria’s finance minister had recently disclosed that the economic growth in Nigeria could in the worst case scenario contract as much as 8.94 percent in 2020 but in a best case the contraction could be just be 4.4

percent if there is no fiscal stimulus But with the fiscal stimulus package the economy would contract by 0.59 percent, with each state looking to get an average of N200 billion from the World Bank in fiscal stimulus by the end of September she said.

Investors frown as Presco Q1 EPS declines for 3rd consecutive year BALA AUGIE AND IFEANYI JOHN

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resco share price has declined about 34 percent in the last 2 years as investors bemoan the persistent decline in the company’s first quarter earnings per share which dipped for the third year in a row.

In Q1 2018, Presco recorded an EPS of N2.60k which represented a 33.33% decline from the N3.90k reported in 2017 Q1. Subsequently in Q1 2019, the company again posted a decline with EPS dropping to N2.14k before dipping to N1.80k in 2020 Q1.

Analysts attribute the poor EPS performance on declines in gross revenue, profit before tax and profit after tax over the last few years.

Presco within the periods under review, saw an 18.44% decline in gross revenue with revenue dipping from N6.59 billion in 2018 Q1 to N5.37 billion in 2020 Q1.

Analyst also believe that the decline seen in the company’s share price between the period under review from a high of N75.60k to N44.90k can be attributed to the consistent decline in profit before tax

SHORT TAKES N312m

BALA AUGIE AND IFEANYI JOHN

espite gloomier economic forecast by International Monetary Fund (IMF) and World Bank the Nigerian Exchange Stock (NSE) as remained relatively unchanged since IMF revised Nigeria’s economic contraction downwards from 2.4 percent to 5.4 percent since the 24th June 2020 3 weeks since the revision of the 2020 Nigeria’s economic forecast, the Nigerian Exchange Stock All Share Index (ASI) as return a negative 1.5 percent. Although the market dipped marginally it appears that investors are not significantly concerned with the steepness of the economic contraction this year, which is expected to be at least twice as worse as the economic contraction in 2016 Analyst say the marginal drop may simply be as a result of investors repricing stocks based on the new forecast, as they had earlier priced stockS using the -4.4 percent growth forecast issued by the Nigerian federal government in its 2020 revised budget.

Year to date the Nigerian All Share Index has returned a negative 9.49 percent showing investors are

P.E

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

and profit after tax between 2018 Q1 and 2020 Q1 by 31.42% and 30.69% from N3.43 billion to N2.35 billion and N2.59 billion to N1.80 billion respectively.

The decline in profit before tax and profit after tax, can be said to have been caused by increased

finance cost, between 2018 Q1 and 2020Q1. Presco saw its finance cost more than doubled moving from the N289.85 million recorded in 2018 Q1 to N499.23 million recorded in 2020 Q1 representing a 72.24% increase with an average cost of borrowing of 9.93%.

Meanwhile, persistency of the global health pandemic coronavirus which has seen economic activities slowdown in Nigeria cast a shadow on the hope that Presco will buck trend in the coming year and give its investors and shareholders more reasons to smile to the bank.

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

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

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

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

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@Businessdayng

Monday 13 July 2020

BUSINESS DAY

Start-Up Digest

17

In association with

In fight against COVID-19, Yakubu develops Malaysia-type contact tracing app Josephine Okojie

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lakunle Yakubu, a tech ent r e p r e n e u r, has developed Stay-Safe.

NG— a contact-tracing app that helps to reduce the spread of COVID-19.

Yakubu, founder of ITD Africa, an NGO that focuses on building IT infrastructures in Africa, was inspired to develop the app to address the problem associated with contact tracing in the country.

“We followed the trend of the COVID-19 pandemic, and we were also figuring out ways to apply IT technology through data analysis to the problem of contact tracing,” he says.

“One of the solutions is to adopt a cloud-based visitor registers which act as a logbook for people’s movement,” he further says.

He explains that since the virus cannot spread without the movement of people, the only way to track the virus is to track individual move-

ments.

The young entrepreneur says the Stay –Safe.NG app works when users of the app register. By so doing, their check-in time is automatically registered on the cloud-based database, and backward tracing can be done if the individual gets tested positive for the virus.

“We can easily do what we call backward tracing if anyone tests positive for coronavirus. It can determine the names and contacts of people that have been exposed to the virus through contact with this new case,” he says.

“For example, if Mr. A gets on a flight from Abuja to Lagos and tests positive for COVID-19 a few days later, ever yone on that flight will receive an SMS notification informing them that they have been exposed to the virus,” he explains.

He adds that with the Stay-Safe.NG, the government can keep the economy functioning at an optimal rate and keep track of the spread of the virus simulta-

Olakunle Yakubu

neously.

Speaking on how other countries are using technology to curb the spread of the COVID-19 pandemic, he says Malaysia is making use of three different QR-based

applications to keep track of their infections, and this has led to a sharp decline in new infections.

He notes that the QRbased applications is similar to the Stay-Safe.NG applica-

How Ebunlomo started, built NUBE Events Odinaka Anudu

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hose who know Boluwatife Ebunlomo would agree that she is a goal-getter.

She holds a master’s degree in English and is a recipient of several awards.

In the events and logistics industries, she is a pacesetter.

She founded NUBE Events and Logistics in 2010 and has made remarkable impacts on the fields since then.

It all began as a passion for anything related to hospitality. Way back in the higher institution, Ebunlomo worked with a family friend who was a decorator and would contract her to provide hostesses for events.

According to her, those simple ushering jobs turned out well and landed her referrals.

“When we saw the prospect in what we were doing, it became necessary for us to be more professional,” she says.

“I had to engage the services of a poise coach who brought out the best in us and then in 2009 we officially launched an ushering outfit,” she explains.

From there, the entrepreneur saw the need to start coordinating and managing

Boluwatife Ebunlomo

events, having realised that her team were practically providing hostesses for clients.

This gave birth to the event coordination arm of the business.

“Today, we have grown to become one of the foremost event planning companies in Nigeria,” she says.

“We also run a rental and logistics company, ‘I Run Errands,’which is one of the leading logistics companies that offer first-class pick-up and delivery services. The new addition to our business portfolio, Akanke Eleso, is our fruit supply business,” she discloses.

Ebunlomo is a certified member of the Association of Professional Party Planners and Organisers of Nigeria (APPOEMN) and a member of Rental Professional Society of Nigeria. She has bagged numerous awards for her www.businessday.ng

entrepreneurial skills and for being a vibrant personality in the event industry in SouthWest Nigeria and beyond.

She says that apart from providing services to individual clients, her brand has been privileged to work for the likes of Ogun State Government, Nigerian Stock Exchange and the like.

The entrepreneur desires to create a platform for business owners in the event industry, especially those operating in the South-West part of Nigeria, to express themselves. This has culminated into a project called ‘My Grand Event Ogun State,’ which serves as a veritable platform for all event vendors and business owners to learn, network and showcase their brands. She further explains that the first edition held in 2017 and has since been running till date.

Explaining reason for her motivation as an entrepreneur, she says, “The fear of failure inspires me to do more. I am an optimistic person and a goal-getter with a ‘can do’ spirit. Therefore, I cannot afford to fail. The fact that a whole lot of people look up to me and draw inspiration from me, seeing me as a role model, means I cannot afford to fail them. And there is a

target I am working towards and I cannot afford to drop the ball.”

“We have been giving back through empowerment, having trained about 500 ushers, supervisors and coordinators as well as those who want to start up their own event companies,” she says, when asked about her contribution to the economy.

“We are proud to say that we are the only events company that steadily trains and retrains its workforce from time to time. With the rich bouquet of services that we offer, our brand has evolved into a one-stop shop in the hospitality industry, especially in the South-West,” she explains.

She further says the NUBE brand is known for thorough dedication to details when it comes to service delivery.

The serial entrepreneur says it has not been all rosy for her. She recalls that when she started, she had challenges in areas like putting a structure to her business, book-keeping and accounting. Appropriate pricing was also a challenge, but she was able to effectively deal with that.

Ebunlomo advises budding entrepreneurs to develop passion for whatever business they intend to venture into.

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tion developed by his firm, adding that Thailand, South Korea, and several European countries are also deploying a similar app to contain the virus.

Commenting on strategies the business has adapted to survive the pandemic, the computer scientist says the virus outbreak has made his business move most of its processes online.

“We were already having several online training sessions before the pandemic.

But the virus has made it easy for us to fully make use of opportunities provided by group meeting programs like zoom and google meet,” he says.

He points out that his business plans to be a pan – African free solutions provider, supporting several countries and giving factbased advice on how to apply data analysis to real-life problems experienced on the continent.

On some of the challenges confronting his business, Olakunle says lack of unacceptability by the government and its agencies

remains the major problem.

“Government leaders tend to think data analysis will expose their flaws.

This is why we will continue training them so we can change this misconception,” he notes.

“We need them to understand that a problem is 50 percent solved when you collect and analyse data linked to it,” he adds.

He urges the government at all levels to ensure that its employees and processes adopt technology in the 21st century.

In evaluating the country’s tech industry, he says it has the potential to transform the economy owing to its multiplier effects on other sectors.

He notes that the potential in the IT industry can be fully harnessed when the government starts adopting the right IT systems.

On his advice to other entrepreneurs, he says, “Identify your challenges and try to discover the opportunities they present. Our challenges sometimes can become a gold-mine.”

Leverage opportunities in tech to survive pandemic, expert urges youths Josephine Okojie

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s Nigerians continue to feel the economic string of COVID-19 pandemic, an expert has urged unemployed youths to leverage opportunities in technology to survive the difficult moment.

Wumi Oghoetuoma, chief executive officer, Crown Interactive, a Lagos based software solution company, who gave the advice to young Nigerians, also urged the government to provide adequate support to the micro, small and medium enterprises (MSMEs) to survive the economic fallout of the pandemic.

“COVID-19 has affected the livelihoods of many Nigerians. Our unemployment rate has been predicted to rise 33.6percent in 2020 - that is 39.4 million Nigerians,” Oghoetuoma said.

“While supporting MSMEs is a major part of what we do, here at CICOD, we are also committed to providing young people with viable job opportunities so that we can begin to provide real solutions for youth unemployment,” she said. @Businessdayng

Speaking more about its unique offering to empower Nigerian youths, she said her organisation through its affiliate programme - Independent CICOD Executives (ICE)- will provide extensive training to youths about the organisation’s products to enable them source and onboard customers on their own while receiving a commission.

“This is a job opportunity that allows you to maintain your relative independence as an affiliate and still bring in some money for your household,” she said.

“As an ICE, you aren’t just another sales channel or representative for us as a firm.

You become part of the larger CICOD team, working within a network of people dedicated to improving the output and efficiency of MSMEs,” she further said.

She added that as the organisation cultivates these affiliate partnerships to create thousands of jobs amidst an unemployment crisis.

Oghoetuoma noted that the organisation also provides the marketing, sales, and support services for the products that the youths joining its network will sell.

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Monday 13 July 2020

BUSINESS DAY

In Association With

Tackling racism

AHow Balkan betrayal to wind down stimulus

The new ideology of race

As the economy recovers fiscal policy has to shift

And what is wrong with it

A

MERICA’S PROBLEM with racism can be divided into two parts.

One contains all the myriad injustices that still blight African-American lives a century and a half after the end of slavery. The other is the way that factions on the right exploit racial division as a political tool. An example of the first occurred on May 25th on a shabby street corner in Minneapolis, when George Floyd was killed by a white policeman. An example of the second occurred on July 3rd, at Mount Rushmore, against the monumental backdrop of the country’s greatest presidents, when Donald Trump sought to inflame a culture war centred on race to boost his chances of a second term. To be successful, a campaign for racial justice needs to deal with both.

Leaders like Frederick Douglass and Martin Luther King used vigorous protest and relentless argument to push society towards their vision of equality of opportunity and equality before the law. Most Americans still hew to that classical liberal ideal as do many of those who marched with justified anger over the killing of Mr Floyd. But a dangerous rival approach has emerged from American universities (see article). It rejects the liberal notion of progress. It defines everyone by their race, and every action as racist or anti-racist. It is not yet dominant, but it is dynamic and it is spreading out of the academy into everyday life. If it supplants liberal values, then intimidation will chill open debate and sow division to the disadvantage of all, black and white.

The premise underpinning this ideology is correct: that racial inequality is shockingly persistent.

Even though attitudes to race have improved, the quality of AfricanAmerican lives has not kept pace.

A third of black boys born in 2001 will probably spend time locked up, compared with one in 17 white boys. In 1968 black households earned around 60% as much as white households, and owned

assets that were less than 10% of those of a typical white family.

They still do.

This ideology also has some valid insights. Racism is sustained by unjust institutions and practices.

Sometimes, as in policing, this is overt. More often, in countless small put-downs and biases, it is subtle but widespread and harmful.

But then the ideology takes a wrong turn, by seeking to impose itself through intimidation and power. Not the power that comes from persuasion and elections, but from silencing your critics, insisting that those who are not with you are against you, and shutting out those who are deemed privileged or disloyal to their race. It is a worldview where everything and everyone is seen through the prism of ideology—who is published, who gets jobs, who can say what to whom; one in which in-groups obsess over orthodoxy in education, culture and heritage; one that enforces absolute equality of outcome, policy by policy, paragraph by paragraph, if society is to count as just.

It is tempting to see such ideas as nothing more than overheated campus radicalism. And, true enough, they have not yet taken over a political party. When people speak of ending white privilege, most of them have good things in mind like inclusion and justice.

But ideas are important, and the spread of campus terminology into newsrooms and boardrooms

invites in ideologues. Their approach is already taking a toll.

In universities research agendas are being warped. Outside them, public shaming and intimidation have been curbing debate.

The pity is that these ideas will not solve America’s problems with race. They will not eliminate inequality because they are a poor way to bring about beneficial change. Unless you can freely analyse causes and question orthodoxies you will not be able to solve problems. And unless you can criticise people and practices without fear of being called out, you will not be able to design effective policies and then go on to refine them.

The new race theory blocks progress in another way, too.

The barriers to racism can be dismantled only when they are exposed—and so they must be, however painful. But the false idea that ingrained racism will forever block African-Americans at every turn is a barrier in its own right.

And, by focusing on power and division, this ideology only creates more space for some on the right to exploit race as a tool. A fundamental belief in power above persuasion frustrates coalitionbuilding. Essential allies are not carried along, but forced along.

When every transaction at work, at home, or at the school gate is seen through a prism of racial power, no encounter between different races can be innocent.

The new ideology of race is not just wrong and dangerous, it is also unnecessary. Liberalism can offer a fairer, more promising route to reform. It asserts the dignity of the individual and the legal, civil and moral equality of all people, whatever the colour of their skin.

It believes in progress through argument and debate, in which reason and empathy lift truthful ideas and marginalise bigotry and falsehood.

Liberalism thrives on a marketplace of ideas, so diversity has a vital role. New voices and experiences enrich the debate.

Liberalism does not fight power with power, which risks replacing one abusive regime with another.

Instead it uses facts and evidence, tested in debate, to help the weak take on the strong.

Liberalism is all about progress, including about putting right its mistakes—and there have been many, especially over race, including finding reasons to accommodate imperialism and slavery. That is one reason why, in the 250 years in which it has been influential, humanity has seen unprecedented material, scientific and political gains, as well as a vast extension of social and political rights. Progress on racial inequities has been part of this—as in South Africa, where liberals joined forces with the trade unions and communists to sink apartheid.

Liberals can help in America, too. Much of the material gulf between African-Americans and whites can be bridged with economic policies that improve opportunity. You do not need to build a state based on identity. Nor do you need tools like reparations, which come with practical difficulties and have unintended consequences. Economic policies that are race-neutral, which people qualify for because of poverty, not the colour of their skin, can make a big difference. They have a chance of uniting Americans, not dividing them. If the mood now really is for change, they would be politically sellable and socially cohesive.

Is it time to wind down emergency stimulus Editor’s note: Some of our covid-19 coverage is free for readers of The Economist Today, our daily newsletter. For more stories and our pandemic tracker, see our hub

A

S THEY FIRST battled the pandemic with lockdowns earlier this year, governments in the rich world pumped cash into the economy almost indiscriminately.

Output was collapsing and the speed and scale of support rightly trumped any worries about its cost, accuracy or side-effects. Now lockdowns are easing, there are tentative signs of economic recovery (even in places where covid-19 is still raging) and political debate has shifted to whether, when, and how far to pare back these dauntingly expensive

emergency fiscal policies. America’s unemployment top-up scheme expires on July 31st, Britain’s furlough scheme at the end of October. What should governments do?

They should start by acknowledging that the largesse worked.

Massive fiscal support has proved remarkably effective. Nothing could have prevented a sudden stop in activity as lockdowns were imposed.

But generous top-ups to unemployment benefits and direct cheques from Uncle Sam meant that in April household incomes in America were 12% above their level a year earlier, even as joblessness reached its highest level since the Depression. Remarkably, the poverty rate has fallen since the start of this year (see article). In Britain and the euro area, where governments have channelled stimulus through furlough schemes, the share of people in unemployment is no higher than in January.

Continues on page 19

Monday 13 July 2020

BUSINESS DAY

19

In Association With

The covid bonus

America’s huge stimulus is having surprising effects on the poor Though severe deprivation is rising, not everyone is worse off

N

O ONE WELCOMES a recession, but downturns are especially difficult when you are poor. Rising unemployment means rising poverty: the recession of 2007-09 prompted the share of Americans classified as poor, on a widely used measure, to jump from 12% to 17%. That economic shock, as bad as it was, pales in comparison with what America is seeing today during the coronavirus pandemic. The jobs report for June, published on July 2nd, showed that unemployment remained well above the peak of a decade ago.

Severe deprivation is certainly on the rise. According to a new survey from the Census Bureau, since the pandemic began the share of Americans who “sometimes” or “often” do not have enough to eat has grown by two percentage points, representing some 2m households. An astonishing 20% of African-American households with children are now in this position. Meanwhile, the proportion of Americans saying that they are able to pay the rent is falling. Many more people are typing “bankrupt” into Google.

Yet these trends, bad as they are, do not appear to be part of a generalised rise in poverty. The official data will not be available for some time. A new paper from economists at the University of

Chicago and the University of Notre Dame, however, suggests that poverty, as measured on an annual basis, may actually have fallen a bit in April and May, continuing a trend seen in the months before the pandemic hit (see chart 1).

Why? The main reason is that fiscal policy is helping to push poverty down. The stimulus plan passed by Congress is twice the size of the one passed to fight the recession of a decade ago. Much of it, including cheques worth up to $1,200 for a single person and a $600-a-week increase in unemployment insurance (UI) for those out of work, is focused on helping households through the lockdowns. At the same time, unemployment now looks unlikely to rise to 25% or higher, as some economists had predicted in the

early days of the pandemic, thereby exerting less upward pressure on poverty than had been feared.

The upshot is that the current downturn looks different from previous ones. Household income usually falls during a recession— as it did the last time, pushing up poverty. But a paper in mid-June from Goldman Sachs, a bank, suggests that this year nominal household disposable income will actually increase by about 4%, pretty much in line with its growth rate before the pandemic (see chart 2). The extra $600 in UI ensures, in theory, that three-quarters of job losers will earn more on benefits than they did in work.

By international standards, America’s unexpected success at reducing poverty nonetheless remains modest. Practically every

other rich country has a lower poverty rate. It is also a fragile accomplishment. The extra $600-aweek payments are supposed to expire at the end of July. The authors of a recent paper from Columbia University show that poverty could rise sharply in the second half of the year, which seems likely if unemployment has not decisively fallen by then.

Goldman’s paper assumes that Congress will extend the extra unemployment insurance, but that the value of the payment will drop to $300. Even then, household disposable income would probably fall next year.

Whether extra stimulus would help those at the very bottom of America’s socio-economic ladder—including people not able to buy sufficient food—is another question. Six per cent of adults do not have a current (checking), savings or money-market account, making it difficult for them to receive money from Uncle Sam. Some may have been caught up in the delays which have plagued the UI system, and a small number may be undocumented immigrants not entitled to fiscal help at all. Others report not being able to gain access to shops closed under lockdowns.

The best way to remedy this would be to get the virus under control and the economy firing on all cylinders once again. But that still looks some way off.

Bands of blue

Reining in police unions’ power in America

Cities and states have begun to curb organisations that have been indulged from left and right

H

E UNION forever defending our rights,” rhapsodises Billy Bragg, a British singer and activist, in his song “There is Power in a Union”. And that, indeed, is what unions do: they advance the interests of their members. That means pushing for better pay, benefits and working conditions. Unions representing police officers are no different: their efforts keep police pensions and salaries generous, and provide their members with broad protections against disciplining and oversight, to keep them in work.

That has long frustrated many criminal-justice reformers—but, buoyed by calls for change in the wake of George Floyd’s death, some governments have begun to rethink those protections.

Law enforcement is among the most heavily unionised sectors in America, and police unions occupy a unique position. They tend to be conservative, unlike much of the labour movement.

The International Union of Police Associations, for instance, has endorsed Donald Trump, even though it is affiliated with the AFL-CIO, a staunchly Democratic union federation.

Politically, police unions are shielded on both sides. The right dislikes confronting the police— in Wisconsin Scott Walker, a former Republican governor, specifically exempted police unions from a measure passed in 2011 that limited public unions’ collective bargaining rights—whereas the left is loth to take on unions.

Governments often find it easier to give in on disciplinary and oversight matters, which incur no direct or noticeable costs, than on pay and pensions, which might require tax rises or service cuts elsewhere.

Union contracts for police forces in most of America’s 100 largest cities have provisions reducing police accountability.

In Chicago, for instance, officers

have 24 hours after a shooting to make a statement, which they can amend after watching video footage of a disputed incident.

Chicago also bans anonymous complaints of misconduct, which a Justice Department report argues “creates a tremendous disincentive” to report it, since complainants fear they may be targeted. Other states and cities indemnify police against misconduct by paying their legal fees and settlement costs, allow officers access to information that citizens do not get which they can review before being interrogated, and eventually erase disciplinary records from officers’ files.

A forthcoming paper from Rob Gillezeau, an economist at the University of Victoria, British Columbia, who studies police practices, found that the spread of police collective-bargaining in America between the 1950s and 1980s led to what he calls “a meaningful increase in civilians

killed by law enforcement, mostly among the non-white population.”

He argues that, “it looks like the collective-bargaining process is being used to protect the ability of officers to discriminate.”

Some states have begun taking measures to boost police accountability and rein in union power.

In late June, Oregon’s legislature passed bills requiring officers to report or prevent misconduct by their colleagues and limiting the ability of arbitrators to overturn disciplinary actions. Connecticut’s legislature plans to pass police-accountability legislation in a special session later this month that may include measures limiting officer indemnification and unions’ ability to negotiate over some disciplinary and oversight measures.

Some prominent Democrats in California have asked the party to stop accepting contributions from police unions—a move that would limit the unions’ influence in what is, in effect, a one-party state.

As the economy recovers fiscal policy has to shift Continued from page 18

However, the recovery is fragile.

Not only is the virus still spreading rapidly in much of America’s south and west; localised outbreaks are also happening in countries where caseloads have fallen. And even without full lockdowns, rising infection rates will weaken the recovery.

The latest real-time mobility data from Australia and America suggest that supposedly gung-ho consumers get spooked fast when infection rates spike (see article).

Why not just continue the stimulus? One reason is the staggering cost. Rich-country governments have collectively launched stimulus programmes worth 10% of GDP, with one-third of that either subsidising work or compensating people who lose it. Before the year is out, government deficits in these countries will easily be in double digits.

It also makes no sense to freeze the economy for too long. All the signs are that life in the 2020s will be different from life in 2019—think of the surge in e-commerce and remote working; or the expectation of a long-term dampening of demand for air travel; or the reality that customers in pubs may no longer be allowed to elbow their way through crowds to order pints.

Workers will have to leave their old jobs, and find new ones. In Europe a fifth of furloughed workers have jobs in industries that seem likely to shrink over time, such as hospitality and leisure.

As governments grapple with this, lots of bad ideas are creeping in. In June the French government said it would extend its furlough scheme to two years, in return for reductions in working hours. France also makes extra allowances for the tourism trade, even though Parisian guides and Club Med windsurfing instructors may face a permanent drop in demand. Meanwhile on July 8th Britain’s chancellor, Rishi Sunak, said he would cut value-added taxes for hospitality and leisure firms and introduce a scheme that cuts up to £10 ($12.60) off restaurant bills on Mondays to Wednesdays (soft drinks are included, but not the hard stuff). Some economists have called for wage subsidies for the worst-hit industries.

20

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BUSINESS DAY

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BUSINESS DAY

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Monday 13 July 2020

BUSINESS DAY

INTERVIEW ‘COVID-19 has forced operators to re-imagine digital money transfer’ Gbenga Okejimi, country manager of WorldRemita digital money transfer service that transfers money around the world, tells Isaac Anyaogu how the business of money transfer has been impacted by the Coronavirus pandemic. Excerpt: What distinguishes WorldRemit from other online money transfer services? What makes your services unique? orldRemit is a digital money transfer service that transfers money from over 50 countries to 150 receive countries. We are 100% digital on the send side allowing customers to send money 24/7. We have a wide range of options in the receive countries, options include bank deposits, cash collection, mobile airtime top-up and mobile money. Our customer service is 24/7 supporting customers to send money abroad in a cost effective, secure and convenient way. This distinguishes us from the traditional players that employ brick and mortar stores with a lot of operational inefficiencies.

Give us an insight into your background - education, professional training, past work experience, etc. What prepared you for this role?

I have an MBA with specialization in Financial Management from the Lagos State University. My career includes key roles at Universal Trust Bank (which later merged with Union Bank) and First Bank of Nigeria to name a few. My education and employment journey along with first hand knowledge of the industry have prepared me for my role as WorldRemit Country Manager for Nigeria & Ghana.

Kindly explain how the process of international money transfer through WorldRemit works?

At WorldRemit, we are 100% digital from the send side. A sender can go to our website or download our App from an IOS or Android device.

The sender can then register on our platform providing basic KYC details followed with the receiver’s information. Select any of our receive options like Bank Transfer, Cash pick up, Mobile Money and Airtime top up. Please note that the sender pays for the service while the service is at no cost to the recipient. The recipient does not need a smartphone to receive the money.

What precautions should a person making international money transfers take?

WorldRemit is a fully licensed international money transfer service. Operating as an Authorised Electronic Money Institution, we are regulated by the Financial Conduct Authority in the UK and also have to meet the requirements of global regulatory bodies. By adhering to each country’s regulations, we further protect our customers against fraud and safeguard your money. We con-

W

Gbenga Okejimi

www.businessday.ng

but it is still too early to state that cash is no longer king.

How long have you been in operation and which other regions in Africa and across the world do you operate in?

WorldRemit has been in operation for 10 years. We are a global company operating in over 50 send markets and 150 receive countries.

We offer over 6,500 money transfer corridors globally.

We have offices in London, Denver, Warsaw, Cebu and Johannesburg, South Africa.

What value would you say, digital payment solutions are adding when banks still report high foot traffic in banking halls?

Digital payment solutions have assisted in driving the message of financial inclusion. Across Africa, we have seen an uptake in the use of M-PESA for bill payments and other services. Ghana today is the fastest growing African country in Mobile Money with about 35million wallets and volume reaching USD 42billion in 2018 compared to USD 29billion in 2017 (Source:BoG). In Nigeria, banks have invested significantly in technology to drive acceptance of digital solutions and reduce traffic in the banking halls. We continue

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to educate our customers about the importance of digitization and the inherent benefits.

A sore point in payment solutions like yours is charges, why do you think customers consider them prohibitive and how can this situation be improved?

‘

We are in interesting times with the Covid-19 pandemic.

The Social Distancing measures put in place by the government has challenged the Cash pick up services in many countries across the globe.

Customers have to be careful when visiting bank branches for their financial services

‘

tinuously advise our customers on cyber security, key things to look out for and stress that they send money only to people that they know to avoid falling victim to scams.

Do you receive the money in the currency it was transferred or is it converted - if it is - at what rate?

We operate in several countries and each country has its own regulation depending on its economic policy. Some countries allow payments in foreign currencies while others like Nigeria only allow payments in the local Nigerian currency, the Naira.

The rates of conversion are as advised by the Central Bank of Nigeria on a regular basis.

What trends have you identified with recent customer transactions?

We are in interesting times with the Covid-19 pandemic. The Social Distancing measures put in place by the government has challenged the Cash pick up services in many countries across the globe. Customers have to be careful when visiting bank branches for their financial services. As a result of these restrictions, we have seen an upswing in our digital channels such as Bank Deposits and Mobile Money. Some countries like Fiji have actually seen a total migration to digital platforms as a result of the Covid-19 pandemic,

@Businessdayng

Charges are an important part of any business. There are costs involved in the process of sending funds from a sender in the US to a receiver in Accra or Lagos. Such costs include marketing, compliance, systems maintenance etc.

In addition, the traditional players need to pay agency fees to agents in their brick and mortar stores.

These all add up to the cost of sending a transfer. WorldRemit was established with the intent to provide a cost effective, flexible and convenient money transfer service.

We have optimised our 100% digital solution to significantly reduce the cost of our service. We also offer the first three transfers on our platform at no cost to the sender to provide value for money.

Since you engage in international money transfers, how are you affected by foreign exchange volatility?

Remittance business is predominantly an FX business because it involves the transfer of value in one currency to another. If a sender in the United Kingdom provides GBP to be exchanged to Naira in Lagos, Nigeria, there has to be a basis for conversion. It therefore implies that as a company we are affected by foreign exchange volatility. However, we do have in-house experts that manage our FX liquidity and hedge against any anticipated losses.

What message, if any, about international monetary transfers do you think the public is not getting or getting wrongly?

Some persons actually believe International Money Transfers could be sent at “No fee”. No such thing exists as long as it is business.

How have regulatory policies impacted the activities of companies like yours and what reforms do you think will best serve the public in your field?

Regulatory policies are significant to maintaining ethical procedures in the International Money Transfer business. They have helped to instil globally acceptable standards for all players in the ecosystem. The FX market in Nigeria is a major driver for the Money Transfer business, it is therefore expedient that checks and balances are put in place for all licensed operators. However, the Central Bank needs to ensure strict compliance to its rules as some operators, especially the unlicensed ones have been alleged to contravene the rules. Money Transfer Operators are in the business to make money.

The CBN should be flexible enough to allow for some margins as the current scenario is not encouraging for business to thrive.

Monday 13 July 2020

BUSINESS DAY

This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

23

• Utilities • Managing your Tax

When last did you take a look at your money matters? thumb and the fastest way to reduce your debt is to tackle your most expensive or the most urgent debt first. By automating your debt payments and making incremental principal payments each month, you will soon find your debt is under control. Don’t ignore your debt or wish it away; if it becomes a burden, approach your lender and discuss the possibilities for rescheduling to make it more manageable.

Are you building your savings?

If you have not got a budget in place and you haven’t paid any attention to your debt, it will be difficult for you to save; they are all connected. You need to find the discipline to develop the budget, pay down or at least reduce your debt and then start to increase your savings.

Most financial advisors suggest that you should save between 10% and 15% or more of your income. Have you built an emergency fund over these past six months?

Emergency funds have been a life-line for thousands of Nigerians during this time as so many faced job losses, and unexpected medical and other expenses. With a financial cushion to fall back on, you are better prepared to cope with emergencies and can better support your loved ones.

One of the greatest advantages of the lock down was that those that were lagging with online banking were forced to embrace technology; this is great news for your savings. The

www.businessday.ng

‘

A major difference between those who enjoy financial security and those who do not, is simply the discipline to do something about their financial situation versus procrastinating and never getting round to it

‘

M

id-July already! Most of us had such noble plans at the start of the year. In January, the plan was to start afresh in a new decade, do the right things, and work towards exciting goals. Nothing could have prepared us all for a global pandemic that has turned our world upside down. What happened to the personal, financial and professional goals or plans that you were set to accomplish this year? How have you fared? Have you made any progress? When was the last time you reviewed those goals?

If you are one of those that keeps putting off that dreaded dental check-up until you are in agony, stop it; it only causes things to fester and then turns into a nightmare. It is the same with your personal finances.

It is important to review the progress you are making with your personal finances periodically. Half way through the year is a good time to reflect on your goals and plans, take stock, and see if you have lived up to your own expectations. It is a time to identify any festering problems and to make adjustments as necessary.

It is so easy to make excuses about non-performance; indeed Covid-19, the Coronavirus, has become a top reason for not achieving anything, yet for some this has been a most productive time as they seize opportunities and make the best of these unusual times.

With barely five months left to go this year, carve out time, say an hour or two before the end of this month to look over your finances to see how far you have come these past six months. If you’ve made some progress in even two or three of the areas below, that is progress.

Have you invested in yourself?

Your human capital is by far your most important asset as it encompasses your essence, your knowledge and skills. One thing we can’t complain about is the amount of time we have had

on our hands, that we’ve never had before.

How are you using this extra time? Have you invested in improving yourself, reading, attending courses and webinars or even gaining a formal certification in an area of interest? You can significantly improve your prospects by developing yourself.

Did you put a budget in place?

Do you have a clear idea of how much you are spending each week, or month?

Yes, your income may have dropped but you have saved in others such as transport and travel, and regrettably, entertainment. Have you tracked your expenses for a period and developed a clear picture of what can be cut back? You can use one of many on line tools or just simply get out a pad of paper and track your expenses manually. You need to know where your money is going.

Have you reduced your debt?

The use of debt can be one of the most effective ways to grow your wealth, when it is used for assets that are likely to increase in value such as for the purchase of property. On the other hand, debt abused and used for lifestyle and luxuries can get out of control and land you in a dire situation.

Have you taken steps to reduce your debt and do you carry less debt today than you did on January 1st?

Until you start to face up to your debt, it will continue to grow.

The general rule of

easiest way to start to grow your savings is to automate it by putting a direct debit in place so that you won’t be tempted to spend all your income but rather it can be directed to an appropriate savings vehicle. Most mutual fund companies make it easy for you to be able to automate your savings and investment plan. A regular savings and investment plan is a powerful way of building wealth and future financial security.

How are your investments doing?

Your stock portfolio may have taken a bashing in the bear market, but that is only if you sold shares in a panic.

You might consider taking advantage of the discounted

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prices on some great bluechip stocks if you are in a position to do so. Investing regularly in good times and in bad, a strategy known as cost averaging reduces the overall average cost of your purchases.

Do you own property?

Is rent due or is your tenant struggling to pay? There are important conversations to have and most importantly it is best to have a property let to the right tenant than to have it empty for months at a time. Negotiate terms and try to retain good quality tenants.

Asset prices have generally fallen so it is a great time for those interested to take advantage of great investment opportunities in stocks, property and business.

Have you protected your assets?

Don’t let your insurance lapse. Review your insurance for your car, home, health and life. This is one of the best gifts you can give yourself at this time. Protect what you have. Insurance was created for times like this. Visit a leading insurance company and see what is on offer; from car insurance, household insurance, educational insurance, to life insurance, which comes with a job loss component, and much needed health insurance policies. Give yourself peace of mind.

Have you made a will?

Too many people avoid dealing with their mortality because thinking about death makes them feel uncomfortable. However, dying without a will, or a will that is out-of-date, can cost your loved ones so much pain and throw away decades of hard work. Knowing that your young children will be cared and provided for should anything happen to you, will give you peace of mind.

If you already have a will, when last did you review and update it to make sure you have included any recently acquired assets or new beneficiaries. Circumstances change. Perhaps your assets have grown or shrunk? Maybe you have had children or grandchildren since you wrote your last will.

Don’t be complacent about Covid-19 Health is wealth. Are you taking steps to safeguard @Businessdayng

your health? Covid-19 is still very much alive and in our midst. Don’t be complacent about strictly following the necessary protocols; wear a mask, keep your social distance, wash your hands frequently, use a sanitizer as necessary and avoid crowds.

If you can, just stay at home unless absolutely necessary.

Our personal behavior and sense of responsibility is what will beat this virus, get our economy back to work and improve both our personal and business finances.

By maintaining good health or taking active steps to improve it through exercise, a healthy diet and lifestyle, you could save yourself significant health and medical costs in future and be in a position to fully enjoy the wealth that you have created.

A major difference between those who enjoy financial security and those who do not, is simply the discipline to do something about their financial situation versus procrastinating and never getting round to it. To which camp do you belong? If you are on track, congratulations! If not, don’t worry, there is still some way to go this year to put things right, but do get started.

Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.

For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

24

Monday 13 July 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Friday 10 July, 2020

Top Gainers/Losers as at Friday 10 July, 2020 LOSERS

GAINERS Company

Company

Opening

Closing

Change

MTNN

N115

N116.1

1.1

VITAFOAM

N5.07

N5.33

0.26

UBA

INTBREW

N3.6

N3.85

0.25

ABCTRANS

GLAXOSMITH

N4.6

N4.8

0.2

N4.35

N4.5

0.15

PZ

GUARANTY

Opening

Closing

Change

N22.75

N22.45

-0.3

ASI (Points)

24,306.36

DEALS (Numbers)

N6.4

N6.25

-0.15

N0.56

N0.51

-0.05

VOLUME (Numbers)

ZENITHBANK

N16.75

N16.7

-0.05

VALUE (N billion)

FBNH

N5.25

N5.2

-0.05

3,044.00 131,630,651.00

MARKET CAP (N Trn)

899.490

Global market indicators FTSE 100 Index 6,095.41GBP +45.79+0.76%

Nikkei 225 22,290.81JPY -238.48-1.06%

S&P 500 Index 3,163.68USD +11.63+0.37%

Deutsche Boerse AG German Stock Index DAX 12,633.71EUR +144.25+1.15%

Generic 1st ‘DM’ Future 25,796.00USD +225.00+0.88%

Shanghai Stock Exchange Composite Index 3,383.32CNY -67.27-1.95%

12.679

Stock market decreases by 0.12% amid mix of bargain hunting, profit taking activities

Trade with caution shares of Medview, Aso Savings, Staco Insurance, IEI, Goldlink, others, says NSE …mulls suspending trading on their shares after Sept.

Iheanyi Nwachukwu

Iheanyi Nwachukwu

N

igeria’s stock market decreased by 0.12 percent in the trading week ended Friday July 10 as the local Bourse saw a mix of bargain hunting and profit taking activities.

Stock investors booked about N16billion loss in one week. The stock market’s negative return yearto-date (YtD) stood lower at-9.45 percent at the close of the week’s trading session.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) and Market Capitalisation depreciated to close the trading review week at 24,306.36 points and N12.679trillion respectively as against preceding trading week when both indicators closed at 24,336.12 points and N12.695 trillion.

Stock buyers are advised to trade cautiously in a new week as market watchers foresee a more pressured Bourse in the meantime, despite the attractiveness of a number of fundamentally sound stocks hence.

The continued spread of the Coronavirus and its

T negative impact on major global and domestic indicators remains a source of worry to investors and businesses.

Though many companies first-quarter (Q1) results were not totally negative, but were obviously affected by the Covid-19 pandemic and the lockdown across states.

Their second-quarter (Q2) results are expected to more precisely reflect the impact of the Pandemicdriven decline in economic activity.

Going into July, analysts remain very cautious on the equities market in the short term, due to a number of factors.

“From a fundamental perspective, July is an earnings reporting month which would span the April to June period where the Coronavirus pandemic hit the economy and many businesses hard.

“Thus, we expect many companies to report significantly weak numbers save for Telecoms, Logistics, Pharmaceuticals and Food focused companies, FSDH Research said in their July 2 note.

“The performance of equity markets across the world was a tale of two quarters in H1-2020. This was as the outbreak of the COVID-19 pandemic in first-quarter (Q1) 2020

spurred a broad-based risk-off sentiment while the synchronised injections of fiscal and monetary stimulus spurred a risk-on sentiment later in second-quarter (Q2) 2020”, said United Capital research analysts in their July 10 note.

The analysts noted that despite the recovery in Q22020, major equity indices in the global, emerging and frontier markets remain below the water, “still wheezing from the negative impact of COVID-19-induced selloffs. Notably, all the six bourses under our coverage in Sub-Saharan Africa (SSA) ended first-half (H1) 2020 in the negative territories.”

FMDQ Exchange admits N11.5bn Axxela Bond

F

MDQ, through its subsidiary, FMDQ Securities Exchange Limited (FMDQ Exchange or the Exchange) has admitted for listing on its platform, the Axxela Funding 1 Plc N11.50 billion Series 1 Bond under its N50billion Bond Programme (the Axxela Bond).

Axxela Funding 1 Plc is a special purpose vehicle (SPV) incorporated by Axxela Limited to raise funds through the issuance of debt securities in the domestic capital market.

Axxela Limited, owned by Helios Investment Partners, is a natural gas shipping company on the West African Gas Pipeline, providing unique energy solutions with presence in Nigeria and gas export operations

in neighbouring West African countries.

The critical role which debt markets play in facilitating sustainable growth and development cannot be overemphasised.

The Nigeria debt market capital (DCM) plays an important role in the efficient mobilisation and allocation of resources in the economy and despite the impact of the current times, the market has continued to effectively support corporates looking to expand their business operations.

It is in this regard that FMDQ Holdings Plc (FMDQ Group or FMDQ) in its role as a market organiser of the Nigerian DCM, amongst others, has continued to provide www.businessday.ng

stakeholders in the Nigerian capital market with a credible and robust platform for capital access, risk management and transfer of value.

The admittance of the Axxela bond is testament to the opportunities which the DCM avails to corporates in diverse business areas and further, to the potential of the market to support stakeholders effectively even as they carry on their activities in the face of the pandemic.

The Axxela bond, by its listing on FMDQ, shall be admitted onto the FMDQ Daily Quotations List; thus, promoting the much-needed transparency for investors and providing a credible basis for portfolio valuation daily.

Also, through the global visibility which the FMDQ website and systems guarantee, the corporate profile of the issuer is raised even further ahead of tapping into other opportunities in the Nigerian capital market.

FMDQ Group is Africa’s first vertically integrated financial market infrastructure (FMI) group which provides a one-stop platform for the seamless and cost-efficient execution, risk management, clearing, settlement, depository and data and information services for the Nigerian financial market, through its subsidiaries – FMDQ Exchange, FMDQ Clear Limited, FMDQ Depository Limited and FMDQ Private Markets Limited.

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he Nigerian Stock Exchange (NSE) has urged investors to exercise caution while trading on the shares of thirteen (13) companies in the absence of up to date financial information on them.

The companies are: Aso Savings and Loans Plc, Deap Capital Management & Trust Plc, DN Tyre & Rubber Plc, FTN Cocoa Processors Plc, Goldlink Insurance Plc, International Energy Insurance Plc, Medview Airline Plc, Resort Savings & Loans Plc, Staco Insurance Plc, Standard Alliance Insurance Plc, UNIC Diversified Holdings Plc, Union Dicon Salt Plc, and Union Homes Savings and Loans Plc. Already, the Exchange has issued Deficiency Filing Notice (DFN) against the aforelisted companies, according to a July 8 note on the Bourse. “The above listed companies’ Unaudited Financial Statement (UFS) became due on June 29, 2020 being the extended due date as granted by The Exchange”, the NSE said.

It further noted that by virtue of non-filing of the UFS by the due date, the companies have violated Rule 1.1.2, Rules for Fil-

ing of Accounts and Treatment of Default Filing, Rulebook of The Exchange (Issuers’ Rules).

The 13 companies failed to comply with The Exchange’s directives set forth in the DFN and in light of the companies’ continued breach of Rule 2.2.1 of the Rules, and in line with the requirements of Rule 2.2.2.

The investing public has further been advised that the Exchange will continue to engage with these companies and may take the following additional steps should they fail to comply, and file their UFS within the ninety (90) day cure period stipulated by Rule 3.1 of the Rules, that is September 27, 2020: (i) send to the aforelisted companies a “Second Filing Deficiency Notification” within two (2) business days after September 27, 2020; and (ii) suspend trading in the companies’ securities.

Issuers’ Rules provide that “Every Issuer shall file its unaudited quarterly accounts not later than thirty (30) calendar days after the relevant quarter, and publish it within five (5) business days after the date of filing, in at least two (2) national daily newspapers, and post it on the company’s website, with the web address disclosed in the newspaper publication.

Seplat appoints Emeka Onwuka as Chief Financial Officer, Executive Director Iheanyi Nwachukwu

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he Board of Directors of Seplat Petroleum Development Company Plc has appointed Emeka Onwuka as Chief Financial Officer (CFO) and Executive Director of the Company. He will be joining the Seplat Board with effect from August 1, 2020.

Onwuka has over 30 years’ experience in financial services within Sub-Saharan Africa. He has acted as the voice and face of major financial institutions in Nigeria as former Group Managing Director /CEO of Diamond Bank Plc and former Chairman of Enterprise Bank Limited.

Onwuka is a Partner at Andersen Tax Nigeria and holds @Businessdayng

various Board positions as Chairman; FMDQ Securities Exchange Limited; Director FMDQ Holdings Limited; Director, Ecobank Nigeria Limited; and Director, Bharti Airtel Nigeria.

Onwuka received his B.SC. in Political Science from the University of Nigeria, Nsukka and holds an MBA from the University of Benin. He is a Chartered Accountant, a Fellow of the Institute of Chartered Accountants of Nigeria, a Fellow of Chartered Institute of Taxation of Nigeria. He has attended executive programs at the Lagos Business School, Wharton Business School and Harvard Business School.

Onwuka holds the Nigerian National Honour, Officer of the Order of the Niger (OON).

Monday 13 July 2020

BUSINESS DAY

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Monday 13 July 2020

BUSINESS DAY

FT

FINANCIAL TIMES

World Business Newspaper

Covid-19 deaths rise as US states impose new restrictions

President Trump wears mask in public for first time as he visits army medical facility COURTNEY WEAVER AND PETER WELLS

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onald Trump wore a face mask in public for the first time since the outbreak of Covid-19 in the US to meet wounded soldiers and medical staff at the Walter Reed National Military Medical Center on Saturday.

Leading public health officials have urged Americans to wear masks to slow the spread of coronavirus, but the president has until now been reluctant to back their calls.

“I think when you are in a hospital, especially in that particular setting when you are talking to a lot of soldiers, people that in some cases just got off the operating table, I think it’s a great thing to wear a mask,” Mr Trump said.

The president’s visit to Walter Reed came as some US states ordered new restrictions including mandatory mask-wearing in response to a surge in coronavirus, a day after the country reported its largest one day jump in cases.

Louisiana’s Democratic governor John Bel Edwards announced that masks would be required for anyone over the age of eight who was within 6ft of a non-family member, and bars would be closed.

The move followed earlier mask mandates in Texas and Mississippi.

US sunbelt states continued to post increases in coronavirus in-

fections and fatalities on Saturday.

Texas reported a record increase of 10,351 new cases over the past 24 hours, while the number of deaths rose by 99, six short of Thursday’s record increase. The state has more people hospitalised with Covid-19 than any other in the US; the total ticked higher to 10,083 on Saturday.

Florida reported more than 10,300 new cases. South Carolina posted a record number of new infections — more than 2,220 — as did North Carolina, which saw more than 2,400 new cases of the virus.

At a press conference to announce Louisiana’s measures,

Catherine O’Neal, an infectious diseases specialist in Baton Rouge, said the state had experienced a “massive increase” in the number of hospitalisations in the past 10 days.

“Now we are overwhelmed. Our hospitals are full,” she told reporters.

Despite the spike in cases, some US businesses continued to forge ahead with reopening plans. In Florida, which has been among the US states worst hit by a resurgence in Covid-19 cases, Disney World reopened the doors of its Magic Kingdom and Animal Kingdom theme park on Saturday, as did Sea World Orlando.

There are now more than 12.5m confirmed cases around the world and more than 560,000 fatalities, according to Johns Hopkins University. Some 134,430 of those deaths have been in the US and 70,398 in Brazil, the second worstaffected nation.

On Saturday, the US reported just over 63,000 new cases, according to Covid Tracking Project data, down from a record of nearly 67,000.

It is the third day in four that the daily increase has topped 60,000, since surpassing the milestone for the first time on July 8. The number of deaths from coronavirus in the US

rose by 757 over the past 24 hours and continued to ease from a jump of more than 900 on July 7.

Elected officials from both parties have warned that they would need to take new measures to curb the outbreak.

In Texas, Republican Governor Greg Abbott, who issued the statewide mask-wearing order, warned in a series of television interviews on Friday that the state might have to take even harsher measures as it faced a shortage of hospital beds.

“If we do not all join together and unite in this one cause for a short period of time, of adopting a mask, what it will lead to is the necessity of having to close Texas back down,” he told a local Texas television station.

“The only way those businesses are going to stay open is to make sure people wear masks to slow the spread of the coronavirus.”

In Georgia, Atlanta mayor Keisha Lance Bottoms, a Democrat, announced on Friday that the city would roll back its reopening plans amid a new spike in cases. That prompted criticism from the state’s Republican governor who was one of the first to reopen his state this spring. Georgia reported nearly 4,500 on Friday.

The new surge in cases has presented a conundrum for the Trump administration, which is trying to convince states to reopen schools after the summer holidays while reigniting the president’s faltering re-election campaign.

WHO struggles to prove itself in the face of Covid-19 Donald Trump’s rejection of UN body highlights problems over politics, science and funding MICHAEL PEEL, ANNA GROSS AND CLIVE COOKSON

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resident Harr y Truman signed the US up to the World Health Organization in 1948 with the “hope and expectation” it would “help liberate men everywhere from the overhanging dread of preventable disease”.

This week President Donald Trump moved to rip the US out of the UN body over its performance during the coronavirus pandemic — and the WHO announced an independent review into how it and others handled the crisis.

The Trump administration’s rejection of an institution to which it has been the biggest donor is a reflection of both anger at the body’s perceived closeness to Beijing and the president’s revolt against multilateralism. But it has also highlighted concerns about how a health guardian created from the devastation of war and disease has become hobbled by political power plays, battles over science and unstable funding — all of them exacerbated by the urgency of the Covid-19 crisis.

Announcing the pandemic inquiry, Tedros Adhanom Ghebreyesus, WHO director-general, said it should examine “whether

the global health architecture is fit for purpose”. Some critics say the Geneva-based body is one structure that requires urgent reforms if it is to fulfil its mandate to promote public health and respond to emergencies.

“The sad truth is that global health is a political field, not a medical one,” said Tammam Aloudat, deputy executive director of the Access campaign at Médecins Sans Frontières, the global medical charity. “Everyone will say nice stuff — and then act in their own national interests.”

An escalating grab for supplies of possible coronavirus vaccines by national governments has underlined the concern.

Washington’s trigger of the formal process to exit the WHO followed through on Mr Trump’s threat in May to quit an organisation he has branded a “puppet of China” — an allegation the health body denies. Mr Trump’s Democratic rival Joe Biden has said he will reverse the decision to leave if he wins November’s presidential election.

The US leader’s complaints that the WHO was too slow to respond to the growing crisis in China are echoed in the terms of the pandemic inquiry, which include a review of when the organisation was informed of the first outbreak www.businessday.ng

and when it declared a health emergency.

One recurring criticism is that the WHO has no authority to order member states to follow its instructions beyond the weak provisions of its International Health Regulations. Observers say this creates an incentive for it to avoid conflict by accentuating praise and playing down criticism — as it has generally done with China during the crisis, despite widespread concerns about the transparency of Beijing’s initial response.

It also has no powers to order countries to allow access to investigate the origins of disease outbreaks — a crucial issue for Covid-19. This weekend, more than six months after China announced the existence of Sars-Cov-2 in Wuhan, WHO officials are finally travelling to the country to prepare plans to identify its animal origin.

“The governance is problematic in the sense that it is a multilateral institution whose legitimacy is based on its member states — they have a lot of power and influence on the decision making,” said Jennifer Prah Ruger, professor of health equity, economics and policy at the University of Pennsylvania. “It’s in all of our interests to have an independent institution that tells the truth. We want that information for

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the common good.”

The WHO denied it lacked authority or pulled its punches over countries’ failings. “The conversations we have in private with member states can be very candid and frank,” it told the FT. Another common complaint is that WHO procedures have become too ponderous. The body has an executive board of 34 member-state nominated representatives — but any other country may speak at its meetings. “In the end, it’s a mini world health assembly,” lamented one European official, referring to a protracted annual decision-making gathering of all 194 WHO member states. “So it’s more inefficient again.”

TheWHOdisputedthenotionithad become too unwieldy. It argued that the executive board was now “more participatory and more inclusive”.

Its approach to science — the foundation for any pandemic response — is a further source of contention. Critics charge that WHO is slow to adapt its public health guidance to the latest research insights.

They argue that it is sometimes too cautious when it lacks scientific evidence that meets the highest standards, even in cases where that is hard to obtain and where there are few if any health downsides to endorsing a course of action.

One oft-cited example is that it @Businessdayng

took until June 5 to issue a definitive recommendation that people should wear face masks. Questions have also been raised over its slowness to embrace the idea that coronavirus can be transmitted via sprays of small particles known as aerosols that linger in the air for some time.

“My impression is that the WHO treats its scientific advice like some sort of academic research project,” said Sir Venki Ramakrishnan, president of Britain’s Royal Society.

“They wait for definitive evidence to emerge before they issue guidance. The problem is that in a fastchanging scenario where urgent decisions have to be made, you have to go with the available evidence while you wait for the best evidence to accumulate.”

The WHO said it was “cautious and rightly so” in its approach, as its technical guidance carried great weight. “We won’t change or revise guidance on the basis of one or two studies,” it said. “We do wait until we have a critical mass.”

The WHO’s finances are a further perceived weakness. Many observers say its budget of $5.84bn for the two years 2020-21 is inadequate and rests on a precarious foundation — even though it has now been topped up to about $7.2bn with extra Covid-19 related contributions.

Monday 13 July 2020

BUSINESS DAY

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NEWS

How CAC’s unreliable e-platform is Obaseki boosts emergency response with Emzor, Freedom Foundation partnership training of medical first responders to help rehabilitate drug abusers frustrating business registration MICHAEL ANI

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igerians seeking to register their businesses via the e-platform of the Corporate Affairs Commission (CAC) are becoming increasing frustrated over unending process that leads to nowhere.

Legal practitioners in some renowned law firms, complained to BusinessDay about the CAC’s inability to get their online platform fixed for them to register the businesses of their clients in the wake of the pandemic which has seen many businesses work remotely.

According to these lawyers, they have spent roughly three months trying to register businesses for clients with the process proving abortive due to the failed website of the CAC, and the commission is not showing signs of resolving it.

This is as opposed to the maximum two weeks it normally takes them to finish the process with the com-

mission before the heat of the pandemic, showing how terrible the situation has gotten for Nigerian business.

For the lawyers, the situation has become a torn in the flesh and making them look unprofessional before their clients, whom they have assured that the process would take just two weeks.

“This has made us look like liars before our clients.

This process is just frustrating; despite our complaints, nothing has been done,” one lawyers who spoke on condition of anonymity due to the sensitivity of the matter, told BusinessDay. The lawyer said she was yet to conclude a business registration process she started since April for one her clients.

Amodu Oluwafemi, head of account at First Capital Trust, confirmed the situation, saying much of what they have been doing is to calm the nerves of clients who are already furious about the whole process.

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do State governor, Godwin Obaseki says the state is boosting its capacity to respond to emergencies with the training of medical first responders.

The governor said this during a courtesy visit by the director-general of the National Emergency Management Agency (NEMA), Muhammadu Muhammed, who was in Edo to flag off the emergency agricultural intervention funds programme for persons affected by flood.

NEMA also donated palliatives to 64,613 households in the state to cushion the economic effect of the Covid-19 pandemic.

Obaseki noted that emergency response was in fulfilling government’s plans to protect the people. He said that the state was training medical first responders to help in medical responses as his administration has set up helplines to facilitate res-

cue operations.

The governor expressed appreciation to NEMA for the donation, noting that the agency has maintained cordial relationship with Edo State and responding to its requests over the years in dealing with emergencies.

“We are partners in progress and we appreciate this gesture of palliatives to support the most vulnerable in our society, particularly those affected by the coronavirus (COVID-19) pandemic.

We have a very transparent community engagement process that helps us identify the most vulnerable in our society. It is these people we will reach out to with these items. It is done in cooperation with religious bodies, community leaders who help in identifying those who suffered the most. I want to assure you that the palliatives will get to the proposed 64,613 households,” Obaseki said.

GBEMI FAMINU

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igeria’s leading pharmaceutical firm, Emzor Pharmaceuticals Limited, has taken its anti-drug abuse advocacy to the next level as the company engaged Freedom Foundation in a strategic partnership to help in the rehabilitation process of drug abusers.

Freedom Foundation is a non-profit organisation, committed to addressing the evermounting and staggering challenges in our society by empowering individuals who are plagued by various categories of social and economic challenges.

Freedom Foundation’s model of Rehabilitation, Education and Empowerment is augmented by research and awareness promotion.

This strategic partnership was announced in commemoration of this year’s International Day against Drug Abuse and Illicit Drug Trafficking with the aim to consciously educate the public on the dangers of abusing drugs in a society.

Glo subscribers to relish 6 months’ data in smartphone festival

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ubscribers to the Globacom network who purchase mobile phones from any Gloworld outlet pan Nigeria are to enjoy bundled data along with their devices of choice.

Globacom announced at the weekend that customers would enjoy this in the on-going Glo Smartphone Festival designed to offer more value to customers and consolidate its leadership in Nigeria’s telecommunications market.

According to the company, customers who purchase devices during the festival would have access to bundled data from 500

MB per month to 2GB per month for six months. This will, however, depend on which model they choose from a wide collection of phones from popular brands available for the offer, including iPhone, Samsung, Infinix, Itel, Tecno and Imose.

It further explained that the Glo Smartphone Festival was designed to make the Gloworld outlets nationwide a “one-stop shop for everything devices” and the best place to get the best price deals, accessories, bundle data ranging from 500MB to 2GB monthly for 6 months and free accessories on their choice devices.

Industrial dispute: NIPC seeks salaries commission’s intervention in workers’ allowances HARRISON EDEH, Abuja

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he management of the Nigerian Investment Promotion Commission (NIPC) says it is seeking the approval of the National Salaries, Income and Wages Commission to meet the demands of its workers.

Members of staff of NIPC had last week crippled business activities at the commission’s headquarters over allegations of poor working conditions and institutional failures.

Chairman of the NIPC’s workers’ union, Yusuf Mustapha, told news men that the union was demanding

the immediate removal from office of the commission’s executive secretary, Yewande Sadiku.

But reacting to the development, the director of Strategic Communication at NIPC, Emeka Offor in a statement at the weekend said the management was concerned about the unexpected industrial action instituted by the leadership of the union According to him, major welfare improvements were initiated by the management without being prompted to stimulate productivity and ensure job satisfaction for members of staff. www.businessday.ng

With the tagline for this year being “Better Knowledge for Better Care”, the emphasis is on the need to improve the understanding of the world drug problem and how better knowledge will foster greater international cooperation for countering its impact on health, governance and security.

Speaking on the impact of drug abuse in the society, Kunle Faloye, marketing manager, Emzor Pharmaceuticals, states that the brand is committed to ensuring that the society is free of drug abuse, and people are constantly aware of the dangers of abusing drugs.

He state, “We are aware of the dangers of drug abuse in our society today and it’s unfortunate that it has eaten so deep into society that it is now a norm. As an organisation, we will continuously educate the public on the dangers and enlighten other stakeholders on what is expected of them.

The fight against drug abuse is a collective one and we are happy to lead the charge.”

L-R: Busola Wale Micaiah, USL Securities Limited (Registrar); Joshua Ojo, Deloitte and Touche (Auditors); Bola Ajomale, MD, NASD plc; Oladipo Aina, acting chairman; Lola Ikwuagwu, company secretary (GIO Nominees Limited), and Kasimu Kurfi Garba, audit committee chairman (APT Securities), during the 7th annual general meeting of NASD plc in Lagos.

Pay-TV subscribers to pay more as StarTimes adjusts prices DANIEL OBI

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ubscription for Pay TV is not coming cheap for Nigerians as StarTimes, a player in Nigeria’s pay TV market has equally increased price for its various bouquets by 22 % From August 1, 2020, StarTimes, Basic Bouquet subscribers will now pay N1,700 as against N1,300 monthly to enjoy close to 80 exciting channels.

Similarly, Classic Bouquet subscribers will pay N2, 500 as against N1, 900 monthly to keep enjoying close to 100 channels.

For DTH (Dish) users: Smart bouquet subscribers will pay N2,200 as against N1,900 monthly; Super Bouquet subscribers will pay

N4,200 as against N3,800 monthly. Its Nova bouquet remains unchanged at N900 with over 43 exciting channels.

The increase in prices by StarTimes was as a result of some factors including Federal Government VAT increase effective February 1, 2020 and the impact of the foreign exchange rate on its business.

Speaking on the challenges that the company is facing in its quest to provide cable TV entertainment to subscribers, the StarTimes marketing manager Viki Liu told newsmen during a Webinar that earlier this year, the Federal Government increased the rate of the Value Added Tax (VAT) from 5% to 7.5%. “This increase did have an effect on our cost but in consideration of our customers’ plight, we continued to

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bear that extra cost” She said more recently, “the impact of the foreign exchange rate has had an overwhelming adverse effect on our business. Our business is not exempted from the effect of the naira depreciation affecting all businesses in the country.

“All of our foreign content is bought in dollars and to continually serve our subscribers the best content; we have been constrained to make the slight review on our subscription rates. The decision to make this review is based on compelling external factors beyond our control”, she said.

To bring these exciting offerings within the reach of every Nigerian, the payTV entertainment provider said it will continue with its @Businessdayng

flexible subscription options – daily, weekly, monthly and quarterly, allowing Nigerians to subscribe according to their needs and means.

She noted that the model options are available for all bouquets; and whether a customer subscribes daily, weekly or monthly to a bouquet, the customer will have access to the same channels and services, adding that flexible billing systems are reasonable for people who do not spend reasonable time watching television after subscription.

It will be recalled that MultiChoice, operators of DStv on June 1, 2020 effected the Federal Government VAT increase from 5% to 7.5%, a development seen by subscribers as usual price increase in its bouquet and which resulted in protests.

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Monday 13 July 2020

BUSINESS DAY

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Monday 13 July 2020

BUSINESS DAY

29

News InfraCos await NCC’s N65bn subsidy after ...

Continued from page 2

While six more states including Kaduna (N0); Kwara (N1 per km); Imo (N145); Plateau (N145); Anambra (N0), and Katsina (N145) - Ogun (waived fees for MainOne) followed the Ekiti example in May, the momentum appears to have been lost in June, and so far in July, with no new state joining the party.

Experts say the speed will likely pick up again once the InfraCos start deploying fibre cables in the states that have already reduced the fee.

“Remember the governors have their options, they can harmonise the rates or even waive it. It is through that collaborative approach that we will see more governors and states following the example of the first seven.

“Is there a timeline to this?

Actually, we would like to have something happen immediately, but we need to be reasonable. It is not a switch, there are IGR impacts to the decisions made by governors and they need to see the sacrifice of slow term gains with the benefits of medium to long term gains. Until we get to that point, we might be looking at some governors still waiting until they see the proof, and that may mean Q3 of 2021 or even into 2022,” Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), told BusinessDay. Deploying fibre infrastructure across the entire 774 LGAs in Nigeria as stipulated by the National Broadband Plan 2020-2025 is a very capital intensive project. Matter of fact, the plan set out an ambitious strategy aimed at delivering data download speeds across Nigeria of a minimum 25Mbps in urban areas, and 10Mbps in rural areas with effective coverage available to at least 90 percent of Nigerians by 2025 at a price not more than N390 per 1GB of data (i.e.

2% of medium income or 1% of minimum wage).

The ambitious plan also comes with a hefty price tag of around $3.5 billion (N1.3trn at current rate) to $5 billion (N1.9trn). The government acknowledges that successful

execution would only be possible if the public and private sectors align and harmonise activities, including contributing the needed money.

Prior to the COVID-19 pandemic, most of the InfraCos had expressed willingness to deploy in states that were willing to waive or reduce their right of way fee to the agreed N145. The spread of the virus has changed the calculations of many providers, hence the need for the NCC and the government to fast track subsidies to the telecoms sector. Some experts have also suggested that the N145 right of way fee may not be good enough if the operators are to effectively bridge the 4G gaps in the country.

“We need to review the inland distribution of fibre. For us, we need to lay more fibre and, to this extent, we strongly advocate the elimination of the right of way charges. Now, the Federal Government is advocating N145 per linear metre based on certain studies, but the dynamics are changing and we should begin to consider free right of way and put some coverage obligations against the service providers,” Gbenga Adebayo, chairman, Association of Licensed Telecommunication Operators (ALTON) said in May. The telecoms sector in many developed countries was included in the government palliative, an indication that the authorities recognise the important part they play in enabling the economy. The UK and US governments provided over $40 billion government subsidy and palliatives for the sector.

In Nigeria, InfraCo licensees are still waiting to sign a draft agreement with the regulator, NCC, which will finalise the subsidy arrangement.

“If we don’t have that agreement sorted and we don’t have an ability for the InfraCos to access subsidies, it puts a question mark over their business model and the investments they have already made to roll out because for Nigerians we don’t want excuses, we want to be able to say by this timeline this LGA has been connected and this is what will happen,” Teniola said.

Hard times ahead for real estate as COVID-19...

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explains that what the government measures had done was to shutdown demand, noting, “When you shut down demand, then there is a drop in footfall in the mall and we witnessed a 30 percent drop in the first three weeks of the lockdown measures.”

Investors in conference and event centre facilities have also taken a bashing from the deadly virus. Their case seems to be worse because the social and physical distancing rule

has put a lid on all forms of social gathering including conferences, seminars, marriages, etc., giving way to virtual meetings and webinars.

“Though it is difficult to quantify, the loss investors have incurred in this sub-sector is substantial,” notes Paul Onwuanibe, CEO, Landmark Africa Group, estimating that operators of event centres may have lost over N800 million in the last three months of the pandemic.

Estate developers are also another group of losers who, according to Adetokunbo Ajayi,

L-R: Bamidele Onimode, director of Relief and Rehabilitation, National Emergency Management Agency (NEMA); Sunday Micah, director of finance and accounts, and Kayode Fagbemi, director, planning, research and forecasting, during a news conference addressed by directorgeneral of NEMA, on the 2020 Flood Preparedness, Mitigation and Response plan for Nigeria, at a news conference in Abuja.

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CBN taps cash reserve ratio debits as...

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as N22 trillion worth of OMO bills, two times the N11 trillion sold in 2017 and more than three times the N7.8 trillion sold in 2016, according to data from the CBN’s 2018 financial statement.

“It is part of the unconventional ways the CBN is trying to repair its beleaguered balance sheet after years of offering high interest rates to foreign investors,” a banking source familiar with the matter says.

“Using the CRR in this manner however squeezes banks profitability and reduces the incentive to lend, which contradicts the CBN’s mantra to boost lending to the real sector, and is negative for the economy,” the source, who does not want to be named because the practice is unofficial, states.

The CBN’s spokesperson, Isaac Okorafor, did not respond to phone calls seeking comment.

Sources say the bulk of money taken from the banks by the CBN under the guise of breaching CRR or LDR (loan to Deposit Ratio) guidelines has also been recycled to the Federal Government in CBN overdrafts, and forms a large chunk of the single-digit loans doled out to what the CBN deems as priority sectors.

They say it leaves the financial system on the receiving end of its backdoor strategy to rein in on OMO costs.

“The CBN started digging a hole for itself when it began using OMO bills to stabilise the exchange rate by selling it at high interest rates to foreigners in order to get their dollars. It’s a pity that it’s the banks and the entire financial system, which includes local investors and pensioners that are paying for that recklessness on the part of the CBN,” another source, who does not want to be quoted as criticising the CBN, states.

The Open Market Operation is designed to be a shortterm market instrument the CBN uses to control the supply of money in the economy. But the CBN started to use the instrument as a means of attracting dollars needed to stabilise the foreign exchange market.

For most of 2019, the CBN increasingly issued OMO bills at high yields to attract foreign portfolio investments, buttress foreign reserves, and stabilise the exchange rate.

The stock of CBN bills grew substantially, hitting the equivalent of $55 billion by year-end with yields at 12.2‒15.3 percent, with about a third of the issues held by foreigners. That drew the criticism of analysts who note that the practice was unsustainable and would excessively strain the CBN’s balance sheet.

“Risks stem from the central bank’s policy of attracting portfolio investments in its short-term OMO bills

CEO, Propertygate Development and Investment Company, are challenged in many fronts. “Apart from lack of credit from the banks, you cannot even go to site and where you can, you cannot do development because you cannot import your materials,” he says.

He notes that even those whose houses, especially luxury houses, are already on the market cannot find buyers, “But there is market for affordable small-size family housing units. Investors in this housetype are part of the few gainers in the sector at the moment.”

Ayo Ibaru, director of re-

search at Northcourt, shares the view that healthcare is leading the pack of gainers and is likely to continue to do so, as, “Infrastructure investment is upbeat and foreign donors/ VC firms are more open to investing in the sector.”

According to Ibaru, lastmile warehousing is considered by industry analysts as the favoured child of the logistics/warehousing family. He explains that the closer that segment of the warehousing sector is to the heart of the city, the better, “Although, the subsector is moderated by income and employment numbers.”

ments after selling as much

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through high yields and hedging instruments offered to non-resident investors at low cost, despite a wide spread between the naira and dollar interest rates.

“As a result, non-resident holdings of the CBN’s OMO bills soared to $17 billion by end-August, equivalent to 40 percent of foreign-currency (FX) reserves at the time,” Fitch Ratings said in August 2019 when it downgraded Nigeria’s outlook to negative.

The CBN continued to sell OMO bills to foreigners even after revising the rules by banning non-bank local corporates from buying and trading the bills, but with interest rates collapsing into single digits this year coupled with the dollar illiquidity in the country, foreigners started losing appetite in the bills.

“What is happening now, CBN is no longer getting dollars from OMO auctions because foreigners who have their dollars trapped in the country are now using the naira they have to buy OMO and sell to the banks while they are stuck here. The CBN is trying to rein in on that by mopping bank liquidity through the CRR so that they don’t have enough cash to buy the OMO bills off the foreigners,” a trader with one of the tier-one banks says.

“The banks are on the receiving end of the CBN’s effort to salvage its balance sheet from the damages caused by the OMO issuances of the past three years,” the trader states.

The discretionary debits are also used by the CBN as a viable administrative tool for foreign exchange management.

Sources familiar with the matter say the debits are usually made days before an FX auction.

By draining the banks of naira liquidity, the CBN is able to reduce how much they are able to bid for FX, thereby reducing pressure on the CBN for FX. Hammered by the fall in oil export receipts, Nigeria’s major earner of dollars, the CBN has struggled to meet the dollar demand of investors and importers, leading to a backlog that is frustrating investors and manufacturers. @Businessdayng

With dollar inflows declining and its external reserves under increasing pressure, the CBN has resorted to demand management strategies last seen in 2016, during an acute dollar scarcity.

CRR/LDR debits hit N2.2trn The CBN took total bank debits over CRR or LDR breaches to N2.2 trillion after it debited banks to the tune of N118 billion July 3. The N118 billion debit was the fourth such action by the CBN this year alone.

The move brings “further downward pressure on banks liquidity ratios and earnings,” according to Tunde Abidoye, an analyst at Lagos-based FBN Quest.

Unlike previous debits for which Zenith and United Bank for Africa (UBA) were the most affected banks, Stanbic IBTC and GTBank were the hardest hit this time around, both with debits of N15 billion each.

“Based on the total sum each bank has been debited this year, and our NIM assumptions for each bank, we estimate an aggregate opportunity cost of funds of N86 billion for our universe of banks coverage,” Abidoye says in a note to clients.

Due to the sizable debits on their accounts with the CBN, Zenith and UBA have the highest opportunity cost of funds at N34.4 billion and N15.8 billion, respectively.

In contrast, Fidelity Bank and Access Bank are the least impacted, with opportunity cost of funds of N2.9 billion and N3.8 billion, respectively.

Choking CRR By twisting its official CRR rule, which mandates banks keep 27.5 percent of their deposits with the apex bank at zero interest, the CBN now holds as much as 60 percent of deposits, more than double the official rate. That means for every N100 the banks hold in deposits, N60 is with the CBN earning zero interest.

The 60 percent effective CRR rate, the highest globally, is even higher for some banks, putting a strain on profitability and draining the banks of much needed liquidity.

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Monday 13 July 2020

BUSINESS DAY

news Coronavirus is the killer, PPE shortage is the...

Continued from page 1

utes. Fearing she could be a COVID-19 case, healthcare

workers did not near her since they didn’t readily have the PPE. When finally admitted, the oxygen cylinder that was brought lasted no more than two minutes. At some point, one of the deceased’s sons filmed her gasping for breath — with no oxygen, of course.

Ten minutes later, she died.

Yet, despite the unarguable evidence, including a video by John Oluwadero, Deborah’s last child, who escalated the situation on social media, an investigation ordered by Kayode Fayemi, governor of Ekiti State, into the case claimed the alarm was false. It claimed there was no shortage of PPE or oxygen at EKSUTH and there was no delay in attending to the patient.

“Our health system is weak! It is a big shame on our health system for health workers in a tertiary hospital to not be provided with personal protective equipment (PPE) amidst this coronavirus pandemic,” John said in his first open letter to the state government.

EKSUTH is the same hospital where doctors who do not want to be mentioned have confided in BusinessDay that the shortage of PPE has continued to cause casualties, especially in patients suffering from elevated diabetes or hypertension.

Health workers, on the other hand, are buying their nose masks while doctors’ hazard allowance remains N5,000 under Fayemi’s watch.

“What can you do as a doctor in a week with probably four nose masks in a week, when you have hundreds of patients?” an EKSUTH emergency doctor asked. “There is no way you won’t buy your own protection kits if they are not protecting you yet you’re told to work.”

Nine-month-old pregnancy lost at another Ekiti hospital due to PPE scarcity Between April 29 and May 2, a 26-year-old woman could have died at the Federal Teaching Hospital, IdoEkiti, Ekiti State, due to nonavailability of PPE. But even as she survived, she lost her nine-month-old pregnancy.

The woman, admitted as a case of fatal distress on Wednesday April 29, also presented with fever, which may or may not have been COVID-19. She was supposed to immediately undergo an emergency CS which, of course, required the healthcare workers to put on the PPE.

Mumini’s aged father sobbing after his son gave up the ghost before his eyes.

However, due to the late provision of PPE, the CS was delayed for about five hours. By the time it was done, the baby had died in the uterus. Hospital sources told BusinessDay the baby would have survived had the CS been done immediately.

After losing her baby, the woman went into respiratory distress but doctors were not seeing her because of the difficulty of getting the PPE, even though BusinessDay saw non-clinical hospital staff donning the N95 mask!

To get the PPE, the request had to be channelled through a typed — not handwritten — letter to the chairman, Medical Advisory Committee (CMAC).

This process took five hours on April 29! The Ekiti State COVID-19 Task Force was notified of the need to test the woman to ascertain her COVID-19 status, but they did not turn up until their hands were forced by a social media outcry.

At UCH, buy PPE or face fatal delay In different wards of the University College Hospital (UCH) Ibadan, patients were compelled to buy PPE for doctors assigned to handle their condition or face a delay that could lead to death or deterioration, under an unwritten coronavirus policy.

It was what Oladejo Olayide experienced when UCH finally agreed to conduct radiotherapy on his twoyear-old daughter suffering from rhabdomyosarcoma — a common type of cancer in children.

Oladejo spent N16,000 out of pocket on two packs of theatre gown at N4,600 each, a pack of examination gloves at N3,500, and a pack of nose masks at N12,500 at Kunle Arà Pharmacy, opposite the hospital. www.businessday.ng

According to BusinessDay’s findings, it requires N25,000 or more to properly kit a doctor or nurse each day with PPE. This implies a hospital with 50 will need nothing less than N1.2 million to operate daily.

Some private hospitals have had to pause operations at some point due to the high cost of operation. In many government-run hospitals where operations have been restricted to essential services such as accidents, hypertension, diabetes and cancer emergencies, health workers in the emergency wards are not given the same standard of protection that workers in COVID-19 isolation centres enjoy based on the faulty assumption that they work with low-risk patients, whereas the method of determining which patient should be isolated is predicated largely on assumption or probability due to insufficiency of testing kits. Screening doctors work in the dark, creating a terrible loophole for coronavirus patients to slip into the wards not devoted to the treatment of the pandemic.

Goodness Olayide, for instance, was billed to begin the second batch of her radiotherapy treatment when the machine broke down and the hospital shut its facility under coronavirus fear. Her troubled father was advised to resume chemotherapy treatment at the largest government hospital in neighbouring Osun State — Obafemi Awolowo University Teaching Hospital (OAUTH), Ife — where a paediatric oncologist managed her in the past one year.

But the doctor in Ife insisted the only option left was radiotherapy, which has its closest point in UCH, Ibadan. A temporary succour was then sought in a drug. But sadly, the pandemic strain on national and international medical supply chains blocked access to the drug.

By May 18, when UCH revived its radiotherapy machine and agreed to a oncea-week treatment for the young girl, the cancerous outgrowth had displaced her face, covering half of it.

After the treatment, she lost her mobility.

“My baby was walking, jumping, and full of life as of May 18. On the day the second batch of radiotherapy was to take place, the anaesthesiologists (a doctor that administers drugs for insensitivity to pain) didn’t show up, so the treatment was cancelled. That was Friday. On Monday the same thing happened,” Olayide told BusinessDay. “They later managed to carry out the radiotherapy.

But four days after she was discharged from the hospital, she was down. She could neither walk nor stand. She couldn’t sit without support.

I called UCH and they said the cancer cells could have spread terribly.”

Goodness continues to lie in the hospital’s children ward, with her family left with just hopes.

At LUTH, no PPE, no treatment for octogenar-

One of the emergency doctors show up after Mumini’s death, aiming to convince the family that the doctor’s weren’t to blame.

ian In Nigeria’s fight against COVID-19, the Lagos University Teaching Hospital is a point of reference. On three different occasions, pregnant coronavirus patients have been delivered of their babies without onward transmission of the virus.

Two of its five blocks have been earmarked as an isolation ward, further decimating the operating capacity of the poorly equipped and understaffed hospital.

But the world of noncoronavirus patients presenting clinical emergencies is grimly different.

After some series of dialysis, Ngozi Egenti, over 80, was rushed into the hospital in an ambulance on May 4 over kidney complications.

Some of her symptoms were consistent with coronavirus signs. Her blood pressure was high. She was coughing and vomiting and had difficulty breathing. She was also being oxygenated in an ambulance parked opposite the accident and emergency department.

But the triaging doctor insisted nothing could be done until a swab test was obtained. “It will take a while. We are very busy,” he

Goodness Olayide after coronavirus outbreak & Goodness Olayide before the novel coronavirus lack of protection scared doctors from continuing care. outbreak https://www.facebook.com/businessdayng

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had said.

At 2:57pm, attendants in the COVID-19 team said the day’s business was over since 1pm, until 8am again the following day. Even if the test result was produced, beds spaces were not available in the usual fashion.

“If there is no space here, I’ll direct you to the private emergency to make enquiry,” the doctor said.

The spill-over ward is the private emergency but they had no room for any patient that afternoon on the excuse that they were fumigating.

According to a consultant doctor at the hospital, such cases are rife and on the increase. He said the old lady would have been cared for if the specialists were equipped with PPE. The doctors in the emergency are left to grapple with their own protection as even the basic surgical masks and gloves were scarcely provided.

For him, “If you cannot test everybody, then you should protect all doctors”.

The pre-COVID-19 era at the hospital was already fraught with inadequacies.

Barely 20 out of 65 patients seeking care daily got admitted to an Accident and Emergency (A&E) ward of less than 35 available bed spaces. The system relied on transferring, discharging or death to make bed spaces available. On a good day, a doctor could see about 13 patients. It’s a doctor to 20 patients on bad days, which are often the case.

Coronavirus has further reduced that attention but people have not stopped coming down with other ailments nor have they stopped presenting their cases at hospitals as they regularly did.

“My main fear now is lack of testing, lack of manpower and lack of protection,” a source who pleaded not to be mentioned told Busi-

Continues on page 31

Monday 13 July 2020

BUSINESS DAY

Coronavirus is the killer, PPE shortage is the...

Continued from page 30

nessDay. “I also fear the complete collapse of the health sector. We are not far.

Politics is still going on in the way we are responding to the pandemic.”

COVID-19 result makes no difference without PPE At UCH, getting a quick swab test for patients wasn’t a hassle but it made no difference for non-coronavirus patients presenting with highly sensitive conditions.

Although a 35-man team of doctors and nurses undertook daily monitoring at scheduled periods in six designated points, the queue of patients writhing in distress at the emergency department car park, for instance, was long, with clusters of relatives scampering to get doctors’ attention.

The doctors wouldn’t take them in due to lack of bed spaces in the ward. This killed even faster than the suspicion of the virus.

For example, on May 4, Isa Mumini stared without motion at the emergency department foyer from the back seat of a Lexus SUV till he took his last breath. He was referred from Oluyoro Catholic Hospital Oke-Ofa — the largest private hospital in Ibadan, following the decline of his struggle with malaria and typhoid fever.

His relatives thought the quick coronavirus test ran on him removed a major hurdle in the way of his rescue. They didn’t know that even with a bank of money, he stood no chance with a lean system of healthcare workers short of PPE and wards lacking beds.

The triage team led by one doctor Ojunaye sprinkled some salt of negligence in the recipe for Mumini’s death. The deceased’s brothers were still waiting for the internet connection to be stabilised at the pay port of the hospital when he died, at about 1:50pm. He spent roughly four hours on the queue. Some of the things recommended for Mumini were hand gloves, sanitiser, and nose masks.

“We have been here since past 9am. The doctors asked about his health status and we presented the letter of referral from Oluyoro Hospital.

They assessed him. Another doctor came to ask about his symptoms. He asked if he was coughing, had catarrh, had too high temperature level. After the oral test and an infrared thermometer screening, he was found negative for coronavirus.

Since then, we have not set our eyes on those doctors again,” Taiwo Mumini told this reporter, who had earlier planted herself in the crowd

of relatives to observe the unfolding events.

However, the moment cries of sorrow from the Muminis rang through the department, two triage doctors, including Ojunaye, appeared suddenly. The triage doctor seconding Ojunaye was primarily particular about exonerating his team.

“Am I the Federal Government?” he queried. It is not our fault. We asked you to buy those things because of coronavirus. You saw the amount of time you wasted trying to get them.”

In another shocking turn of events, Mumini’s death quickly paved the way for other patients who had queued for hours in private vehicles. A patient who had been sustained on oxygen from the referral hospital was given a pass to move to the emergency ward entrance and in barely 10 minutes, he was moved into the ward.

A deep-seated problem Over the past decade, Nigeria’s health indicators have remained stagnant, as one in eight children die before their fifth birthday. Less than one in three have received all basic immunisations, with Nigeria accounting for the highest number of children in the world who remain unvaccinated against measles.

The health sector is plagued by an inadequate number of trained health workers in rural and remote locations. Government’s inability to commit more than 4 percent of total budget to health despite pledging 15 percent under the Abuja Declaration as well as delays in releases largely widen the gaps filled by international donors such as Gavi, the Vaccine Alliance, Global Financing Facility of the World Bank, UKAID, Global Fund and the CDC. Average individual spending on health in Nigeria was just about $5 in 2018, according to the World Bank, whereas WHO estimates suggest at least $105 per person is needed to deliver a basic package of health yearly.

Out-of-pocket health expenditure in Nigeria was 75.6 percent of total health spending in 2016 – a system which punishes the have-nots and pushes families into poverty when illness strikes.

Even with the billions of donations to the Federal Government from international and private corporations as well as foreign allies, deadly loopholes remain generally unfixed.

The lack of prioritisation and disinvestment in the health sector nudged higher But perhaps more worrywww.businessday.ng

ing is the halving of the statutory transfer of the 1 percent Consolidated Revenue Fund (CRF). The Nigerian government has proposed N44.50 billion for the Basic Health Care Fund (BHCF) in the 2020 budget, but this does not appear to be in accordance with the National Health Act (2014), which compels the government to allocate at least 1 per cent of the CRF, which should be about N81.55 billion, to health.

Mass testing and PPE provision for all healthcare workers One of the foremost points echoed by health experts in addressing the PPE challenge is that the federal and state government enable mass testing across the country or provide protection for all health workers at all costs.

“If it were a scenario where the cases are still few, you can talk of managing surgical masks. But now, we are at a full-blown stage and we are not testing,” a source in LUTH confided in BusinessDay. “The logical thing is to give all doctors protection; if you arm them well, they will be more confident to work. Even the full adequate PPE does not mean you won’t come down with the virus, but at least it will reduce chances. Most doctors are buying their own PPE.” But the government does not even need to listen to this LUTH doctor. Instead, it needs to listen to the cries of Chike Ihekweazu, the expert it picked to head the agency spearheading the war against this virus. Before now, both public and private Nigerian hospitals did not have a culture of including the PPE when drawing up their lists of regular purchases, the NCDC DG observed in May at one of the media briefings of the Presidential Task Force on COVID-19, with a warning that the attitude must change during and after this pandemic.

“The longer it takes for that change to come,” a doctor told BusinessDay, “the more lives we’ll lose during this pandemic.”

Note: Pictures of the minor in the story taken with the parents’ permission.

This investigation was commissioned by the African Centre for Media & Information Literacy (AFRICMIL) as part of its whistleblowing initiative under its Corruption Anonymous project supported by the MacArthur Foundation.

Published materials do not reflect the views of the MacArthur Foundation.

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News FG spends N1.25trn on debt servicing in 5 months … plans N11.86trn record budget for 2021 Cynthia Egboboh, Abuja

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inister of finance, budget and national planning, Zainab Shamsuna Ahmed, said weekend the Federal Government spent N1.25 trillion on debt servicing between January and May 2020, and was proposing N11.86 trillion budget for 2021.

Ahmed also said government spent some N1.32 trillion on personnel cost, including pensions during the period, but had only released N253.33 billion for capital expenditure due to the budget revision exercise.

The minister disclosed this during a virtual conference on the presentation of the 20212023 Medium Term Expenditure Framework & Fiscal Strategy Paper (MTEF/FSP) held shortly after President Muhammadu Buhari signed the revised N10.810 trillion budget into law.

The draft 2021 – 2023 MTEF/FSP was prepared against the backdrop of heightened global economic uncertainty, with the framework indicating continued global challenges due to the COVID-19 pandemic.

At the meeting, Ahmed raised concerns that Nigeria’s fiscal risk has somewhat been elevated by the covid-19 pan-

demic which has exacerbated structural weakness in the economy.

“The Covid-19 pandemic has further elevated the dwindling government finances and has taken a toll on public infrastructure and economic growth, as the government has been unable to meet revenue projections in the past years.

“The disruptions in global trade and logistics would negatively affect custom duty collections in 2020. The Covid-19 containment measures though necessary are inhibiting domestic economic activities with consequential negative impact on taxation and other government revenues,” she stressed.

Governor Hope Uzodimma (m), with the Interim Management Committee members of the 27 LGAs after their courtesy call on the governor at the Governmentt House, Owerri.

Reform of Calabar, Kano economic zones to stir industrialisation - FG … seeks private sector investments in zones HARRISON EDEH, Abuja

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he Federal Government on Friday said the proposed reform of the Calabar and Kano Special Economic Zones (SEZs) would cause a major revitalisation of the two zones while stimulating industrialisation and diversification of the economy for wealth creation.

Niyi Adebayo, minister of industry trade and investment, who gave the information on Friday during the inauguration the Transaction Implementation Committee for the reforms of the zone, noted that it would bring about Nigeria’s economic diversification, growth and development, as he charged members of the committee to take the national assignment with the highest sense

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of responsibility.

He said the world over, SEZs had been pivotal in the economic growth and development of several countries but that in Nigeria and generally in Africa, their performance had been sub-optimal.

There are 34 SEZs in Nigeria, out of which the Federal Government owns only the Calabar and Kano Free Trade Zones while the rest are either privately owned or joint ventures between the private sector and state governments.

Adebayo regretted that the two Federal Governmentowned SEZs in their current state were underperforming and cannot significantly improve the country’s competitiveness.

He observed that inadequate and out-dated infrastructure including unreliable public power supply and @Businessdayng

expensive cost of generating power through other sources were some of major concerns impeding the progress of the zones.

He also noted that lack of deliberate or strategic plan to attract investors create clusters, alongside over reliance on treasury to finance the capital expenditure also impeded the impact of the zones.

The minister said it was for these reasons and given the large investments required to transform the two SEZs that private sector investment was imperative to reduce government’s financial burden and associated business risks as well as to introduce innovative ideas to the management and operational framework of the zones for improved employment generation, Foreign Direct Investment (FDI) and export promotion.

32

Monday 13 July 2020

BUSINESS DAY

Government Enterprise & Empowerment Program

Brought to you by

How GEEP impacts lives of Nigeria’s poor odinaka Anudu

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eneficiaries of the Government Enterprise and Empowerment Programme (GEEP) say it is positively impacting their lives and changing their life’s stories.

They say GEEP, an initiative of the Federal Government of Nigeria aimed at providing financial inclusion and access to micro-credit for Nigerians at the bottom of the economic pyramid, has succeeded in onboarding them into the formal financial system.

They confess that the programme has helped them have access to micro credit, raising their revenues and profits.

Makinde Helen sells palm oil at Oja Bisi market in Ekiti State.

She has been in the business for over 10 years. Before she accessed the GEEP micro credit, she had been making little profit from palm oil because she sold in small portions.

One day, she came to the market and overheard women saying that the Federal Government was helping petty traders.

“They told me that the government wanted to add to our capital so we don’t sit idle at home,” she said.

“One of the people came to register me. They asked me for my name, phone number and took a picture of me and my goods. They said I will get a text message the next day. I was so surprised I got the text message the next day and they came to give us the money,” she testified.

Helen got N10,000, which has helped her get two extra kegs without having to buy on credit.

“This means I can now buy three kegs. Also, my profit has increased. In fact, I am so happy,” she further said.

At Markudi Modern Market, Benue State, Agbo Nnenna, who

Makinde Helen Jumai Bello

Agbo Nnenna

is a petty trader, said the loan has made positive impact on her business.

“The person that registered me told me that I have to pay back the money within six months. So I started paying back immediately. I have finished repaying the N10,250 . As I finished paying, I got a message that I am qualified to get N15,000,” she said.

“The message said I should

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look for any TraderMoni agent in the market to collect the money.

The next day, I saw the agents in the market and I got the N15,000 that same day. I want to tell the people that have not paid to pay because it is real. They didn’t give us this money to ‘eat’ and sit at home. They gave it to us so we can hustle and improve our business. Once you pay back, they will give you the 15,000,” she counseled.

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She further said that the programme is g8ood and has helped her and many other people in this market.

MSMEs contribute 50 percent to Nigeria’s GDP and accounts for 86.3 percent of jobs (59.6million jobs in 2017).

A national survey of MSMEs conducted by National Bureau of Statistics (NBS) and Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) in 2017 said the number of MSMEs rose from 37 million to 41.5 million between 2013 and 2017. Micro businesses make up 41.469 million of this number, representing 99.8 percent of the total. However, many micro businesses have no access to micro credits despite their huge contributions to the country’s GDP, employment and entrepreneurship. But GEEP is changing the situation.

Jumai Bello sells ointment in Bauchi State. She said she got N50,000 from GEEP, which has transformed her business.

“I learnt about GEEP Marketmoni through my cooperative association. Our cooperative

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usually gives us loans but it is a very small amount due to the number of people who want the loans,” she said.

“In my business, I give small shop owners in the market to help me sell the ointments. I keep records of all the ointments I have given for sale to help me remember what I will get in return and calculate my profit. I used the N50,000 to buy the materials for my ointments in bulk quantity rather than in bits like I used to. It helped me to produce more and also give more shop owners to help me sell,” she said.

Bello is paying back the loan now. She intends to apply for N100,000 once she finishes paying back.

On what she plans to use the N100,000 for, she says she needs a machine.

“I want to use the money to buy a machine that will help me produce ointments faster. I really like this programme and I hope that the Federal Government will continue to do more people- oriented programmes like this,” she said.

Monday 13 July 2020

BUSINESS DAY

33

REAL SECTOR WATCH

What 57% capacity utilisation means for Nigerian consumers ODINAKA ANUDU

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apacity utilisation measures the quantity or proportion of potential economic output that is actually realised, according to Investopedia. In other words, capacity utilisation measures the extent to which a country or firm realises its actual capacity. Consider Company XYZ which produces leather shoes in Aba, Nigeria’s leather hub.

If the firm’s machines can produce 300 pairs of shoes but it only makes 230 pairs, say in one year, it means that the company’s utilisation is 230/300, which, when expressed in percentage, gives 77 percent. Capacity utilisation often applies to firms because the quantity of their output can easily be known and calculated. But it also applies to countries.

Inefficient countries like Nigeria that do not realise their capacities in many sectors often have low capacity utilisation.

In Nigeria’s manufacturing sector, which is the subject of the discourse, capacity utilisation in 2019 was 56.8 percent, according to the Manufacturers Association of Nigeria (MAN) Economic Review for the second half of 2019.

Source: MAN, BusinessDay

The number was 57.75 percent in 2018 as against 57.13 percent the previous year. In 2016, capacity utilisation in the manufacturing sector was 51.74 percent, a little higher than 49.32 percent realised in the previous year. In 2014 and 2013, capacity utilisations in the sector were 53.08 and 55.06 percent respectively, according to MAN’s data.

These are not just numbers, and consumers need to be worried when manufacturing capacities are low, experts say. Investopedia explains that capacity utilisation rate is important for assessing a company’s cur-

rent operating efficiency, and it helps provide insight into cost structure in the short term or long term.

“It can be used to determine the level at which unit costs rise,” it further says.

Consider, once again, Company XYZ mentioned earlier. The company can produce 300 pairs of shoes without incurring additional costs, but in this case, it is making 230 pairs. This means that Company XYZ is incurring higher production cost for producing 230 pairs.

Assuming that its production cost is N1 million, it means that the production cost of a pair of shoes is

N4,347. But if Company XYZ produces 300 pairs, it means its cost per pair of shoes will be N3,333. By implication, the consumers buying from Company XYZ is paying N1,014 more for each pair of shoes, which is expensive.

At 57 percent capacity utilisation of the Nigerian manufacturing sector, a lot of Nigerian consumers are spending much more buying Nigerian products.

Company XYZ illustrated above will be producing 171 pairs of shoes rather than 300. With N1 million set aside for production, a pair of shoes will now cost N5,847 rather than N3,333,

meaning that the consumer may be forced to part with extra N2,513 for a pair. This means rising poverty among consumers.

“Consumers are actually paying a lot more for Nigerian-made products,” Ike Ibeabuchi, a manufacturer of chemicals, said.

“Consumers are becoming poorer any moment they spend on these products. It is a clarion call for the government to remove obstacles to manufacturing and come up with an industrial strategy, which is lacking at the moment,” he further said.

Solomon Okunade, a lecturer at the Department of Economics, Obafemi Awolowo University, in an empirical research, identified foreign exchange shortage, preference for foreign products, high cost of equipment and machinery, power failure and maintenance culture as some of the factors slowing the capacity utilisation of Nigeria’s manufacturing sector.

According to MAN, capacity utilisation in the sector averaged 56.8 percent in 2019, indicating 0.95 percentage point increase from 57.75 percent recorded in 2018.

“The decline in 2019 was attributed to reduction in the purchasing power of the populace on account of

the increasing inflation rate experienced in the country particularly in the second half of the year,” MAN said in the Economic Review.

Nigerian manufacturers are self-generating 13,000 megawatts of power due to the unreliability of energy supplies from DisCos. Naira exchanges at N450/$ in the parallel market today as against N360/$ in February and mid-March. This means that manufacturers now spend more while importing their inputs. Apapa and Tin Can port roads have become a clog in the wheel of manufacturers as raw materials take time to arrive at factories and finished goods spend a lot of time before being exported. Logistics cost make up 20 to 30 percent of expenditure cost of manufacturers, according to key players. Manufacturers access funds at 20 to 30 percent rate at financial institutions, which they say is expensive.

Banks expect them to return their loans in 12 months.

In a recent interview, Muda Yusuf, director-general of the Lagos Chamber of Commerce and Industry (LCCI), explained that Nigerian manufacturers were not competitive due to age-old issues such as high energy cost and high cost of doing business in the country.

tions at the current rate of N345/$.

It asked the CBN to ensure that the strategy pursued two fundamental objectives: first, to limit the short-term pains until efficiency gains materialised by responding swiftly with an inward-oriented rescue guideline, and second, seeking to boost the pace at which such efficiency gains materialised.

“Submit all the instruments of exchange rate determination gradually to the unseen forces of demand and supply as a matter of necessity and completely avoid the temptation of interference in order to fully harvest all the benefits that foreign exchange unification can offer,” MAN told the CBN.

It urged the apex bank to ensure that the implementation of the critical aspects of the unification process be done as fast as possible, to enable Nigeria take her portion from the meagre capital currently available in the global economy.

“This is not unconnected with the fact that the intensity of the prevailing aggressive competition for resources occasioned by the backlashes of COVID-19 may deny some countriesfrom accessing the much-needed capital inflow, as investors holding scarce resources by default rationally settle for destinations where investment is safe and earnings can be easily repatriated,” MAN advised.

End undue interference in FX market, manufacturers urge CBN ODINAKA ANUDU

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he Manufacturers Association of Nigeria (MAN) has urged the Central Bank of Nigeria (CBN) to allow the forces of demand and supply to determine the exchange rate and avoid the temptation of interfering in it in the future.

In a statement sent to BusinessDay, MAN commended the apex bank for working to unify the exchange rate market, saying that a market-friendly rate would facilitate stable production planning and engender sustainable economic growth.

The CBN is pushing for rate convergence around

the Investors and Exporters (I&E) window, devaluing the naira to attract investors. The bank had since 2016 maintained multiple exchange rates that frustrated investors and created uncertainty.

But there are concerns that the rate convergence is taking a long time.

However, MAN said it was a welcome development that should engender increased investment inflow into the real sector of the economy and a laudable initiative that had come at the right time, particularly now that the economic outlook was gloomy in light of the ravaging impact of Covid-19 pandemic.

“The World Bank had attributed the country’s www.businessday.ng

loss of Foreign Direct Investment (FDI) to investors’ exasperation from perceived manipulation of the foreign exchange market,” MAN said.

“A piece of advice was hitherto rejected by the monetary authority until very recently when it became conditionality for monetary support,” MAN further said.

The association said it was important to recognise the existence of the unavoidable pains that naturally came with the transition from a multiple exchange regime to the domain of a single exchange rate, particularly the burden of dollar-denominated loans and offsetting existing credit commitments to foreign suppliers of raw

materials.

MAN urged the CBN to, as a matter of urgency, put a measure in place to minimise the intensity of the pain by considering outstanding obligations of manufacturers from the second quarter of 2019 till date and allow such to be settled at between N330 and N360 per dollar to enable banks to redeem these obligations to foreign suppliers of manufacturers.

The association said anything otherwise could lead to factory closures.

“CBN stimulus packages to the manufacturing sector will suffer a huge setback as cash flow crunch becomes the order of the day,” MAN said, referring to the possible effect of settling obliga-

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NUT wants states to align with Customs intercepts contrabands, raises Lagos to develop improved data to N17bn debit notes in 6 months FG on 2020 WASSCE exam aid quality healthcare delivery unit also intercepted a truck MARK MAYAH

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tate governments have been urged not to enrol their schools in this year’s West African Senior Secondary School Examination (WASSCE), if Federal Government-owned schools are not going to take part in same.

If they go ahead, according to the Nigeria Union of Teachers (NUT) and the National Parent Teacher Association of Nigeria, (NAPTAN), it will not only distort the education sector, but will also create chaos that may be difficult to remediate. Haruna Danjuma, president of NAPTAN, and Segun Raheem, national treasurer of the NUT stated this said in separate interviews with BusinessDay. Raheem said there was a stakeholders’ meeting with the Federal Ministry of Education and other government agencies concerned with the Covid-19 pandemic in which the NUT was present, and where it was agreed that anything that would lead to chaos should be avoided. “We all know that education is on the concurrent list in our consti-

tution, and that is why when the Federal Government said its schools would not open now, and advised the state governments to key into that.”

He said that the NUT has asked every state chapter to look into the peculiarities of their states and be guided accordingly.

“Some states have gone far in preparing their terminal students for their final examinations. I am from Lagos State and I can say that the commissioner for education has done a lot in this respect.

However, schools cannot be reopened unless it is safe to do so. Before the pandemic got to this level, the NCDC said each state should prepare at least 300-bed isolation centre, how many states were able to do that?

“We have to be careful not to use our children as laboratory rats. If the affected students sit for WASSCE now, will they be admitted to the university immediately? No. Some countries reopened schools and shut them down almost immediately. It is not appropriate that some states will sit for the WAEC exams (WASSCE) and others will not,” he said.

AMAKA ANAGOR-EWUZIE

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he Federal Operations Unit (FOU), Zone A of the Nigeria Customs Service (NCS) said it has intercepted contrabands and raised debit notes on imports worth N17 billion between the months of January and June 2020.

The contrabands intercepted by the unit from smugglers terrorising the Southwest states of the country include used vehicles, pharmaceuticals, textiles, foreign parboiled rice, tomato paste and secondhand clothing, while the debit notes were raised on imports, which the owners under declared the value in order to pay lesser import duty.

Usman Yahaya, the Customs Area Controller of the unit, said at the weekend that contrabands seized from smugglers were worth N15.6 billion while N1.4 billion were recovered from imports of wrong classification, transfer of value and false declaration of cargoes.

According to him, the

load of textile materials worth N565 million smuggled from Benin Republic.

He further disclosed that 18,760 bags of foreign parboiled rice smuggled into the country from Benin Republic and 64 units of exotic vehicles were intercepted and detained for duty evasion and under payment.

“A quick glance of our seizure reports from January 7, 2020 shows that 64 exotic vehicles including two bullet proofs; 18,760 bags of 50kg of foreign parboiled rice valued at N469 million; 1,338kg of Indian hemp worth N201 million, and 147 sacks (9,504kg) of Pangolin scales worth N10.4 billion,” he said.

Others seizures include 3,059 cartons of tomato paste; 10,653 cartons of frozen poultry products; 5,423 kegs of 25 litres each of vegetable oil; 56,472 bundles of printed textiles valued at N565million; 66 packs of tramadol; 872 bales of second hand clothing worth N61 million, and 11,077 cartons of frozen products worth N177 million.

JOSHUA BASSEY

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agos State Government is to develop improved data governing systems to enhance the quality of its healthcare delivery.

Commissioner for health, Akin Abayomi disclosed this at a workshop organised by the state ministry of health on data privacy with the theme “Data protection and public health- the role of government and other stakeholders,” held at the weekend.

Abayomi stated that the state government was poised to leverage data governance to deploy quality health services.

“The essence of the workshop is to establish the fundamental principles of governance and accountability around building a temple of bio economy in Lagos with the objective of exploring the Nigeria Information Technology Development Agency’s (NITDA) policy with a view to domesticating it,” said Abayomi.

According to him, the development of a robust

Bloomberg user’s guide to navigating Nigeria’s foreign exchange maze

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igeria, under pressure from multilateral lenders, has vowed to untangle its byzantine foreignexchange regime that deters investment in Africa’s biggest economy. But the slow pace of change signals the path to a single rate could be long and confusing for investors.

The collapse of oil prices in March forced the central bank to take the first step, adjusting its official currency peg against the dollar to 360 naira from 307 naira. Before this move, the rate had been relatively unchanged since 2015.

The devaluation was also a nod to the International Monetary Fund (IMF), from which the West African nation was seeking a $3.4 billion emergency loan.

The Fund approved the loan after Nigeria promised to seek a unified and more flexible exchange rate, even though that was not a precondition. Authorities are also in talks with the World Bank for another loan needed to cover its budget gap.

Besides the official exchange rate, used mainly for government transactions and the budget, Nigeria maintains a number of other rates.

The rate for investors and exporters, known as Nafex, also acts as a spot rate for the

naira. This rate has averaged 388 naira per dollar since March.

There is a rate for small businesses that want to import raw materials. This rate is now 380 per dollar after the central bank devalued it from 360 on July 3.

There is another rate for Bureau de Change operators, mainly to allow Nigerians to access foreign currency to pay school fees for their wards abroad, or for travel. There have been no sales of foreign currency to BDCs since the outbreak of the pandemic.

Then there is the blackmarket rate, where the dollar sells for 463 naira to those who cannot access any of the official windows.

The central bank devalued the official rate a second time by 5.5% to 381 per dollar this week on the FMDQ OTC Securities exchange, the country’s largest currency and debt trading platform.

But the bank has not yet officially announced the new rate, causing confusion among traders. The central bank maintains 360 naira to the dollar as the official rate on its website and President Muhammadu Buhari signed a revised 10.8 trillion naira 2020 budget based on this figure.

Price stability is a key aim www.businessday.ng

of Nigeria’s central bank policy. A weaker naira could stoke inflation, which at 12.4% in May is already at a two-year high and well above the target-range ceiling of 9%. The central bank aims to curb inflation by using the stronger official rate for imports of items like fuel that have an impact on prices.

Africa’s largest oil producer imports almost all of its gasoline because its three derelict refineries have not processed any crude for more than a year.

Electricity tariffs, which the government subsidises, are also linked to the dollar and a weaker naira would lead to a significant rise, fueling inflation.

Africa’s most populous country has the widest spread between 12-month currency forwards and one-month contracts among its peers on the continent, suggesting traders expect a large depreciation. That increases the risk of holding Nigerian assets and deters foreign investors.

“What is important for investors is predictability around the rate, that they don’t wake up one day and find the market has moved without explanation,” said Yewande Sadiku, the head of the Nigerian Investment Promotion Commission. https://www.facebook.com/businessdayng

@Businessdayng

data makes it possible to have a single source of truth with a solid database which makes planning and decision making effective.

“Data is the future of the knowledge of the economy.

We are here to establish the fundamental principle of governance and accountability around building the temple of bio-economy and how it will be governed to prevent bio-piracy and bio-theft”, he said Speaking as a facilitator, Moses Braimah the CEO of Pacific Messages, highlighted the importance of accurate data in medicine and healthcare delivery. He described data as increasingly becoming the centre of every organization and business which makes it a precious asset of any organisation.

Braimah explained that data governance would go a long way in better decision making, quality delivery and improved for the state.

“Data is increasingly becoming the centre of every organisation and business.

This makes it one of the most precious of any organisation”, he said.

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insight

BUSINESS DAY Monday 13 July 2020 www.businessday.ng

Oil crash piles pressure on bloated refinery sector

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il refineries are struggling as the worst demandcrash in decades cascades through the industry, leaving plants around the world at risk of closure.

Demand for fuel remains depressed and stockpiles are bulging, while the crude refiners’ process has become more expensive following deep Opecled supply cuts.

That is squeezing margins for the plants, which convert the crude into products such as diesel, jet fuel and petrol. Europe is considered most at risk because facilities are generally older and governments have embarked on initiatives to phase out some fossil fuels from transport.

But analysts at UBS said almost 3m barrels a day of refining capacity — equivalent to about twice as much as the UK consumes or roughly 3 per cent of the global total — needs to be removed from the global market by the end of 2021 to restore the sector’s profitability.

Small US refineries and some capacity in Asia-Pacific could also be forced out, the analysts add.

Newer refineries tend to be more complex and efficient, allowing them to process a wider variety of crude oils at a lower cost.

But plants built in the 1950s and 1960s, as mass-market adoption of motor vehicles took off, look vulnerable — especially in the context of a lot of new capacity coming on stream in developing countries, from Nigeria to Kuwait. “We had too much refinery capacity before Covid,” said Robert Campbell, head of global oil products for Energy Aspects, a consultancy. “We’ve certainly got too much now.”

Demand for fuel has started to recover from the depths of lockdowns in April and May — when global consumption was down by more than 20 per cent — but few see it reaching preoutbreak levels before late 2021.

Some plants are already losing money, once total costs of operating are factored in.

Analysts say the outlook for the industry is reminiscent of the period after the financial crisis, when profit margins recovered only after a number of facilities shut for good.

Predicting which refineries could close is difficult, as governments often place plants on life support owing to concerns over

security of supply and job losses.

But industry figures say plants such as Essar’s refinery in Stanlow in the north-west of England and Eni’s Milazzo in Sicily may struggle, along with Grangemouth, Scotland’s sole motor

fuel refinery. Commodity trader Gunvor is already looking to mothball its plant in Antwerp.

Essar said the Stanlow refinery was a “profitable and sustainable” business. Eni said it was “not making any specific as-

sessment” on the Milazzo plant, which it jointly owns with Kuwait Petroleum Italia.

Petroineos, owner of Grangemouth, did not respond to requests for comment. Even before coronavirus, the industry was

Why the market is not sold on the idea of a big rebound in oil prices

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he oil industry has had a disastrous 2020, hit square-on by the full force of the coronavirus pandemic. From collapsing demand and the indignity of negative prices, to a recovery that has been tepid at best, there are few smiles among executives in the sector today.

Those who can manage a wry grin seem set on using the opportunity to write off billions of dollars from the value of their assets, resetting their businesses with one eye on accelerating the transition to cleaner fuels, as increasingly demanded by investors.

But a few influential figures do believe there are better days ahead. The oil cycle, they argue, has not been broken yet. Low prices and under-investment in the sector could still lead to a runaway rally eventually, they say, once the dark days of lockdowns and insipid demand are a thing of the past.

Take JPMorgan. The bank’s lead oil equities analyst, Chris-

tyan Malek, says crude prices cannot remain depressed for ever. While global oil demand is still down sharply from its preCovid level of 100m barrels a day, he sees the seeds being sown of “the next oil supercycle”.

His view is predicated on the long-term hit to supply being larger than the long-term hit to demand. It will take until late 2021 for demand to return to pre-crisis levels, he says — in effect losing two years of growth, or 2m-3m b/d — but Mr Malek sees a sharper fall in production along the way.

About 1m b/d have been wiped out by old fields being shut down that will not return even if prices rise, he argues.

Another 4m b/d of supply will be lost from delayed or deferred investments in new projects and expansion plans.

That suggests a supply gap could open from around 2022.

“Covid-19 has increased the chances of much higher prices,” Mr Malek says.

It is a seductively simple argu-

ment, and should play well with national oil companies such as Saudi Aramco (which JPMorgan advises) and US majors such as ExxonMobil and Chevron, which have been slower than European peers to make plans for the energy transition.

And it may well be right.

Whether you believe peak demand is just over the horizon or not — most analysts still put it at some point in the 2030s, as electric vehicles achieve mass adoption — a supply gap for what remains of the world’s most important commodity should raise prices, and perhaps to a substantial degree.

In 2011 the loss of less than 2m b/d from Libya was enough to send prices to more than $120 a barrel, less than three years after the financial crisis. But the broader market does not appear to buy that argument just yet.

Brent crude oil contracts for delivery three years from now are trading at less than $50 a barrel, barely $5 above the current spot price.

under pressure from long-term plans to move away from petroleum fuels and competition from newer plants in Asia.

HollyFrontier, a refiner in the US, recently converted its plant in Wyoming to biodiesel.

Eni and Total may do the same with plants in Europe, said UBS. “There will be a shakeout in the refining sector,” said John Auers, executive vice-president of Turner, Mason & Company, a consultancy.

Margins have plunged in recent weeks as oil prices rose faster than the price of finished fuel. Richard Joswick, head of refining analysis at S&P Global, said that in an average year refiners net roughly $10 a barrel — and are now getting about half that.

Certain plants are earning even less. Par Pacific, a US refiner, reported margins of just $0.24 a barrel in the first quarter from its operations in Hawaii — a 93 per cent drop from a year earlier.

Despite weakening margins, the US refining sector has been relatively resilient, partly because it throttled back processing operations as demand dropped earlier this year. About a third of the country’s capacity was idle in April, according to the US Energy Information Administration.

US refiners have begun to process more crude in recent weeks, but as big petrol-consuming states such as Texas reimpose Covid-19 lockdowns, consumption may stall. US petrol inventories are near historic seasonal highs, despite the onset of the summer driving months, when demand tends to peak.

One UK refining executive said there were about 10 plants around the world considered “at risk” over the next few years.

Moreover, with countries such as the UK expected to ban the sale of new petrol or diesel cars in the 2030s, fuel makers may be running out of road. Capital investments to boost plants’ longer-term profitability appear risky, in that context.

Alan Gelder, head of refining at consultancy Wood Mackenzie, compared the industry’s traditional mentality to being “chased by a bear”. “As long as you keep running and the rival beside you falls over you’d be OK,” Mr Gelder said. “But now they’re running downhill towards water and it’s not clear any of them can swim.”

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